Pepe v. Board of Tax Review of Town of Woodbury, s. 69105

• Decision Date: 11 April 1990
• Docket Number: Nos. 69105,72109 and 90673,s. 69105
• Court: Connecticut Superior Court
• Parties: Joseph R. PEPE, Trustee v. BOARD OF TAX REVIEW OF the TOWN OF WOODBURY. (Two Cases) Hillard N. EINBINDER et al. v. BOARD OF TAX REVIEW OF the TOWN OF WOODBURY.

Page 712

585 A.2d 712

41 Conn.Supp. 457

Joseph R. PEPE, Trustee v. BOARD OF TAX REVIEW OF the TOWN OF WOODBURY. (Two Cases)

Hillard N. EINBINDER et al. v. BOARD OF TAX REVIEW OF the TOWN OF WOODBURY.

Nos. 69105, 72109 and 90673.

Superior Court of Connecticut Judicial District of Waterbury.

April 11, 1990.

Robert E. Wright, Hartford, for plaintiff in the first and second cases.

Perelmutter & Potash, Seymour, for plaintiffs in the third case.

Carmody & Torrance, New Haven, for defendant.

BYRNE, Judge.

These cases are appeals, pursuant to General Statutes § 12-118, from an assessment of a private road in Woodbury for the grand list years 1983 through 1989. In order to place the present appeals in proper perspective, a review of the procedural history is in order.

In the early 1970s, Joseph R. Pepe, trustee, commenced the development of a condominium complex in Woodbury, which ultimately contained 400 units. These units were subsequently sold to other individuals. Pepe, however, retained ownership to Woodlake Road and to some sixty-three acres of property adjacent to Woodlake Road. Woodlake Road is 6424 feet long and fifty feet wide. Woodlake Road consists of 7.505 acres. Woodlake Road is the only means of access to the condominium complex from Transylvania Road, the nearest public highway.

At a later date, an easement was granted to the condominium association (association), and its members were given a right of ingress and egress over Woodlake Road. It became the responsibility of the association, however, to maintain and to repair the road. The association became responsible to maintain all utilities (electricity, water and sewers) located in Woodlake Road. This easement was created in 1972. For varied reasons, Woodlake Road has never been accepted by the town of Woodbury. At all times mentioned here, it has been privately owned and considered to be a private roadway.

Subsequently, the town of Woodbury instituted litigation against Pepe to collect the delinquent taxes on the property. In Woodbury v. Pepe, 6 Conn.App. 330, 505 A.2d 723 (1986), the Appellate Court concluded that Woodlake Road was subject to assessment as private property and that the town of Woodbury was entitled to the property taxes for the tax years 1975 through 1982.

In 1983, the Woodbury board of tax review (board) reassessed Woodlake Road and placed the fair market value of the property at $580,000 for the grand lists of October 1, 1983, through October 1, 1985. Thereafter, the board established the assessment value of the property at $406,000, or 70 percent of its fair market value.

Pepe appealed the aforementioned assessments for the years October 1, 1983, through October 1, 1985, to the Superior Court. In Pepe v. Board of Tax Review, Docket Nos. CV84-69105S and CV85-72109, the court, Ripley, J., upheld the board's assessments and dismissed the appeals. Thereafter, that decision was appealed to the Appellate Court. In Pepe v. Board of Tax Review, 14 Conn.App. 705, 542 A.2d 756 (1988), the Appellate Court concluded that the trial court relied on inconsistent facts and improper accounting principles in reaching its decision and remanded the case for a new trial to determine the valuation of the roadway. By this circuitous route, the present proceeding, as it applies to the assessments for the years 1983 through 1985, has been reached.

Subsequent to the remand of the matter from the Appellate Court, the complaint was amended so as to include the assessments for 1986 and 1987. In the interim, Hillard N. Einbinder and Moshe M. Schweky (owners) acquired title to Woodlake Road and to the sixty-three acres adjoining it. The pleadings were amended to substitute the owners as parties plaintiff.

Thereafter, the owners instituted another tax appeal, Einbinder v. Board of Tax Review, Docket No. CV-89-90673S. This appeal is the third case involved in the present proceeding and contests the assessments for the years 1988 and 1989.

During the course of the trial, the parties stipulated that for the years 1983 through 1987, the board had determined the fair market value of the property to be $341,100, with an assessed value of $238,770, or 70 percent of its fair market value. As to 1988 and 1989, the parties stipulated that the board had determined the fair market value of the property to be $889,242, with an assessed value of $622,470, or 70 percent of its fair market value.

Several real estate experts testified on behalf of the parties. Philip W. Ball testified on behalf of the owners while Daniel K. Thomas and Arthur P. Oles testified on behalf of the board. All of them agreed that the highest and best use for the property was as a roadway and that the road should be revitalized so that it would be accepted as a public road by the town of Woodbury.

Ball came to the conclusion that the road had nominal value at best in that there was no other reasonable use for the property but as a road. The property cannot be developed in accordance with the present zoning regulations in that the regulations require an open space residential use with thirty foot minimum side yard requirements. With the right of way restrictions nothing can be done with the property other than using it as a roadway. Ball concluded that the three ordinary means used to determine value were (1) the comparable sales approach, (2) the income approach, and, (3) the reproduction cost approach. It was his opinion that none of those methods would apply to this case.

Ball could not find any comparable sales of roadways except one, in Madison, where the selling price was $6000, for a roadway one thousand feet long. Ball found two other private roadways in Woodbury, and there was no separate assessment for these roadways. It was his opinion that roadways add value to the properties served.

As to the other methods of valuation, the road produced no income and, therefore, the income method could not be used. The replacement cost method could not be used because it would cost the owners $889,000 to reproduce the road while the value of their adjoining sixty-three acres is $419,000. The owners would not rebuild the road if it were destroyed. This opinion would apply to any property the owners had in Woodbury and to the use of Woodlake Road to get to the Southbury property. Ball concluded that the board's use of the replacement cost approach was not proper in the present case.

Ball concluded that the land under the roadway had a nominal value that he placed as follows: as to the grand lists of 1983 through 1987, inclusive, the 100 percent valuation of Woodlake Road was $15,000 ($2000 per acre X 7.5 acres), and the 70 percent assessment was $10,500; as to the grand lists of 1988 and 1989, the 100 percent valuation was $60,000 ($8000 per acre X 7.5 acres), and the 70 percent assessment was $42,000. During the period 1983 through 1989, the nominal value of an acre of land has increased from $2000 to $8000.

Both experts called on behalf of the board based their opinions of value and assessment on the replacement cost basis in that the other recognized valuation approaches did not apply. Thomas was project supervisor for the corporation that performed Woodbury's decennial revaluation, which became effective with the grand list of October 1, 1988. He concluded that the 100 percent valuation of the roadway was $889,240, and that the 70 percent assessment was $622,440. Thomas valued the land outside the road at $13,500 per acre, with 4.4 acres involved for a total value of $59,400. Thereafter, he reduced the sum by 90 percent so that the 100 percent valuation of this property was $5940, and the 70 percent valuation was $4160. The 90 percent depreciation factor was taken from the Marshall Valuation Catalog, a recognized reference manual used in revaluation.

The same catalog stated that the cost to replace a road similar to Woodlake Road would be between $185 to $220 per lineal foot. It should be noted that these figures apply to a forty foot wide road, while Woodlake Road is twenty-four feet wide on the average. Due to the hillside topography of the area, a 1.25 cost factor would be added to the estimated lineal foot estimate. To that total cost, a 50 percent depreciation factor would be used to consider the deterioration to the road. ¹

Thomas could not find any comparable sales so that a comparable sales approach might be used. He could not use the income approach in that the property did not produce any income.

Oles rendered an opinion on the value of the property for the grand lists of 1983 through 1989. As to the grand lists of 1983 through 1987 inclusive, the 100 percent valuation of Woodlake Road was $341,100, and the 70 percent assessment was $238,770.

In reaching this conclusion, Oles determined that the value of the 7.505 acres was $3000 per acre for a total market value of $22,500. Also using the Marshall Valuation Catalog, he concluded that the cost to replace the roadway would be $152 per lineal foot for a forty foot wide road. Oles reduced the lineal foot cost to $91.20 per lineal foot because the paved portion of Woodlake Road is twenty-four feet wide. It should be noted that he used 6302.2 instead of 6420 feet. Oles also used a cost index factor to reduce the lineal foot cost to $80.61 per foot. Thus, the reproduction cost amounted to $508,000. Then, a depreciation factor was computed, amounting to $189,350. The depreciated value of the roadway was thus established at $318,600. Then, the land value of $22,500 was added for a total fair market value of $341,100; the 70 percent assessment was $238,770.

As to the grand lists of 1988 and 1989, Oles concluded the 100 percent value of the roadway was $478,500, and the 70 percent assessment was $334,950. In reaching this conclusion, he determined that the value of the 7.505 acres was $15,000 per acre for a total market value of approximately $112,600. Using the Marshall Valuation Catalog, he estimated that the...