NY Appellate Court Holds Record Supported Trial Court’s Pre-Taking Value of Real Property Based on State’s Appraisal

This post was authored by Matthew Loescher, Esq. 

This appeal centered around the determination of just compensation for the partial taking of property in Greenpoint, Brooklyn, owned by the claimant, 20 Rewe Street, Ltd. Prior to the taking, the parcel was a 39,900 square foot double-cornered property with a maximum floor area ratio (“FAR”) of 2.0, located in a M3–1 (Manufacturing/Industrial) zone. The property was unimproved, except for a concrete wall and a chain-link fence, and was used for storage and the parking of construction equipment and vehicles. In January 2012, the New York State Department of Transportation appropriated 27,041 square feet of the northern side of the property as part of the Kosciuszko Bridge Project, leaving a remainder property of approximately 206 feet by 60 feet (12,859 square feet). The claimant commenced this claim seeking damages from the State as just compensation for the taking. Following a trial, the Court of Claims awarded the claimant the sum of $3,310,500.

On appeal, the court noted that the determination of the Court of Claims to credit the appraisal of the State’s expert, with one adjustment, over that of the claimant’s expert was supported by the record and was adequately explained. Contrary to the claimant’s contention, the Court of Claims did not base its determination of the amount of consequential damages to the remainder property on a finding as to the highest and best use of the remainder property. Instead, the court applied a percentage reduction to the value of the remainder parcel per square foot of FAR, utilizing the higher 20% figure proffered by the State as an admission against the State’s interest. The claimant did not challenge the percentage diminution method used by the court. As the claimant proffered a lower diminution figure, it failed to meet its burden of establishing an entitlement to higher severance damages. Accordingly, the determination of the Court of Claims to award the claimant the principal sum of $3,310,500 as just compensation for the taking was affirmed.

20 Rewe Street, LTD v State of New York, 174 N.Y.S.3d 117 (2 Dept. 9/14/2022)