Court Opinion

ID: 5833154
Source: CourtListenerOpinion
Date Created: 2022-01-12 22:30:46.604697+00
Date Added: 2024-06-11T08:43:30.727076
License: Public Domain

OPINION OF THE COURT
Markewich, J.
The issue before us is whether, in this proceeding in eminent domain, a claimant using a unique idea to bring about increased rental returns is to be deprived of the benefit of that idea by having a lesser hypothetical rent roll substituted for the actual rent roll. The subject 10-story, loft-type building was acquired in 1964 by the claimant from the City of New York for $340,000. For the next 10 years, it was used for storage of records and office equipment by approximately 100 tenants. The city’s theory advanced in this condemnation proceeding to reacquire its formerly owned property is that the actual rent roll is to be ignored, and, as it seems, that an artificial rent roll must be substituted therefor, calculated from figures provided by other similar buildings in the neighborhood, not operated in the same manner as the subject premises. Special Term has adopted respondent’s theory. We disagree, and remand to have the actual rental figures considered as a factor in ascertaining value of the condemned property. Respondent’s valuation was based upon the purchase price paid by claimant, and the 1969/1970 tax assessment of $305,000, together with a hypothetical rent roll arrived at after "carving” away the higher rent charged to and paid by tenants for whom claimant had, in effect, provided custom space precisely calculated to fit the exact needs of the tenants for storage space by the use of movable partitions. This unique entrepreneurial device actually saved tenants money by complete elimination of waste space over and above actual needs. At the same time, it resulted in a higher rate per square foot to the landlord. The city claimed, however, that the actual *113rent return was inapplicable because the claimant was free to use its idea wherever it moved, and the city had not deprived claimant at all of continued use of the device. It had not, it argued, bought the idea along with the building. Special Term adopted respondent’s theory and agreed that the value of the subject property, compared to other loft buildings in the vicinity was $635,000 instead of the $1,100,000 asked by claimant as based on the actual rent roll. Other rents nearby were $1.75 to $3 per square foot; claimant’s rate was $8 to $9. The difficulty with the city’s thesis that it had not bought claimant’s idea is that it fails to consider at all the hard fact that it has deprived claimant of the use of that idea at the place where installed by claimant and in highly successful operation at the time of taking.
The adjustment in the rent roll made by respondent’s experts is based on sheer speculation and not on fact. Indeed, the opinion of the experts as to value actually translates into an opinion as to what they believe the law should be. It is not supported by the actual facts in the record. Rental figures usually do not present an issue of basic fact, nor should they here, readily ascertainable as they are from the records. The real figures should not be ignored, as they have been here. (See Hicks Realty Assoc. v State of New York, 34 AD2d 866.) We find nothing whatever in the record to sustain an inference that claimant’s rent figures have been inflated by income from other businesses in the same ownership. Nor is there anything out of the ordinary in the sharing by several businesses of certain services as long as—and we believe this to be the situation here—they are charged to each beneficiary in appropriate proportion. In short, there is nothing in the record to indicate that the rental return from the subject building is other than that claimed.
We find claimant’s insistence on the use of correct rental figures to be justified. That it has been increased by use of a unique idea does not bar it from consideration any more than if it had come about through excellent lighting, location, commodious elevators capable of raising loaded trucks, air conditioning, etc. Better and more desirable facilities always command higher rents.
Due process in eminent domain has been succinctly summarized: "The owner whose property is taken for public use is to be justly compensated for damages sustained. He is to be made whole, as well off after the taking as he was *114before.” (Matter of City of New York [Fourth Ave.], 221 App Div. 458, 459.)
"One who is deprived of his property by eminent domain has the right to prove every element that can fairly enter into the question of value. In the determination of what is just compensation, there is no single element which is controlling, and it is proper to consider all factors indicative of the value of the property. The court must consider those things which will be present in the minds of a willing buyer and a willing seller.” (19 NY Jur, Eminent Domain, § 140, p 353.) What willing buyer could reasonably overlook the actual rent roll and its cause? And what seller would willingly part with the property at a figure which did not consider its actual rent roll?
"In the determination of the fair market value, the condemnee is entitled to have the appraisal based on the highest and best available use of the property irrespective of whether he is so using it”. (Keator v State of New York, 23 NY2d 337, 339.)* Claimant is actually putting the building to its highest and best use. The fact that its neighbors are not doing likewise should not deprive this claimant of the benefits of its ability to find an even higher and better use than envisioned by the others.
Fourth separate and partial final decree entered October 18, 1976, Supreme Court, New York County (Mangan, J.), awarding claimant $635,000 and interest for acquisition of its property on June 1, 1970 in eminent domain proceedings, should be reversed, on the law and the facts, and remanded for further proceedings not inconsistent herewith, without costs.

 We certainly do not overlook the fact that Keator dealt with a "specialty”. But the same principles apply. In any event, while claimant’s property comes close to being a specialty, it may be treated of, as done here, by appropriate application of basic principles.