In re County of Suffolk, 47 N.Y.2d 507 (1979)
When private property taken by eminent domain qualifies as a ‘specialty’ due to its unique nature and lack of a market, just compensation is determined by the summation method: land value plus replacement cost of improvements, less depreciation.
Summary
Suffolk County condemned property owned by the Van Bourgondien family, which had operated a flower-growing nursery for over 50 years. The key issue was how to value the property. The County argued for residential development value, while the owners claimed it was a ‘specialty’ property. The Court of Appeals held that the property qualified as a specialty because of its unique greenhouse complex and the absence of a market for flower-growing businesses in the area. The court affirmed the Appellate Division’s decision to value the property using the summation method, which considers the land value plus the replacement cost of the improvements, less depreciation. This case clarifies the criteria for determining specialty property status in eminent domain cases.
Facts
The Van Bourgondien family owned a 19-acre parcel in Suffolk County, zoned for residential use. They operated a wholesale flower-growing nursery with a large greenhouse complex (125,000 sq ft under glass) since 1920. The main residence contained special instruments to monitor greenhouse conditions. The family had prior unsuccessful attempts to rezone the property for multiple residences. At the time of condemnation in 1974, the business was profitable, with increasing gross sales. The County argued the highest and best use was residential development due to high taxes making the flower business unfeasible.
Procedural History
The County condemned the property. At Special Term, the court determined the highest and best use was residential development and assigned no value to the greenhouse complex. The Appellate Division modified this ruling, deeming the property a specialty and ordering valuation accordingly. Upon remand, the parties stipulated the reproduction cost less depreciation. The County appealed the amended order to the Court of Appeals.
Issue(s)
Whether the Van Bourgondien family’s nursery property qualified as a ‘specialty’ property for valuation purposes in an eminent domain proceeding, thus requiring valuation based on the summation method (land value plus replacement cost less depreciation) rather than market value for residential development.
Holding
Yes, the property was a specialty because it met the criteria for uniqueness, special use, lack of a market, and economic appropriateness. Therefore, the summation method was the correct valuation approach.
Court’s Reasoning
The Court of Appeals affirmed the Appellate Division’s ruling, emphasizing the constitutional requirement of just compensation for private property taken for public use. The court applied the four-part test for determining whether a property is a specialty, as established in Matter of County of Nassau (Colony Beach Club of Lido), 43 A.D.2d 45 (1973) and refined in Matter of Great Atlantic & Pacific Tea Co. v Kiernan, 42 N.Y.2d 236 (1977). The court found that the greenhouses were unique and specially built for growing plants and flowers, constituting a unique structure adapted to the business conducted. The property was actively used for its specialized purpose. Crucially, there was no market for the property as a whole for flower-growing businesses in western Suffolk, as other such properties had been converted to residential use. Finally, the business was economically feasible and not outmoded at the time of the taking. The court distinguished Colony Beach Club, noting that the beach club property was underutilized and surrounded by single-family residences, making its commercial use inappropriate. Here, the flower business was profitable and on the upswing. The Court stated, “a specialty may perhaps be best defined as a structure which is uniquely adapted to the business conducted upon it or use made of it and cannot be converted to other uses without the expenditure of substantial sums of money”. The Court also held that the main residence was an integral part of the nursery complex and properly valued as part of the specialty, and the greenhouses qualified as compensable fixtures because they were annexed to the land with the intention of permanence and would lose substantial value if removed. Ultimately, the court concluded that all elements of the property including the plants, were compensable.