CASINO DEV. AUTH. v. Lustgarten

753 A.2d 1190, 332 N.J. Super. 472
CourtNew Jersey Superior Court Appellate Division
DecidedJuly 5, 2000
StatusPublished
Cited by29 cases

This text of 753 A.2d 1190 (CASINO DEV. AUTH. v. Lustgarten) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CASINO DEV. AUTH. v. Lustgarten, 753 A.2d 1190, 332 N.J. Super. 472 (N.J. Ct. App. 2000).

Opinion

753 A.2d 1190 (2000)
332 N.J. Super. 472

CASINO REINVESTMENT DEVELOPMENT AUTHORITY, a public corporate body of the State of New Jersey, Plaintiff-Appellant,
v.
Kenneth J. LUSTGARTEN and Robert B. Wolf, Trustees of the Trust under the Will of Hilda F. Lustgarten, Deceased, for Kenneth J. Lustgarten; Scott Lustgarten; Kenneth Kaiserman; Ronald Kaiserman; Constance Kaiserman Robinson; Donald A. Fuhrman and Rose C. Fuhrman, Trustees under the Will of Norman H. Fuhrman, Deceased; and Melvin L. Fuhrman, Defendants-Respondents, and
City of Atlantic City and Atlantic City Municipal Utilities Authority, Defendants.

Superior Court of New Jersey, Appellate Division.

Argued April 3, 2000.
Decided July 5, 2000.

*1192 Peter D. Manahan, Roseland, for plaintiff-appellant (Connell, Foley & Geiser, attorneys; Mr. Manahan, of counsel and on the brief; Ernest W. Schoellkopff, on the brief).

John H. Buonocore, Jr., Morristown, for defendants-respondents (McKirdy and Riskin, attorneys; Mr. Buonocore, of counsel and on the brief).

Before Judges HAVEY, KEEFE, and COLLESTER.

*1191 The opinion of the court was delivered by KEEFE, J.A.D.

Plaintiff, the Casino Reinvestment Development Authority, condemned 2020-22 Baltic Avenue, Atlantic City ("the Property"), owned by defendants Kenneth J. Lustgarten, Robert B. Wolf, Scott Lustgarten, Kenneth Kaiserman, Ronald Kaiserman, Constance Kaiserman Robinson, Donald A. Fuhrman, Rose C. Fuhrman, and Melvin L. Fuhrman. A jury determined the fair market value of the Property was $3,132,000.

*1193 Plaintiff contends on appeal that the judge erred in: (1) admitting the testimony of defendants' appraisal expert, Jon P. Brody; (2) admitting Brody's comparable sales; (3) excluding the report of plaintiff's expert, Angelo V. Stambules, on the economic feasibility of a hotel; (4) failing to properly instruct the jury on highest and best use; (5) refusing to allow it to serve upon defendants the supplemental report of its expert appraiser, Henry J. Mancini; (6) preventing plaintiff's other appraiser, Thomas P. Welsh, from testifying as to the highest and best use of the Property; and (7) putting unwarranted limitations on plaintiff's cross-examination of Brody. Further, plaintiff claims that (8) defendants' counsel made certain improper comments that prejudiced plaintiff's right to a fair trial. Finally, plaintiff claims that the trial judge erred in (9) preventing Welsh from testifying as a rebuttal witness. We conclude that the trial judge committed reversible error with respect to the last issue. Accordingly, we reverse the judgment under review and remand for a new trial. Nonetheless, we have discussed the other issues presented by plaintiff since our discussion will be of assistance to the trial judge on remand.[1]

The facts can be briefly stated for the purpose of this opinion. The Property, in the 2000 block of Baltic Avenue, is a level, vacant lot with 240 feet frontage along Baltic and 150 feet deep; it is Block 148, lots 2, 3, and 66, on the tax map of Atlantic City. The Property is rectangular-shaped and approximately 36,000 square feet or.83 acres. The only improvement to the Property is older concrete and asphalt paving from a prior use. Close to the Property is the Atlantic Plate Glass building,[2] a boarded-up clothing factory, and a fast-food restaurant, the Philly Steakhouse. The immediate neighborhood is predominantly light industrial.

The Property is within a block of the Atlantic City Convention Center, which the New Jersey Sports Exposition Authority received permission to develop in January 1992. Eleven months later, plaintiff declared its intention to condemn property in the nine blocks between the Convention Center and the Boardwalk, an area dubbed the "Corridor." The Property is within the Corridor. The construction on the Convention Center began in 1993 and as of June 30, 1995, the relevant appraisal date, construction was well-under way. The Convention Center was completed at the time of trial at an approximate cost of $258 million. The Convention Center, located on Kirkman Boulevard, has 500,000 square feet (11.5 acres) of contiguous exhibit space.

Plaintiff's expert, Henry J. Mancini, estimated that the Convention Center will generate $447 million in economic benefit to the city annually. He stated that current projections indicate that 500,000 to 750,000 people a year will visit the Convention Center. In Mancini's opinion, the Convention Center business primarily has a positive impact on the hotel, retail, and food industries. The Property is in the central business district zone ("CBD"), which is predominately a commercial zone that permits a wide variety of uses, including retail businesses, office buildings, hotels, and service parking lots.

Mancini testified that as of June 30, 1995, the fair market value of the Property was $32 per square foot, or a total value of $1,119,000 adjusted for removal of the existing concrete and asphalt. He included the impact of the Convention Center in forming his opinion as to the value of the Property. Mancini stated that on the valuation *1194 date, the Atlantic City real estate market was flat, with little in the way of private development, except for some casino expansion projects. The only development in the Corridor area was the construction of a bus parking lot in the mid-1980's at Michigan and Atlantic Avenues.

Mancini determined that, because the zoning affecting the Property is CBD, it is suitable for most commercial uses. The physical characteristics of the Property make it appropriate for a wide variety of commercial development: it is large, almost an acre; has sufficient footage on Baltic Avenue; and sufficient depth. As to financial feasibility, the Property is located on Baltic Avenue, which has a high traffic level and feeds into the Atlantic City Expressway. Also, it is located one block from the Convention Center. Finally, Mancini concluded: "So my ultimate highest and best use conclusion was a use which is legally permitted, physically possible, financially feasible, and maximally productive for this site and that use would be generally a use which is permitted by zoning and would be classified as a retail or service-oriented use." Mancini used four comparable sales to support his opinion as to the value of the Property.

Defendants offered the testimony of Jon P. Brody as an expert in the field of real estate appraisal. Brody testified that the dominant feature of the area is the Convention Center, which must be taken into account in valuing the Property. Brody considered the Property to be a large parcel in the CBD zone, which allows the greatest variety of potential uses and a building elevation of up to 220 feet. He concluded that the highest and best conforming use is as an assemblage parcel, which takes advantage of the proximity to the Convention Center, casinos, and the Boardwalk. This highest and best use, however, did not require that the Property be assembled with some other property; it could be used on its own or assembled with other property for development. He decided that the way to value the property is through the market approach. He used six comparable sales to support his opinion that the Property had a value of $90 per square foot or $3,240,000. Unlike Mancini, however, Brody made no adjustments to his comparable sales. This was one of the many controversies that arose at trial.

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Cite This Page — Counsel Stack

Bluebook (online)
753 A.2d 1190, 332 N.J. Super. 472, Counsel Stack Legal Research, https://law.counselstack.com/opinion/casino-dev-auth-v-lustgarten-njsuperctappdiv-2000.