Posted by: Patricia Salkin | August 7, 2015

NY Appellate Court Finds County’s Valuation of Property in Question In Partial Taking Condemnation Proceeding was Inadequate

The undeveloped property at issue in this partial taking condemnation proceeding was located in the Village of Kiryas Joel and consisted of 70.70 acres prior to the taking, and 69.23 acres after the taking. The claimant, Monroe Bakertown Road Realty, Inc., and the petitioner, County of Orange, agreed that high density housing was the highest and best use of the subject property. At a nonjury trial, Monroe Bakertown and the County offered opposing evidence as to the density and scope of the housing project that could be built on the property. The appraiser for Monroe Bakertown testified that he employed a comparable sales approach that analyzed three sales of vacant land within the Village which had taken place in the three years prior to his appraisal and had been approved for multi-family residential units. After making various adjustments to those sales prices based on time, location, size, zoning, and topography, the appraiser valued the entire property, prior to taking, at $27,150,000, and after taking, at $26,050,000, or a difference of $1,100,000. The County’s appraisal was also based on a comparable sales methodology, but it analyzed four recent sales of vacant land located outside the Village limits. The Supreme Court concluded that “[t]he lack of adequate water supply is a predominate factor which cannot be disregarded and leads this court to accept the evaluation placed on the property by the County of Orange.”

The court noted, that when private property is taken for public use, the condemning authority must compensate the owner so that he may be put in the same relative position, insofar as this is possible, as if the taking had not occurred. Here, where there is a partial taking of real property, the measure of damages is the difference between the value of the whole before the taking and the value of the remainder after the taking. The court found that the evidence demonstrated, and the parties agreed, that a high density, multi-family residential development was the highest and best use of the subject property. While the County’s witness testified that the County would not have permitted a high density residential project on the property due to the lack of available water, proof was adduced that the Village had undertaken efforts to increase its water well supply capacity. This uncertainty over water availability and governmental approval would affect the price an open market buyer would be willing to pay for the property. Accordingly, by rejecting the appraisal of Monroe Bakertown and simply adopting the County’s appraisal, the Supreme Court failed to adequately take into account how the market would factor the water supply uncertainty and governmental approval issues into the selling price of this property.

The court therefore concluded that the facts adduced at trial did not warrant the determination that the appraised valuation submitted by the County had to be accepted. For that reason the court remitted the matter to the Supreme Court, Orange County, to recalculate the value of the subject property in accordance with this decision and order, and for the entry of an amended judgment.

County of Orange v Monroe Bakertown Road Realty, 2015 WL 4255295 (NYAD 2 Dept. 7/15/2015)


Responses

  1. This case provides an excellent example of small issues (that have a large impact) that can arise in the eminent domain context. The taking of private property takes an emotional toll on the people who own the property. In some cases the compensation received does not cover the intrinsic and extrinsic value of the property that was taken. As seen in this case, the compensation that was to be paid to the private property owner might not reflect the actual market value of the property. Something as small as water supply could substantially change the valuation when determining just compensation. The property should be used for its highest and best use and the developers sought that in this case. However, small things, like water, impacts the use of eminent domain.


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