Appellate Court Finds County’s Valuation of Property In Partial Taking Condemnation Inadequate

The 70.70-acre property at issue was located in the Village of Kiryas Joel, and consisted 69.23 acres after the partial taking. Claimant, Monroe Bakertown Road Realty, Inc. (“Claimant”), and the condemnor County of Orange (“County”), agreed that high density housing was the highest and best use of the property. At a nonjury trial, the parties offered opposing evidence on the density and scope of the housing that could be built on the property. Claimant’s appraiser testified that under a comparable sales approach analyzing three recent sales of vacant land approved for multi-family residential units in the Village, and making various adjustments based on time, location, size, zoning, and topography, the entire property was worth $27,150,000 before the taking, and $26,050,000 after the taking, a difference of $1,100,000. The County's appraisal also used a comparable sales methodology, but analyzed four recent sales of vacant land outside the Village limits, concluding a value of $1,555,400 before the taking and $1,522,400 after the taking, or a difference of $33,000.  The County also provided evidence that the Department of Health would not approve Claimant’s proposed building plan due to inadequate water supply.  The Supreme Court adopted with the County’s appraisal, concluding that “[t]he lack of adequate water supply is a predominate factor which cannot be disregarded and leads this court to accept the evaluation placed on the property by the County of Orange.”  Claimant appealed.

On appeal, the Court noted that when private property is taken for public use, the condemnor must compensate the owner to put him in the same relative position as if the taking had not occurred. Where there is a partial taking, damages are the difference between the value of the whole before the taking and the value of the remainder after the taking. The Court agreed that a high density, multi-family residential development was the highest and best use of the property. However, while the County's witness testified that the County would not have permitted a high density residential project due to the lack of available water, proof was adduced that the Village had undertaken efforts to increase its water well supply capacity. This uncertainty over water supply and governmental approval would affect the price a buyer would be willing to pay, but simply rejecting Claimant’s appraisal and adopting the County's appraisal failed to adequately consider how the market would factor the water supply uncertainty and governmental approval issues into the selling price of this property.

The Court concluded that the facts presented at trial did not warrant the determination that the appraised valuation submitted by the County had to be accepted. Thus, the court reversed and remitted the matter to the Supreme Court, Orange County, to recalculate the value of the subject property in accordance with this decision and order.

The case was County of Orange v. Monroe Bakertown Road Realty, 130 A.D.3d 823 (2d Dep’t 2015).

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