Condemning a Golf Club? Not So Fast – It’s Worth More Than You Think.

When a town condemns a country club to continue its use as a golf course, it may have bitten off more than the taxpayers can chew.

The law in New York and elsewhere in our country is that the Constitution requires the payment of just compensation,

It is the general rule that “just compensation” is the fair market value of the property at the date of the taking, Matter of Board of Water Supply of City of New York, 277 NY 452 (1938); County of Erie v Fridenberg, 221 NY 389 (1917), and the fair market value is the price for which the property would sell if there was a willing buyer who was under no compulsion to buy and a willing seller who was under no compulsion to sell.  Keator v State of New York, 23 NY2d 337, 339 (1968).

It is also a bedrock principle of eminent domain that “[t]he measure of damages in a condemnation case must reflect the fair market value of the property in its highest and best use on the date of the taking regardless of whether the property is being put to such use at the time.”  Matter of 730 Equity Corp. v New York State Urban Dev. Corp., 142 AD3d 1087, 1088 (2d Dept 2016).

The determination of highest and best use must be based upon evidence of a use which reasonably could or would be made of the property in the near future.  Matter of City of New York (Broadway Cary Corp.), 34 NY2d 535, 536 (1974).  However, it is not essential to demonstrate that the property has been used as its projected highest and best use, or that there had been an ante litem plan for such use.  Keator v State of New York, 23 NY2d 337, 339 (1968).  But, the proposed use cannot be a speculative or hypothetical arrangement in the mind of the claimant.  Matter of City of New York (Shore Front High School), 25 NY2d 146, 149 (1969).

So, the land of the country club may be subdivided in accordance with zoning and local regulations resulting in a great multiple of value compared to a golf country club.

Posted in Country Club, Golf Course, Highest and Best Use
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