Opinion
December 2, 1971
Appeal from the Court of Claims.
Present — Del Vecchio, J.P., Gabrielli, Moule, Cardamone and Henry, JJ.
Judgment unanimously modified on the law and facts in accordance with memorandum, and as so modified, affirmed, with costs to claimant. Memorandum: The claimant has appealed from an award of $88,242, contending that it is inadequate. The premises taken consist of two parcels of land improved by a six-story masonry building in the City of Rochester. There was a total taking of claimant's property for highway purposes. In fixing its award the trial court incorrectly relied exclusively upon reproduction costs of the building less depreciation ($60,000) and added to it the value of the land ($28,242). There is no indication in the record that the trial court considered either capitalization of income or market data. This was error. Unless a building is either a specialty or unique, an award cannot be based solely on the reproduction cost approach ( Matter of City of Rochester [ Morris], 32 A.D.2d 882). A specialty has been defined as a building designed for unique purposes or a building which produces income only in connection with the business conducted in it ( Matter of City of New York [ Lincoln Sq. Slum Clearance Project], 15 A.D.2d 153, 171, affd. 12 N.Y.2d 1086). Reproduction cost analysis is proper only where rebuilding is the sole method by which an owner can acquire similar premises ( Matter of City of New York [ First Elephant Estates — La Hermosa Church], 17 A.D.2d 317). The claimant's building was being used as an ordinary warehouse for storage purposes prior to the taking and does not qualify as a specialty. In our view the award of $88,242 as damages for this entire taking was inadequate. We are not required, however, to remit for a new trial since there is sufficient evidence found in the record upon which we may make new findings as to damages ( Slepian v. State of New York, 35 A.D.2d 462, 464). The most satisfactory evidence in the record upon which a proper award may be determined is found in the income approach. We find the fair rental value of the building (considering comparable leases to ascertain economic rent) was $.75 per square foot for 29,562 square feet or $22,000, from which we deduct 6% for vacancy ($1,320) resulting in gross annual income of $20,680. After further deducting expenses (taxes, insurance, management and repairs) totaling $4,600, the net annual income amounted to $16,080. The trial court valued the land at $3.50 per square foot or $28,242 which was within the range of the testimony and properly determined. Applying the State appraiser's 8 1/2% rate for capitalization of the land to the $28,242, resulted in $2,400 income attributable to land, which deducted from the net annual income ($16,080) left a remainder of $13,680. Employing the State appraiser's 15.2% rate of capitalization for the improvement, we find a value for the building of $90,000 ($13,680 divided by 15.2%) to which the value of the land ($28,242) is added, producing a total value by the income approach of $118,242. This is a proper method of determining value where there is ample support for it in the record ( City of Buffalo v. Joseph Davis, Inc., 32 A.D.2d 604). We conclude that an award of $118,242 is warranted on this record and that the judgment should be modified accordingly.