Matter of City of New York v. Eman Realty Corp.

Court:	Appellate Division, Second Department
Docket No.:	2018-00873
Index No.:	33132/08
Plaintiff:	Eman Corp. (“Eman”)
Defendant:	City of New York (“City”)

Facts: Eman owned several adjoining parcels in Brooklyn. The City condemned the parcels and there was a subsequent disagreement as to the valuation of the parcels. A non-jury trial was held, and both parties’ experts agreed that the highest and best use for the parcels was a continuation of the multifamily housing existing on the lots. Both experts used the income capitalization and sales comparison approaches to valuation. The experts did not, however, agree as to whether there were transferable development rights (“TDR”) owned by Eman, which could be factored into the valuation. The lower court based its determination of value upon, in part, the worth of these TDR and held that the parcels were worth $5,549,000. The City’s expert had valued the parcels at $1,750,000. An appeal ensued.

Holding: The Appellate Division determined that the inclusion of TDR in the valuation was not appropriate, as there was no prior attempt at assembling adjoining parcels or any community interest in the TDR prior to condemnation. The Appellate Division concluded that the inclusion of the value of TDR in the compensation award was too speculative and reduced the condemnation award to $3,959,000.