City claimed condemned property designated as wetlands was overvalued at $10 million. In 1985, seven acres of property covering six blocks in the Oakwood Beach section of Staten Island was donated to a yeshiva. The yeshiva’s plans for the property included development of a school and synagogue. Due to fiscal setbacks and a freshwater wetland designation, the yeshiva in 1991 sought and the City approved a hardship exemption in development of the planned school and synagogue. The yeshiva never actually began development on the property.
On May 8, 2009, the City condemned the property for City use as part of the City’s Oakwood Beach Bluebelt Stage 1 Project. In October 2014, Supreme Court Justice Wayne P. Saitta determined that the fair market value of the condemned property was $10,100,000 and awarded that sum to the yeshiva. The City appealed.
The City argued that the planned use of the property as a school and synagogue was merely hypothetical given the long hiatus in development and the wetland designation. The City also claimed that even if the yeshiva had legitimate plans to develop the school and synagogue, two blocks of the property remained undeveloped and should have been valued at a much lower price per square foot.
The Appellate Division, Second Department upheld the lower court, but reduced the award. The court found that the yeshiva had demonstrated that the use of the property as a school and synagogue was not hypothetical despite pursuing a hardship exemption during their extended hiatus in development, and that the planned use was the highest and best use of the property. The Second Department nonetheless agreed with the City that the lower court had overvalued the two blocks of undeveloped land that had not been included in the yeshiva’s plans. The court accordingly reduced the fair market value of the total initial award from the sum of $10,100,000 to $3,165,513.
(CIT) Matter of Oakwood Beach Bluebelt – Stage 1, 164 A.D.3d 1453 (2d Dep’t 2018).
By: Abby Cannon (Abby is a New York Law School student, Class of 2020.)