United States v. ONE PARCEL OF LAND, ETC.
| Citation | 186 F. Supp. 433 |
| Parties | UNITED STATES of America, Petitioner-Plaintiff, v. ONE PARCEL OF LAND SITUATED IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, State of New York, E. Jan Nadelman, et al., Defendants. |
| Decision Date | 07 April 1960 |
| Court | U.S. District Court — Southern District of New York |
Harry T. Dolan, Special Asst. to the Atty. Gen., for petitioner-plaintiff.
Skinner, Bermant, Leddy & Raber, New York City, for defendant, E. Jan Nadelman; Harold L. Leddy, and George Bergen, New York City, of counsel.
Hodges, Reavis, McGrath & Downey, New York City, for defendant, American Ice Co.; Denis B. Sullivan, New York City, of counsel.
M. Carl Levine, Morgulas & Foreman, New York City, for defendant, M. Shapiro & Sons, Inc.; Albert Foreman, New York City, of counsel.
This condemnation suit was begun on December 23, 1958. On the same day, title to the involved property vested in the United States. As of that date, respondent's damages are to be determined.
The property is known as 222-232 East 55th Street, New York City. It consists of a plot of land on the southerly side of East 55th Street, having a width of 100 feet, and a depth of 100 feet, 5 inches. Its easterly boundary line is 250 feet west from the westerly side of Second Avenue. Its westerly line is 260 feet east from the easterly side of Third Avenue.
Years ago, the land was improved by the erection of a brick and stone, two story building, presently occupied by American Ice Company, and used as an office, and a garage. The block, in which the property is located, and the immediate neighborhood, are characterized by garages, warehouses, stores, and old time tenement houses, interspersed with restaurants and barrooms.
At the moment, the community, generally speaking, is unimpressive. Nevertheless, here and there, one can see that the locality is in the process of redevelopment. By and large, transportation facilities are good. A block, or two, from the premises, improvements of a major character are under way. Barring a serious business recession, the land area of the neighborhood, over a period of years, will be rejuvenated.
At the time of the Government's appropriation, the premises were under lease to the American Ice Company, for a term expiring on December 31, 1960. The rental was $13,000 per annum. The Government, having taken all interests in the property, it will be necessary to fix the value of the leasehold, as well as that of the fee.
At the time of taking, E. Jan Nadelman, owner of the property, was employed by the State Department of the United States, and located in Washington, D. C. When the case was tried, Nadelman was on a mission to Poland, and did not appear as a witness.
Harold L. Duncan was employed by the Post Office Department, as Director of Real Estate. He, too, was stationed in Washington.
Duncan testified that, in 1956, his Department was considering the advisability of locating a post office in the neighborhood of 55th Street, east of Third Avenue. The Nadelman property was part of the proposed site. Negotiations were then in progress with one or more property owners, whose land adjoined, or was close by, Nadelman's property.
In January, 1957, Duncan conferred with Nadelman, in Washington. The latter was told that the Post Office Department had decided to acquire land in New York City, which included his property. Duncan explained that his Department was prepared to acquire an assignable option to purchase Nadelman's real estate; which option, at a later date, could be assigned to "a successful bidder."
Nadelman stated that he had no desire to sell his property. Nevertheless, he would give thought to the matter, and suggested that Duncan talk with Francis A. Armeny, a New York attorney, and arrange a date, on which Armeny, Duncan, and Nadelman, could discuss the situation.
On January 16, 1957, Duncan and Armeny had a conference in New York. Nadelman was not present. Duncan told Armeny of the procedure that the Department wished to follow, in acquiring Nadelman's property. This procedure was not agreeable to Armeny. But, he did say that, if a fair and equitable price could be worked out, he would be willing to recommend to Nadelman that he sell his property to the Government, under a conventional real estate contract.
Duncan attempted to have Armeny suggest his idea as to the value of the property, but he was noncommittal. Duncan said that his Department would procure an appraisal of the property; and that, after doing so, he would like another audience with Armeny.
Thereafter, in September, 1957, the Department secured an appraisal of the property from the real estate firm of Cross & Brown. About mid October, 1957, Duncan saw Nadelman at the State Department, and attempted to negotiate with him. This availed nothing. However, Nadelman suggested that Duncan have another talk with Armeny. This took place in September, or October, 1958. In the meanwhile, the Government had contracted to purchase a substantial area of the block (82,000 square feet), in which Nadelman's property is located.
In October, 1958, Duncan again talked with Armeny, but the conversation was fruitless. However, the latter intimated that he would recommend that his client sell his property to the Government for something in excess of $400,000.
Thereafter, one or more conferences were held between representatives of the Government, and Armeny, or Nadelman. These were unproductive.
Whether the impasse was attributable to Nadelman, or to the real estate sagacity of Armeny, I do not know. Neither Armeny, nor the Government seems to have been in a hurry. Delay, however, was to the advantage of Nadelman. In other words, through this period of inaction, the value of Nadelman's property increased.
Indeed, upon the trial, Frank Wittman, Nadelman's real estate expert, testified,
S. Edwin Kazdin, the Government's expert, an experienced man, and conservative in statement, said "* * * the removal of the (Third Avenue) elevated railroad structures, and the contemplation of (their) removal, created * * * activity. There was speculation for the rise; particularly after 1955. This * * area * * *, with the exception * * that prices have been increasing, and there was this speculation * * * it remains, essentially, of the same character it has been, heretofore.
"There has been some new construction, not a great deal of it, but prices have been rising * * * since the (elevated road) was removed, in line with the speculation that took place on Third Avenue."
Notwithstanding the conferences that had been had between Nadelman and Armeny, on one side, and Post Office officials on the other, Nadelman entered into a contract, dated December 11, 1958, with M. Shapiro & Son, Inc., to sell his property to that concern, for $344,500.
The Shapiro organization is a defendant in this suit. But, at the trial, none of its representatives saw fit to testify; and Nadelman, it will be recalled, was in Poland.
The contract provided that the purported purchaser, on executing the agreement, should pay Nadelman, the sum of $25,000; and this was done. The remainder of the purchase price, may be itemized as follows:
$28,201.42, by the purchaser taking title subject to a mortgage in that amount, bearing interest at 5%, and payable, as to principal and interest, in specified installments;
$291,298.58, by the purchaser, executing a note to the seller, * * * secured by a purchase money mortgage in that amount, * * * payable in installments, as follows:
The contract further provided that:
The contract also provided that the purchase money mortgage of $291,298.58,
Thus, for two years, Nadelman would forego interest on his purchase money mortgage, amounting to about $29,000. This money, had it been received, would yield, at market rates, about $1500 per annum.
It follows that, had the transaction been consummated, and the alleged purchaser taken advantage of his privileges, the purchase price of the premises, in actuality, would have fallen far below the stipulated price of $344,500.
Furthermore, had title passed to the purported purchaser, on December 30, 1958, the closing date, Nadelman would have been deprived of the annual rental of $13,000, being paid by the American Ice Company.
The contract, having been made on December 11, 1958, it would appear that December 30, 1958, was a "short" closing date. This, I think, is of no particular significance. Nadelman had expected to...
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