MTA took private land to expand Sunnyside Rail Yard for East Side Access Project. The Metropolitan Transportation Authority acquired 38-38 43rd Street and 38-40 43rd Street in Sunnyside, Queens through eminent domain. The MTA plans to use the lots to expand the Sunnyside Rail Yard for the East Side Access Project, which would connect the Long Island Rail Road directly to Grand Central Terminal in Manhattan. 38-38 43rd Street consisted of a two-story storage, warehouse, parking, and office building situated on a 23,000 sq.ft. site. The building, with its basement, had 30,240 sq.ft. of gross area. 38-40 43rd Street consisted of a similar building (28,050 sq.ft. of gross area) situated on a 12,725 sq.ft. site. Both lots were zoned M1-1 for light manufacturing uses. At the time of the taking, both properties were being leased for income generation.

In a dispute over the fair market value of the properties at the time of the taking, the MTA’s appraiser disagreed with the private owners’ appraiser over: (1) the highest and best use of each property and (2) the fair market value of each property.

Justice Jaime A. Rios agreed with the private owners’ appraiser that the highest and best use of each property was as a combination industrial storage/warehouse and office building for owner occupancy, and not as a multi-tenanted facility like the MTA’s appraiser opined. Using the sale-comparison approach rather than the income approach, Justice Rios valued 38-38 43rd Street at $6.3 million and 38- 40 43rd Street at $5.9 million, or $209.18 per square foot.

East Side Access Project, Index No. 176/08 (Queens Cty. Sup. Ct. Nov. 28, 2011) (Rios, J.).