Berwick v. State

107 A.D.2d 79
CourtAppellate Division of the Supreme Court of the State of New York
DecidedFebruary 25, 1985
DocketClaim No. 1; Claim No. 2; Claim No. 3; Claim No. 4; Claim No. 5; Claim No. 6
StatusPublished
Cited by11 cases

This text of 107 A.D.2d 79 (Berwick v. State) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Berwick v. State, 107 A.D.2d 79 (N.Y. Ct. App. 1985).

Opinion

[82]*82OPINION OF THE COURT

Per Curiam.

As in the recently decided case of Chase Manhattan Bank v State of New York (103 AD2d 211), the central issue on this appeal is the proper valuation of property classified as wetlands taken in condemnation, where the claim is made that the wetlands restrictions are, themselves, confiscatory.

On October 26, 1979, the State of New York appropriated several parcels of land for conservation purposes pursuant to ECL 3-0305. The parcels, designated as Moneybogue Bay Marsh or Tidal Wetlands, are located in the Village of Westhampton Beach, Town of Southampton, Suffolk County. All front on either Moneybogue Bay or Quantuck Channel, and are vacant and unimproved. We are here concerned with nine of these parcels, owned by six separate claimants or groups of claimants.

The Berwick property consists of 5.4276 acres and has frontage on the west side of Library Avenue and on Moneybogue Bay. It has an elevation above mean sea level of 5.6 feet at Library Avenue and then slopes down to the bay, averaging 1.4 feet over the remainder of the parcel. The Dix property, consisting of two parcels on Berwick’s southeasterly boundary, consists of 5.50 acres, with frontage on Library Avenue and Moneybogue Bay. Dix is the only case of a partial taking. The taking encompasses a narrow strip at one end of the property and a wider piece at the opposite end, for a total taking of 2.5998 acres. The remainder contains two dredged channels and a marina. The Berwick and Dix parcels are unique in that they are the only properties in the village to enjoy “Facility District 3” (F3) zoning, which permits marine usage, such as boat yards, and, by special exception, apartment houses.

The other parcels taken enjoy “Residential District 1” (Rl) one-acre single-family residence zoning and front on Quantuck Channel at their southerly boundaries. The Pascale property, consisting of 19.7965 acres, also has frontage along the west side of Beach Lane. However, the Bishop property, 7.1468 acres, and the various noncontiguous “Rogers” parcels of 2.1712 acres (parcel No. 23.5), 2.4866 acres (parcels Nos. 23.7A and 23.7B), and 3.8967 acres (parcel No. 23.7C), respectively, located to the west of the Pascale property, are landlocked and have access only via a one-rod right-of-way to Beach Lane (see map appended to this opinion).

All of the above claims were tried together, claimants being represented by the same attorney and retaining the same appraiser and engineer while the State also retained one appraiser [83]*83who used the same comparable sales throughout. As in Chase Manhattan Bank v State of New York (supra), the parties posited diametrically opposed views as to the properties’ highest and best use and, hence, their value on the day of taking. Claimants’ appraiser valued the properties in accordance with their residential zoning (single-family or condominium apartment units, as the case may be), while the State’s appraiser believed that their highest and best use was recreational and assigned only nominal values, i.e.:

The enormous difference in proffered market values is attributable primarily to the parties’ differing views on the economic feasibility of residential development and only secondarily to their differing views on the effect of the Tidal Wetlands Act (ECL, art 25). As to the latter, and assuming that residential development was economically feasible, claimants asserted that they were entitled to compensation for the loss of their right to challenge any permit denial pursuant to the Act as confiscatory (see, ECL 25-0404). Although claimants had never, in fact, sought a permit for development prior to the taking, they contended, in effect, that their properties had to be valued as if a finding of confiscation had already been made. The State, on the other hand, asserted that the market value of the properties on the day of taking would be nominal even if development were economically feasible because of the need to successfully surmount the long drawn out process of acquiring legal permission from State and local environmental authorities and the local zoning authority to develop these wetlands properties.

The Court of Claims found that the highest and best use of the properties was recreational, agreeing with the opinion of the State’s appraiser that residential development was not economically feasible. It also stated its view that “any proposed residential development would encounter serious difficulties in being approved under local and State tidal wetlands regulations * * * [which] difficulties, like the need for zoning changes, reduce the desirability of property when other land is available with the [84]*84correct zoning”. The court declined, however, to accept the $1,000 or $1,100 per acre recreational value ascribed to the properties by the State’s appraiser. Rather, it found a per acre value of $3,000 by making further upward adjustments to the State’s comparable sales for time, size and access.

On appeal, claimants argue that the Court of Claims finding as to the effect of the Tidal Wetlands Act is erroneous in that the properties had to be valued without regard to the Act if they had a reasonable economic use; and that the court erred in finding that zoning changes were required before the properties could be residentially developed. As to the effect of the Tidal Wetlands Act, we reiterate and expand upon what we recently stated in Chase Manhattan Bank v State of New York (103 AD2d 211, supra). Property taken in condemnation must be valued as legally restricted in use by all zoning and environmental regulations in effect on the date of taking. If a claimant believes that application of the Tidal Wetlands Act unconstitutionally deprives him of any reasonable economic return on his property, he may challenge its validity in the condemnation proceeding by demonstrating that no permit would have issued for any economically productive use and that application of the Act, coupled with the denial of a permit, destroyed the property’s economic value. However, the law accords no retroactive effect to an evidentiary showing that claimant would probably have succeeded in securing a judicial declaration of unconstitutionality had he challenged the denial of a permit in a CPLR article 78 proceeding brought pursuant to ECL 25-0404. Rather, the law follows the realities of the marketplace, which are that a knowledgeable buyer would adjust his purchase price to offset the cost in time and money of applying for a permit and challenging its denial in court as confiscatory. Certainly, a knowledgeable buyer would not pay claimants the full unrestricted residential values of their properties on the day of taking, when the wetlands restrictions were still legally in effect. He would pay only the value of the property as so restricted, plus some increment representing its enhanced value at such future time when he is successful in nullifying the wetlands restrictions in court. Thus, in this sense, the Court of Claims did not err in its statement that difficulties in securing approval for residential development under local and State tidal wetlands regulations would reduce the desirability of these properties in the marketplace. That claimants might eventually have secured a judicial declaration of confiscation, compelling the State to compensate them for their loss if a permit was denied, simply cannot be translated [85]*85into a market value for immediate residential use on the date of taking.1

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Bluebook (online)
107 A.D.2d 79, Counsel Stack Legal Research, https://law.counselstack.com/opinion/berwick-v-state-nyappdiv-1985.