Hudson Yards owners lose condemnation claim

Owners of M1-5 properties claimed their land should be valued as if zoned C6-4. The City acquired properties through eminent domain for the Hudson Yards Rezoning and Development Program. The project aimed to develop 38 blocks in Manhattan’s Far West Side and extend the No. 7 subway line south-westward from Times Square to Eleventh Avenue and West 34th Street. 2 CityLand 4 (Feb. 15, 2005). The affected owners’ properties were primarily located on 34th and 35th Streets between Tenth and Eleventh Avenues and were zoned M1-5 prior to the rezoning. The plan rezoned portions of some properties to C6-4, while the rest remained M1-5.

The property owners sought compensation for the takings. Prior to the parties submitting appraisal reports, the owners argued that they were entitled to have all the seized M1-5 properties valued as if they had been rezoned C6-4. For certain M1-5 lots, the owners claimed the City did not rezone these properties to the more valuable C6-4 zoning because the City wanted to take the property at an unfairly low price. The owner also claimed that these M1-5 properties would have been rezoned to C6-4, or otherwise would have received variances in the near future, even if the City’s project had not existed. For other lots that were partially zoned M1-5 and partially zoned C6-4, the owners argued that the seized M1-5 portions should have been valued as C6-4, based on the partial C6-4 zoning that applied to the other portion of each lot. Lastly, Mercedes-Benz, which owned property located on Eleventh Avenue between 40th and 41st Streets, also sought a C6-4 valuation. 

Justice Jane S. Solomon held that all seized properties, except the Mercedes-Benz property, should be valued as if they were zoned at the existing M1-5 designation. Justice Solomon also held that the owners of the M1-5 lots failed to prove they were victims of improper zoning decisions, and that the project was not part of a well-considered comprehensive plan. The court further explained that the owners of the M1-5 lots and the partially zoned lots did not show that, absent the project, their lots would have been rezoned C6-4 in the near future. Justice Solomon refused to value the Mercedes- Benz property at C6-4, but did value it as if it were zoned C6-3. According to Justice Solomon, the property was much closer to development along the 42nd Street corridor and was thus likely to have been rezoned C6-3 in the near future.

Hudson Yards Rezoning and Development Program, 2011 N.Y. Slip Op. 51759(U) (N.Y. Cty. Sup.Ct. Oct. 4, 2011) (Solomon, J.) (Attorneys: M. Robert Goldstein, Jonathan Houghton, for property owners; John R. Casolaro, for NYC).

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