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CLAIMANT ENTITLED TO COMPENSATION BASED UPON THE VALUE OF THE LAND BEFORE IT WAS DESIGNATED PROTECTED WETLANDS WHICH COULD NOT BE DEVELOPED (SECOND DEPT)

The Second Department modified (reduced) the award for condemnation of regulated land but upheld the Supreme Court’s legal reasoning. Claimant owned vacant land in a commercial zone. After claimant acquired title New York City took title by eminent domain and designated the land as protected wetlands. Claimant sought the difference in value of the land before and after the wetlands regulation. The Second Department held that claimant was entitled to that relief but accepted the city’s pre-regulation value of the land, which was substantially less than the claimant’s valuation (which had been accepted by Supreme Court):

As the City does not dispute, the claimant established that there was a reasonable probability that the imposition of the wetlands regulations on the property would be found to constitute a taking, inasmuch as the parties agreed that the imposition of the regulations diminished the value of the property by approximately 95% and that there was virtually no chance that the New York State Department of Environmental Conservation would issue a permit allowing the property to be developed … .

Accordingly, the claimant established its entitlement to an increment … .

“The increment above the regulated value of the property that must be added to the regulated value of the property is a percentage that represents the premium a reasonable buyer would pay for the probability of a successful judicial determination that the regulations were confiscatory” . “When adding an increment to the value of vacant land to reflect its development potential, the specific increment which is selected and…  applied must be based on sufficient evidence and be satisfactorily explained”  … . Matter of New Cr. Bluebelt Phase 3, Staten Is. Land Corp. (City of New York), 2019 NY Slip Op 00128, Second Dept 1-9-19

 

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