Case ID: ad_269/html/0735-01.html
Source: Caselaw Access Project
Author: {"author": "Callahan, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The People of the State of New York ex rel. Cenwest Corp., Appellant, against William S. Miller et al., Constituting the Tax Commission of the City of New York, Respondents.
   Callahan, J.

(dissenting). I dissent and vote to modify the order appealed from by further reducing the building and total assessments as follows:

The fact that relator’s building expert testified to a sound value based on the cost of reproduction less depreciation at about the figures fixed by Special Term would seem to indicate that such values were adopted by the court. In face oí the earning record of the present premises, such fixation was unwarranted. Reproduction cost merely indicates a maximum value. (People ex rel. Manh. Sq. Beresford v. Sexton, 284 N. Y. 145.)

In ordinary circumstances investors will pay for income-producing property a price measured in large part by the amount and certainty of the income which can be obtained from such property. Therefore, evidence of income derived or which can be derived from real property may at times constitute the more persuasive evidence of the value thereof. (People ex rel. Parklin Operating Corp. v. Miller, 287 N. Y. 126.)

The only way that earnings could be capitalized to support the values fixed herein would be to assume potential rents at a much higher rate than the actual rents. This is to ignore reality in favor of abstract and unsupported theory, especially in view of the present limitation of reiits maintained by governmental control. But even if we assume the correctness of the potential rents contended for by the City, and further assume the correctness of the figures testified to by the City’s expert as to the proper cost of operating the building, the instant premises would earn only about 4% to ^P/%% on the assessed valuation here fixed, after proper allowances for operation, costs, taxes, depreciation, etc. The ordinary investor would not base values on any such return in face of the nature and risks of the investment.

Martin, P. J., Townley, Glennon and Cohn, JJ., concur in decision; Callahan, J., dissents in opinion.

Order affirmed, with $20 costs and disbursements. No opinion.