Eminent Domain Law

Condemnation Award Must Reflect Probability That Current Zoning Constitutes Regulatory Taking

Matter of New Creek Bluebelt, Phase 4, Paolella v. City of New York

NYLJ 11/21/14, p. 23, col. 2

AppDiv, Second Dept.

(memorandum opinion)

In a condemnation proceeding, both claimants and the city appealed from a decree, after a nonjury trial, awarding claimant $810,000 for the property condemned. The Appellate Division affirmed, holding that claimants had adequately established a reasonable probability that the city's prior regulation had worked a taking, and that the city had adequately established that developing the property would entail extraordinary costs.

Some time after claimants obtained title to vacant Staten Island land, the city designated the land as wetlands. Later, in 2007, the city acquired the property by condemnation as part of the New Creek Bluebelt. Claimant sought $1,090,000 as just compensation. Supreme Court held that landowner had established a reasonable probability that the imposition of wetlands regulation worked a regulatory taking. As a result, the court held that it would add 75% to the regulated value of the land to reflect the premium that a reasonable buyer would pay for the probability of a successful takings challenge. The court then reduced the value by $723,000 to reflect extraordinary development costs claimants would face in developing the property, arriving at a final compensation award of $810,000. Both parties appealed.

In affirming, the Appellate Division first held that Supreme Court property added the 75% increment to regulated value. The court noted first that claimants had produced evidence that the wetlands regulation resulted in an 82% reduction in property value, and second that the parties agreed that it was highly improbable that the DEC would have issued a permit to develop the property in accordance with applicable zoning. As a result, claimants had established a reasonable probability that the wetlands regulation worked a taking. Those facts justified Supreme Court's award of a 75% increment above regulated value, especially because, at trial, the city's expert disavowed his own lower proposed increment. The Appellate Division then rejected claimants' argument that Supreme Court had erred by accepting the city's estimate of the extraordinary costs it would take to develop the property. The Appellate Division observed the Supreme Court had discretion to determine that the city's expert was qualified to testify on the extraordinary cost issue, and held that the determination to credit the expert's estimate was supported by the record.

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Court's Award May Depart From Appraisals By Both Experts

Matter of Metropolitan Transportation Authority v. Longridge Associates

NYLJ 11/21/14, p. 29, col. 5

AppDiv, Second Dept.

(memorandum opinion)

In a condemnation proceeding, condemnor appealed from Supreme Court's award of $3,675,000 to claimant. The Appellate Division affirmed, holding that Supreme Court's award was adequately supported by the record.

The Metropolitan Transportation Authority condemned claimant's vacant land. Claimant's expert contended at trial that the land's highest and best use was as a retail development, while the MTA contended that the highest and best use was as vacant land. Supreme Court rejected the premise of the MTA's appraisal, and accepted the claimant's appraisal, with some adjustments. The MTA appealed.

In affirming, the Appellate Division held that once the court rejected the MTA's appraisal, the court was bound to accept the claimant's appraisal or explain the basis for any departures. In this case, Supreme Court adequately explained its reasons for departures from the claimant's appraisal, and its determination was entitled to deference.

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Condemnation Award Must Reflect Probability That Current Zoning Constitutes Regulatory Taking

Matter of New Creek Bluebelt, Phase 4, Paolella v. City of New York

NYLJ 11/21/14, p. 23, col. 2

AppDiv, Second Dept.

(memorandum opinion)

In a condemnation proceeding, both claimants and the city appealed from a decree, after a nonjury trial, awarding claimant $810,000 for the property condemned. The Appellate Division affirmed, holding that claimants had adequately established a reasonable probability that the city's prior regulation had worked a taking, and that the city had adequately established that developing the property would entail extraordinary costs.

Some time after claimants obtained title to vacant Staten Island land, the city designated the land as wetlands. Later, in 2007, the city acquired the property by condemnation as part of the New Creek Bluebelt. Claimant sought $1,090,000 as just compensation. Supreme Court held that landowner had established a reasonable probability that the imposition of wetlands regulation worked a regulatory taking. As a result, the court held that it would add 75% to the regulated value of the land to reflect the premium that a reasonable buyer would pay for the probability of a successful takings challenge. The court then reduced the value by $723,000 to reflect extraordinary development costs claimants would face in developing the property, arriving at a final compensation award of $810,000. Both parties appealed.

In affirming, the Appellate Division first held that Supreme Court property added the 75% increment to regulated value. The court noted first that claimants had produced evidence that the wetlands regulation resulted in an 82% reduction in property value, and second that the parties agreed that it was highly improbable that the DEC would have issued a permit to develop the property in accordance with applicable zoning. As a result, claimants had established a reasonable probability that the wetlands regulation worked a taking. Those facts justified Supreme Court's award of a 75% increment above regulated value, especially because, at trial, the city's expert disavowed his own lower proposed increment. The Appellate Division then rejected claimants' argument that Supreme Court had erred by accepting the city's estimate of the extraordinary costs it would take to develop the property. The Appellate Division observed the Supreme Court had discretion to determine that the city's expert was qualified to testify on the extraordinary cost issue, and held that the determination to credit the expert's estimate was supported by the record.

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Court's Award May Depart From Appraisals By Both Experts

Matter of Metropolitan Transportation Authority v. Longridge Associates

NYLJ 11/21/14, p. 29, col. 5

AppDiv, Second Dept.

(memorandum opinion)

In a condemnation proceeding, condemnor appealed from Supreme Court's award of $3,675,000 to claimant. The Appellate Division affirmed, holding that Supreme Court's award was adequately supported by the record.

The Metropolitan Transportation Authority condemned claimant's vacant land. Claimant's expert contended at trial that the land's highest and best use was as a retail development, while the MTA contended that the highest and best use was as vacant land. Supreme Court rejected the premise of the MTA's appraisal, and accepted the claimant's appraisal, with some adjustments. The MTA appealed.

In affirming, the Appellate Division held that once the court rejected the MTA's appraisal, the court was bound to accept the claimant's appraisal or explain the basis for any departures. In this case, Supreme Court adequately explained its reasons for departures from the claimant's appraisal, and its determination was entitled to deference.

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