Hudson County Assignment Judge Peter Bariso recently rejected a property owner’s argument that the date of value should be a date earlier than the commencement of condemnation action on August 23, 2012. City of Hoboken v. Ponte Equities, Inc. (Docket No. HUD-L-4095-12). The property owner argued that the date of value should have been June 11, 2008, the date the City of Hoboken allegedly took action that substantially affected the owners’ use and enjoyment of the property consistent with N.J.S.A. 20:3-30, which requires the court to set the date of value as the “earliest” of four possible dates. On that date, the City introduced an ordinance(Dr-366), and adopted two resolutions. That ordinance recommended rezoning certain properties to open and recreational space, including Ponte’s property. Dr-366 was never adopted.
Resolution 08-206 was a “Resolution Supporting Acquisition of Block 11 for Open Space,” and recommended that the zoning board of adjustment post-pone all pending variance applications for properties within Block 11 or identified in Ordinance Dr-366.
Resolution 08-207 authorized retention of an appraiser to value several properties to be used in support of a future City application to obtain Open Space Trust Funds to acquire the properties appraised, including Ponte’s. The City’s 2009 appraisal valued the Ponte property at $10,070,000 for residential development.
On March 16, 2011, the City adopted the 2010 Master-Plan Re-Examination Report, which recommended park use for the subject. The City re-appraised the subject in 2011 at $2,350,000 for continued use as a public parking lot. The City offered Ponte this amount to acquire the property. Upon rejection a condemnation complaint was filed on August 23, 2012.
Ultimately a bench trial was held in January of 2014 to determine the appropriate date of value. The owner presented two expert witnesses; a professional planner and an appraiser. The court was critical of the planner because he did not provide any factual support for his opinion that a variance application to build residential on the subject property as of the date of complaint (2012) was any less likely than as of the earlier date (2008). The court also criticized the appraiser for failing to bring any examples of variance denials after the June 2008 municipal actions, and also for failing to offer an opinion on whether the municipal action affected the property value other than to generally agree with the City’s appraisal valuation for residential ($10M) and parking ($2.3M).
Without recounting the entirety of the opinion, the Court found the lack of factual foundation for the experts’ opinions fatal. Since the planners and the appraisers “testimony lacked any factual basis, they constitute net opinions for failing to meet the threshold requirements of N.J.R.E. 702 and N.J.R.E. 703. Consequently, Hoboken’s motion in limine to exclude Ponte’s experts’ testimony is granted. As a result, Ponte has failed to offer sufficient evidence to find June 11, 2008 as the appropriate valuation date pursuant to N.J.S.A. 20:3-30(c).” [Slip op. at 27].
The apparent lack of factual support for the property owner’s contentions might ultimately assist in determining just compensation because there is an argument that a buyer and seller would take into consideration the probability of a variance to build residential as of the date of the commencement of the action.
A copy of the court’s opinion in this matter is available here.