Matter of City of New York (Victory Blvd. from Senenca Ave. to Grand Ave.)

In Re:	City of New York (Victory Blvd. from Seneca Ave. to Grand Ave.)
Court:	Supreme Court, Richmond County (Staten Island)
Citation:	2020 NY Slip Op 50119(U)
Plaintiff:	New York City
Defendant:	Seneca Clove Corp.

Facts: New York City acquired fee simple rights to a 2308 sq.ft. property to be used for a road widening project. The three parcels were improved by a vacant one-story building formerly used as a convenience store. The parties exchanged appraisals. Once exchanged, New York City moved to strike that portion of Seneca Clove Corp.’s (“Seneca”) appraisal on severance damages. Seneca’s appraisal used a discounted cash flow analysis of a hypothetical income stream to determine value. The theory behind this appraisal was that prior to the appraisal, the properties could be used as a three-pump gas station. After the condemnation, there was room for only two pumps. Seneca’s appraiser created an income flow for fifteen years and then discounted it.

Holding:The NYS Supreme Court granted New York City’s motion to strike Seneca’s appraisal, finding that it was improper to basis value upon a hypothetical projection of income for a non-existent facility. The Supreme Court determined that this approach cannot be the sole basis for valuation of condemned property. Seneca was ordered to produce a new appraisal.

Submitted by: Philip Sanchez, Esq.(www.spnylaw.com)

Precis:Davida S. Scher