South Farms Associates Ltd. Partnership v. Burns

• Decision Date: 05 July 1994
• Docket Number: No. 12078,12078
• Citation: 644 A.2d 940,35 Conn.App. 9
• Court: Connecticut Court of Appeals
• Parties: SOUTH FARMS ASSOCIATES LIMITED PARTNERSHIP v. J. William BURNS, Commissioner of Transportation.

Page 940

644 A.2d 940

35 Conn.App. 9

SOUTH FARMS ASSOCIATES LIMITED PARTNERSHIP v. J. William BURNS, Commissioner of Transportation.

No. 12078.

Appellate Court of Connecticut.

Argued March 29, 1994.

Decided July 5, 1994.

William H. Champlin, III, with whom, on the brief, was Kristine D. Ragaglia, Hartford, for appellant (substitute plaintiff).

Robert T. Morrin, Asst. Atty. Gen., with whom, on the brief, were Richard Blumenthal, Atty. Gen., Kenneth N. Tedford, and Lawrence T. Widem, Asst. Attys. Gen., for appellee (defendant).

Before FOTI, LAVERY and FREDERICK A. FREEDMAN, JJ.

FOTI, Judge.

This is an appeal by the substitute plaintiff, Martin W. Hoffman (hereinafter plaintiff), the trustee in bankruptcy for the plaintiff, South Farms Associates Limited Partnership (South Farms), brought pursuant to General Statutes § 51-197a from the assessment of damages for the total taking of its property by eminent domain pursuant to General Statutes §§ 13a-73(b) and 13b-23. The defendant, the commissioner of transportation, determined the value for the purpose of the taking to be $433,500. South Farms made timely application to the Superior Court, pursuant to General Statutes § 13a-76, for a reassessment of damages. Thereafter, the court, pursuant to General Statutes § 52-434a(b), referred the condemnation appeal to a panel of three state trial referees. The trial referees agreed that the defendant had undervalued the property taken and awarded the plaintiff an amount of $1,233,000 in compensation, ¹ plus interest and an appraisal fee.

The plaintiff claims that the trial referees improperly valued the property by failing to consider the effect on market value of the most advantageous and probable use of the property and in assessing the property at a value for the general use of commercial development. The plaintiff argues that after the trial referees found that there was a reasonable probability that the zone change and wetland permits necessary for commercial development would be obtained, it should have valued the property for the specific use demonstrated by the evidence to be the highest and best use of the property--the proposed development of an a suite hotel and two office buildings. We affirm the judgment of the trial referees.

The trial referees' memorandum of decision and the record reveal the following facts. South Farms purchased the subject property on August 5, 1988, for $380,000. The property is an irregularly shaped parcel of vacant land situated in the town of Newington consisting of open and wooded sections with low rolling topography. The property spans approximately 29.9 acres, approximately twenty acres of which is classified as wetlands and the remainder is uplands. The property was taken together with all appurtenances including an easement approximately fifty-one feet wide to pass and repass over the lands of Ginsburg Properties Group, Inc., and McDonald's Corporation. This easement is located in the towns of Newington, New Britain and Farmington and provides access to Route 71.

The subject property is located in a class B business zone. ² Permitted uses include retail stores, banks, personal and business services, business and professional offices, and the like. Special exceptions include restaurants, theaters and similar places of entertainment, motor vehicle sales and service, and other specified uses. The maximum building height allowed is thirty-five feet, two stories. The land to the west and fronting on the east side of Route 71 is zoned commercial development (CD).

The plaintiff's site development plan proposed for the site a mixed use project, Quadrangle Corporate Center. The proposal included a five-story hotel and conference center containing 231,653 square feet with 262 suites, and two multistory office buildings, each with approximately 160,000 square feet. Parking for the project was to be provided in a two level garage the top level of which would serve as a deck on which the three buildings were to be located. On February 22, 1989, Radisson Hotel Corporation conditionally committed itself to a possible franchise operation of the suite hotel, stating: "Once all city approvals are in place and financing is imminent, we should move to get the application submitted to our franchise committee for their approval."

The development was to be constructed on the highland area located on the southern portion of the subject property, occupying approximately 9.2 of the total 29.9 acres. It was estimated that the hotel would occupy approximately 3.86 acres, 42 percent, and the office development 5.34 acres, 58 percent. According to the proposed plans, the project was located entirely outside the wetlands area, except for an access bridge connecting the complex to Route 71 via the easement over the land of McDonald's Corporation.

On November 9, 1988, the plaintiff applied to the Newington town plan and zoning commission for reclassification of the subject property to CD zone. On the date of the scheduled hearing, the application was withdrawn because the required site development plan did not accompany the application. A neighboring landowner, however, completed an application and received such a zone change, from B to CD, for the adjoining land.

In June, 1989, the plaintiff, through one of its general partners, received the first indication of the defendant's interest in the condemnation of the property from the Army Corps of Engineers in connection with the central Connecticut expressway project. Thereafter, it received an official notice of intent to condemn, which was followed by two state appraisals and the commencement of eminent domain proceedings. The taking map is dated July, 1989. Having been given this notice of intended condemnation, the plaintiff ceased further development activity. Bankruptcy followed.

The trial referees heard seventeen days of testimony and viewed the subject property in the presence of trial counsel. Four appraisers testified, two for the plaintiff and two for the defendant. ³ All agreed, and the trial referees concurred, that the sales comparison approach was the best valuation method. They did not agree, however, on the highest and best use or fair market value of the property at the time of the taking.

The defendant's first appraiser, a department of transportation employee, stated that in his opinion the subject property was "nonbuildable" and that its highest and best use was as open space. He set damages for the taking at $433,500. The defendant's second appraiser, a private appraiser, calculated damages at $600,000 and indicated that development might be an alternative use, subject to obtaining the proper permits. The plaintiff's two appraisers estimated damages at $5,250,000 and $6,600,000, respectively, and were of the opinion that the highest and best use of the property was a quality hotel and two office buildings of the size proposed by the plaintiff.

The crucial issue in this matter, as the plaintiff argues, is whether the trial referees correctly stated the law, when they stated in the memorandum of decision: "The true issue is, not the value of the property for the specific use which would be permitted if a zone change was made, but the value of the property as zoned at the time of the taking as it is affected by the probability of a change. Greene v. Burns, [221 Conn. 736, 745, 607 A.2d 402 (1992) ]." The plaintiff agrees with the second portion of that statement, but asserts that the law requires the court to consider the value of the property under the development plan proposing the highest and best use. The plaintiff contends that the trial referees rejected the defendant's argument that value should be based on open space use, accepted and credited the evidence concerning zone change and permits, and heard evidence of the highest and best use of the property for a specific development plan, the hotel and office complex. The plaintiff contends that no general use was defined by the evidence. Accordingly, the plaintiff argues that by failing to value the land in accordance with the specific development plan, the trial referees reached "a speculative and unsupported valuation" for the property for an unknown and general commercial development use. The plaintiff asserts that, because the trial referees did not consider the highest and best use, a remand is required with direction to apply the proper standard of valuation. We do not agree.

The plaintiff is entitled to be paid just compensation, as the owner of land taken by condemnation. Leverty & Hurley Co. v. Commissioner of Transportation, 192 Conn. 377, 380, 471 A.2d 958 (1984). "The amount that constitutes just compensation is the market value of the condemned property when put to its highest and best use at the time of the taking." Greene v. Burns, supra, 221 Conn. at 745, 607 A.2d 402. The probability of a zone change that could affect the price may properly be considered in the determination of the fair market value. Transportation Plaza...