Matter of Flushing Main St. Improvements Project

Court:	Supreme Court, Queens County
Index No.:	910/15
Plaintiff:	Metropolitan Transportation Authority ("MTA")
Defendant:	Aron Forem

Facts:Aron Forem was the owner of a one- story commercial building with a basement located on Main Street in Flushing, Queens. The property was leased to a Chinese supermarket on a ten year lease with an annual rental of $561,000. In 2015, the MTA condemned the property in order to construct improvements to a local transportation hub. Property vested in the MTA in 2015. Aron Forem contested the amount paid by the MTA for the property.

A nonjury trial was held in 2021. At the trial, an appraiser retained by Forem opined that the property was worth $15,000,000 based upon the income capitalization approach. He determined that the net operating income for the property was $392,411 and the cap rate was 2.5%. He did not use the sales approach as he claimed that there were not enough comparable sales but did use the sale of the adjacent property to obtain his cap rate.

The MTA's appraiser contented that the cap rate was 6.5% based upon similar properties located in strip malls and based upon national rather than local sales trends. The value of the property according to the MTA was $5,000,000.

Holding: The Supreme Court determined that Forem's appraiser had approached the problem of valuing the property in a more credible fashion than the MTA's appraiser. The Supreme Court accepted Forem's valuation number of just over $15,000,000.

Submitted by: Philip Sanchez, Esq. (psanchez@herrick.com)

Precis: Davida S. Scher

 

Matter of Flushing Main St. Improvements Project

Court:	Appellate Division, Second Department
Docket No.:	2026 NY Slip Op 02650
Appellant:	Metropolitan Transportation Authority ("MTA'')
Respondent:	Aron Forem

Facts: fter a nonjury trial, Supreme Court, Queens County awarded respondent the sum of about $15,000,000 for condemned property in Flushing, Queens. The MTA contested this amount and initiated an appeal for the purpose of overturning the judgment amount.

Holding: The Appellate Division, Second Department determined that the Supreme Court was correct in its findings regarding the value of the property condemned by the MTA. The appraiser retained by the owner of the property opined that the highest and best use for the property was a one- story building developed for retail use. The MTA's appraiser opined that the highest and best use for the property was a multi-story commercial building. The MTA's appraiser relied upon national rather than local data and trends. Since the Supreme Court heard the testimony and evaluated the credibility of the two experts, the appeals court decided that the amount awarded was supported by the evidence at trial. Judgment affirmed.

Submitted by: Philip Sanchez, Esq. (psanchez@herrick.com)

Precis: Davida S. Scher