Mid-Town Tennis Club of Rochester v. Wagner, MID-TOWN

• Decision Date: 27 May 1977
• Docket Number: MID-TOWN
• Parties: TENNIS CLUB OF ROCHESTER, Appellant, v. Wallace J. WAGNER, as Assessor of the City of Rochester and the Board of Assessment Review of the City of Rochester, Rochester, New York, Respondents.
• Court: New York Supreme Court — Appellate Division

Page 823

395 N.Y.S.2d 823

57 A.D.2d 1066

MID-TOWN TENNIS CLUB OF ROCHESTER, Appellant v. Wallace J. WAGNER, as Assessor of the City of Rochester and the Board of Assessment Review of the City of Rochester, Rochester, New York, Respondents.

Supreme Court, Appellate Division, Fourth Department.

May 27, 1977.

Frank & Garrity, Bernard Frank, Rochester, for appellant.

Louis N. Kash, Corp. Counsel (Merwyn M. Kroll, Rochester, of counsel), James Grossman, Rochester, for respondents.

Before MARSH, P. J., and CARDAMONE, DILLON, GOLDMAN and WITMER, JJ.

MEMORANDUM:

In this action to review and reduce the assessment on petitioner's real property respondent served notice to examine petitioner before trial concerning its business operations, operating income, profits and losses, etc. Petitioner appeals from the order denying its motion for a protective order. Because business profits depend upon many factors apart from the value of the real estate whereon the business is conducted, evidence thereof is not directly admissible on the question of its value and assessment (see People ex rel. Hotel Paramount Corp. v. Chambers, 298 N.Y. 372, 374-375, 83 N.E.2d 839, 840), unless such profits, by the terms of a lease, are the measure of the rentals payable for use of the land (Matter of Woolworth Co. v. Commission of Taxation & Assessment of City of Plattsburgh, 45 Misc.2d 701, 257 N.Y.S.2d 417, mod. and affd., 26 A.D.2d 759, 272 N.Y.S.2d 257; Matter of Hilton Inns v. Board of Assessors of Vil. of Tarrytown, 39 Misc.2d 792, 793, 242 N.Y.S.2d 433, 435).

If the property is a "specialty", the method of evaluating it is to use the cost of reproduction less depreciation (Matter of City of New York (Kramer Realty Corp.), 16 A.D.2d 148, 150, 226 N.Y.S.2d 288, 290, affd., 12 N.Y.2d 1094, 240 N.Y.S.2d 160, 190 N.E.2d 533; Matter of Great Atlantic & Pacific Tea Co. v. Kiernan, 49 A.D.2d 99, 102, 371 N.Y.S.2d 173, 176). That is recognized as the maximum basis for evaluation and tax assessment (see G. R. F., Inc. v. Bd. of Assessors of City of Nassau, 41 N.Y.2d 512, 393 N.Y.S.2d 965, 362 N.E.2d 597, dec. April 5, 1977; People ex rel. Hotel Paramount Corp. v. Chambers, supra; People ex rel. Parklin Operating Corp. v. Miller, 287 N.Y. 126, 130, 38 N.E.2d 465, 467; Matter of Federated Dept. Stores, Inc. v. Podeyn, 51 Misc.2d 555, 556, 273 N.Y.S.2d 500, 501, affd., 32 A.D.2d 823, 302 N.Y.S.2d 289). The record does not reveal whether petitioner's property has been assessed as a "specialty" or whether petitioner claims that it has been. If upon the trial petitioner takes that position, it will have the right to introduce evidence of the profits of its business to establish that the structural improvements on the land are not fully suited thereto, that they do not contribute enough value thereto and that their full value (cost of reproduction less depreciation) should not be included in the...