756 A.2d 335 | Conn. Super. Ct. | 1998
On August 6, 1996, the town of North Haven (the town) filed its duly and properly authorized statement of compensation at the Superior Court, in the judicial district of New Haven, and the plaintiff, Peter Rock Associates (Peter Rock), a Connecticut limited partnership,2 has appealed therefrom, alleging that it is aggrieved by it.
This action was predicated on a vote of the town's board of selectmen (the board) on July 11, 1996, to acquire by purchase or condemnation the subject property in North Haven "for open space, recreational or other municipal purposes" and recommended that $2,375,000 be appropriated for that purpose. The town electors approved, at a special town meeting held on July 22, 1996, a resolution authorizing the appropriation of $2,375,000 for the acquisition of the property "for open space, recreational and other municipal purposes." On August 5, 1996, the board voted to institute eminent domain proceedings to acquire the property, having failed to agree on a sales price with the owner, Peter Rock. *460
In a separate action,3 the town, on August 19, 1996, filed a certificate of taking whereupon Peter Rock filed a motion for payment of deposit. Peter Rock's motion was granted on September 23, 1996. The town paid Peter Rock $2,375,000 pursuant to court order on October 16, 1996. Peter Rock then filed the present appeal and application for review of statement of compensation condemnation. The committee heard evidence from April 13 through April 15, 1998, viewed the property on May 21, 1998, reviewed the pleadings, exhibits, briefs and appraisal reports filed by the parties, discussed the matter in conference and examined the controlling law.
The specific matter before the committee is to determine the fair market value of the fee simple interest of the 182 acres, more or less, of raw, undeveloped land in North Haven taken by the town and to file a report revising the statement of compensation if that is so concluded in such manner as the committee deems proper.
By far, the greater part of the 182 acres was acquired by Peter Rock by deed in 1969. In December, 1990, the balance of some eighteen acres was acquired by deed from Yorkview Associates (Yorkview). About 176 acres are zoned R-40 residential (minimum 40,000 square feet), about five acres are zoned R-20 residential (minimum 20,000 square feet) and about one acre is zoned CB-20 business. Throughout the trial and in their posttrial briefs, the parties have treated the entire 182 acres in the R-40 zoning context. The property has approximately 1425 feet of noncontiguous frontage on Middletown Avenue.4 Additional frontages are located along *461 Hermitage Lane and Rock Lane as well as an undeveloped street stub extending from Rabbit Road in East Haven.5
The property consists of an irregularly shaped parcel of land with mixed topography that climbs generally from west to east up to and surrounding the thirteen acre Peter's Rock Park6 at its terminus with Hermitage Lane. The property, which is moderately to heavily wooded, rises from the Middletown Avenue frontage, in both gradual and steep grades, from thirty feet, more or less, to 360 feet, more or less, at its highest point in the easterly most portion of the property. This change takes place over a distance of approximately 3000 feet. There is a combination of level areas, as well as the upward and downward sloping areas of the property, some of which have steep grades throughout the site. There are also ledge outcroppings in some areas. The property is "laced" with approximately twenty-six to twenty-eight acres of wetlands7 in various areas including approximately forty-five percent of the Middletown Avenue frontage. All public utilities are directly available to the subject property along the Middletown Avenue frontage.
In 1988, Peter Rock filed an application for a 122 lot subdivision under R-40 zoning requirements and, as part of this application, the North Haven inland wetlands commission requested a report from King's Mark Environmental Review Team (the team),8 which team, as a *462 public service activity, is able to assist towns and/or developers in the review of sites proposed for major land use activities. In 1988, the team prepared a fortyfour page report (the King's Mark Report) describing and developing the attributes of the property. An executive summary of the King's Mark Report is in evidence in the present case and Peter Rock's expert conceded on cross-examination that he could not point to anything in the report that had changed from 1988 to the present time.
The King's Mark Report noted that the proposed subdivision by Peter Rock would encompass 122 house lots with five roads proposed to serve the subdivision. The report pointed out that slopes on the site "range from gentle to very steep" and that as to the five wetlands areas on the site, the soils in the wetlands areas are "poorly to very poorly" drained. The impact of the development on the wetlands will be, it said, "significant" and will "eventually change the overall character and quality of the wetlands." The report, while noting that the town "includes wetlands in [its] calculations of area for lots" also said that impact on wetlands may be substantial on lots with large areas in wetlands." The report further observed that the town master plan designated the area around Peter's Rock [Park] for "Natural Preservation Concept" protection with that plan showing low density residential and open space uses in the area. While observing that the property had some serious limitations, it suggested that a cluster approach to development "might be preferable to property of this type" as such a plan "could avoid areas with severe limitations and focus on areas that are better suited for development." The King's Mark Report indicated that the site was located in an R-40 zone and that the proposed plan complied with the existing zoning standards.
At trial, five witnesses testified on the issue of fair market value. This evidence was given by four experts *463 and the general partner of Peter Rock. Joseph Perrelli was Peter Rock's expert, and Donald Nitz, John Leary and Frederick Fox9 were the town's experts. Perrelli, Nitz, Leary and Fox all submitted written appraisal reports which were admitted into evidence. Perrelli, *464 Nitz and Leary were examined and cross-examined. Fox's deposition was admitted into evidence. Stephen Papa, Sr. (Papa), who was Peter Rock's general partner, was examined and cross-examined at trial.
Material and testimonial evidence of fair market value of the property on August 6, 1996 at trial may be summarized as follows:
Valuation Appraiser Total FMV FMV/Per Acre Date
11/24/95 Fox $2,275,000 $12,500
12/12/95 Nitz 2,375,000 13,000
8/6/95 Perrelli 3,185,000 17,500
8/19/96 Leary 2,350,000 12,915
at trial Papa 3,640,000 20,000
During the trial, various opinions regarding the fair market value of the property were given, both from experts and from Papa,10the general partner. An owner of real property has been held competent to testify as to its market value. Misico v. LaMaita,
"It is the court's duty to award just compensation to an owner whose property is taken for public use. The usual measure of just compensation is the fair market value or the price that would probably result from fair negotiations between a willing seller and a willing buyer, taking into account all the factors, including the highest and best or most advantageous use, weighing and evaluating the circumstances, the evidence, the opinions expressed by the witnesses and considering the use to which the premises have been devoted and which may have enhanced its value. . . . Put in another way, the rule is that the trier must take into consideration everything by which value is legitimately affected including those factors which a willing buyer *466
and a willing seller would consider in fairly and advantageously negotiating an agreement." (Citations omitted.) Wronowski v. Redevelopment Agency,
The referees are the final judge of the credibility of witnesses and the weight to be given their testimony. Morgan v. Hill,
The basic issue is for the committee to determine and arrive at the fair market value of the fee as of the date of the taking, August 6, 1996.
The evidence before this committee concentrated on the sales comparison approach as the best approach to arrive at the fair market value of the subject property. No evidence supported the cost approach or the income capitalization approach.
The four expert witnesses all agreed that the sales comparison approach to value was the appropriate approach in this matter.
In using the comparable sales approach, it must be remembered that the comparison is made with lands which are similar and because, no two parcels are exactly alike, parcels may be used as comparables where the dissimilarities are reduced to a minimum and allowance is made for any such dissimilarities. 4 P. Nichols, supra, § 12B.04[3], p. 12B-26; see 26 Am. Jur.2d 71213, Eminent Domain § 301 (1996). One court, citing Nichols, has stated that "[a] comparable sale must *468
be one that sufficiently resembles the parcel in question with respect to time, place and circumstances that reasonable men would consider it in evaluating fair market value. Nichols on Eminent Domain § 13.02(4) `Selection and Presentation of Comparable Sales'." United States v. 534.28 Acres of Land,
The four expert witnesses utilized a number of properties offered as comparable sales. All four used the Pine Hill tract in North Haven, comprising some 119 acres as a comparable and upon which a residential subdivision under R-40 zoning has been developed. Three of the experts, including the plaintiff's expert, *469 used the King's Highway property in North Haven, comprising some forty-six acres (composed of two noncontiguous parcels on opposite sides of King's Highway) as a comparable sale. Both portions of it are in an R-40 zoning district and the larger portion of about 30.76 acres was approved for a twenty-five lot subdivision in April, 1995. Two experts, one of whom was the plaintiff's expert, used an eighty-three acre parcel in Cheshire as a comparable sale. Thereafter, each of the experts (except Fox, whose appraisal utilized only the Pine Hill and King's Highway properties as comparables) all advanced different properties as comparables. These were seven in number and varied in size from about eighty acres to nine acres with one being in North Haven (comprising about fourteen acres and fronting on Middletown Avenue). The balance were parcels situated in East Haven (three), North Branford (one), Wallingford (one) and Middletown (one). The four experts were examined and cross-examined on the comparables they utilized. Their detailed and comprehensive appraisal reports were subject to thorough inquiry. The basis of their opinions was probed as was their experience as appraisers, not only in appraising raw land but as to what, where and how their proffered expertise has been pursued by each of them professionally. As to their opinions of value and the elements that went into such opinions, counsel thoroughly probed their methodology such as why particular comparables were selected, the plus and minus adjustments made in their comparables vis a vis the subject property, their knowledge of the history of the comparable and the subject property and where such factors as topography, size, location, amenities, adaptability, zoning, different market value climates and others impacted on fair market value. Claimed inconsistencies were competently explored. Their respective opinions of value, as explicated, generated weighty credibility issues for the panel to resolve. *470
The Leary report concluded that the highest and best use of the subject property is for residential subdivision at a development density of 90 to 102 lots.
The Perrelli report concluded that the highest and best use of the subject property is for a residential subdivision.
The Nitz report concluded that the highest and best use of the subject property would be for residential subdivision within the parameters of the R-40 zone regulations, if all necessary zoning requirements can be met, any needed wetlands approvals can be obtained and both feasibility and marketability studies are favorable.
The Fox report dated November 24, 1995, concluded that the highest and best use of the subject property is for single-family residential use.
"The concept of highest and best use [is] chiefly employed by appraisers as a starting point in estimating the value of real estate . . . ." South Farms Associates Ltd. Partnership v. Burns,
The concept of highest and best use has been said to be "best defined" as " `that reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value.' " 7 P. Nichols, supra, § 4.04[4][a], p. 4-58; see South Farms Associates Ltd. Partnership v. Burns, supra,
The appraisal reports in evidence and testimony of the appraisers plus the testimony of Papa, clearly support the unanimous conclusion of the committee members that the highest and best use of the subject property is for residential subdivision development. *471
"[C]ourts have adopted the approach that raw land as such, with little or no improvements or preparation for subdivision may not be valued as if the land were in fact a subdivision." (Emphasis added.) 4 P. Nichols, supra, § 12B-14 [1] [a], p. 12B-162. "The accepted rule for the evaluation of such land, therefore, is that the land will be considered in its present condition as a whole, with consideration given to any increment or enhancement in value due to the property's present adaptability to subdivision development. (Emphasis added.) Id., § 12B-14[1] [a], p. 12B-168. In determining its highest and best use, the trial referee must consider whether there is a reasonable probability that in the reasonably near future the subject property will be subdivided. Budney v. Ives,
"The `highest and best use' concept, chiefly employed as a starting point in estimating the value of real estate by appraisers, has to do with the use which will most likely produce the highest market value, greatest financial return, or the most profit from the use of a particular piece of real estate." State National Bank v. Planning
Zoning Commission,
Zoning is an important factor to be considered when placing a value upon land. The credible evidence demonstrated the significance of the zoning history of the subject property. Peter Rock has owned the vast majority, 163 acres, since 1969.11 Presumably, and there is no contrary evidence, the property has been in an R-40 zoning classification since that time. During the entire period from 1969 to 1988, Peter Rock has never filed and pursued to completion any application for a zoning application together with a subdivision approval. In 1988, however, Peter Rock filed an application proposing a 122 lot subdivision under the R-40 requirements.12 The King's Market Report was filed in the context of that application and the evidence established that there have not been changes on the subject property to the time of trial. The inland wetlands commission denied the 1988 subdivision application and there was no appeal. In 1991, a proposal for an eighteen hole golf course (including seventy acres of open space) was *473 approved by the town of North Haven's inland wetlands commission, but that was never developed. In 1995, a zoning application seeking a change from an R-40 zone to an R-12 zone for a proposed affordable housing subdivision was filed by one D'Amato, an option holder.13 After hearings, it was denied by the North Haven planning and zoning commission in March, 1996. No specific number of lots/units was cited in that application, but the decision noted a potential range of 337 to 525 lots/units if the zone change were granted. D'Amato, the option holder, appealed from this March, 1996 denial. In July, 1996, the town wrote Peter Rock making a formal offer to purchase the subject property for $2,375,000, an amount that offer indicated that the parties had discussed earlier. The town also indicated at that time that if this amount were not acceptable, it would initiate eminent domain proceedings.
At this point, it may be said that Peter Rock argued at the trial that it had evidence to show that there was a reasonable probability of a zone change to allow "affordable housing" development of the subject property,14 the effect of which probability, it claimed, would impact on the market value of the subject property. Included among the proffered evidence was the socalled option "agreement" it had with D'Amato on this property. This option "agreement" was offered into evidence on several occasions and its admission was denied each time. Evidence quite apart from the actual option but nevertheless concerning the option, was, however, before this court from both testimonial and documentary sources. *474
We recognize that because a change in zoning restrictions obviously could affect the price of real property, "where such a change is reasonably probable and not merely a remote or speculative possibility, the probability may properly be considered in the determination of the fair market value of the property taken by eminent domain." Budney v. Ives, supra,
Initially, we observe that Peter Rock, in vicariously asserting the "rights" of D'Amato under the option, appears to argue that the town's condemnation on August 6, 1996, coming as it did after D'Amato appealed the denial, injured Peter Rock. Then it argues that the town, by thus "mooting" D'Amato's appeal, caused it to suffer the "loss of opportunity" to render its property more valuable to it by the probability of a zone change from its present R-40 zoning. Peter Rock cites, on the timing of the town's action, Budney v. Ives, supra,
To suggest, as Peter Rock does, that because the town would have the burden of proof, as it would, on the zoning appeal from the denial of the D'Amato application under the affordable housing act, the town's "chances" of proving that its planning and zoning commission did not err in denying Peter Rock's application for a change of zoning to R-12 "were poor," does not, in the first instance, constitute an element of the reasonably probable zone change mix. It has been indicated that a court must tread carefully in deciding whether a local zoning body would probably not approve a particular subdivision plan because "[a]ny such forecast must be carefully scrutinized as it is difficult to project what a public body will decide in any given matter." Delfino v. Vealencis,
Despite the circumstances that there were serious conflicts in the evidence leading to the ultimate issue of fair market value, the experts reached a consensus that the highest and best use of the subject property was for residential subdivision purposes. We agree. We also conclude that the issue of compensation must be resolved in the context of the present R-40 zoning.
As we have already pointed out, the expert evidence as to fair market value was: $3,185,000 by Peter Rock's expert Perrelli, $2,375,000 by Nitz, an expert for the town, $2,350,000 by Leary, an expert for the town and $2,275,000 by Fox, an expert whose appraisal was offered by the town. The committee was impressed with *477 the "cluster" effect of the three appraisals submitted by the town. Leary, Nitz and Fox did not listen to each other's testimony. Moreover, there is no evidence that Leary or Nitz even knew of the other valuations. The appraisals of Leary and Nitz were $25,000 apart, and the earlier tax appraisal was $75,000 lower than that of Leary. There appears to be remarkable agreement between the three. We observe that both Leary and Nitz were credible witnesses.
The plaintiff's expert recognized that the concerns vis-a-vis potential development of the subject property in the King's Mark report made in 1988 still existed at the time of trial. This report, which was commissioned by the town inland wetlands commission in the context of Peter Rock's 1988 change of zone application, adduces a cautious outlook for potential development as a residential subdivision without considerable work. The property, however, has some "serious limitations" including topography and the significant impact of development on wetlands (forty-five percent of which are along Middletown Avenue frontage). While it is correct that the King's Mark Report did opine in 1988 that "a cluster approach [to development] might be preferable with property of this type" nothing of that nature has been considered since then under the credible evidence. Indeed, the 1988 subdivision application which was for a 122-lot subdivision under the R-40 requirement and which was denied in 1988, was never appealed. The 1996 application for a zoning change filed by D'Amato was not for R-20 zoning just below R-40 but for R-12, and that too was denied. There is no other zoning history since Peter Rock bought the great majority of this property twenty-six years ago in 1969, except the golf course approval in 1991. The outcome of the recent zoning applications for the property operates to set the legal parameters for the legal uses of the property and economic return thereunder. Given the zoning history, *478
the nature of the property, and the activity concerning the property, it is difficult to give very much weight to the unsubstantiated evidence proffered as a potential for a "park-like" or "village" development. We say this aware that it is proper on the issue of determining value in eminent domain cases "to consider all those elements which an owner or a prospective purchaser could reasonably urge as affecting the fair price of the land." Andrews v. Cox,
All four experts agreed that the comparable sales approach to determining fair market value was the only method to use in the present case. In addition to what we said earlier on this issue, however, we found the town's evidence more persuasive on comparable sales than that of Peter Rock. Generally speaking, this includes resolution of credibility issues which, in turn, includes the quality of the expertise and the degree of analysis employed. There were certain comparables that experts for both parties agreed were comparable and there were others offered as "comparable" by the various experts that were different properties (and this was so even between the town's experts). No two pieces of property are exactly alike and, precise guidelines as to degrees of similarity cannot be fixed. In evaluating and weighing that expert testimony on a comparable sale, we are aware that a comparable sale does not have to be similar in all comparative respects "so long as there is sufficient similarity in some significant respects to permit the expert testifying, or the factfinder, to draw rational probative valuation inferences from the [comparable] sales cited, after weighing and allowing for such differences as do obtain between the properties sold and that which is the subject of the valuation litigation." (Emphasis added.) Moorestown *479 Township v. Slack,
Particularly significant was the evidence of the adjustments made by individual experts because the sales price of the particular comparable was a known fact and the dollar value of the subject property was not, and so adjustments to the particular comparable were often required to be made to make it as similar to the subject property as could be done. Evidence to claimed comparables made here included percentage adjustments. The factors going into the mix, both from the degree of percentage and the "similarity" factors to which the adjustment was applied produced serious conflicts in the evidence. We found the evidence of the town's experts much more credible and entitled to more weight than that adduced by Peter Rock in arriving at their respective opinions of market value and, ultimately, at our opinion of fair market value.
On the law and the credible evidence, the present committee of three judge trial referees finds that Peter Rock Associates is aggrieved and it concludes that the fair market value per acre of the subject property as of the date of taking (August 6, 1996) is $13,500 per acre for a total fair market value, as of that date, of $2,457.000. The town has already paid $ 2,375,000 into the Superior Court, Peter Rock has already moved for the payment of that amount, and has been paid that amount. The balance due Peter Rock in damages for the taking of August 6, 1996, therefore, is $82,000 plus interest thereon, at the reasonable and just rate of 7.5 percent per annum from August 6, 1996, to the date of this judgment. See General Statutes §