Eminent Domain Law

Landowner Fails to Establish Condemnation Blight

Matter of Village of Spring Valley v. N.B.W. Enterprises, Ltd.

NYLJ 2/25/08, p. 22, col. 3

Supreme Ct., Westchester Cty

(LaCava, J.)

In an eminent domain proceeding, landowner sought additional compensation due to 'condemnation blight.' The court held that landowner had not established condemnation blight, and valued the property based on capitalization of income.

Landowner purchased the property in the 1980s for $147,000 and made capital improvements of $140,000. In early 2000, the village conducted a blight study that identified the subject premises as being subject to condemnation. The village ultimately condemned the property on Aug. 23, 2005. At trial on the issue of value of the property, landowner introduced evidence based on capitalization of income, and also introduced evidence of comparable sales. Landowner also sought an increase in compensation due to condemnation blight. The village also produced an expert who testified as to capitalization of income and condemnation blight.

In awarding landowner $325,000, the court discredited much of the village expert's testimony, noting that several of the figures used by the village inspector were unreliable, and that the figures used by the inspector resulted in a value considerably smaller than the equalized value of the property for real estate tax purposes. The court made adjustments to the figures generated by landowner's expert, and noted that, as adjusted, an income capitalization method generated a value of $325,000 while a comparable sales approach generated a value of $315,000. The court awarded the higher of the two, but concluded that no additional compensation was due for condemnation blight, because the landowner had not demonstrated than any of the blight was due to any actions taken by the village, and because the landowner had provided no evidence of any value of the premises at any time earlier than the valuation date.

COMMENT

Where landowner's property value decreases as a result of the condemning authority's actions before actual condemnation, the landowner is entitled to additional compensation for condemnation blight. In City of Buffalo v. George Irish Paper Company, 31 A.D.2d 470, prior to actual condemnation, the city informed the landowner's current tenants of the city's intent to condemn the property and stopped garbage pick-up from the site. These actions caused tenants to vacate and adversely affected an otherwise fully-occupied property. Since it was the condemning authority's actions that caused tenant departure and lowered property value, the court concluded that the landowner was entitled to additional compensation. Similarly, in In re Lynbrook, 75 Misc. 2d 678, where the condemning authority recorded an agreement that disclosed its intention to condemn landowner's property, thereby putting prospective tenants on record notice of the future condemnation, the court held that the condemning authority had depressed the property's rental value, and the landowner was entitled to recover to the extent of that decreased value. However, where the actions of the condemning authority are not the cause of reduced property value, a landowner is not entitled to additional compensation for condemnation blight. Accordingly, in Matter of Village of Port Chester v. Brody, 43 A.D.3d 943, the court denied landowner's claim for condemnation blight because landowner's decline in property value occurred not as a result of the condemnation but instead because the condemned property was located in a neighborhood with already depressed real estate values. Additionally, in Samfred Belt Line Corp. v. State of New York, 43 A.D.2d 62, where the city condemned a portion of the landowner's property, thereby foreclosing construction of a lucrative regional shopping center with the remaining portions of land, the court held that condemnation blight did not exist because the landowner had abandoned plans to develop the shopping center before he learned about the city's condemnation plans. Therefore, even though the landowner built less valuable office space instead of more valuable retail space, the landowner did not receive additional compensation because the condemning authority's actions did not cause the decrease in landowner's property value.

In Matter of Village of Spring Valley, as in Matter of Village of Port Chester and Samfred Belt Line Corp, the court refused to award landowner additional compensation for condemnation blight because landowner's alleged decrease in property value was caused not by any demonstrable action by the condemning authority but instead by decreased market demand for rental residential space in that neighborhood and regionally depressed apartment property values.

Landowner Fails to Establish Condemnation Blight

Matter of Village of Spring Valley v. N.B.W. Enterprises, Ltd.

NYLJ 2/25/08, p. 22, col. 3

Supreme Ct., Westchester Cty

(LaCava, J.)

In an eminent domain proceeding, landowner sought additional compensation due to 'condemnation blight.' The court held that landowner had not established condemnation blight, and valued the property based on capitalization of income.

Landowner purchased the property in the 1980s for $147,000 and made capital improvements of $140,000. In early 2000, the village conducted a blight study that identified the subject premises as being subject to condemnation. The village ultimately condemned the property on Aug. 23, 2005. At trial on the issue of value of the property, landowner introduced evidence based on capitalization of income, and also introduced evidence of comparable sales. Landowner also sought an increase in compensation due to condemnation blight. The village also produced an expert who testified as to capitalization of income and condemnation blight.

In awarding landowner $325,000, the court discredited much of the village expert's testimony, noting that several of the figures used by the village inspector were unreliable, and that the figures used by the inspector resulted in a value considerably smaller than the equalized value of the property for real estate tax purposes. The court made adjustments to the figures generated by landowner's expert, and noted that, as adjusted, an income capitalization method generated a value of $325,000 while a comparable sales approach generated a value of $315,000. The court awarded the higher of the two, but concluded that no additional compensation was due for condemnation blight, because the landowner had not demonstrated than any of the blight was due to any actions taken by the village, and because the landowner had provided no evidence of any value of the premises at any time earlier than the valuation date.

COMMENT

Where landowner's property value decreases as a result of the condemning authority's actions before actual condemnation, the landowner is entitled to additional compensation for condemnation blight. In City of Buffalo v. George Irish Paper Company, 31 A.D.2d 470, prior to actual condemnation, the city informed the landowner's current tenants of the city's intent to condemn the property and stopped garbage pick-up from the site. These actions caused tenants to vacate and adversely affected an otherwise fully-occupied property. Since it was the condemning authority's actions that caused tenant departure and lowered property value, the court concluded that the landowner was entitled to additional compensation. Similarly, in In re Lynbrook, 75 Misc. 2d 678, where the condemning authority recorded an agreement that disclosed its intention to condemn landowner's property, thereby putting prospective tenants on record notice of the future condemnation, the court held that the condemning authority had depressed the property's rental value, and the landowner was entitled to recover to the extent of that decreased value. However, where the actions of the condemning authority are not the cause of reduced property value, a landowner is not entitled to additional compensation for condemnation blight. Accordingly, in Matter of Village of Port Chester v. Brody, 43 A.D.3d 943, the court denied landowner's claim for condemnation blight because landowner's decline in property value occurred not as a result of the condemnation but instead because the condemned property was located in a neighborhood with already depressed real estate values. Additionally, in Samfred Belt Line Corp. v. State of New York, 43 A.D.2d 62, where the city condemned a portion of the landowner's property, thereby foreclosing construction of a lucrative regional shopping center with the remaining portions of land, the court held that condemnation blight did not exist because the landowner had abandoned plans to develop the shopping center before he learned about the city's condemnation plans. Therefore, even though the landowner built less valuable office space instead of more valuable retail space, the landowner did not receive additional compensation because the condemning authority's actions did not cause the decrease in landowner's property value.

In Matter of Village of Spring Valley, as in Matter of Village of Port Chester and Samfred Belt Line Corp, the court refused to award landowner additional compensation for condemnation blight because landowner's alleged decrease in property value was caused not by any demonstrable action by the condemning authority but instead by decreased market demand for rental residential space in that neighborhood and regionally depressed apartment property values.