Opinion
No. 4004/08.
2012-09-26
In the Matter of the CITY OF NEW YORK Relative to Acquiring Title in Fee Simple absolute in certain real Property, where not heretofore acquired, for South Beach Bluebelt, Phase 1 Bounded by Vulcan Street on the west, Father Capodanno Boulevard on the south, Oceanside Avenue on the north, and Sand Lane on the east, located in the Borough of Staten Island, City and State of New York. Ramfis Realty, Inc., (Fee Claimant with respect to Block 3491 Lots 19, 20, 41, and 81) Claimant, v. The City of New York Condemnor.
Michael A. Cardozo, Corporation Counsel of the City of New York, New York, City's Attorney. Fred Kolikoff, Esq., Goldstein, Rikon & Rikon, P.C., New York, Claimants Attorney.
Michael A. Cardozo, Corporation Counsel of the City of New York, New York, City's Attorney. Fred Kolikoff, Esq., Goldstein, Rikon & Rikon, P.C., New York, Claimants Attorney.
Michael Rikon, Esq.
WAYNE P. SAITTA, J.
At issue in this condemnation proceeding is the just compensation to be awarded to Claimant RAMFIS REALTY, INC., for the taking of the subject property located on Staten Island, (Block 3491 Lots 19, 20, 21, and 81). The Condemnor THE CITY OF NEW YORK, took title on May 28, 2008 (the vesting date). The Court viewed the property on August 1, 2011 and November 28, 2011. A non jury trial was held on August 9, 10, 12, 15, October 5, 6, 7, 11, 12, 31, and November 1, 2011.
FACTS
The CITY acquired the subject property for use as part of the CITY's South Beach Bluebelt Phase 1 project. The property is 241,772 square feet in area and is bounded, on the south by Father Capodanno Boulevard, on the north by Oceanside Avenue. Its eastern boundary is approximately 100–200 feet west of Sand Lane and roughly 50 feet east of Wentworth Avenue, a unbuilt street.
The site consists of wetlands and wetlands adjacent upland areas. The site is located within DEC Freshwater Wetlands NA–7 which is a Class I wetlands.
The subject property was regulated as wetlands on the vesting date.
It was stipulated that the Claimant purchased the property prior to the enactment of the wetland regulations and was owner of the subject property on the vesting date.
RAMFIS purchased the property in 1977. In 1979 RAMFIS obtained a permit from the CITY to construct an 8 story hotel on the site. After RAMFIS had commenced construction, including installation of over 200 piles on the site, its permit was revoked because it had not gotten a permit from the New York State Department of Environmental Conservation (“DEC”).
In March of 1981, DEC filed a tentative freshwater wetlands map and designated the site as freshwater wetlands. In response to a letter from RAMFIS's architect seeking a jurisdictional determination, DEC formally designated the property as subject to the Freshwater Wetlands Act on June 16, 1981.
The Claimant challenged the wetlands designation of the property but that challenge was denied. RAMFIS also commenced several law suits in State Court challenging DEC jurisdiction over the property as a wetlands. Those suits were dismissed. Those suits dealt only with whether the property was properly designated a wetlands and did not involve delineation of the boundary between wetlands and wetlands adjacent uplands on the property. DEC's jurisdiction include both wetlands and upland areas within 100 feet of a wetland boundary.
The tentative freshwater wetlands map filed by DEC was drawn at scale of 1:24,000 at which 1/2? equal to 1000 feet. The map states in its legend that the wetland boundaries are approximate and that the map does not delineate wetlands from adjacent areas.
On August 10, 1981, DEC inspected that property and drew updated wetland boundaries on a photocopy of what was identified, at trial, as a street map. While there is no scale on this map, the size that subject property appears on the map is 2 1/2? by 1?.
A final map was adopted by DEC in 1987 which did not differ from the 1981 tentative map at the subject property. Both maps were approximate and did not delineate the boundary between wetland areas and wetland adjacent upland areas.
Although, RAMFIS had requested DEC to make a delineation of what part of the property was wetlands and what part was adjacent uplands, DEC never did so. The reason DEC declined to do so is not clear.
The CITY did not commission a delineation of the boundary between wetlands and wetland adjacent upland areas of the property in preparation for this proceeding.
RAMFIS commissioned a delineation report by Carpenter Environmental Associates (CEA). The report was based, in part, on an inspection and borings done on the site by Ralph Huddleston of CEA, who planted flags at various points to mark the boundary between wetlands and wetlands adjacent uplands. A survey was then made incorporating the position of the flags.
Huddleston testified that in 1954 there were buildings on the subject property and that the amount of pre 1975 historic fill was so extensive that it did not allow wetland conditions to exist, as they would not support hydric soil.
Huddleston testified that it was his opinion based on the history of the property, his borings, as well as borings done in 1978 and 1999, that the areas upon which the fill was alleged to have been placed in 1983 and 1984, were wetland adjacent upland areas rather than wetlands as of 1975..
An earlier delineation report of the property had been done on the property by Malcolm Pirnie and Associates in 1999. The Pirnie delineation was based on borings and flaggings done on the site by Dennis Corelli, and a survey of those flags by Robert Marks.
The boundary delineated by Pirnie report is essentially the same as Huddleston's boundary.
Corelli testified that he submitted his report to the Army Corps of Engineers who sent a representative, Craig Spitz, to the site confirm his delineation line. Corelli testified that Spitz made his own borings and did not move any of Corelli's flags.
The Army Corps of Engineers then issued a letter dated July 26, 1999 determining that the wetlands delineation on the Marks survey was accurate.
On June 13, 1983, a DEC officer, David Becker, inspected the property and reported that he found evidence of filling of wetlands areas and that numerous pilings had been driven on the site. He stated in a memo dated June 14, 1983:
“On June 13,1983 at 12:45 pm I discovered the filling of freshwater wetlands area located off Father Capodonna Blvd. South west of Sand La., S.I. In this area numerous pilings had been driven into the wetlands and fill had been brought in a dump at the site. An area of approximately 260' x 300' had been filled to a depth of approximately four feet.”
The memo does not state when the fill or pilings had been placed.
On the basis of his report, DEC issued Notice of Violation to Joseph Macaluso, dated June 15, 1983 which alleged that there was fill in an area 260 feet by 300 feet to a depth of four feet, and also that there was a placement of pilings without a valid permit. The letter also directed Macaluso to cease and desist from placement of fill or pilings on the site.
Vincent Macaluso, a principal of RAMFIS, testified that only 50 to 100 loads of fill were placed on the site, and they were placed abutting Father Capodanno Boulevard to create a ramp to allow heavy construction equipment to access the site during the time RAMFIS had a permit to construct a hotel.
DEC commenced an enforcement action against both RAMFIS and Joseph Macaluso, an officer of RAMFIS. Thereafter, DEC and RAMFIS entered into a consent order which required RAMFIS to submit an application for a permit to place fill on the site, within 30 days, and to cease all activity including placing fill at the site pending review of the permit.
The Order also provided that in the event a permit to fill was not granted, RAMFIS was required to remove all fill within 60 days of being notified of the denial of a permit to fill, and to restore the site to its pre-violation condition within 90 days of notice of the denial.
The consent order contained no admissions nor findings of a violation. Also, the consent order did not specify the size or depth of the fill alleged or when it had been placed. The consent order did not require RAMFIS to remove the pilings that had been placed on the site.
On August 16, 1983, RAMFIS submitted an application for a freshwater wetland permit. Thereafter, DEC notified RAMFIS that the application was incomplete and asked RAMFIS to submit an Environmental Assessment, which RAMFIS did on November 28, 1983.
In February 1984, based on a review of the assessment, DEC issued a notice of Determination of Significance which found that the proposed project required construction in freshwater wetlands and would have a potentially large impact on the wetlands, and required RAMFIS to submit an Environmental Impact Statement (“EIS”).
In March of 1984 DEC issued a second notice of violation alleging that demolition debris and solid waste had been dumped at the site, and directing RAMFIS to secure the site and erect a barrier to prevent vehicles from entering the site.
The notice alleged that over 100 truckloads of fill containing demolition debris and solid waste was placed onto an area of existing fill. The letter further alleged that the new fill material expanded the surface area covered by fill from approximately 50' by 150' to 200' by 300'.
The notice also alleged that RAMFIS violated the 1983 consent order because the barrier it erected pursuant to the order was too flimsy and short to be impervious to vehicles.
Vincent Macaluso inspected the property after this violation was issued and found piles of construction debris, and burnt timbers which he believed came from the South Beach Boardwalk which had burnt down.
In April of 1984, RAMFIS notified DEC that it had removed the demolition debris dumped at the site and had a erected a barrier to prevent vehicles from entering the site.
In 1999, RAMFIS attempted to modify the 1983 consent order but DEC declined to do so. In 2000, RAMFIS, through its attorney Mark Chertok, again sought a modification of the 1983 consent order which DEC declined.
In 2005, Rey Olsen contacted DEC on behalf of RAMFIS to resolve the 1983 consent order but no resolution was achieved.
By a letter dated July 5, 2002, DEC notified RAMFIS that it deemed its application for a wetlands permit abandoned, because of RAMFIS's failure to submit an EIS.
DEC also informed RAMFIS that because the application was deemed abandoned, pursuant to the terms of the 1983 consent order, it had to remove all fill from the site within 60 days.
In 1999 RAMFIS entered into a contract of sale for the property with Atlantic Development Group LLC. However, Atlantic did not close on the property.
In 2001 RAMFIS entered into a contract of sale for the property with Aldo Puletti of Bedell Development Corp. Puletti filed an application for a wetlands permit with DEC to develop part of the property that fronted Sand Lane. No permit was issued by DEC and Puletti did not close on the property.
In late 2002 or early 2003, RAMFIS sold the part of the property fronting Sand Lane (Block 3491, Lots 51, 70, 79 and part of lot 81) to Dolphin Plaza LLC which then resold it to Sand Lane Housing Developement LLC, which constructed 16 attached dwellings on it.
No permit from DEC was required because the portion of the property on which the 16 units were built was neither wetlands or wetlands adjacent upland areas. The dwellings were built on uplands more than 100 feet from the wetlands boundary and thus outside of the jurisdiction of DEC.
In December 2003, in response to a violation issued by the NYC Department of Sanitation which alleged that debris had been dumped on the site, RAMFIS engaged a contractor to remove the debris but did not obtain a permit from DEC. The excavating machinery used by the contractor became stuck into the wetlands and was submerged up to its cabin. In 2004 the contractor entered into a consent order to remove the excavator and remediate area of the site it had disturbed.
In 2005, DEC commenced an enforcement against RAMFIS's contractor for not complying with the 2004 consent order. DEC apparently attempted to bring the 2005 enforcement action against RAMIFS as well, but never served RAMFIS in that proceeding. The excavator was eventually removed.
In 2005 RAMFIS made further attempts to have the 1983 consent order modified but DEC declined to do so because it believed RAMFIS had not complied with the consent order.
As of the date of vesting, May 28, 2008, RAMFIS had not removed the fill from the site. The 1983 consent order has never been modified. Although DEC has taken the position that RAMFIS has not complied with the 1983 consent order, it did not move to enforce that consent order.
ANALYSIS
There is no claim in this case that the wetlands regulations constitute a regulatory taking. Both sides have valued the property as regulated by existing wetlands regulations. There is a significant disagreement over how much development, if, any would be permitted on the property as regulated. The parties also have a significant disagreement as to how much of the property is wetlands and how much is wetlands adjacent uplands.
The CITY contends that on the date of vesting no development would have been allowed because RAMFIS had not complied with the 1983 consent order and that the wetlands adjacent uplands portion of the property is too small to permit development.
RAMFIS contends that a permit would likely have been issued for development on the wetland adjacent upland portion of the property and that 54 residential and 19 commercial units could be constructed on the wetland adjacent upland areas of the property.
The CITY argues in rebuttal that even if a permit would be granted to develop the wetlands adjacent upland portion of the property, that portion is much smaller than claimed by RAMFIS. The CITY contends that at most only 6 mixed use building comprising 12 residential units, 6 commercial units and 6 community facility units could be built on the adjacent upland area.
The Claimant bears the burden of proving that there is a reasonable probability that a permit would be granted. County of Westchester v. State 127 A.D.2d 556, 511 N.Y.S.2d 358 (2nd Dept 1987); Rodman v. State, 109 A.D.2d 737, 485 N.Y.S.2d 842 (2nd Dept 1985). Grantwood Retention Basin v. City of New York, 33 Misc.3d 586, 929 N.Y.S.2d 478, 2011.
The two obstacles to obtaining a permit raised were by the CITY. First, the lack of compliance with the 1983 consent order, and second, that there is not a sufficient amount of wetland adjacent upland area to permit development.
While RAMFIS or any subsequent owner would have to resolve the outstanding issues covered by the consent order with DEC before they could obtain a permit, there is no evidence that the 1983 consent order would be an absolute bar to a permit.
As Claimant's expert Mark Chertok testified, the consent order by its terms provided RAMFIS an opportunity to apply for a permit. The consent order clearly indicates that DEC was willing to consider granting a permit for development if its concerns were addressed and the plan included appropriate mitigation.
Both Chertok and Huddleston testified that consent orders do not necessarily preclude development but are the basis for negotiations between DEC and owners seeking to develop wetlands properties.
There was evidence adduced at trial that DEC has granted permits to develop on wetland adjacent upland portions of property in the South Beach area with as little as a 10 to 15 feet buffer between the development and the wetlands boundary.
In this case, there never was a determination by DEC that no permit would be allowed. DEC deemed RAMFIS's 1983 application for a permit abandoned because it failed to follow through with DEC's direction that it submit an EIS. Nothing in the consent order prevented RAMFIS or a subsequent owner from making a further application.
Also, the consent order dealt only with the allegation that fill had been illegally placed on the site in 1983. In the event that an agreement on a permit could not be reached the consent order only required RAMFIS to remove the fill with 60 days. It is unclear from the records in DEC's files whether it was alleged that an area of 50 x 100' or an area of 260 x 300' had been filled in 1983.
There was no consent order entered into concerning the debris placed in 1984 and in April of 1984, RAMFIS notified DEC that it had removed the debris dumped at the site and had a erected a barrier to prevent vehicles from entering the site.
The 1983 consent order did not require the removal of the pilings that had been placed by RAMFIS. While the order does call for the restoration of the site to its “pre-violation condition” the pilings pre-dated the alleged violation by several years. Also, the fact that RAMFIS was required to restore the site to its pre-violation condition with 90 days of notice indicates that removal of over two hundred pilings was not contemplated under the consent order.
Finally, the fact that DEC has not moved after all these years to enforce the 1983 consent order, and the fact that it only addressed the fill alleged to have been placed in 1983, argues against it being an absolute bar to any permit being issued.In fact, Ugo Drescher, an attorney for DEC who was called by the CITY to give an opinion on the likelihood that DEC would grant a permit, never testified that the 1983 consent order would preclude the granting of a permit to RAMFIS or another subsequent owner, only that its concerns would have to be addressed before DEC would issue a permit.
Thus, the consent order would be a point of negotiation between DEC and whatever owner or developer sought a permit. It would give DEC leverage in seeking mitigation and limiting the development it would allow. However, DEC has the authority to limit development on any wetland or wetland adjacent upland site, and condition any permit on an owner agreeing to mitigation measures, even in the absence of a consent order.
While the 1983 consent order would not be an insurmountable bar to getting a permit, the more difficult question is whether there is sufficient wetlands adjacent upland area for a buffer sufficient for DEC to grant a permit for development such as is proposed in the Rampulla plan. This question turns on where the boundary between the wetlands and wetlands adjacent upland areas on the property lies.
The CITY has argued that Claimant sold off the developable portion of the property which fronts Sand Lane in 2002 and that the remainder, which is the subject of this vesting, is undevelopable. This Sand Lane portion was resold in 2003 to a developer who built 16 residential units on that portion
However, the Sand Lane portion that was sold was merely the portion that DEC had no jurisdiction over and thus did not require permits from DEC to develop. The fact that this portion was sold off has no bearing on determining what portion of the remaining property was wetlands and what was wetlands adjacent uplands. While the selling off the Sand Lanes portion is relevant to whether the wetland regulations constitute a taking, that is not an issue in this case, as both sides have valued the property as regulated.
The CITY also argues in essence that Claimant received the full value of the whole property when it sold off the Sand Lane portion for $2,678,650. The price Claimant received for a portion of the property several years before vesting can not properly be deducted from the amount they are entitled to as compensation for the remainder. The remainder must be valued independently as of the date of vesting.
Similarly, the price that the Sand Lanes portion was sold for in 2003 has little bearing on the value of the remainder of the property on the date of vesting in 2008. Significantly, neither Claimant's nor the CITY's appraiser used the 2003 sale of the Sand Lane portion as a comparable sale in this proceeding.
Both sides agree that the area fronting Father Capodanno Boulevard is wetlands adjacent uplands, not wetlands, but they disagree on how far from Father Capodanno Boulevard the wetlands adjacent upland area ends and the wetlands begin. The question of whether there is enough adjacent upland area for a buffer necessary to allow any development is inextricably tied up with the question of where the exact boundary between wetlands and wetland adjacent upland areas is.
Steven Seymour, a professional wetlands scientist who testified on behalf of the CITY, stated that its was unlikely that the Rampulla plan would be approved because he believed that it was not confined to wetland adjacent upland areas but included development on wetland areas. He stated that an applicant would have a better likelihood of getting a permit if the disturbance was only occurring in the adjacent upland area than if it was occurring in the wetland itself.
Magnus Sjoberg, a land use planner who prepared a rebuttal report for the CITY, testified that his critique of the development plan proposed by Claimant is based on his opinion that the wetlands boundary delineated by Huddleston was incorrect and the proposed development was sited on wetland areas. He further testified that he assumed for the purposes of rebuttal that a permit could be obtained for a development that was confined to the wetland adjacent upland areas and in designing his proposal left a 10 foot buffer between the development and the wetlands boundary.
Ugo Drescher stated in a October 26,2010 letter to the CITY's attorneys that his opinion was that DEC would have denied permits for the Rampulla plan because the plan proposed development in the wetlands areas and that there was not sufficient wetlands adjacent upland areas on the property to provide an adequate buffer between any development and the actual wetlands.
Drescher based his assumption that the Rampulla plan would be built on wetlands areas on the boundaries drawn on the DEC 1981 and 1987 freshwater wetland maps.
Drescher stated that he believed that the wetlands boundary delineated by Huddleston was incorrect because he did not follow procedures set forth in the DEC Delineation Manual. Specifically Drescher stated Huddleston did not follow the procedures for delineating disturbed areas. However, Drescher did admit that the small portion of the Father Capodanno Boulevard side of the property where the DEC did delineate a wetlands boundary, as indicated on the damage and acquisition map, was similar to Huddleston's delineation.
Neither, Sjoberg or Drescher are wetland experts and neither has performed delineations and not in a position to dispute Huddleston's delineation.
Claimant raised an objection at trial that Drescher's testimony violated a DEC policy prohibiting DEC employees from testifying as expert witnesses in private litigation. Whether or not his testifying violated a DEC policy is not a matter this Court must decide. However, it is clear that despite that fact that Drescher had no material interest in the outcome of the case, he was not a disinterested expert.
Drescher developed his letter which was part of the CITY's appraisal in consultation with Corporation Counsel, He submitted drafts to Corporation Counsel for review and comment. While there is nothing improper with such consultation it does go to the weight the Court gives his opinions. He also appeared to be motivated by his belief that Claimant was trying to get over by grossly over estimating the value of the portion of the property that remained after having sold off what he believed to be the only developable piece of the property. Further, Drescher was less than forthcoming in his responses to cross examination.
However, despite whatever feelings Drescher may have had towards Claimant, the material basis for his opinion that DEC would not grant a permit for the Rampulla plan is that it included substantial development of wetlands areas. Thus the validity of his opinion depends on whether he is correct that the Rampulla plan includes development on wetlands.
Seymour, the CITY's environmental expert did not conduct his own delineation of the boundary between wetland and wetland adjacent upland areas. He testified that he disagreed with Huddleston's delineation because Huddleston did not bore 18? or below disturbed areas.
Seymour described a delineation as a formal process by which wetlands are mapped. He testified that a delineation is typically performed by reviewing maps and documents relating to the site, conducting a site visit to observe hydrology, soil and vegetation, boring soil samples and then flagging the wetland boundary.
Seymour did not state in either his testimony or his report what delineation he relied on for his conclusion that Rampulla proposal included development on the wetlands itself. However, based on the testimony and report of Sjoberg it can be inferred that Seymour relied on the boundary drawn in the 1987 DEC freshwater wetlands map.
Both Drescher and Sjoberg assumed as the basis of their opinions, adjustments to the 1981 tentative Freshwater Wetland Map made by Joseph Pane of State DEC, and the Final 1987 Freshwater Wetland Map.
As discussed more fully below, the Damage and Acquisition Map of the subject property prepared by the CITY contained a gap in the delineation of the wetlands boundary on the site along the Father Capodanno side of the property. The CITY superimposed the boundary drawn on the 1987 Freshwater Wetlands map onto the Damage and Acquisition map for that portion of the subject property where no delineation had been done.
However, neither the 1981 tentative map nor the 1987 permanent map relied upon by the CITY's experts, constitute delineations of the boundary between the wetland and wetland adjacent upland portions of the property. This is so both because the scale of the maps and the manner in which the boundary was determined.
To begin with, the 1987 Freshwater Wetlands map states clearly in the notes section of its legend that “This map indicates approximate location of the actual boundaries of wetlands regulated according to the Freshwater Wetlands Act.” It also states that adjacent areas “are not delineated on this map.”
DEC regulates both wetlands and 100 feet of uplands adjacent to the wetlands. The DEC freshwater wetland maps show the areas subject to wetland regulations, but not the boundary between the wetlands and adjacent upland areas.
Second, the scale of the map is 1 to 24,000 at which scale1 inch on the map equals approximately 2000 feet, and 2 1/2 inches equals almost a mile. The depth of property from Father Capodanno Boulevard, at the portion in dispute, is only about 280 feet deep. On the map, the depth of the property is less than .15 of an inch. Seymour admitted that thickness of the line drawn on the map can itself equal150 feet. It is clear that given the scale of the 1987 Freshwater Wetlands Maps any boundary drawn on it would, by necessity, be very inexact.
Seymour testified that the DEC freshwater maps were not delineations but demarcations of what areas were designated wetlands and the boundaries on these maps could vary 500 feet either way
A memorandum by Kenneth Wich, Director of DEC's Division of Fish and Wildlife, dated August 19, 1987, states it is difficult to determine where wetland boundaries are on the ground based on wetlands maps at a scale of 1:24,000.
In addition to the inadequacies of the 1987 map, the manner in which the line was determined is inadequate as a delineation. The NYS Freshwater Wetlands Delineation Manual defines the wetland boundary as the location “where there is a discernable change in vegetation from a community predominated by wetland species to one predominated by upland species.” (ex K, p. 20).
Delineation of a precise boundary between wetlands and wetlands adjacent upland areas is done by first examining available maps, aerial photos and soil survey maps. Then an inspection is done during which the vegetation, water and soils on the site are examined and soil borings are taken. The boundary is then flagged by placing sequentially numbered flags at various points on the boundary line. Where a precise boundary is needed the flagged boundary is transferred to a survey map.
The wetlands boundaries on the 1987 Freshwater Wetlands Map were not created by the procedure outlined in the Delineation Manual, and as discussed above does not, on its face, purport to be a delineation map.
DEC had also made an earlier tentative Freshwater Wetlands Map in 1981 which contained essentially the same boundaries as the 1987 map. Minor modifications to the tentative map were made based on a visual site inspection by Joseph Pane, a DEC inspector. Pane's boundaries were hand drawn on a portion of an unidentified street or Sandborne map that contains no scale. Although Drescher referred to it as a delineation, it is not. Pane did not take any borings and did not flag the boundary. The boundary was not surveyed but merely hand drawn with a pen. It is even less suitable for determining the actual boundary between wetlands and wetlands adjacent upland areas than the 1987 map. However, it was the boundaries on the 1987 Freshwater wetlands map that the CITY and its experts used for its assumptions as to what portions of the property were wetlands and what were wetland adjacent uplands.
The Damage and Acquisition Map prepared by the CITY contains earlier delineations of portions of the wetlands/wetlands adjacent upland boundaries on part of the property. However there is a gap in the delineated boundary that covers most of the side of the property fronting Father Capodonna Boulevard. Thus, the Damage map contains no delineation along almost the entire area which Claimant claims could be developed.
The Damage and Acquisition Maps contain a wetlands note that alleges that NYS DEC cannot determine the wetland boundary on the parcel because fill is present on the site. The note however, was not signed by anyone from New York State DEC. It was signed by the Commissioner of the New York City Department of Environmental Protection which does not have responsibility for confirming wetland delineations. Drescher admitted on cross examination that the note was not put on by NYS DEC, but by the CITY.
More importantly, the existence of fill on a site does not prevent a delineation of the wetlands boundary. The Delineation Manual contains detailed procedures on how to delineate a boundary on a site that has been disturbed by fill. The procedures, which will be discussed more thoroughly below, in essence call for taking borings that go below the level of the fill, to determine whether the fill was placed on wetlands or uplands.
Sjoberg testified that he superimposed the boundary from the 1987 Freshwater Wetlands map onto the Damage and Acquisition Map by use of a Computer Aided Design (CAD) program in order to prepare his analysis. While the use of CAD allows for a accurate transfer of the line from the 1987 map to the Damage and Acquisition Map, it can not remedy the defects and inaccuracies inherent in the line on the 1987 map.
Claimant made a written request to DEC to make a delineation of the wetlands boundary on the site. DEC declined to do so on the grounds that they believed that there was illegal fill on the site. However, Drescher testified at trial that he did not know why DEC did not make a delineation.
There was conflicting testimony at trial as to whether DEC had a legal obligation conduct a delineation at Claimant's request.
Claimant has suggested that the Court should make a negative inference from the CITY's failure to perform a delineation that had they done a delineation, it would not have supported their position and would have agreed with the delineation submitted by Claimant.
Both sides cited the decision of the Freshwater Wetlands Appeals Board in 196 Slater Boulevard Building Corp., v. Sheehan, 2005 WL 3170689 to support their opposing positions on whether DEC was required to perform a delineation at Claimant's request.
The facts in Slater were similar to the present case in that it involved DEC's refusing to perform a delineation at an owner's request because it alleged that there was illegal fill at the site. Like the present case, there is a dispute whether the fill pre-dated the effective date of the Freshwater Wetlands Act. The DEC argued that because of the fill, a current delineation would not have been accurate and would have lead to a loss of wetlands.
The Freshwater Wetlands Board decided in favor of the owner and held that pursuant to NYS Environmental Conservation Law (ECL) 23–0301(7), DEC had an obligation to perform the delineation not withstanding the allegations of illegal fill.
Section 24–0301(7) of the ECL provides that DEC shall, upon a written request of a landowner “cause to be delineated more precisely the boundary line or lines of a freshwater wetland or portion thereof.”
The Board held “However regardless of whether the fill was placed before or after the effective date of the Freshwater Wetlands Act, DEC's remedy would have been to initiate an enforcement proceeding against the Appellant for any such violation.” Id.
The fact there was a consent order on this property does not require a different result. The point of the decision is that whether or not there is illegal fill, an owner is entitled to a delineation and violations do not preclude making a delineation.
The Board concluded that,
“While the Board shares DEC's concerns regarding wetland preservation and further agrees that no individual should profit from an illegal act, it is the Board's opinion that providing Appellant with a delineation of its property is not contrary to either of these goals. Appellant justifiably made a request pursuant to the Environmental Conservation Law for a more precise delineation of the actual boundaries of its property and is entitled to it.” Id.
As noted, the Delineation Manual provides specific procedures for how to conduct a delineation where there has been unauthorized fill.
Nonetheless, whether DEC violated its obligation under the ECL to perform a delineation at Claimant's request is not an issue this Court must decide. What is relevant is whether the CITY has presented reliable evidence of where the wetland boundary on the property is, to support its position that a wetlands permit would likely not be issued because there is insufficient wetland adjacent upland area upon which to place the development and provide an adequate buffer.
In this case the CITY has not provided reliable evidence of where the wetlands boundary is. The CITY did not prepare a wetlands delineation for this case, which they could have done even if they considered part of the property to be a disturbed area. The CITY's experts instead chose to rely upon the 1987 Freshwater Wetlands Map, even though it is manifestly inadequate for such a purpose.
As discussed above, given the scale of the map and the manner in which the line is drawn on the map, it is far too inaccurate to be used to establish the boundary between wetlands and wetland adjacent uplands on the subject property.
The Court rejects the opinions of the CITY's experts that a wetlands permit would not be granted as unsubstantiated, because the map on which their opinions are based is unreliable and not suited to the purpose for which it is cited.
The Court must next consider whether the boundary set forth in the delineation map submitted by the Claimant is a valid basis for the opinions of its experts that there is sufficient wetlands adjacent upland area on the property, such that it is likely that a permit would be granted for the development proposed by Rampulla Associates.
The map relied on by Claimant was based on an inspection and flagging of the boundary between wetland and wetlands adjacent upland areas on the site done by Ralph Huddleston. The flags set by Huddleston were then mapped by William Spiezia, a surveyor. The two material criticisms made by the CITY's experts of Huddleston's delineation, were that he did not continue his borings down at least 18? deep and that he did not conduct his delineation according the procedures required to be used for a disturbed area.
Seymour, the City's wetland scientist, testified that he disagreed with Huddleston's delineation even though he did not inspect the site. He opined that the Huddleston delineation was invalid because his borings did not go down 18?. He also testified that the areas of alleged fill were disturbed areas and that the proper procedure was to excavate through the filler material “to see what the conditions of the native soil beneath the fill are”.
Huddleston testified that where he did not bore down to 18 inches it was because he met refusal, which he explained was where he encountered hard material such as stone concrete, or brick which his augur could not penetrate. He further testified that the inability to obtain soil samples down to 18 inches did not preclude him from completing the delineation because the vegetation and hydrological conditions he found at the site were sufficient to allow him to determine the boundary.
He also testified that he did not treat any of the area as disturbed because in his opinion the fill was “historic”. By historic he meant that the fill predated 1975 the effective date of the Wetlands Act.
Where fill has been placed after the effective date of the Wetlands Act (1975) and without a permit, such fill can not be a basis for reducing the area of wetlands. It is the condition on the effective date of the act that governs. Where the soils beneath such illegal fill indicate that fill was placed on areas that were wetlands in 1975 then that area is considered still to be wetlands. Where fill was placed on areas that in 1975 were uplands then such areas are still considered uplands. Berlin v. Grannis EWAB No.07–03 (2008) (ex LL)
The DEC Wetlands Delineation Manual provides that where an area has been disturbed one must determine whether the site was wetlands before the disturbance or alteration. The Manual directs one to consider which of three wetland land identification criteria; vegetation, soil or hydrology, has been altered, and sets out procedures for inspecting each of the three criteria.(ex K, p 23). Since the disturbance alleged in this case is fill, soil is the relevant criteria.
Where a portion of a wetlands has been filled, one must ascertain the actual presence of buried hydrophytic vegetation, buried hydric soils, or buried wetland hydrology. (ex K, p 24). One is directed to then develop a list of the hydrophytic vegetation, hydric soils, and hydrologic and topographic characteristics of the adjacent or closest wetlands, for comparison. (ex K, p 24).
One should then “Dig a series of holes through the fill to find the outer limit of what may have been wetland.” (ex K, p24). One then makes a determination whether the area under the fill was wetlands based on whether hydrophytic vegetation, hydric soils or hydrological indicators are found in the soil samples taken. The procedures set forth numerous conditions to consider in evaluating what has been found in the samples. (ex K, p 25–27)
Huddleston did not employ the above procedures on the site, because in his opinion, the 1980's fill was placed on fill that predated 1975. He testified that the Delineation Manual provides that if the disturbance took place before 1975 or pursuant to a permit, then one delineates the boundary as the area exists presently and one need not determine whether the disturbed area was wetlands prior to the disturbance.
The Manual states:
“If the activity occurred before the effective date of the regulation or as the result of a permit, it may not be necessary to conduct a wetland boundary delineation for regulatory purposes. In this case only the remaining wetland boundary should be delineated. The wetland just outside of the disturbed area can simply be delineated using the routine or other appropriate method. If the alteration was carried out in violation of Article 24, it may be necessary to determine the nature and extent of the wetland disturbance and perhaps to delineate the former boundary of the wetland for restoration or mitigation purposes.” (ex K, p. 23).
In 2001, Huddleston had produced at Claimant's request an Historical Analysis of Filling Activities on the site in which he concluded that there was fill placed on the site prior to 1975.
He based his opinion that the area where the fill was alleged to have occurred in the 1980's had already been filled prior to 1975, on maps, aerial photos, soil borings from 1978, and 1999, and a prior delineation done in 1999 by Malcolm Pirnie Associates.
He testified that he first examined the damage and acquisition map as well as aerial photos from the 1950's and 1970's. This is in line with the procedures set forth in the Delineation Manual. He stated in the 2001 report that aerial photos from 1951 and 1966 show fill on the area of the alleged violations.
He also examined boring logs from 1978 which were done in connection with the Claimant's earlier hotel development. Those logs show fill ranging from 2 feet to 12 feet.
He also examined borings from 1999 and 2001 which he stated showed two distinct layers of fill, a more recent fill on top of historic fill. From this Huddleston concluded that any fill placed in the 1980's was placed on historic fill.
He also concluded that the amount of historic fill was so extensive that it did not allow for wetlands conditions to exist. He testified that because of the extensive fill placed prior to 1975, the areas in question would not support hydric soil, did not have the moisture necessary to provide advantage to wetland vegetation, and because their level was raised, contributed to hydrology runoff, which does not support wetland vegetation.
The CITY produced no borings or inspections of vegetation or hydrology that indicated that the soil under the alleged 1980's fill was still wetlands, as of the effective date of the act in 1975.
Huddleston had a sufficient basis to conclude that the area that was alleged to have been illegally filled in 1983 and 1984 had been filled in prior to 1975 and was not wetlands but wetlands adjacent uplands by 1975. Therefore, the fact that he did not treat the area as disturbed in conducting his delineation was not improper under the procedures outlined in the Delineation Manual, and is not a basis to reject his delineation.
Additionally, the boundary he delineated essentially matches the boundary delineated by Dennis Corelli of Malcolm Pirnie Associates, in 1999. Corelli conducted his delineation in the same manner that Huddleston conducted his. The report was then submitted to both the United States Army Corps of Engineers and DEC for confirmation. Craig Spitz of the Army Corps came to the site and confirmed the boundary flagged by Corelli and issued a letter determining that the boundary was accurate. DEC took no action on Corelli's report.
The Army Corps of Engineers has jurisdiction over wetlands, in addition to DEC. The DEC Delineation Manual adopted procedures and methods set forth in the Technical Report Y–87–1, of the Corp of Engineers Wetlands Delineation Manual (ex K, p. 2). The difference between the jurisdiction of the Army Corps of Engineers and DEC is that the Army Corps only has jurisdiction over wetlands and DEC has jurisdiction over wetlands and upland areas that are within 100 feet of the wetlands boundary. This difference in jurisdiction has no bearing on the manner in which the Army Corps would delineate a wetlands boundary.
By reason of the above the Court finds that the wetlands boundary delineated by Huddleston is reliable and accurately represents the boundary between wetlands and wetland adjacent upland areas on the subject property.
The Court must next consider whether the Rampulla plan was confined to wetland adjacent upland areas and whether, given the boundary delineated by Huddleston, there was room for a sufficient buffer.
The Rampulla plan calls for 9 mixed use, 3 story buildings (on 18 zoning lots) along Father Capodanno Boulevard, with approximately 80 parking spaces behind the buildings. These would include 18 stores, 54 apartments and one community facility use.
The CITY for rebuttal purposes submitted a hypothetical development by HDR Engineering Inc., based on an assumption that DEC would issue a permit for the site. It called for six units of mixed development with 1st floor commercial and residential on the second and third floors on the northeast corner of the property. It also called for a 3 story mixed use building on the southeast corner. The six buildings contained 1,425 square feet of commercial space and approximately 1,367 square feet of residential space. This is approximately the same square footage on each of the zoning lots as is proposed in the Rampulla plan.
The basic difference in the plans is the number of units and the fact that the HDR hypothetical includes only a ten foot buffer.
However, the HDR limits its development to areas outside the wetland boundary shown on the 1987 wetlands map. HDR did not consider what could be developed on the property based on the Huddleston delineation. To the extent the HDR's plan proposes buildings of the same use and size as the Rampulla plan, it in not inconsistent with the Rampulla plan, if one assumes the Huddleston delineation.
The zoning study of the Rampulla plan shows that the development is entirely in wetland adjacent upland areas, as delineated by Huddleston, and that it provides a buffer or between 40–50 feet between the end of the development, including parking spaces, and the wetlands boundary.
Seymour, the CITY's wetlands expert noted in his report that DEC has permitted development with buffers as small as 10 feet for smaller developments. Seymour also stated in his report that DEC has granted permits for larger developments but seeks to limit disturbance of wetland areas and insists on mitigation to offset the potential impacts on the wetlands.
At Crestwater Court, a development on property just to the west of the subject property, DEC gave a permit for a large development of over 30 units that included a buffer of between 40 to 60 feet from the wetlands boundary.
Based on Huddleston's delineation, the Rampulla Plan limits development to the wetlands adjacent upland areas and provides a buffer well within the range typically required by DEC. Therefore, it is probable that a purchaser of the property on the date of vesting would have been able to obtain a permit from DEC for the development proposed in the Rampulla Plan.
The Court must next consider what an investor would pay for the subject property based on the probability they could develop the Rampulla plan.
Bob Sterling, the CITY's appraiser, concluded the highest and best use of the site was to remain vacant and thus selected comparable sales that were of lots that were not bought to be developed. These comparable sales are not relevant to determining the value of the property based on the highest and best use of a mixed use development as proposed in the Rampulla plan.
The Rampulla plan contains 25,249 square feet of commercial floor area, 47,031 residential square feet and 1,028 square feet of community facility space for a total of 73,308 square feet. Henry Salmon, Claimant's appraiser valued the property at $215 a square foot for a total of $15,761,220. He deducted $1,144,584 for extraordinary construction costs and wetlands mitigation for a final value of $14,600,000. Salmon based his figure of $215 a square foot on a sample of 5 comparable sales.
In rebuttal, Sterling argued that Salmon's comparable sales 3, 4 and 5 were not truly comparable to the subject property and that Salmon inflated the value of sales 1 and 2 by underestimating the developable square footage of those two sites. Sterling stated that the accurate average adjusted value of sales 1 and 2 was $100 a square foot.
Sterling testified that sales 3, 4, and 5 were developed commercially which does not match the highest and best use of mixed use development proposed by Claimant for the subject property.
It is the highest and best use of the comparable sales properties, rather than their actual use, that determines whether the properties are sufficiently comparable. In this case sales 3, 4, and 5, had zoning similar to the subject property. However, all three properties were located in areas that were more densely developed with commercial uses than the subject property. The properties were located on Hylan Boulevard and Richmond Road in areas that were primarily commercial.
It is not the maximum FAR alone the determines the highest and best use. The use must also be financially feasible and maximally productive. The locations of sales 3, 4, and 5 are not suitable for residential development, which is major part of the Rampulla Plan. It is significant that Salmon felt compelled to give an upward 25% adjustment for residential location for each of these properties.
The buyer of sale 3 applied for a permit to construct a 9,000 square foot building with retail space a restaurant and 29 on-site parking spaces. A combined retail and office building with 50 on site parking spaces was constructed on sale 4 and a one story branch bank with on site parking was constructed on sale 5.
These actual uses, which are consistent with the busy commercial character of these locations, represent the highest and best use of each of the properties. These commercial uses are more intensive commercial uses than the neighborhood retail office use contemplated in the Rampulla plan. They are distinctly different from the highest and best use of the subject property.
Additionally, the buildable square footage used by Salmon to calculate the value per square foot of sales 3, 4, and 5, appears to be significantly less than the allowable FAR and lot coverage permitted under the zoning of each property, for a mixed commercial and residential building.
Sales 3, 4, and 5, are not comparable and thus should not considered by in valuing the subject property.
Sales 1 and 2 are located within a couple of blocks of the subject property and have the same zoning, C1–1 (R3–2), as the subject property. The sales were in fact close in time to the vesting date, occurring on March 25, 2008, and May 3, 2006 respectively.
The two appraisers came up with widely divergent adjusted values per developable square foot for sales 1 and 2. However, the divergence was a result of each appraiser using a different amount of developable square feet for sale 1 and 2.
The appraisers also differ over the size of the lot and the purchase price of sale 2. Salmon sizes the lot at 17,439 square feet and Sterling has it at 19,476 square feet.
More significantly Salmon divides the sales price by 12,072 square feet, which represents his estimate of the potential building floor area. However, he does not substantiate the basis for estimating that to be the potential building floor area. In the case of sale 2, the existing use is a vacant commercial building and there was no evidence presented of any development plans for the property.
Sterling divided the purchase price of sale 2 by 22,764 square feet. Sterling based his use of 22,764 developable square feet on a concept plan developed by HDR which determined that the maximum density allowed on the site would be 22,764 square of mixed commercial, community facility and residential space.
Claimant's counsel questioned whether the HDR's plan complied with the New York City Building Code, specifically whether the proposed second story community facility space would required a separate handicapped accessible entrance and an elevator. However, no evidence was actually introduced that such accommodations were required or that it would not be feasible to include them in the proposed building.
Further, the City's rebuttal report contains copies of the plans filed for the buildings actually constructed on sale 1 and they include three story buildings similar to that proposed by HDR for sale 2, which show second story community facility spaces without elevators.
However, Sterling's adjustments for sale 2 fail to adequately adjust for the superior location of the subject property as compared to sale 2, for commercial uses. The Rampulla plan, the HDR proposal for sale 2, and the actual development on sale 1 all have ground floor commercial uses. Sterling gives an upward adjustment of 15% for the location of sale 2 which is the same adjustment he gives for the location of sale 1. Sale 1 is located on Sand Lane which is a through street that has several commercial uses. HDR's plan for Sale 2 proposes buildings fronting Quincy Ave, a short non-through street off Sand Lane which is less valuable for commercial use. Also, the rest of Quincy Avenue has only residential uses. This difference in value between sales 1 and 2 is corroborated by the fact that, assuming HDR's plan, the unadjusted price for square foot for sale 2 was $20 less than sale 1.
Further, the Crestwater project which was developed adjacent to the subject property, on a non through street indirectly off Sand Lane, was built as residential without any commercial or community facility use. A zoning map, included in the Claimant's appraisal report, indicates that the Crestwater property has the same R3–2 zoning as the subject property and as sales 1 and 2. This is a further indication that buildings fronting on Quincy Avenue would be less valuable for commercial use than either sale 1 or the subject property.
In fact, Sterling recognized the superior location of sale 1 even though he adjusted both sale 1 and 2 by the same 15% for location. He gave sale 1 more weight than sale 2 in arriving at his mean adjusted value of $100 per square foot,
The location adjustment for sale 2 should be increased in recognition of its inferior location as compared to sale 1 and the subject property. This would significantly reduce the difference in adjusted value of sale 1 and sale 2 and bring the adjusted value of sale 2 closed to that of sale 1.
For these reasons, and the fact the Sale 1 was actually developed with 3 story mixed use buildings much like those proposed in the Rampulla plan, sale 1 is the most appropriate comparable sale for the subject property.
Salmon put the unadjusted value of sale 1 at $211 a square foot based his estimate that 11,076 square feet could be built on the site. Sterling, on the other hand, divided the purchase price of $2,300,000 by 22,252 square feet with a result of $103 a square before adjustments.
Sterling used the square footage of the actual construction on the property, based on building department records. Salmon was unable to substantiate the basis for his estimate of square footage. The evidence of what was actually built, supports Sterling's use of 22,252 square feet as the basis for determining the value per developable square foot for sale 1.
The individual adjustments made by each appraiser varied by category. However the major difference in the adjustments was that Sterling included extraordinary construction and mitigation costs as an adjustment to the comparable sales while Salmon did not include those costs as an adjustment but subtracted those costs after calculating the average adjusted value. Also, Salmon adjusted upward by 25% for the waterfront location while Sterling added only a 15% adjustment. Additionally, Salmon added 40,000 for demolition to the purchase price, while Sterling made an upward adjustment of 2%, which equals a little over $45,000 to account for demolition costs.
Sterling's adjustments are reasonable and the Court accepts his adjusted valuation of sale 1 with the proviso that a change in the manner in which extraordinary construction and mitigation costs is factored in must be made.
Sterling calculated the extraordinary costs not by subtracting HDR's estimate from the adjusted value of the subject property but by making a percentage adjustment to the value of the comparable sales. An estimate of extraordinary costs is by its nature is inexact because it is an estimate of costs for developing a project that has not been built based on average industry costs applied to projected linear, square or cubic footage. When one converts such projected costs of developing the subject property to a percentage of the value of a different property, further deviation from the actual costs is necessarily introduced.
Sterling's adjusted value for sale 1 is $105 and includes a 20% deduction for extraordinary construction and mitigation costs which reduces the unadjusted value of $103 per square foot by approximately $20.60. When applied to the 22,252 square feet of sale 1, it results in costs of $458,350. However, when applied to the 73,300 square feet of the Rampulla plan, this $20.60 per square foot adjustment equals $1,509,980. This far exceeds even the high end of HDR's extraordinary cost estimate of between $477,000 to $677,000. However HDR's extraordinary costs estimate was based on the smaller HDR rebuttal proposal. It would be speculative to attempt to extrapolate from the HDR extraordinary costs what the costs for the Rampulla plan would be. For this reason it is appropriate to use CEA's higher extraordinary cost estimates rather than HDR's.
If the 20% downward adjustment for extraordinary costs is removed from Sterling's adjustments then the adjusted value for sale 1 is approximately $126 a square foot.
Applied to the 73,308 square feet of the Rampulla plan this results in a value of the subject property of $9,236,808. From this must be subtracted the extraordinary construction and mitigation costs estimated by CEA.
CEA estimated the extraordinary construction costs at $985,967 and wetland mitigation costs at $158,617 for a total of $1,144,584.
Additionally, given that DEC required an EIS as part of RAMFIS's 1983 application, and that the Rampulla plan would disturb a significant portion of wetlands adjacent uplands, which would likely impact the wetlands, it is probable that an Environmental Impact Statement (EIS) would be required for the Rampulla plan. However, Claimant has already conducted a delineation and has prepared a mitigation plan which deals with some of the environmental impacts of the development. As these would be a large part of the preparation of an EIS, a appropriate estimate for completing an EIS for the project would be $100,000. This would bring the total mitigation and extraordinary costs to $1,244,584.
When extraordinary construction and mitigation costs of $1,244,584 are deducted from the adjusted value of $9,236,808, then final value is $7,992,224 or $7,992,000 rounded.
Wherefore, the court finds that the value of the property for condemnation purposes on the date of taking was $7,992,000. Settle judgment and order on notice.