45 N.Y.2d 115 (1978)
When a property is unique and lacks a readily ascertainable market value, particularly properties like churches or clubhouses held by nonprofit organizations, it may be valued as a specialty using the reproduction cost less depreciation method in eminent domain proceedings.
Summary
This case concerns two separate condemnation proceedings involving properties owned by nonprofit organizations: a VFW post and a Grange hall. In both cases, the properties were specially constructed for their respective organizations. The central issue was whether these buildings were correctly classified as specialties and thus properly valued using the cost of reproduction less depreciation method. The Court of Appeals affirmed the lower courts’ decisions, holding that both properties were indeed specialties due to their unique design and lack of a recognizable market value, justifying the use of the reproduction cost less depreciation method for determining just compensation.
Facts
In Matter of Rochester Urban Renewal Agency (Patchen Post), the property was a fraternal meeting hall owned by a VFW post, used primarily by its members but also made available to other service groups without charge. In Matter of Village of Newark Urban Renewal Agency (Newark Grange), the property was a two-story building used by the Grange for meetings and public functions, with some portions rented to community-related tenants.
Procedural History
In Patchen Post, Trial Term adopted the respondent’s approach and rendered an award that was affirmed by the Appellate Division. In Newark Grange, Commissioners of Appraisal determined the property was a specialty, which was confirmed by the Wayne County Court and affirmed by the Appellate Division. Both cases were then appealed to the New York Court of Appeals.
Issue(s)
Whether the properties owned by the VFW post and the Grange hall were properly classified as specialty properties, thus justifying the use of the cost of reproduction less depreciation method for valuation in condemnation proceedings.
Holding
Yes, because both buildings were found to have been specially designed with unique structural features for which there was no recognizable market value, and their primary use was for nonprofit community service, not commercial purposes.
Court’s Reasoning
The Court of Appeals emphasized that while