City of Buffalo v. George Irish Paper Co.

• Decision Date: 03 April 1969
• Citation: City of Buffalo v. George Irish Paper Co., 299 N.Y.S.2d 8, 31 A.D.2d 470 (N.Y. App. Div. 1969)
• Parties: The CITY OF BUFFALO, Appellant-Respondent, v. GEORGE IRISH PAPER COMPANY, Inc., Respondent-Appellant, E. Allen Stevenson, andCarol L. Alf, as Executors of the Estate of F. A. Stevenson et al., Respondents.
• Court: New York Supreme Court — Appellate Division

Page 8

299 N.Y.S.2d 8

31 A.D.2d 470

The CITY OF BUFFALO, Appellant-Respondent, v.GEORGE IRISH PAPER COMPANY, Inc., Respondent-Appellant, E Allen Stevenson, andCarol L. Alf, as Executors of the Estate of F. A. Stevenson et al., Respondents.

Supreme Court, Appellate Division, Fourth Department.

April 3, 1969.

[31 A.D.2d 471] Anthony Manguso, Buffalo, for appellant-respondent City of Buffalo (John P. Egan, Buffalo, of counsel).

Gordon & Mesch, Buffalo, for respondent-appellant(Morton H. Levy, Buffalo, of counsel).

Magavern, Magavern, Lowe & Beilewech, Buffalo, for respondent Koester Estate.

Before DEL VECCHIO, J.P., and MARSH, WITMER, GABRIELLI and HENRY, JJ.

OPINION

WITMER, Justice.

Under a provision of Article 21 of its charter (Laws of 1929, Ch. 527)the plaintiff, City of Buffalo, appellant herein, in January 1967 petitioned the court for a preliminary order of condemnation of the property of defendant, consisting of an improved lot at 21--25 River Street, Buffalo, and such an order was granted on February 27, 1967.Hearings upon value of the property were held in September 1967 after which the trial court promptly rendered its decision on September 27, 1967, fixing the sum of $136,500 as just compensation to the defendant for the property.Under section 381 of Article 21 the City was given the right to determine within 4 months of such decision whether or not to continue with the condemnation.In an effort to delay the time when it must make such determination, the City entered a judgment upon the decision, instead of a final decree as provided by the Article, and appealed therefrom.Defendant filed a notice of cross-appeal, but also moved to vacate the judgment as improperly entered.That motion was granted by decision dated February 2, 1968, and the judgment was vacated.The City then formally resolved, pursuant to section 381, to apply for the final decree upon the court's decision, subject to the right to appeal from the amount of the award; and upon the City's application a final decree was entered on February 13, 1968 upon the decision of the court.As an aggrieved party(CPLR 5511) the City then filed a notice of appeal from such final decree.Defendant did not file a notice of cross-appeal from the final decree, but upon the argument before uscounsel for each of the parties stated that defendant had cross-appealed.Under CPLR 5517(a) 1 and 5520(c)we treat defendant's cross-appeal from the judgment as a cross-appeal from the said final decree; and consider both appeals herein.

The property lies on the east side of River Street, and directly in front of it on the west side of said street lie Buffalo Harbor and Lake Erie.The lot is about 70 feet wide front and rear, and has an average depth of about 214 feet and an area of about 15,000 square feet.There is a 5-story building, plus a basement therein, on the lot, covering the entire width of the lot, which building has an average depth of about 184 feet, with a ground floor area of over 12,900 square feet and a total floor area of about 77,500 square feet.It is very strongly constructed, well serviced with stairs and two elevators, and is totally equipped with a fire sprinkler system.Until a short time before this proceeding was begun there was a railroad siding on the premises which extended into the building, permitting all-weather loading of cars.The floors were level and in good condition; the building was insulated, had automatic gas heat and was equipped for 60 cycle electricity.It is located within 660 feet of the New York State Thruway.

In 1954 the City initiated Waterfront Redevelopment ProjectNo. UR N.Y.R. 35, which included the area wherein defendant's subject property is located; and by 1961--2 plans for implementing the project had progressed so far that much publicity was given to it; and the City in late 1961 and early 1962 began to notify defendant's tenants by letter and telephone that it would soon take the property for the project.Indeed, in the winter of 1962 the City notified defendant that it would start demolishing the building in May 1962.The building had been fully occupied by tenants from 1954 when Mr. and Mrs. Francis Backus, the present owners of the defendant corporation, bought nearly half of its corporate stock for $80,000 and in 1959 when they bought the rest of such stock for $100,000 additional.It continued to be fully occupied through 1961.

The publicity about the City taking the property, the City notices to the tenants to look for other quarters, the City's action in approving the removal of defendant's railroad siding, and the City's further action in cutting off garbage pick-up from the tenants of the building, caused defendant to lose most of its substantial tenants.At the request of one tenant, Sciandra's Toyland, defendant on February 1, 1962 released said tenant from its lease.As a result of the foregoing depressing acts attributable to the City, there were not many tenants in the building at the time of the trial; the tenants remaining were not vigorous ones who paid top rent; and defendant was in default on its $98,000 of mortgages and owed over $27,000 in back taxes on the property.

Because of the effect of 'condemnation blight' caused by the 'cloud of condemnation' which hung over this property from 1961 onward and which, together with the affirmative acts of the City above noted, severely depressed the rental value of this property, defendant's appraiser, Mr. Marsh, did not use actual rents of the property in his income approach evaluation thereof, but used what he determined to be economic rents established from the rentals of comparable properties.On this basis he appraised the property at $195,000.In his market value approach he arrived at the value of $194,866.75; and in his cost of reproduction approach, less 75 per cent depreciation, he arrived at the value, including the land, of $206,507.60.Except for the inclusion in his estimated rents of the sum of $6,000 per year for potential income from signs which might be erected on the property, discussed hereinafter, we find that his estimates are well supported.We note especially that the record completely disproves the City's contentions as to Mr. Marsh's inexperience and the unreliability of his appraisal.

The City's appraiser testified that the total value of the property on both the market and income approaches was $60,000, and that on the cost approach it was $62,800.His appraisal firm had made 649 appraisals for the City within two years, and the record shows that he personally was quite unfamiliar with the details respecting this property and his appraisal.

Without doubt defendant's appraiser was in error in assigning $6,000 of potential income to sign rentals on the building, because the property is within 660 feet of the New York State Thruway and section 361--a of the Public Authorities Law is applicable, limiting the use of such property for signs.The City contends that such statute bars the use of the property for signs; but the statute is not that restrictive.Subdivisions 1 and 2 thereof forbid advertising within 660 feet of the Thruway insofar as such advertising may distract travelers thereon.It does not apply to signs so placed as not to distract drivers on the Thruway (21 Codes, Rules and Regulations of the State of New York, §§ 104.1; 104.5).The latter section provides in part

'(b) Exclusions.An advertising device may be erected or maintained within a special regulation area Without (emphasis added) an application or a permit provided:

'(1) The device is not directed at Thruway traffic and the attraction of the device is deemed incidental by the authority.'

This property is in such 'a special regulation area.'Moreover, by regulation the Thruway Authority has determined that in such areas permits for advertising signs visible on the Thruway may be granted (21 Codes, Rules and Regulations of State of New York, §§ 104.1; 104.5).The latter section further provides in part that a sign may be erected with permit provided:

'(b) * * * (2) the device does not exceed 150 square feet in area including border and trim, but excluding normal supports and

'(i) is located on the premises of and advertises a business actually conducted thereon * * *.'

Thus, it is apparent that considerable sign rental might reasonably have been expected from this property.

The City contends that the court erred in giving little weight to evidence that someone listed this property for sale with a broker in 1959 for the sum of $110,000.Not only did the City fail to establish who made the alleged listing, but it was remote in time from the taking herein.Moreover, this evidence must be considered in the light of the undisputed facts above noted that in 1954 the present owners of the stock of the defendant corporation paid $80,000 for nearly half of such stock, and in 1959 paid an additional $100,000 for the remainder of such stock.We find no error by the court in this respect.

The City also contends that the trial court erred in considering the 'current equalization rate in the City of Buffalo' of 51 per cent; and it relies on Matter of O'Brien v. Assessor, 20 N.Y.2d 587,...