Palisadium Management Corp. v. Borough of Cliffside Park
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VALUATION OF REAL PRPERTY - COST APPROACH – HYBRID APPROACH Tax Court: Palisadium Management Corp. v. Borough of Cliffside Park, Docket No. 005633-2011, 010266-2012, 008940-2013; Carlton Corp. v. Borough of Cliffside Park, Docket No. 005634-2011, 0102742012, 008943-2013, opinion by Fiamingo, J.T.C., decided May 2, 2016. For plaintiff – Michael A. Paff (Wilentz, Goldman & Spitzer, attorneys); for defendant - Christos J. Diktas (Diktas Gillen, P.C., attorneys). Plaintiffs, Palisadium Management Corp and Carlton Corp., appealed the Borough’s assessment for their property for the years in question. Both lots operated as a single economic unit and the matters were consolidated for purposes of trial. The improvements on the subject property consisted of a building containing a banquet facility and a fitness/health spa facility, as well as a four-story parking garage. The court approved plaintiffs’ use of a hybrid approach to valuation, utilizing the sales comparison approach for the banquet facility and an income and expense approach for the fitness/health spa, however, the court found plaintiffs’ expert’s adjustments were not credibly supported. The court rejected the Borough’s expert’s use of the cost approach. Neither the superior view enjoyed by the subject property by virtue of his location on a cliff along the Hudson River overlooking the Manhattan skyline, nor the unusual combination of uses located within the structure, qualified as special purpose or unique for which the use of the cost approach was appropriate. Furthermore, the Borough’s expert utilized a computer program whose reliability has yet to be proven before any court to calculate his cost estimates, which has been previously rejected by the Tax Court in Forsgate Ventures IX v. Township of South Hackensack, 29 N.J. Tax 28 (Tax 2016) (appeal pending). The assessments were therefore affirmed. (26 Pages)
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