In a very comprehensive decision, the Honorable John J. Leo discussed, among many legal issues, special benefits. The decision, Freudenberger v County of Suffolk, Index No. 606055/16 (Suff. Co. April 5, 2021), the Court awarded $172,302 in a taking by the County on Fire Island for the reconstruction of Fire Island’s barrier beach and dune network. The intent of the project was to protect the sand dunes by taking easements to construct flood hazard risk reduction measures. The County’s total appraised damages for the 2,558 square feet of property was $1,791.
The Court in a 44 page, well thought decision found that direct damages were $2,302 and the severance damages total $170,000.
But we think the most interesting part of the decision addressed the County’s contention that there should be a deduction for special benefits. We know general benefits are not deductible from any award. While special benefits may reduce severance damages. Here is what Justice Leo stated:
The County postures that Claimant failed to offer any rationale or methodology by which the Court my offset severance damages by the Special and General benefits. The County states the Court should rely on the methodology proposed by Grossman, which is rational and supported by his analysis. Claimants maintain no Special benefits to this taking.
Nichols on Eminent Domain, Third Ed., Sec., 8A.02(4) provides, “General benefits have been described as those benefits which result from the fulfillment of the public project which necessitated the taking and are common to all lands in the vicinity of the condemnee’s property. They are those benefits which accrue to the owners of property within the useable range of the public work…
Special Benefits are those that arise from the peculiar relation of the land in question to the public improvement.”
The takings on Fire Island were the result of a federal study which followed Hurricane Sandy. (Exhibit H). The study, Inlet Stabilization Fire Island Inlet to Moriches Project Report, US Army Corps of Engineers, June 2014, stated the dune was to protect Fire Island and, in addition, the back-bay area of the South Shore opposite Fire Island. It was established that there were 4,000 buildings on Fire Island. See Ex. H., p. 22.
The County’s appraiser calculated the alleged benefit by dividing a percentage of the cost of the project $133,336,000 by only the frontage homes which were beach front. The US Army Corps of Engineers states that all of the Fire Island Homes (5,094) will benefit as well as over 9,000 mainland homes. So, this calculation of the alleged cost offset was inaccurate.
Grossman supported his position by the case citation to Chiesa v State of New York, 36 NY2d 21 (1974) as authority for the proposition.
Grossman was asked on cross-examination if he was instructed to insert the citation in his appraisal. His response lacked credibility. Exhibits 7 & 8 were in Grossman’s file with memorandum to the Fire Island Appraisers. Exhibit 8 is another memorandum to FIMI Project Appraisers.
On cross-examination Grossman stated that to be an offset a benefit must be particular and special to the remainder. He did not adequately explain how it is applicable to the Property.
The Court based on Claimant’s demonstration that Grossman’s Paired Sales methodology was not sufficient (i.e., failure to show protected sales had a greater increase than other sales in an area examined; marked pairs being compared in 2 different real estate cycles; no support explanation for his adjustments); improper comparing price movement on Fire Island to different parts of eastern Suffolk County, as well as insufficient use of a project construction cost as part of the benefit analysis.
Based on the above the Court finds in this case, the County failed to establish factually and legally that there is a basis for special benefits, so it will award none.