Coney Island Redevelopment – Thunderbolt Roller Coaster Case
For my final post of 2023, a condemnation valuation case from neighboring New York. I don’t know whether the litigants referred to it as the “Thunderbolt Roller Coaster Case”, but I would have. The case offers an interesting perspective on three discrete valuation issues arising out of a partial takings redevelopment case. The opinion is worthy of a read, and it’s here if you’re bored on New Years’ Eve. Coney Island Redevelopment
First, the court addressed the “larger parcel” issue. “The term larger parcel means the whole property before part of it is taken. Damages in a partial taking are determined by comparing the value of the larger parcel before the taking to the value of the part not taken, or remainder parcel, after the taking.” Slip op. at 3. “In determining whether two or more lots should be evaluated together as a larger parcel, the Court must look to whether the lots have contiguity, unity of ownership, and unity of use. “To establish the propriety of valuing two separate parcels of property as a single economic unit for the purpose of awarding condemnation damages, the property owner must show that the subject parcels are contiguous, and that there is a unity of use and of ownership.'” (Notably, New Jersey law is inapt on this point because the parcels do not have to be contiguous in order to claim damages to the remainder). The court ultimately found that all parcels owned by the claimant should be included in the valuation.
Second, the court addressed the nettlesome issue of the “scope of the project rule.” The Court referred to the oft-cited United States v. Miller as its precedential source (of confusion) to determine that a change in zoning years before the actual taking was part of the project, therefore the owner would not be entitled to rely upon the enhanced zoning in valuing its property.
Third, the court looked at whether the property owner’s just compensation award could be reduced by alleged “project benefits”. It appears that New York still relies upon general v. special benefits, which the New Jersey Supreme Court jettisoned in Harvey Cedars v. Karan. It appears that the condemnor had reduced the owners’ compensation award based upon an alleged benefit, while the owner argued that the remainder had been damaged by the partial taking mostly because the property no longer had access to the famed Coney Island Boardwalk (where the roller coaster was located). The court found that the argument was “in violation of the New York rule that special benefits to a remainder parcel cannot be used to offset the direct damages of the taking.”
A final distinction is that New York condemnation cases are always decided by the judge. In New Jersey, any party may request to have the issue if just compensation decided by a jury. While the case is not precedential in New Jersey, its always interesting to see how a tribunal reasons its way to a decision of constitutional import.
That’s it for 2023 – Happy New Year ! ! !
