34 N.Y.2d 535 (1974)
In eminent domain proceedings, a property owner seeking compensation based on a proposed highest and best use of the property must demonstrate a reasonable probability that the asserted use could or would have been made in the reasonably near future, not merely a speculative or hypothetical possibility.
Summary
The City of New York condemned property owned by Broadway Cary Corp. for park purposes. Broadway Cary Corp. argued that the highest and best use of the land, which was zoned for light manufacturing, was for a community shopping center and sought compensation based on that use. The Court of Appeals held that Broadway Cary Corp. failed to substantiate this claim because they presented evidence of physical feasibility but not economic feasibility. The court emphasized the need to demonstrate a reasonable probability that the proposed use would occur in the reasonably near future, considering factors like financing, construction costs, and potential profits.
Facts
The City of New York initiated condemnation proceedings to acquire real property owned by Broadway Cary Corp. The property was zoned for light manufacturing. Broadway Cary Corp. contended the highest and best use of the property was for a community shopping center. The City presented evidence of value based on comparable sales of adjacent parcels. Broadway Cary Corp. presented evidence only on the physical possibility of erecting a shopping center.
Procedural History
The case reached the Court of Appeals after Broadway Cary Corp. sought compensation based on the proposed shopping center use. The lower courts apparently sided with the city’s valuation based on current zoning and comparable sales. The Court of Appeals affirmed the lower court’s determination.
Issue(s)
Whether a property owner in an eminent domain proceeding, seeking compensation based on a proposed highest and best use of the property, must demonstrate a reasonable probability that the asserted use could or would have been made in the reasonably near future, or whether evidence of physical feasibility alone is sufficient.
Holding
No, because a property owner must show a reasonable probability that the asserted use could or would have been made in the reasonably near future, supported by evidence beyond mere physical feasibility, to justify compensation based on that proposed use in an eminent domain proceeding.
Court’s Reasoning
The court emphasized that while it’s not essential to demonstrate that the property had been used as its projected highest and best use or that there had been an ante litem plan for such use, it is necessary to show a reasonable probability that the asserted use could or would have been made within the reasonably near future. The court distinguished between a speculative or hypothetical arrangement in the claimant’s mind and a use that has a reasonable probability of occurring. The court cited Matter of City of New York [Shorefront High School Rudnick], 25 N.Y.2d 146, 149, noting that an expert would likely consider factors like the availability of financing, costs of construction, taxes, and possible profits in determining the highest and best use and probable market price. Broadway Cary Corp.’s evidence only addressed physical feasibility, failing to meet the usual criteria for establishing a reasonable probability of the proposed use. The court effectively requires that evidence of economic feasibility accompany evidence of physical feasibility to support a claim for compensation based on a property’s potential highest and best use.