In re Queens W. Dev. Corp.

Decision Date11 May 2016
Docket Number2014-04862, 2014-04865, Index No. 2370/02.
Citation139 A.D.3d 863,2016 N.Y. Slip Op. 03746,33 N.Y.S.3d 274
PartiesIn the Matter of QUEENS WEST DEVELOPMENT CORPORATION, respondent; Nixbot Realty Associates, et al., appellants.
CourtNew York Supreme Court — Appellate Division

Goldstein, Rikon, Rikon & Houghton, P.C., New York, NY (Jonathan Houghton and Jamie Sinclair of counsel), for appellants.

Zachary W. Carter, Corporation Counsel, New York, NY (Rochelle Cohen of counsel), and Carter Ledyard & Milburn LLP, New York, NY (John R. Casolaro, Lee A. Ohliger, and Michael H. Bauscher of counsel), for respondent (one brief filed).

RUTH C. BALKIN, J.P., SANDRA L. SGROI, COLLEEN D. DUFFY, and FRANCESCA E. CONNOLLY, JJ.

In a condemnation proceeding, the fee claimants appeal from (1) a decision of the Supreme Court, Queens County (Rios, J.), entered December 18, 2013, and (2) an order of the same court (Raffaele, J.) entered April 7, 2014, which, after a nonjury trial and upon the decision, determined that they were entitled to an award in the principal sum of only $18,086,658 as just compensation for the taking of their real property.

ORDERED that the appeal from the decision is dismissed, as no appeal lies from a decision (see Schicchi v. J.A. Green Constr. Corp., 100 A.D.2d 509, 472 N.Y.S.2d 718

); and it is further,

ORDERED that the order is affirmed; and it is further,

ORDERED that one bill of costs is awarded to the respondent.

In 1973, tennis professional Fred Botur leased a parcel of land on the Queens waterfront in the Hunters Point section of Long Island City (hereinafter the property) and opened a tennis club on the property (see Matter of Queens W. Dev. Corp. [Nixbot Realty Assoc.], 121 A.D.3d 903, 904, 995 N.Y.S.2d 84

). Botur and a business partner, Heinz Nixdorf, purchased the property in 1979 and formed Botnix Realty Corporation to hold the real estate (see id. ). In 1986, after Nixdorf's death, the corporation was reorganized as Nixbot Realty Associates (hereinafter Nixbot) (see id. ).

In the early 1980s, the City of New York (hereinafter the City) began to consider plans for redeveloping the Long Island City waterfront, and, in particular, Hunters Point, moving it away from its historically industrial character and creating, at least along the waterfront, a mixed residential and commercial area with parks and a waterfront esplanade. A variety of studies were performed and a number of plans were proposed. Plans were finalized in the mid 1990s and, on February 25, 2002 (hereinafter the title vesting date), the New York State Urban Development Corporation (hereinafter UDC), doing business as Empire State Development (see McKinney's Uncons. Laws of N.Y. § 6255[8]

[Urban Development Corporation Act (UDCA) § 5(8), as added by L. 1968, ch. 174, § 1, as amended] ), condemned the property for use in the Hunters Point (Queens West) Waterfront Development Land Use Improvement Project (hereinafter the Queens West project) (see Matter of Queens W. Dev. Corp. [ Nixbot Realty Assoc.], 121 A.D.3d at 904–905, 995 N.Y.S.2d 84

). The UDC subsequently transferred its interest in the property to the City. Nixbot and Nixdorf's heirs (Martin Nixdorf, Matthias Nixdorf, Renate Nixdorf, and the estate of Michael Nixdorf) are the fee claimants (hereinafter collectively the claimants) (see id. ). The claimants filed a notice of claim with the Supreme Court and sought a hearing to determine reasonable compensation for the taking of the property.

On the title vesting date, the Hunters Point section of Queens remained largely industrial and was zoned M3–1, which allowed the heaviest industrial uses. However, at trial, the claimants argued that, had the City not, in effect, restrained development for years by moving so slowly in its plans to redevelop Hunters Point, the area would have changed its character to reflect the increased demand for moderately priced housing in close proximity to midtown Manhattan, and the property's magnificent views and excellent access to transportation. The appraisal submitted by the claimants' expert identified the property's highest and best use as high-rise residential development and valued the property at $85 million. The City contended that, absent the Queens West project, the area would not have been rezoned and high-rise residential development of the property would not have been financially feasible. The City also presented extensive evidence challenging the claimants' assumptions regarding the profitability of high-rise residential development. The City contended that, as of the title vesting date, the property's highest and best use was “big box” retail and valued the property at $13.44 million. The claimants refuted the City's contention that big box retail was the highest and best use and also submitted evidence to show that, even if big box retail were the highest and best use, the City underestimated the value for such use by approximately $5 million.

After a nonjury trial, the Supreme Court found that high-rise residential development was not financially feasible as of the title vesting date and was, therefore, not the property's highest and best use. The court found that the highest and best use was big box retail, as the City advocated, and valued the property on that basis. The court based its award on the appraisal submitted by the City, but adjusted its determination of the property's value in the claimants' favor. The claimants appeal, arguing that the court erred in rejecting their assessment of the highest and best use of the property and, consequently, severely undervalued the property.

The bedrock of eminent domain law is the principle 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” (Matter of County of Orange v. Monroe Bakertown Rd. Realty, Inc., 130 A.D.3d 823, 824, 14 N.Y.S.3d 78

[internal quotation marks omitted] ). “The measure of damages 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” (id. at 825, 14 N.Y.S.3d 78 [internal quotation marks omitted] ). Moreover, [i]t is necessary to show that there is a reasonable possibility that the property's highest and best asserted use could or would have been made within the reasonably near future, and a use which is no more than a speculative or hypothetical arrangement may not be accepted as the basis for an award” (Matter of Village of Haverstraw [AAA Electricians, Inc.], 114 A.D.3d 955, 956, 981 N.Y.S.2d 436 [internal quotation marks omitted]; see

Matter of County of Orange v. Monroe Bakertown Rd. Realty, Inc., 130 A.D.3d at 825, 14 N.Y.S.3d 78 ; Matter of

City of Long Beach v. Sun NLF Ltd. Partnership, 124 A.D.3d 654, 655, 1 N.Y.S.3d 246 ).

[A] condemnee may not receive an enhanced value for its property where the enhancement is due to the property's inclusion within a redevelopment plan’ (Village of Haverstraw [AAA Electricians, Inc.], 114 A.D.3d at 956, 981 N.Y.S.2d 436

, quoting Matter of Queens W. Dev. Corp., 289 A.D.2d 335, 336, 734 N.Y.S.2d 208 ). Thus, for example, property zoned for industrial use ‘should be valued in accordance with the industrial zoning designation which would apply if the redevelopment plan did not exist,’ for [a] condemnee is only entitled to compensation for what it has lost, not for what the condemnor has gained’ (Village of Haverstraw [AAA Electricians, Inc.], 114 A.D.3d at 956, 981 N.Y.S.2d 436, quoting Matter of Queens W. Dev. Corp., 289 A.D.2d at 336, 734 N.Y.S.2d 208 ).

‘In determining an award to an owner of condemned property, the findings must either be within the range of the expert testimony or be supported by other evidence and adequately explained by the court (Matter of Board of Commr. of Great Neck Park Dist. of Town of N. Hempstead v. Kings Point Hgts., LLC, 74 A.D.3d 804, 805–806, 903 N.Y.S.2d 451

, quoting Matter of

City of New York [Reiss], 55 N.Y.2d 885, 886, 449 N.Y.S.2d 18, 433 N.E.2d 1266 ; see

Chester Indus. Park Assoc., L.P. v. State of New York, 103 A.D.3d 827, 828, 962 N.Y.S.2d 236 ; New York Cent. Lines, LLC v. State of New York, 101 A.D.3d 966, 967, 957 N.Y.S.2d 252 ; Gyrodyne Co. of Am., Inc. v. State of New York,

89 A.D.3d 988, 989, 933 N.Y.S.2d 375 ;

Matter of Town of E. Hampton [Windmill II Affordable Hous. Project (9 Parcels) ], 44 A.D.3d 963, 964, 844 N.Y.S.2d 113

). The court's assessment of the suitability of proposed comparable sales is a matter resting within its sound discretion (see Matter of

Metropolitan Transp. Auth., 86 A.D.3d 314, 326, 927 N.Y.S.2d 67 ; Chase Manhattan Bank v. State of New York, 103 A.D.2d 211, 222, 479 N.Y.S.2d 983 ; see also

Chemical Corp. v. Town of E. Hampton, 298 A.D.2d 419, 422–423, 748 N.Y.S.2d 606 ).

Although [i]n condemnation cases, the authority of this Court to review findings of fact after a nonjury trial is as broad as that of the trial court and it ‘may render the judgment it finds warranted by the facts, taking into account that in a close case the trial court had the advantage of seeing and hearing the witnesses' (Matter of Mazur Bros., Inc. v. State of New York, 97 A.D.3d 826, 828, 949 N.Y.S.2d 160

, quoting BRK Props., Inc. v. Wagner Ziv Plumbing & Heating Corp., 89 A.D.3d 883, 884, 933 N.Y.S.2d 99 ; see

W.T. Grant Co. v. Srogi, 52 N.Y.2d 496, 510, 438 N.Y.S.2d 761, 420 N.E.2d 953 ; Matter of...

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