Opinion
No. CV08 400 93 48
November 9, 2009
MEMORANDUM OF DECISION
On January 29, 2008, the Commissioner of Transportation took by eminent domain, pursuant to Connecticut General Statutes § 13b-36, a certain parcel of land with improvement thereon identified as 100 Saw Mill Road, West Haven, Connecticut owned by Torrington Arms Apartments, LLC, hereinafter referred to as the plaintiff.
The subject parcel is located at the southeast corner of the "T" intersection of Saw Mill Road and Railroad Avenue. Vehicular traffic at said intersection is controlled by an overhead traffic signal.
The subject parcel, according to the taking survey (plaintiff's ex. 2), is bounded 347' ± by Saw Mill Road, 302' ± by Railroad Avenue, by other land 208' ±, and by Metro North 441' ± . The subject parcel is 2.26 acres (98,446 sq. ft.) 43,560 sq. ft. x 2.26 = 98,446.
The plaintiff's appraiser, Charles Liberti, has predicated his appraisal analysis based on 2.28 acres 99,317 sq. ft. The apparent source of his information is an uncertified site map. See page 17 of plaintiff's exhibit 3. This misinformation skews Liberti's analysis in favor of the plaintiff incorrectly.
The subject property is grade level with access on both Saw Mill Road and Railroad Avenue.
The subject property was improved with a 55,203 sq. ft. mixed use industrial type building. Its tenants were retail, warehouse and industrial. The building, built in 1946, was masonry on poured concrete slab with 20-foot ceilings. The building was fitted suitably and adequately for each use and/or tenant. All utilities are available to the site and building. Additional improvements also include approximately 8,000 sq. ft. of black top paving.
The subject property is conveniently located a short distance south of the I-95 Saw Mill interchange. The neighborhood is generally mixed use, primarily industrial with some retail. The site is overwhelmed by the Armstrong Tire building directly across Saw Mill Road.
The Saw Mill/Bull Hill corridor is experiencing commercial development especially north of the Saw Mill interchange, e.g. Wal-Mart, Aldi, Texas Road House and hotels. There is also some, although more limited, commercial development south of said interchange, e.g. Devon Storage and West Haven Police station.
The subject parcel is located in a recently enacted T.O.D. zone. The T.O.D. zone has not been developed and is in the embryo stage. There is no historical data available to gauge the impact on the value of the subject parcel being in a T.O.D. zone. Further, this site being immediately adjacent to the railroad tracks, may very well become part of the planned train station and therefore would not be developed pursuant to the T.O.D. district regulations.
West Haven Connecticut Zoning Regulations provide: "SECTION 35 — TRANSIT ORIENTED DESIGN (TOD) DISTRICT. STATEMENT OF PURPOSE. The purpose of the Transit Oriented Design (TOD) zone is to capitalize upon the locational attributes of the West Haven train station area, the access and personal mobility provided by high volume transit service that connects residential areas and employment centers by encouraging adaptive reuse of existing structures, entrepreneurship and homeownership by allowing alternative forms of physical development that enhance the existing development fabric and infill underdeveloped areas.
This was a total take, effective January 29, 2008. The Commissioner assessed damages to the plaintiff in the amount of $3,250,000., which sum was deposited to the court on January 29, 2008 and paid over to the plaintiff on March 4, 2008.
At trial, the court heard testimony from Charles A. Liberti on behalf of the plaintiff. Steven E. MacCormack testified on behalf of the Commissioner.
It is incumbent on this court to determine market value in order to arrive at fair compensation.
MARKET VALUE is defined as the amount in cash, or on terms reasonably equivalent to cash, for which in all probability the property would have sold on the effective date of the appraisal, after a reasonable exposure time on the open competitive market, from a willing and reasonably knowledgeable seller to a willing and reasonably knowledgeable buyer, with neither acting under any compulsion to buy or sell, giving due consideration to all available economic uses of the property at the time of the appraisal. ( Uniform Appraisal Standards for Federal Land Acquisitions, Appraisal Institute, 2000 Ed.)
In cases of this sort, the court is charged with taking into account the divergent opinions expressed by the witnesses and the claims advanced by the parties. New Haven Savings Bank v. West Haven Sound Development, 190 Conn. 60, 69 (1983).
This court, pursuant to the Connecticut General Statutes and court decisions, is charged with the duty of making an independent determination of value and fair compensation in the light of all the circumstances, the evidence, their general knowledge and their viewing of the premises. Minicucci v. Commissioner of Transportation, 211 Conn. 382, 388 (1989); Birmbaum v. Ives, 163 Conn. 12-21-22 (1972); Feigenbaum v. Waterbury, 20 Conn.App. 148, 153 (1989). It is the court's task to reach a result that gives the defendant, as nearly as possible, a fair equivalent in money as fair compensation for the property taken. Mathis v. Redevelopment Agency, 165 Conn. 622, 623 (1973); Feigenbaum v. Waterbury, supra, at 153-54. The court in this case in determining the value of real property is charged with taking into account the divergent opinions of the witnesses and claims advanced by the parties. New Haven Savings Bank, v. West Haven Sound Development, supra, at 69.
"[T]rial courts must be afforded substantial discretion in choosing the most appropriate method of determining the value of a taken property . . . In condemnation proceedings the trial court is more than a trier of facts or an arbiter of differing opinions of witnesses; it is charged with the duty of making an independent determination of value and fair compensation in light of all the circumstances, the evidence, its general knowledge and its viewing of the premises." (Citations omitted; internal quotation marks omitted.) French v. Clinton, 215 Conn. 197, 200-01, 575 A.2d 686 (1990); see also Minicucci v. Commissioner of Transportation, 211 Conn. 382, 559 A.2d 216 (1989). The court is not, as a matter of law, bound by the valuations and valuation methods used by the appraisers, but it can consider the comparable sales of land that were in evidence, as well as the raw data used, in independently determining fair market value. Second Stone Ridge Cooperative Corp. v. Bridgeport, 220 Conn. 335, 342, 597 A.2d 326 (1991). "A determination of value is, from its very nature, a matter of opinion reached by the exercise of sound judgment." Del Vecchio v. New Haven Redevelopment Agency, 147 Conn. 362, 365, 161 A.2d 190 (1960). Where the usual means of ascertaining market value are lacking, other means must, from the necessities of the case, be resorted to from the best available data. Feigenbaum v. New Britain Housing Site Development Agency, 164 Conn. 254, 260, 320 A.2d 824 (1973).
When confronted with conflicting evidence as to valuation, the trier may properly conclude that under all the circumstances a compromise figure most accurately reflects fair market value. See Bennett v. New Haven Redevelopment Agency, supra, 148 Conn. 515-16, 172 A.2d 612.
Liberti testified that damages to the plaintiff were $4,688,000. He predicated his opinion on two evaluation methods.
There are three classical approaches to value used in appraising real estate. They are defined as follows:
COST APPROACH: "That approach in appraisal analysis which is based on the proposition that the informed purchaser would pay no more than the cost of producing a substitute property with the same utility as the subject property. It is particularly applicable when the property being appraised involves relatively new improvements which represent the highest and best use of the land or when relatively unique or specialized improvements are located on the site and for which there exist no comparable properties on the market."
DIRECT SALES COMPARISON APPROACH: "That approach in appraisal analysis which is based on the proposition that an informed purchaser would pay no more for a property than the cost to him of acquiring an existing property with the same utility. This approach is applicable when an active market provides sufficient quantities of reliable data which can be verified from authoritative sources. The direct sales comparison approach is relatively unreliable in an inactive market or in estimating the value of properties for which no real comparable sales data are available. It is also questionable when sales data cannot be verified with principals to the transaction."
INCOME APPROACH: "That procedure in appraisal analysis which converts anticipated benefits (dollar income or amenities) to be derived from the ownership of property into a value estimate. The income approach is widely applied in appraising income-producing properties. Anticipated future income and/or reversions are discounted to a present worth figure through the capitalization process."Real Estate Appraisal Terminology; 3rd Edition, 1993. Compiled and Edited by Byrl N. Boyce, Ph.D. American Institute of Real State Appraisers. Society of Real Estate Appraisers.
Liberti used the direct sales comparison approach to evaluate the land only of the subject parcel.
Liberti's direct sales comparison approach used 5 sales; 3 in West Haven and 2 in Branford. Those sales located in Branford were located on West Main Street, Branford; high traffic, prime commercial locations, dissimilar to the subject parcel. The Comparable sale at 458 Saw Mill Road was 11,326 ± sq. ft. only about 11% the size of the subject parcel. Further, the purchaser paid a premium for this small parcel, artificially inflating its sales price because the purchaser was an abutter attempting to assemble sufficient acreage for a commercial development. For these reasons, the court does not accept Liberti's evaluation of the land based on the direct sales comparison approach.
As regards to the cost approach, it is generally accepted among certified real estate appraisers that older buildings are not fairly susceptible to evaluation by the cost approach. However, Liberti employed the Marshall Swift evaluation equations, using averages for building cost. Is it site specific? Does it consider labor costs at union or non-union labor rates? Does it consider material and supplies at retail or wholesale cost? Does it cost of material in large or small quantities?
Despite using the Marshall Swift cost approach to determining the cost of building a similar structure, Liberti diverged from the Marshall Swift depreciation guides. Marshall Swift suggests a life span for buildings of this nature at 40-50 years. (Transcript, p. 21.) The building built in 1945 is 63 years old at the time of taking. It has exceeded its life span, yet Liberti depreciated it only 45%. Why not 90%?
For all these reasons, the court does not find the Liberti evaluation acceptable.
MacCormack used both a Sales Comparison Approach and Income Capitalization Approach. This court accepts the comparable sales used by MacCormack to be reliable to arrive at $2,760,000, as the value of the subject property.
Further, MacCormack also determined the value of the subject property using the Income Capitalization Approach to arrive at a value of $3,720,000.
MacCormack averaged both values, giving equal weight to each valuation method to arrive at a final evaluation of $3,250,000.
Based on careful review of the testimony of the witnesses, a careful review of the respective appraisals, a review of the premises and the general knowledge and experience this court concludes that the Income Capitalization Approach should have been afforded more weight. It is the considered finding of this court that the market value of the subject premises on January 29, 2008 was $3,425,000.
Judgment shall enter in favor of the plaintiff in the amount of $3,425,000., less the sum of $3,250,000 which was deposited with the court, in the excess amount of $175,000.
The court also awards interest at the rate of 3.5% per annum to be calculated from March 4, 2008 to the date of payment on the excess amount of $175,000.
In addition, the court awards an appraisal fee to Liberti in the amount of $3,500.
Judgment shall also include taxable costs.