Mitola v. Providence Public Buildings Authority, PC-2015-1646

CourtSuperior Court of Rhode Island
Writing for the CourtTAFT-CARTER, J.
Decision Date12 September 2019
Docket NumberPC-2015-1646



No. PC-2015-1646

Superior Court of Rhode Island, Providence

September 12, 2019

For Plaintiff: Jeffrey B. Pine, Esq.

For Defendant: Mal A. Salvadore, Esq.; Thomas C. Angelone, Esq.



Before this Court for decision is V. George Mitola and Carol A. Mitola's (collectively, Petitioners) Petition for Assessment of Damages pursuant to G.L. 1956 § 45-50-13. Petitioners ask that this Court decide the appropriate damages to be assessed against Respondent Providence Public Buildings Authority (PPBA) resulting from the condemnation of Petitioners' development rights with respect to approximately sixty-seven acres of land (the Property). The Property, owned by Petitioners, is designated by the Town of Scituate Tax Assessor as Map 38, Lot 1. Jurisdiction is pursuant to Section 45-50-13[1] and Super. R. Civ. P. 52.


Findings of Fact

This matter arises from a dispute over just compensation for an interest in the development rights of land acquired by PPBA from Petitioners on March 9, 2012. The parties agree that the highest and best use of the Property is an eight-lot subdivision. Petitioners maintain that just compensation for the development rights of this subdivision amounts to $685, 000, while Respondent asserts that just compensation is $492, 000.

This Court, sitting without a jury, heard testimony at trial. After assessing the credibility of the witnesses and weighing all of the evidence presented, this Court makes the following findings of fact.


The Property

Mr. Mitola and his wife acquired approximately sixty-seven acres of undeveloped land in Scituate, Rhode Island in May 2002 for the sum of $325, 000. Trial Tr. (Tr.) 3-4, Apr. 3, 2018. At the time of the purchase, the Petitioners intended to subdivide the Property. Id. at 5. They considered retaining four lots for their family and selling the remaining lots. Id. at 5-6. The Petitioners eventually built their residence at 21 Country View Lane, Scituate, Rhode Island, and currently live there with their two daughters. Id. at 3.

Petitioners undertook various steps in order to subdivide the property, including swapping a portion of land with a neighbor to obtain appropriate frontage. This enabled them to comply with the Town of Scituate zoning regulations. Additionally, Petitioners sought and obtained Planning Commission approval of a subdivision plan. The approved subdivision plan contained eight lots; Lot 1 includes the 4360 sq. ft. single family residence with 35 acres while Lots 2-8 vary in size. Id. at 4-6.

John Caito Corporation (Caito) was retained to assist in the various zoning and planning issues. Caito designed the plat, road, and infrastructure for the catch basins and detention pond. Id. at 7. [2] [3] Gerry Parrillo was also hired to assist in the construction of a road connecting Country View Lane to the residence. Id. at 8-10.

During the construction period, Mr. Mitola received a request from Rich Blodgett of the PPBA asking to acquire the development rights of the subject property. Id. at 10. Mr. Mitola informed Mr. Blodgett that he did not intend to sell the development rights. Id. at 11. As a result, the PPBA, pursuant to Section 45-50-13 (a)(6), commenced eminent domain proceedings. Id.


Testimony Regarding Valuation


E. Jenny K. Flanagan

E. Jenny K. Flanagan, Vice President at Keystone Consulting Group (Keystone), testified regarding the valuation of the Property. Ms. Flanagan is licensed as a General Certified Appraiser in Rhode Island, Massachusetts, and Connecticut and has performed approximately 400 appraisals over the past twenty years. Tr. 65-67, Oct. 1, 2018. She has been employed by Keystone since 1999. Id. at 65.

Ms. Flanagan was retained to prepare a real estate appraisal to determine the market value of the fee simple interest in the subject property before and after the condemnation of the development rights. She was also retained to determine the value of improvements as a result of the condemnation. Ms. Flanagan used two methodologies in her valuation: the sales comparison approach and the land development discounted cash flow analysis. Id. at 67, 69.

The sales comparison approach required that she obtain data from previous sales in Scituate for both subdivisions and individual lot sales. Flanagan concluded that the retail value of the house lot as of the date of valuation was $165, 000. Id. at 70. Flanagan next valued the existing dwelling on 2.75 ± acres of land and determined that the value was $547, 000. Id. at 71. Using the same approach for the 27.2 ± acres of land suitable for development as prospective house lots, Flanagan concluded that each lot had a value of $70, 000, for a total of $490, 000. Id. Flanagan then assessed the 33.1 ± acres of surplus residential land on the Property and-based on comparison to previous sales of undevelopable properties in Scituate-valued the surplus land at $43, 000. Id. at 72. Given these totals, Flanagan concluded the total indicated value of the Property before condemnation pursuant to the sales comparison approach was $1, 075, 000. Flanagan Report at 93.

Flanagan then conducted the land development discounted cash flow analysis. Tr. 72, Oct. 1, 2018. Flanagan considered the value of the Petitioners' dwelling and the seven prospective home lots and deducted various development costs and expenses. Id. She concluded that the present value was $785, 000. Id.

Ms. Flanagan then reconciled her data to accurately reflect the value. Ms. Flanagan opined that the sales comparison approach value for the Property of $1, 080, 000 was the correct approach. Tr. at 73. She reasoned that the sales comparison approach "tends to be more straightforward in the analysis" and that "[i]t's an indicator of what market participants have done in the past." Id. at 74.

Flanagan next addressed the value of the property post-condemnation and concluded that residential use would be permitted. See Flanagan Report at 91. Additional residential development of the subject property, however, would be prohibited. Id. Using the sales comparison approach, Flanagan concluded that the value of the Mitola residence was $547, 000 and that the surplus undevelopable land was worth $63, 000. Id. at 107, 111. Thus, according to Flanagan, as of March 9, 2012, the total post-condemnation value was $610, 000. Tr. at 76-77; Flanagan Report at 113. Considering that the pre-condemnation value was one million dollars and the post-condemnation value was $610, 000, Ms. Flanagan concluded that the value of the condemned development rights totaled $390, 000. Tr. at 77-78; Flanagan Report at 114.

In reaching this conclusion, Flanagan examined the sum expended for improvements. Flanagan Report at 113-114. In doing so, she examined data from Marshall Valuation Service. Specifically, Flanagan looked to data regarding the differences between roadwork for a subdivision and that for a single-family home, and from such data, she concluded that the "net contributory value of the super-adequate site improvements was $187, 060." Tr. at 80-82; see Flanagan Report at 112-114. Flanagan then examined the additional costs of the approval process for an eight-unit subdivision, and she concluded that Mr. Mitola spent $120, 000 over and above that which would have been spent by a homeowner not seeking to construct a subdivision. Tr. at 82; Flanagan Report at 111-113, 147-151. She then subtracted $12, 000 to account for the amount Mr. Mitola would have had to spend for approval for access to the public road for his family's use of the Property as a single-family residence. Tr. at 82-83; Flanagan Report at 111-113, 147-151. These additional costs amounted to a total of $108, 000 in so-called "soft costs." Tr. at 82-83; Flanagan Report at 111-113, 147-151.

When such costs were added to the $187, 060 spent by Mr. Mitola on physical improvements to the Property, the total amount expended as of March 9, 2012, according to Flanagan, amounted to $295, 000. Tr. at 83; Flanagan Report at 111-113. Therefore, Flanagan concluded "to a reasonable degree of professional certainty" that the "total effect of the condemnation" was $685, 000 ($295, 000 plus the aforementioned $390, 000 decrease in property value). Tr. at 84-86; Flanagan Report at 114.


Peter M. Scotti

Peter M. Scotti (Scotti), a real estate broker and appraiser licensed in Rhode Island, Connecticut, and Massachusetts for the last forty-four years, testified for the PPBA. Id. at 192-193, Oct. 1, 2018. Scotti utilized two approaches to valuing a property: the Sales Comparison approach and the Sales Development Approach. Id. at 195; see Scotti Report at 59. A variant of the Sales Comparison approach is the Sales Development Approach or Subdivision Approach. See Scotti Report at 36. This approach estimates the value based on net income derived from the development and sale of properties. Id. Mr. Scotti determined that the highest and best use of the property was an eight-lot subdivision, and the most likely buyer would be a developer. Scotti Report at 9, 12-13. Therefore, Scotti conducted his analysis with the assumption that a developer would purchase the Property. Ultimately, Scotti concluded that the Sales Development Approach was the best method to determine market value because it considers both the lot value and analyzes the net sale proceeds. Id. at 46, 59.

Scotti performed a valuation of the market value of the house and the lot upon which the house sits within the Property. Tr. at 204. Scotti analyzed this value by performing a standard residential appraisal and considered three residential sales in Scituate which had occurred between December 2010 and March 2012. Tr. at 204; Scotti Report at 44. Scotti considered the comparable sales in terms of the residential square footage and associated acreage,...

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