Rochester Urban Renewal Agency v. Patchen Post, Inc.

• Decision Date: 13 June 1978
• Citation: 407 N.Y.S.2d 641,45 N.Y.2d 1,379 N.E.2d 169
• Parties: , 379 N.E.2d 169 In the Matter of the ROCHESTER URBAN RENEWAL AGENCY, Appellant, Relative to Acquiring Title to Real Property for the Southeast Loop Urban Renewal Project in the City of Rochester v. PATCHEN POST, INC., Respondent. In the Matter of VILLAGE OF NEWARK URBAN RENEWAL AGENCY, Appellant, Relative to Acquiring Title to Real Property for an Urban Renewal Project Known as Newark Midtown Project in the Village of Newark v. NEWARK GRANGE, NO. 366, et al., Respondents.
• Court: New York Court of Appeals Court of Appeals

Page 641

407 N.Y.S.2d 641

45 N.Y.2d 1, 379 N.E.2d 169

In the Matter of the ROCHESTER URBAN RENEWAL AGENCY,

Appellant, Relative to Acquiring Title to Real

Property for the Southeast Loop Urban

Renewal Project in the City of Rochester v. PATCHEN POST, INC., Respondent.

In the Matter of VILLAGE OF NEWARK URBAN RENEWAL AGENCY,

Appellant, Relative to Acquiring Title to Real

Property for an Urban Renewal Project

Known as Newark Midtown

Project in the

Village of Newark v. NEWARK GRANGE, NO. 366, et al., Respondents.

Court of Appeals of New York.

June 13, 1978.

[379 N.E.2d 170] Donald J. Corbett, Louis N. Kash, Corp. Counsel, and Charles Capobianco, Rochester, for appellant in the first above-entitled proceeding.

[45 N.Y.2d 4] John F. Redmond, Rochester, for respondent in the first above-entitled proceeding.

[45 N.Y.2d 5] Donald J. Corbett, Rochester, for appellant in the second above-entitled proceeding.

[45 N.Y.2d 6] Samuel C. Shoolman, Rochester, for Newark Grange, No. 366, respondent in the second above-entitled proceeding.

OPINION OF THE COURT

FUCHSBERG, Judge.

The issue at the heart of both these condemnation proceedings is whether a building owned and operated by each of the respondent nonprofit organizations was properly classified as a specialty and was therefore correctly evaluated in accordance with the cost of reproduction less depreciation method. In each instance, the building in its present form had been specially constructed for the organization at its clubhouse and had been so used ever since.

In Matter of Rochester Urban Renewal Agency (Patchen Post) the structure was a fraternal meeting hall owned by a post of the Veterans of Foreign Wars. Though used primarily by and for its members, the facilities were made available without charge to other VFW posts, to their auxiliaries, and to other service groups. Respondent's expert, on the assumption that the property was a specialty despite the described use by others, supported the employment of the reproduction cost less depreciation basis. Petitioner's expert, proceeding on the expressed premise that there is a "market for every product", arrived at the conclusion that the building could be sold for income-producing use and that its price should therefore be fixed at "market value". Trial Term, adopting respondent's approach, rendered a total award of $223,471.50 plus interest. The Appellate Division affirmed (55 A.D.2d 1029, 391 N.Y.S.2d 260).

In Matter of Village of Newark Urban Renewal Agency (Newark Grange), the property consisted of a two-story plus basement brick structure used by respondent for its meetings and for public functions to which its primary facilities had been tailored at the time of construction. Additionally, however, these facilities were at times rented for temporary use by other civic organizations, while other portions of the building were leased to community-related tenants such as the local government and the area newspaper. Notwithstanding these collateral income-producing uses, Commissioners of Appraisal (see Condemnation Law, §§ 4, 13, repealed by L.1977, ch. 839, § 2, eff. July 1, 1978), after hearing the testimony adduced by each side, found that the property was a specialty and that the cost of reproduction less depreciation method was applicable. Measuring the value by that yardstick, their report, confirmed by the Wayne County Court, recommended an award of $160,627. The Appellate Division affirmed the judgment entered thereon (57 A.D.2d 1065, 395 N.Y.S.2d 817).

At the threshold, we note that our scope of review is narrow. In the present procedural posture of these cases, coming to us as they do with affirmed findings, we have no power to weigh the evidence or review the findings of fact (St. Agnes Cemetery v. State of New York, 3 N.Y.2d 37, 40, 163 N.Y.S.2d 655, 658, 143 N.E.2d 377, 379; Matter of City of New York (Sound View Houses), 307 N.Y. 687; Cohen and Karger, Powers of the New York Court of Appeals, § 119). Essentially, we must confine ourselves to the question of whether a proper evaluation technique was utilized (Acme Theatres v. State of New York, 26 N.Y.2d 385, 388, 310 N.Y.S.2d 496, 498, 258 N.E.2d 912, 913; Matter of City of New York (Exterior St.), 285 N.Y. 455, 458, 35 N.E.2d 39, 40). Though the award in the Newark case, based as it is upon a report of the commissioners, whose findings are deemed entitled to the benefit of "every favorable intendment" Ab initio (Auburn Renewal Agency v. Schwartz Sons, 41 N.Y.2d 1026, 395 N.Y.S.2d 639, 363 N.E.2d 1384, affg. 53 A.D.2d 1051, 35 N.Y.S.2d 892; Matter of Huie (Fletcher City of New York), 2 N.Y.2d 168, 157 N.Y.S.2d 957, 139 N.E.2d 140), may, if anything, reinforce the limitation on our review of factual matters, our power to set aside an award that rests upon erroneous appraisal principles nevertheless applies (Matter of City of New York (Atlantic Improvement Corp.), 28 N.Y.2d 465, 472, 322 N.Y.S.2d 708, 712, 271 N.E.2d 546, 548; Latham Holding Co. v. State of New York, 16 N.Y.2d 41, 44-45, 261 N.Y.S.2d 880, 881-882, 209 N.E.2d 542, 543-544; Kingston Urban Renewal Agency v. Strand Props., 33 A.D.2d 594, 304 N.Y.S.2d 413 (Cooke, J.)).

Turning at once to those principles, we note that, though an owner is guaranteed "just compensation" when private property is taken for public use under the power of eminent domain (U.S.Const., 5th Amdt.; N.Y.Const., art. I, § 7, subd. (a)), there is no inflexible formula or set of inexorable rules by which that term is to be realized in dollars and cents (see United States v. Fuller, 409 U.S. 488, 490, 93 S.Ct. 801, 35 L.Ed.2d 16; Matter of City of New York (School of Ind. Arts), 2 Misc.2d 403, 154 N.Y.S.2d 402). It is only the goal which is fixed, i. e., a reasonable and adequate award the fair equivalent of the actual loss sustained (County of Erie v. Fridenberg, 221 N.Y. 389, 393, 117 N.E. 611, 612; cf. Matter of Board of Water Supply, 189 App.Div. 20, 177 N.Y.S. 852).

That loss ordinarily is represented by what it can reasonably be anticipated a prudent buyer would be willing to pay in an open market. Generally, this is based on the highest and best use to which the property may be put rather than the more limited use to which a particular owner may happen to be putting it at the time of its appropriation (Matter of County of Suffolk (Firester), 37 N.Y.2d 649, 652, 376 N.Y.S.2d 458, 461, 339 N.E.2d 154, 156; St. Agnes Cemetery v. State of New York, 3 N.Y.2d 37, 41, 163 N.Y.S.2d 655, 658, 143 N.E.2d 377, 379, Supra ).

In ascertaining the highest and best use, courts give recognition to the fact that in most cases, the "market value", as that term itself implies, is not only capable of determination, but represents "just compensation" since it corresponds, though perhaps roughly, to the value of the property to the owner (1 Orgel, Valuation under Eminent Domain (2d ed.), § 15). There is, moreover, another sense in which it may serve as a complete...