Court Opinion

ID: 5758803
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:10:56.566278+00
Date Added: 2024-06-11T08:41:29.566379
License: Public Domain

Per Curiam.

This appeal involves awards for the taking by eminent domain of the property known as the Polo Grounds. The subject property is familiar to practically every local inhabitant of mature years as the former home of the Giants. It consists of a stadium with adjacent parking lots, the whole comprising some 17% acres — a plot practically unique as to size on the island of Manhattan. Other features of the land will be discussed below.
The claimants are members of the Coogan family who are the fee owners of the plot, and the National Exhibition Company who, at the time of taking, were the tenants in occupancy. The lease between the parties called for the erection of the stadium by the tenant. It further provided that the stadium would revert to the Coogans at the termination of the lease or the latter could require the tenant to demolish it at its own expense. Another significant provision was that in the event of condemnation any award for the land was to be the property of the landlord, any award for the stadium was to be divided 85% to the tenant and the balance to the landlord.
Special Term fixed the value of the land at $2,614,175. The city has accepted this valuation, but the Coogans appeal. Cer*374tain arguments based on the comparative return to the two claimants do not merit discussion, and we turn to the value claim made on their behalf. Claimants’ real estate expert arrived at a value of $5,200,000. He reached this figure by first reaching the conclusion that the plot was suitable for middle-income housing and that a purchaser could be found because said purchaser would be able to finance the purchase and erection of buildings pursuant to the Mitehell-Lama Law. He then took the square-foot price paid by the purchasers of another baseball installation of comparable size, Ebbetts Field in Brooklyn, and, adjusting it to the size of the Polo Grounds, arrived at his value. We find insurmountable difficulties with these conclusions. Apart from the size of the plot, there is no resemblance between the two fields. The neighborhoods bear no resemblance to each other, the likelihood of .success of middle-income housing projects on the respective sites is vastly different, and, of paramount significance, the soils comprising the two plots have little in common. The Polo Grounds is composed of land captured from the Harlem River. The earth covering is light. In most places excavation will strike water at six feet, and in some places at two feet. There was evidence that in the course of years the playing field sank to an extent where it was found necessary to raise it some four and a half feet. Even a structure as substantially spread out as this stadium has settled to a noticeable degree. Portions of the plot are subject to flooding when weather conditions cause a rise in the river. It is obvious that no substantial percentage of the plot will sustain multistory buildings without extensive use of pilings. Assuming that this is an engineering possibility, the enormous expense would certainly have an adverse effect on what a builder would pay for the land; and even publicly controlled financing would have qualms about lending for such a project. None of these vital factors finds reflection in the appraisal of claimants’ expert. Without them we find no challenge to the correctness of the court’s finding.
We have considered the testimony of the tenant’s expert, Mr. McCann, on this subject although, strictly speaking, his evidence, being on a phase of the matter in which his claimant had no interest, can have little weight.. His testimony in large degree .supports the observations above of the impracticality of this parcel for middle-income housing. Instead, he valued the property for the use to which it hitherto had been put— which he considered the best use. Assuming this to be true, he failed utterly to explain why, over the entire period of upwards of 50 years that the land was so used, the highest rental it ever *375earned was less than 2% of Ms valuation. Only two possibilities can explain this situation: either the tenant was paying less than a third of the proper rental in a situation where the landlord owned one of the very few properties large enough to accommodate the tenant’s enterprise, or the appraisal figure is grossly exaggerated. The latter view is virtually compelled by the facts.
■Special Term arrived at a value for the improvement on an estimate of reproduction cost less depreciation. The result was satisfactory to the claimant but the city has appealed. That the stadium is a specialty is incontestable. However, the city argues, with merit, that this does not necessarily mean that reproduction cost is the proper means of valuation. The theory supporting this method is that a like structure can neither be bought nor rented in the usual course of real estate transactions, and so the owner’s only means of replacing it is to build another. But if the building, though a specialty, would not be replaced, reproduction cost ceases to be a measure of the owner’s loss (United States v. Toronto Nav. Co., 338 U. S. 396; Matter of City of New Yorh [Lincoln Sq. Slum Clearance Project], 15 A D 2d 153, 172, affd. 12 N Y 2d 1086). WMle it is reasonably expected that sports stadia will be continued to be built, it is extremely doubtful whether this will continue to be done as a private enterprise. Significantly, while this claimant has the use of a stadium currently, the record shows that the stadium was publicly built, and the record further confirms what is generally known, that this has been the invariable practice in the cities where such stadia have been constructed in recent years. It is, of course, not essential that the claimant show that he intends to replace the structure but only that it would be reasonable to expect that it would be replaced. Whether this requirement is met by a showing that any replacement would not be a commercial venture but rather a governmental undertaking is open to some doubt. For the reasons indicated below, solution of this problem is obviated in tMs case by certain pragmatic factors.
The city contends that the stadium, by virtue of economic depreciation, has no value at all except as scrap, the value of which it places at $75,000. On the question of depreciaition Special Term applied a factor of 70% to cover physical and economic depreciation as well as obsolescence. Applying this figure to the expert’s estimate of reproduction cost—with which no one appears to have any quarrel—the court arrived at the award of $1,724,714. Just how the 70% was arrived at does not appear. The over-all figure by the expert for physical *376depreciation comes to 48%. Though it was conceded that the amounts or percentages of depreciation for obsolescence and economic depreciation are not susceptible of concrete proof, it is practically inconceivable that as little as 22% of the original cost would represent a fair allotment.
The stadium was built in 1911 and substantially increased and altered in 1922. It is not remarkable that many features such as escalators, certain facilities and the like are not found and that in other respects as well it would compare unfavorably with more recent erections. Of greater significance are the dearth of parking space and the fact that the sewage disposal system is now illegal and could be the subject of a costly violation. These factors of obsolescence are significant both on the cost of operation and the usefulness of the stadium.
But it is in the area of economic depreciation that the stadium really suffers. It was fairly established that the economic significance of a stadium of this kind is inextricably linked with its occupancy by a major league baseball team. It was constructed to house just that activity and without it could not possibly support its maintenance charges. Efforts to support a contrary conclusion had no substantial evidentiary support. And it is most persuasive that when this claimant moved its franchise to San Francisco, with an appreciable term of its lease remaining, it made practically no effort to lease the stadium for the occasional other activities that were used to supplement income, and which it is claimed prove economic value. It must be clear also that the franchise would never have been moved if it were not anticipated that a greater return would be realized by so doing. When it is considered that the move was made to a smaller city, where the team lacked the character of an institution which it enjoyed here, there must have been weighty considerations for it. And without attempting to state these individually, the sum total of the reasons is that the team had less drawing power while playing in that stadium, located in the neighborhood where it was and with its physical disadvantages — especially as those detracted from the comfort and convenience of the patrons — than in some other, more modern, stadium. The actions of the claimant speak louder than its arguments. We believe that these considerations raise the depreciation factor to well over 90% of its original value.
Admittedly it is difficult to arrive at a figure that is impervious to attack. The lease had some eight months to run. It could be said that the terms of the lease providing for the practical ownership of the stadium over a period of 40 years in return *377for the cost of erection indicated- the extent of its economic life as visualized by the parties to it when the lease was made. Events proved them to be unusually accurate. This would indicate a value for the remaining life of the structure of about $100,000. If to this is added its scrap value of $75,000, claimant should be amply compensated. When it is considered that, were it not for the windfall of condemnation coming when it did, this claimant would not have had anything and might be liable for substantial demolition costs at the option of the fee owner, the result is not inequitable.
Decree should be modified, on the law and the facts, by reducing the award for the improvement to $175,000, and otherwise affirmed, with one bill of costs to the City of New York against all claimants.