Opinion
4009/09
06-10-2015
In the Matter of the City of New York Relative to Acquiring Title in Fee Simple absolute in certain Real Property, where not heretofore acquired, for Oakwood Beach Bluebelt, Stage 1 Within an area generally bounded by Fairbanks Avenue and Dugdale Street to the North; Riga Street to the East; Emmet Avenue to the South; and Grayson Street to the West; in the County of Richmond, City and State of New York. Yeshivas Ch'san Sofer, Inc.,Claimant, v. The City of New York Condemnor.
City Attorney Zachary W. Carter Corporation Counsel of the City of New York 100 Church Street New York, New York 10007-2601 (212) 356-2668 Claimants Attorney Goldstein Rikon & Rikon and Houghton, LLP 381 Park Avenue, Suite 901 New York, New York 10016 (212) 422-4000 Michael Rikon, Esq.
City Attorney
Zachary W. Carter
Corporation Counsel of the City of New York
100 Church Street
New York, New York 10007-2601
(212) 356-2668
Claimants Attorney
Goldstein Rikon & Rikon and Houghton, LLP
381 Park Avenue, Suite 901
New York, New York 10016
(212) 422-4000
Michael Rikon, Esq.
Wayne P. Saitta, J.
At issue in this condemnation proceeding is the just compensation to be awarded to Claimant YESHIVAS CH'SAN SOFER, INC., for the taking of the subject property, located on Staten Island. The Condemnor, THE CITY OF NEW YORK, took title on June 25, 2009 (the vesting date). The Court viewed the property on October 6, 2014, and a non-jury trial was held on, October 20-23, 2014.
FACTS
The City acquired the subject property for use as part of the CITY's Oakwood Beach Bluebelt Stage 1 project. The subject property covers approximately 7 acres in the Oakwood Beach section of Staten Island and totals 472,390 square feet. When street beds are excluded the property totals 305,963 square feet. The subject property is comprised of Block 4692, Lots 1, 11, 18, 21 ,28, 33; Block 4736, Lots 1, 6, 15; Block 4737, Lots 1, 5, 7, 9, 13, 18;Block 4738, Lots 1, 3, 13; Block 4739 Lots 1, 3, 9, 20, 29; and Block 4740 Lots 16, 21, 24, 33, 35, 36, 37, 41. The property, is comprised of 466,611 square feet of designated wetlands and 5,779 square feet of wetlands adjacent uplands. The property is undeveloped and there are no opened streets on most of the property.
The subject property was donated to the Claimant in various parcels in 1980 and 1981. Claimant planned to develop a rabbinical seminary with student and faculty housing on the site.
The property was not mapped as a wetland on the first tentative wetlands map of Richmond County issued in 1981, but was included on the 1985 map.
Claimant successfully pursued a hardship application before the Freshwater Wetlands Appeals Board in 1991. The property remained undeveloped as of the date of vesting, June 25, 2009.
Claimant's appraiser, Brent Lally, asserts that the highest and best use of the subject property is to be developed as a rabbinical seminary as outlined in a development analysis by Todd Ettlinger, P.E.
Ettlinger's proposal calls for construction of a synagogue, amphitheater, and three seven story buildings for classrooms and dormitories. The synagogue is planned at 15,000 square feet, the amphitheater at 8,000 square feet and the classrooms and dormitories at 279,000 square feet. The total floor area of the proposed development is 302,000 square feet.
The CITY's appraiser Bob Sterling, MAI, asserts that Claimant fails to demonstrate that Ettlinger's proposed seminary is financially feasible or maximally productive. Specifically, Sterling states that Claimant has failed to show that there is a demand or market for the proposed seminary at the location. Sterling notes that the most common proof of such a demand would be sales of land developed for similar purposes, and that Claimant's appraiser cited no such sales. Sterling adds that the fact that the Claimant has not developed the seminary in the over 25 years it owned the property is evidence that proposed seminary is not a viable use of the property.
The CITY contends that the highest and best use of the property is to remain undeveloped. Sterling stated that in the absence of legal and physical restraints the highest and best use of the site would be for residential development. He further stated that while it is probable that a wetland permit for limited development would be issued, the extraordinary costs involved in developing the site makes such development financially infeasible, and the property would have zero market value as developed.
Sterling valued the parcel, assuming it was not subject to wetlands regulations, at $13,174,000, but found, based on an estimate by Henningson, Durham & Richardson Architecture and Engineering PC (HDR), that the extraordinary costs needed to develop the property residentially were $16,794,000. Thus the extraordinary costs exceeded the value by some $3,500,000.
Sterling also valued the property assuming that a wetlands permit could be obtained to develop part of the property, at $3,809,000, before extraordinary costs. The study by HDR estimates the extraordinary development costs for developing part of the parcel as residential, at $ 4,525,000, which exceeded the value of the property as partially developed.
Claimant submitted no rebuttal to contest the financial infeasibility of residential development on the site.
As a preliminary issue, Claimant argues that the CITY's appraiser should be sanctioned for not saving earlier drafts of his report and that the Court should take a negative inference from his failure to retain the drafts. Claimant argues that failure to retain a draft violates the Uniform Standards of Professional Appraisal Practice (USPAP), while the CITY argues that USPAP contains no requirement that drafts be retained.
The 2010-2011 edition of USPAP, which was in effect at the time the appraisal was completed, requires that an Appraiser must prepare a work file which includes among other items, "true copies of any written reports, documented on any type of media" USPAP 2010-2011 Edition U-9.
Claimant is incorrect in its assertion that the requirement to retain copies of any written reports applies to drafts. USPAP defines the term report as "any communication, written or oral, of an appraisal, appraisal review, or appraisal consulting service that is transmitted to the client upon completion of an assignment." USPAP 2010-2011 Edition U-4. Limiting the term "report" to communications transmitted to the client upon completion of an assignment clearly does not include drafts. While there may be changes made to the definition of the term report or to the record keeping requirements in the upcoming 2016-2017 edition of USPAP, the edition in effect at the time the appraisal was done did not require the retention of drafts.
However, the fact that USPAP does not require retention of drafts does not end the inquiry as to whether a negative inference should be taken. An adverse inference is permitted where a document which is in the control of a party, and that is material and non-cumulative, is not produced by that party, without a reasonable explanation for non-production. An adverse inference can also be taken where a party destroys such a document without reasonable explanation. Whether there was a legal requirement to retain the document is not necessarily dispositive, but only one factor in determining whether there was a reasonable explanation for destruction of the document. The adverse inference that may be drawn, is that the document would not support the position of the party at trial or would support the position of the opposing party.
A party's appraiser is under control of the party for purposes of an adverse inference. Earlier drafts of an appraiser's report may be relevant if there is evidence that the party has influenced the opinion of the appraiser or an appraiser has changed his opinion at the behest of its client. An appraiser's opinion should be based on the appraiser's independent judgment. Of course, an appraiser may rely on facts and assumptions given to him by other experts or by his client, but the report must clearly state where the appraiser is relying on outside material or assumptions. Only in this way can a trier of fact properly weigh an appraiser's opinion.
In this case there was no basis to conclude that the earlier draft of Sterling's report was material or non-cumulative. The only evidence before the Court was Sterling's testimony that there were no changes between the draft and final report, other than deleting the term draft in the final report. Thus, the Court finds no basis, in this case, for drawing an adverse inference from the destruction of Sterling's draft.
In determining the value of the subject property, the first question before the Court is: what is the highest and best use of the property? The highest and best use of a property is a use that is 1) legally permissible, 2) physically possible, 3) financially feasible, and 4) maximally productive.
Ettlinger's development analysis establishes that the proposed development is physically possible on the site, although it would involve certain extraordinary costs
The subject property is in an R3X district which permits single and two family homes and also allows community facility uses, such as a seminary with housing.
Even though the property is almost entirely wetlands, Claimant would have been able to get a permit for the proposed seminary development absent the taking. In a decision and order dated January 10, 1991, the New York Freshwater Wetlands Appeals Board found that the manner in which DEC mapped the subject property as a designated wetlands created a hardship to Claimant. The Board directed Claimant to file a wetlands permit application and directed DEC to issue a wetlands permit to Claimant for the development of an educational facility. In a subsequent order and decision, the Wetlands Board clarified that it approved the inclusion of staff and student housing as part of the development on the site, and clarified that it did not limit development on the site to 53,000 square feet.
The City did not challenge that the proposed seminary is both legally and physically possible. Rather, it argues that Claimant has not demonstrated that the proposed seminary is financially feasible and maximally productive.
In determining whether a proposed use is the highest and best of a property one may consider the availability of financing, costs of construction, taxes, possible profits and the like in arriving at his conclusion concerning the highest and best use of the land, and its probable market price. Matter of City of New York (Broadway Cary Corp.), 34 NY2d 535, 354 N.Y.S.2d 100 (194); Matter of City of New York (Rudnick), 25 NY2d 146, 303 N.Y.S.2d 47 (1969).
Inherent in the concept of financial feasibility is that the investor could realize a profit, either by operating the property developed for such use or selling after developing it for such use.
The fact that Claimant would have developed the site, not as a speculative investment or to make a profit, does not mean such a use is not financially feasible or maximally productive. Here the Claimant intended to develop the property to use in carrying out its educational and religious mission. A non-profit or religious organization must compete with for profit investors or developers in procuring land for their non-profit purposes, and thus generally must pay market price such land. Therefore, there is an economic basis to value land a non-profit institution develops for their own purposes.
In this way, it is no different than valuing a property that a secular educational institution such as NYU or Columbia University purchases, or obtains indirectly through eminent domain, to develop as classrooms or dormitories
Where a non-profit organization seeks a property to carry out its mission, the organization's decision to develop does not depend on whether such a development can be operated or sold at a profit, but whether it is suitable to the needs of the organization in pursuing its mission. Thus the criteria of whether a proposed highest and best use by a non-profit is financially feasible is not defined by whether the proposed use could be operated or sold at a profit.
The fourth criteria, in determining highest and best use, whether the proposed use is the maximally productive use, is necessarily subjective when applied to a non-profit use. Whether a non-profit use such as an educational facility is more productive than a given for profit use is not a strictly economic comparison.
However, determining whether a use is maximally productive involves a comparison to the other uses that the property could be put which are legally and physically possible.
In this case, the only legal use of the property other than for community facilities, is to develop one or two family homes on part of the site. However, as Sterling's report demonstrates, because of the high extraordinary costs in developing either part of the site or the whole site residentially, such a use is not financially feasible, and thus the property has no value as a site for residential development. Clearly, the proposed seminary is a more productive use than leaving the property vacant.
More relevant, is the CITY's argument that the proposed use an educational facility is speculative, based on the absence of sales of other sites in the vicinity to be developed as educational facilities and the Claimants failure to develop the property.
The measure of damages in a condemnation proceeding " must reflect the fair market value of the property in its highest and best use on the date of the taking, regardless of whether the property is being put to such use at the time' " Chester Indus. Park Assoc., LLP v. State of New York, 65 AD3d 513, 514, 884 N.Y.S.2d 243, quoting Chemical Corp. v. Town of E. Hampton, 298 AD2d 419, 420, 748 N.Y.S.2d 606.
"The determination of highest and best use must be based upon evidence of a use which reasonably could or would be made of the property in the near future" City of Long Beach v Sun NLF Ltd. Partnership, 1 NYS 3d 270 (2nd Dept 2015); Yaphank Dev. Co. v. County of Suffolk, 203 AD2d 280, 281, 609 N.Y.S.2d 346; Matter of City of New York [Broadway Cary Corp.], 34 NY2d 535, 536, 354 N.Y.S.2d 100; Matter of Consolidated Edison Co. of NY v. Neptune Assoc., 190 AD2d 669, 593 N.Y.S.2d 259.
A property is not necessarily valued at the actual use of the property as of title vesting, but at the highest and best use for which it could be used. In re Town of Islip, 49 NY2d 354 (1980); Chase Manhattan v State, 103 AD2d 211, 479 NYS2d 983 (2nd Dept 1984); In re City of New York, 29 Misc 3d 1226(A), 920 NYS2d 240, (Kings 2010).
While it is not essential to demonstrate either that the property had been used as its projected highest and best use or that there had been an ante litem plan for such use (Keator v State of New York, 23 NY2d 337, (1968)), it is necessary to show that there is a reasonable probability that the property could have been put to the asserted use within the reasonably near future Matter of City (Broadway Cary Corp) 34 NY2d 535 (1974); Matter of City of New York [Wilson], 21 AD2d 652, 653 [1964], affd 16 NY2d 814 (1965).
A use which is no more than a speculative or hypothetical arrangement in the mind of the claimant may not be accepted as the basis for an award. Matter of City of New York (Rudnick), 25 NY2d 146, 303 N.Y.S.2d 47 (1969); Village of Dobbs Ferry v Stanley Ave Properties, Inc., 95 AD3d 1027, 944 NYS2d 241, (2nd Dept, 2012);
National Bank of North America v Systems Home Improvement Inc., 65 AD2d 557, 419 NYS2d 606, (2nd Dept 1979).
The fact that there were no other sales of large parcels purchased to be developed as seminaries or similar educational facilities on Staten Island is not by itself evidence that the proposed seminary is speculative. That there are few sales of educational facilities on Staten Island does not necessarily mean that the subject property or location is not suitable to develop as an educational facility, it may reflect the fact that a large educational facility with ancillary housing is something of a special use, and that there are not many such facilities, or large sites on which such facilities could be built, that are bought and sold.
Where a property has a higher value because of a restricted use, than what might otherwise be the value of the highest and best use of property so situated, the value resulting from the restricted use is the highest and best use of the property. St. Agnes Cemetery v State, 3 NY2d 37, 163 NYS2d 655 (1957), "The law does not limit market value to that based on use for which land may be most readily and easily sold." Id. at 42.
Sterling, in his rebuttal, cites the fact that one of the unregulated comparable sales he examined, a church in Oakwood Beach, was demolished and redeveloped as single family housing, as proof that residential development rather than a community facility is the highest and best use for property zoned for residential development in Oakwood Beach. However this property was zoned R2 which allows an equal floor area ratio ("FAR") for residential use and for community facility use. The subject property, on the other hand, is zoned R3X, which allows an FAR of 1 for community facility use compared to FAR of .6 for residential use.
More importantly, even if it is the case that residences were the highest and best use generally in Oakwood Beach, they are not the highest and best use of the subject property, because as the CITY has shown, building residences is not financially feasible on the subject property. The CITY is in essence arguing that the highest and best use of the subject property is residential, but that the property must be valued as undevelopable because the asserted highest and best use is not financially feasible. If residential development is not financially feasible on the subject property then it is not, by definition, the highest and best use of the subject property.
Also, the fact that in this case the land was donated to the Claimant rather than being purchased by Claimant, does not alter the highest and best use of the property. Appraisal of property taken by condemnation is based on the value of what an owner has lost, not how it acquired the property.
The CITY also argues that the fact that the Claimant had not developed the site as a seminary is evidence that the Claimant's proposed highest and best use is speculative. The CITY notes that the Claimant has owned the property since 1981 and has not developed it as a seminary or taken any steps to develop it such as raising funds, doing a feasibility study or applying for a wetlands permit. The City also notes that in 1997 Claimant applied for a permit to develop residential housing on the property.
Claimant counters that after acquiring the site in 1981 it successfully pursued a hardship application before the Freshwater Wetlands Appeals Board in 1991, and that development was prevented by a Moratorium on wetland permits in 2003 and 2004. Claimant argues that development was further prevented because in October of 2005 the property was selected as a site to be taken by eminent domain, and the CITY'S ULURP application was approved on January 9, 2006, and in December of 2007 the property was included on the Damage and Acquisition map.
Claimant, successfully pursued an appeal with Freshwater Wetlands Board and won the right to develop an educational facility on the property. It then pursued a second appeal to allow it to include student and faculty housing in the development. These are significant and concrete steps that demonstrate that the development of the seminary was not merely hypothetical. For a good portion of the period following that granting of the hardship application, lack of development of the site was in part a result of the 2003 and 2004 moratoriums on wetlands permits and the fact that the property was included in DEP's site selection for the Bluebelt project in 2005. Thus, it cannot be said that Claimant's failure to actually develop the seminary demonstrates that the proposed development was speculative or hypothetical.
For the reason discussed above, the purchase of the property for development of an educational facility, as outlined in the Ettlinger proposal, rather than leaving the land undeveloped, is the highest and best use of the property.
The next question the Court must consider is how to value the property given its highest and best use of being developed for a non-profit use such as a seminary or educational facility.
To begin with, the Court rejects Claimant's appraiser's contention that the property can be valued based on a "spiritual return".
Also, the subject property cannot be valued based on a reproduction cost or replacement cost analysis, as a special use property. While it is true that churches, synagogues and schools are generally considered special uses, (Keator v State of New York, 23 NY2d 337), the proposed seminary was not built and the subject property was undeveloped on the date of vesting. Vacant land cannot be valued as a special use.
As the Court of Appeals stated in St. Agnes Cemetery v State, 3 NY2d 37, 47, 163 NYS2d 655 (1957),
"Replacement cost has not been admitted as evidence in measuring the value of vacant land. The same rule applies to condemnor as condemnee.(Matter of New York, Lackawanna & Western Ry. Co., 49 Hun 539; Louisiana Highway Comm. v. Boudreaux, 19 La. App. 98; Jeffery v. Chicago & Milwaukee Elec. R. R. Co., 138 Wis. 1; City of Chicago v. Cunnea, 329 Ill. 288; 2 Lewis on Eminent Domain [3d ed.], pp. 1145, 1146, 1147; 2 Orgel on Valuation under Eminent Domain [2d ed., 1953], § 189.) Evidence of replacement or reproduction cost has been accepted in cases only of structures designed for special purposes, such as the stock exchange, but not as to vacant land. Mitchell v. United States (267 U. S. 341), Banner Milling Co. v. State of New York (240 NY 533), and Matter of City of Rochester (234 App. Div. 583)."
Although the CITY has argued that the Claimant has improperly valued the subject property based on reproduction or replacement costs, as if it was a specialty property, in fact, Claimants appraiser used comparable sales to value the property. The more relevant issue is whether the sales are in fact comparable.
Land is valued for condemnation purposes at its market value, what a willing buyer would pay to a willing seller. US v Miller, 317 US 369,63 S.Ct. 276 (1943). "The owner must be compensated for what is taken from him; but that is done when he is paid its fair market value for all available uses and purposes." United States v. Chandler-Dunbar Water Power Co., 229 U.S. 53, 81 (1913).
It is axiomatic that in appraising land the fundamental question to be answered is "what has the owner lost, not what has the taker gained." St. Agnes Cemetery v State of New York, 3 NY2d 37, 163 NYS2d 655 (1957); Boston Chamber of Commerce v Boston, 217 US 189 (1910).
Here the property must be valued at what a willing buyer would pay for land that could be developed as an educational institution with student and faculty housing. The difficulty in this case is how to determine fair market value of the subject property when the market for large tracts of land to develop educational or religious facilities is not very active.
Lally compared sales of nine non-wetlands Staten Island properties. Six of the comparable sales had the same R3X zoning designation as the subject property which allows community facilities such as the proposed seminary. Two of the comparable sales were zoned R3-1 and one was zoned R3A which allow the development of community facilities. These zoning districts also permit such facilities to be built to the same FAR of 1, as is allowed on the subject property.
However, all of the properties were far smaller than the subject property, and none were purchased to develop educational facilities.
Sales of properties purchased to be developed as educational facilities would have been the best measure of the subject property's market value. However, neither appraiser was able to find any such sales that were reasonably close in time and location. In the absence of large properties purchased to be developed as educational facilities, the Court must then look to other properties that are as similar as can be found, with appropriate adjustments made to account for the differences.
Given the lack of sales of properties purchased to develop as educational facilities, it is appropriate, as an alternative, to compare sales of properties, which have zoning similar to the subject property and that would permit the development of an educational facility.
The CITY points to this Court's decision in 730 Equities v ESDC, in which the Court discounted comparable sales that were used by an appraiser to value a property for automotive use, where the purchasers bought those properties to develop as hotels.
In that case the Court held "[t]he fact that in all three comparable sales the purchasers bought the properties to demolish the existing auto related uses in order to build hotels undermines Silber=s [the appraiser's] conclusion that the highest and best use of the property was an automotive use. Also, the fact that the properties were purchased for hotel development renders them inappropriate as comparisons to determine the value of the subject property if its highest and best use is an automotive use." 730 Equities v ESDC, 43 Misc 3d 1226(A), 992 N.Y.S.2d 1612014, NY Slip Op. 50797(U) (Su Kings 2014).
In that case however, the comparable sale properties were purchased in the expectation of obtaining a change of zoning to allow the construction of hotels with far greater floor area than was allowed under the existing zoning for those properties. In this case, Lally's comparable sales had zoning that would have allowed Ettlinger's proposal to be built without a change in zoning.
The use of property zoned as R3X, R3-1 and R3A that were purchased for residential use, as comparable sales, is appropriate in the absence of recent sales of properties purchased to be developed as educational facilities, because there are no zoning districts that permit only community facilities. However, community facilities are permitted in all residential zoning districts.
Where a property can be used for more than one purpose the law does not limit market value to that based on the use for which it is most commonly sold. St. Agnes Cemetery v State of New York, 3 NY2d 37, 163 NYS2d 655 (1957)
A buyer seeking property on which to develop an educational institution with housing on Staten Island would most likely have to purchase land capable of being developed for both residences and community facilities.
Lally selected the median value of his nine adjusted comparable sales which was $49 per square foot, as the adjusted value for the subject property.
Lally's comparable sales 3, 4, and 5, are in the closet proximity to the subject property, being located in South Beach and Midland Beach. The other comparable sales are in Annadale, Hugueunot, Eltingville, Pleasant Plains and Tottenville, neighborhoods that are less similar to Oakwood Beach. Sales 3, 4, and 5 are a better fit to the subject property than the other comparable sales. The average adjusted price of sales 3, 4, and 5, is $46.21 per square feet.
The adjustments made by Lally are reasonable with the exception of his adjustment for the size of the comparable sales. Lally made a negative 10% adjustment for the size of sales 3, 4, and 5, compared to the subject property. Sale 3 is 13,300 square feet, sale 4 is 17,500 square feet and sales 5 is 20,564 square feet while the subject property is over 300,000 square feet. The 25% downward adjustment taken by Sterling for the size of his unregulated sales 2 and 3, which were 16,875 and 14,160 square feet respectively, is more credible. Therefore there should be an additional 15% downward adjustment for size.
Taking an additional 15% downward adjustment for size, the average adjusted value of Lally's sales 3, 4, and 5 becomes $39.27 per square foot.
Additionally, the CITY argues that the value of the property should be calculated based on 214,836 square feet rather than 305,963 square feet because the 91,127 square feet of blocks 4736 and 4740 are not necessary to support the proposed development, and remain undeveloped under Ettlinger's proposal. Specifically, the CITY argues that because the total lot coverage of the proposed building is 50,000 square feet, the development is well within the maximum permitted lot coverage, even if blocks 4736, and 4740 are excluded, and therefore only 214,836 square feet of the property should be included in the calculation.
However, while these two blocks are not needed to satisfy the lot coverage requirements, they are necessary to achieve the floor area of the proposed development.
In an R3X district, community facilities can be built to an FAR of 1. The total floor area of the proposed development is 302,000 which is 98.7 % of the lot area including blocks 4736 and 4740. Therefore, even though blocks 4736 and 4740 remain undeveloped, they are necessary to be able to build the total floor area of Ettlinger's proposal. Without blocks 4736 and 4740, a purchaser could only build up to 214,836 square feet.
At $39.27 a square foot, the value of the 305,963 square feet of the subject property is $12,015,167, before extraordinary costs.
The parties stipulated that the extraordinary costs of constructing Ettlinger's proposed development would be $1,316,518, with the exception of site preparation and foundation work. The parties further stipulated that the site preparation and foundation work, which would include piles, would cost an additional $581,152. The parties disagree as to whether this additional $518,152 in site preparation and foundation work constitutes extraordinary development costs.
The total of $581,152 comes from a review by Ettlinger of the extraordinary costs asserted by HDR on behalf of the CITY. In his sur-rebuttal of October 6 2013, Ettlinger went through HDR's Opinion of Probable Costs line by line and labeled each specific cost as either, not necessary, a normal cost, or simply reduced the cost of a particular item.
Ettlinger stated in the sur-rebuttal that the costs for concrete pile caps, concrete footings, and foundation mats, were normal construction costs, and that the costs for a berm and for fill were not necessary. The $581,152 figure excludes these costs.
Significantly, Ettlinger does not label the piles, which comprise most of the $581,152, as a normal cost. Ettlinger cited a geotechnical study that the CITY's geotechnical expert, Tectonic Engineering & Surveying Consultants PC, did of his proposed seminary. Ettlinger stated that Tectonic recommended that wooden piles be used, rather than the steel piles included in the HDR opinion of costs. Ettlinger did not exclude the cost of the piles, but merely reduced the cost for piles to account for the fact that wooden piles are less expensive than steel piles. Similarly Ettlinger reduced the costs for excavation, well points, and pumps, rather than exclude them as normal costs.
As to the soft costs projected by HDR, Ettlinger stated in his sur-rebuttal, that mobilization and construction management are normal costs, and reduced, but did not exclude, the estimated costs for engineering fees, contingency, and construction management. The mobilization and construction management fees are not included in the $581,152 total.
Despite the fact that in his sur-rebuttal Ettlinger did not remove all of the costs for piles and excavation as normal costs, he testified at trial that piles were normal costs for seven story buildings on Staten Island. His attempt to reconcile his position at trial with his sur-rebuttal was less than tenable.
The Geotechnical Engineering Study, by Tectonic, which Ettlinger accepted and relied upon, found that a system of piles was necessary for the proposed seven story buildings, because of the presence of unsuitable organic soils, soft clay and a very shallow ground water condition on the subject property.
The Court finds that the need for piles was related to the irregular soil conditions at the subject property, and thus the $581,152 for site preparation and foundation work constitute extraordinary costs.
When the additional $581,152 in costs for the site preparation and foundation work are included, the total extraordinary costs for the proposed developed are $1,897,670.
After the extraordinary costs of $1,897,670 are deducted from the adjusted value of $12,015,167, the value of the subject property is $10,117,497 or $10,100,000 rounded.
Wherefore, the Court finds that the value of the subject property for condemnation purposes on the date of taking was $10,100,000. Settle judgment and order on notice.
Dated: Brooklyn, New York
June 10, 2015
E N T E R:
JSC
From:Elizabeth Correa
Sent:Tuesday, June 16, 2015 1:30 PM
To:decisions@alm.com; Reporter
Cc:Wayne Saitta
Subject:Opinion Submitted Electronically
Attachments:Oakwood Beach Bluebelt stage 1 Yeshiva.docx
Good Afternoon,
I am annexing hereto the following Condemnation Opinion for possible publication, City of New York Oakwood Beach Bluebelt, Stage 1 v. Yeshivas Ch'san Sofer, Inc., Index 4009/2009, Supreme Court, Kings County, June 10, 2015, Judge Wayne P. Saitta, Oakwood Beach Bluebelt Stage 1 Yeshiva, decision, , wpd."
The Court awarded claimant in an eminent domain proceeding $10million, holding that claimant proposed development of a rabbinical seminary on 7 acres of wetlands on Staten Island was not speculative.
City Attorney
Zachary W. Carter
Corporation Counsel of the City of New York
100 Church Street
New York, New York 10007-2601
(212) 356-2668
Claimants Attorney
Goldstein Rikon & Rikon and Houghton, LLP
381 Park Avenue, Suite 901
New York, New York 10016
(212) 422-4000
Michael Rikon, Esq.
Thank you for your time and attention on this matter. Please feel free to contact chambers should you have any questions or need additional information.
Best Regards,
Elizabeth Correa Secretary to Honorable Wayne P. Saitta 360 Adams Street, Room 460 Brooklyn, New York 11201 (347) 296-1492 (Chambers)
(718) 643-7799 (fax)