Mazur Bros. Realty, LLC v State of New York

[*1] Mazur Bros. Realty, LLC v State of New York 2010 NY Slip Op 52456(U) Decided on October 25, 2010 Ct Cl Scuccimarra, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on October 25, 2010
Ct Cl

Mazur Brothers Realty, LLC, Claimant, State of New York, Defendant.

Mazur Brothers Inc.,Claimant, v

against

State of New York,Defendant.





112659



Claimant's attorney:

GOLDSTEIN, GOLDSTEIN, RIKON & GOTTLIEB, P.C.

BY: MICHAEL RIKON, ESQ. and PHILIP SANCHEZ, ESQ.

Defendant's attorney:

HON. ANDREW M. CUOMO, NEW YORK STATE ATTORNEY GENERAL

By: J. GARDNER RYAN, ASSISTANT ATTORNEY GENERAL

Thomas H. Scuccimarra, J.

This decision is rendered concerning three (3) related claims that were tried jointly over a period of twelve (12) days, extended over a period of five (5) months. Claim Number 112659 is a claim by Mazur Brothers Realty, LLC seeking compensation for the State's appropriation for highway purposes of 90 Lake Street, a furniture warehouse in White Plains, New York owned by the claimant in fee. Claim Number 112658 is a claim brought by the commercial tenant at 90 Lake Street, Mazur Brothers Inc., seeking compensation for its trade fixtures lost as a result of the taking of the warehouse. Claim Number 112661 is a claim brought by Mazur Brothers Inc. the commercial tenant at 80 Lake Street, which was also taken for highway expansion purposes, seeking compensation for trade fixtures located there where it operated its retail furniture [*2]business, as well as consequential damages for fixtures located at 62 Lake Street, a furniture annex, and adjoining parking lots. The Court has made the required viewing of all the properties.

CLAIM NO. 112659

(Fee taking at 90 Lake Street)

Claim number 112659 seeks damages for the appropriation of property owned by Mazur Brothers Realty, LLC, taken pursuant to Eminent Domain Procedure Law and § 30 of the Highway Law, in a proceeding known as SH 56-1, Cross Westchester Expressway, White Plains section, the property being located at 90 Lake Street, White Plains, New York in Westchester County, as reflected in Map No. 639 R-1, Parcel 952, and Map No. 638 R-1, Parcel 951. [Exhibit 1]. It is listed on the official tax maps of Westchester County as Section 126.45/Block 11/Lot 1. The appraisers of both parties conclude claimant is the owner of the property. (Exhibits A and 4). The Court finds claimant has established title to the property. The record establishes that vesting occurred on April 4, 2006. The date of valuation used by the Court is the vesting date. The Claim was served on the Office of the Attorney General and filed in the Office of the Chief Clerk of the Court of Claims on August 21, 2006. The Court has made the required viewing of the property which is the subject of this claim.

To this Court's knowledge, this claim has not been assigned or submitted to any other court, tribunal or officer for audit or determination except for issues surrounding special proceedings brought by Mazur Brothers Realty, LLC to be heard elsewhere concerning monies on deposit with the State Comptroller. [See Matter of Mazur Bros. Realty, LLC v State of New York, 69 AD3d 726 (2d Dept 2010)].

Description

The property is located on the south side of Lake Street adjacent to the Cross-Westchester Expressway [I-287] in White Plains, Westchester County, New York. It consists of a generally rectangular-shaped land area of ñ 6,362 square feet that is 125 feet deep, with frontage on Lake Street 51 feet wide. It is improved by a warehouse building offering between 7,990 ñ to 8,680 ñ square feet, which at the time of the taking was utilized for storage by a retail furniture business approximately one block away at 80 Lake Street. The property is at grade level on Lake Street, but slopes downward at a steep incline in the rear, and also on the west side toward I-287.

The improvement is a detached, one story brick warehouse building containing a first floor that is all one level with a raised front mezzanine (lowering the ceiling height), a lower level above-grade that is accessed by a 6 foot wide concrete ramp, and a cellar partly below grade. The front of the building has drive-in access through a steel overhead door as well as a single metal frame door offering street access from the sidewalk abutting Lake Street. The cellar is under the rear of the building, and accessed by an interior, 6 foot wide steel staircase. From the outside, rear access to the cellar may only be accomplished over an adjacent property. The building takes up most of the lot, and measures 47 feet wide by 120 feet deep. It was built in 1925 as a one-story and lower level warehouse building. The multi-level rear extension was added in 1930 and the basement was extended in 1951.

After the taking, only a 2,243 square foot strip of land - tapering to a point at the rear of the property and sloping downward - remains on the western and southern portions of the original plot. At its widest point, there is twenty-eight feet of frontage remaining. It is thirteen feet below grade, and abuts property owned by the State of New York, the City of White Plains [*3]and an auto body dealership.

The property is zoned B-3 Intermediate Business District, formerly LI Light Industrial. Uses within such a zone include multi-family dwellings, commercial indoor recreational facilities, theaters, churches, school, professional offices and retail stores among others, and excludes retail stores selling automobile parts or accessories involving installation at the point of sale, dry cleaners, retail, business or trade schools, libraries, museums, art galleries, bars, medical laboratories and municipal parking lots. 90 Lake Street is a legal non-conforming and non-complying use since it predates the zoning laws. It exceeds the 5-foot front yard setback and lacks required parking. While the use could continue, it cannot be expanded nor could similarly sized structures be built if the existing improvements were demolished. Several one to three or four story commercial buildings currently line either side of Lake Street before and after it crosses I-287. As Lake Street moves away from the downtown White Plains central business district, the commercial area immediately surrounding the subject gives way to a mixed residential area with small to large apartment buildings. The area of the subject is centrally located within walking distance of downtown White Plains, and near State highways.

Highest and Best Use

Proof of the value of the property was offered through the filed appraisals and testimony of Daniel P. Lane, claimant's expert appraiser, and Kenneth L. Golub, defendant's expert. [See Exhibits 4 and A]. Both explored the four criteria for determining a property's highest and best use (i.e., legally permissible, physically possible, financially feasible and maximum profitability). Viewed as a whole, the testimony by both experts supports the conclusion that the highest and best use for the property at the time of the taking was for a continued light industrial or (more likely) commercial use, as either owner occupied or as a single tenant rental property. As vacant land, it was most suitable for construction of a commercial building or other single business use within somewhat prohibitive zoning constraints.

Valuation

Both appraisers used a comparable sales approach as well as an income approach to valuation of the property, although the income approach primarily operated as a check upon the values reached after sales comparisons. Neither chose to utilize a cost approach method (cost less depreciation), and the Court agrees that since this property is not a "speciality", such analysis is generally not considered in arriving at the overall value of the subject. See e.g. Matter of Saratoga Harness Racing v Williams, 91 NY2d 639, 645-646 (1998).

In their respective post-trial memoranda, each party would have the Court totally disregard the other expert's appraisal and testimony, because of perceived flaws in approach. Generally, the appraisers disagreed as to the utility of the warehouse space in relation to more modern buildings, and in their measurements of what portions of the space was actually available for such commercial or light industrial uses. This perception was somewhat related to Mr. Golub's presumption in his report that there was some marketable utility to the remaining property in the after situation, while Mr. Lane thought the remaining property was unmarketable and unusable, thus the appropriation should be viewed as a total taking, rather than a partial one.

This conflict in viewpoints meant that Mr. Lane did not analyze the value of the remaining property for comparison purposes after the taking except as valueless, and Mr. Golub, after discarding the abutting landowners as potential purchasers, made the interesting suggestion [*4]that the remainder had some utility as, perhaps, a "donation," saying "I have no assurance that the City of White Plains would buy this as open space but I am reasonably sure that they would accept it as a donation . . . [allowing for savings] on your income taxes." [T- 250;[FN1] see Exhibit A]. These, among other alleged omissions, are urged as reasons to disregard in their entirety the appraisals rendered by each party's opposite number.

As a general rule, it would be difficult to persuade a Court to strike an appraisal entirely, rather than simply assess how meaningful the alleged failings are, and adjust accordingly to ascertain whether the Court has been given sufficient information to do its job.[FN2] This is an inherently subjective area: assessing what matters to a prospective purchaser so as to evaluate what constitutes just compensation.

Regardless, the Court finds that because the evidence preponderates - even on the defense side - toward a worthless remainder of no economic utility other than as a speculative donation as open space, the effect of Mr. Lane's purported failure to provide a range of values in the after situation is immaterial. This was a total taking.

Claimant is entitled to "just compensation" when the State exercises the power of eminent domain. What amount is just, and the measure of damages, is generally determined by reference to the fair market value of the property according to its highest and best use on the date of the appropriation. Matter of Town of Islip [Mascioli], 49 NY2d 354 [1980]; Gold-Mark 35 Assoc. v State of New York, 210 AD2d 377 (2d Dept 1994). The fair market value is the price for which the property would sell if there was a willing buyer and a willing seller under no compulsion to either buy or sell. Gold-Mark 35 Assoc. v State of New York, supra.

Mr. Golub thought that the structure had 7,990 square feet of useable space, while Mr. Lane thought it had 8,680 (because he included the front mezzanine). Both excluded the sub-cellar space because it was damp and had limited access. The lower level, accessed by a wideramp, had a limited utility in Mr. Golub's view as well. Mr. Golub also discounted the mezzanine area, because he thought the ceiling height below it, and the height while standing on the mezzanine, prevented any reasonable use of the area to anyone other than the current furniture storage tenant. Mr. Lane thought that the mezzanine added "an improvement . . . which gives you more floor area . . . [for storage]" [T-158], and thus added 690 square feet to the 7,990 square feet noted on property cards filed in the Town of North Castle for the improvement.

On balance, the Court agrees with defendant's appraiser that the mezzanine furnished a somewhat artificial additional space, not particularly useful for a potential buyer because of the [*5]limited headroom above and below.

Mr. Lane utilized three comparable sales, one in common with those defendant's expert utilized, to arrive at an indicated value of $165.00 per square foot, resulting in a value for the subject in the amount of $1,435,000.00 before the taking. Without much of an explanation in either his report or in testimony, he made time adjustments with regard to the sales compared in a category called "market conditions", creating positive adjustments of 3% for the common sale taking place in December, 2005; 6% for a sale occurring in September 2005 and 13% for a sale which took place in December 2004. [See Exhibit 4].

The income approach, whereby comparable rental properties are compared and capitalized based upon a chosen capitalization rate, resulted in a value for the subject in the amount of $1,500,000.00 (rd) based upon a net operating income of $107,500.00 (from $16.00 per square foot less expenses) and a capitalization rate of approximately 7%. Mr. Lane testified that the concluded fair market value based upon these approaches was $1,500,000.00, again with little explanation.

On cross-examination, Mr. Lane readily conceded that he had not appraised the temporary easement because it had no value if that remainder piece had no value. He thought that because of the changes in the neighborhood, toward commercial from light industrial (at least in the immediate location of the subject) "at a certain point in the future the land will become more valuable than the building for its present use, and development will take place" [T-132] but did not include in his appraisal analysis of the land as vacant. He did, however, indicate that his conclusion had been that removal of the existing improvement and commercial development of the parcel was not indicated on April 4, 2006. At most, he confirmed, a new owner on April 4, 2006 would want to do some cosmetic upgrade rather than tearing the warehouse down and starting anew.

With regard to the common comparable sale, built in 1989 and sold in April 2002 and again in December 2005, it had a low ceiling area above where there was office space carved out - not feasible in the subject - and also included an elevator. [See Exhibits 4 and A]. Mr. Lane conceded that it was in better condition than the subject, and that he did not adjust for an elevator, nor for the onsite parking, or the mostly full floor of offices, in either the comparable sales or the comparable rental analyses.

Mr. Golub, overall, minimized the functionality of the subject space, saying

"it wouldn't work very well for retail purposes because it doesn't have a retail facade and it doesn't have any onsite parking . . . it's not a good place for factory use because there isn't a demand for small factories like that. We don't have small fabrication plants in Westchester; it's too expensive to do that sort of thing

. . .[I]t will not work as a distribution warehouse because the loading is so limited. Not only is there just one door on . . . the front wall to get into the entire space, but you have to drive over the sidewalk . . . It would work probably for someone who wanted to own his own business premises and wasn't too fussy and might use it for dead storage or maybe some kind of a storage for a . . . building contractor." [T-229].

Because of the perceived limitations, when Mr. Golub sought comparable income and comparable sale properties, he said while he "did find a number of small light industrial type properties that I could use as value bench marks," the selection was limited. [T-231-232]. After [*6]comparing six different sales of the property as improved, he found there was an indicated value for the subject of $100.00 per square foot which resulted in a fair market value in his opinion in the amount of $800,000 (rd) before the taking. He made negative adjustments for items such as on-site parking - something the subject did not have - as well as the type of building construction present, since the subject's wood construction put it at a disadvantage in terms of the types of floor load it could tolerate. Additionally, he noted that larger buildings tend to have lower per square foot prices, although they are more desirable. Mr. Golub made no adjustments based on any change in market conditions for the comparable sales.

Mr. Golub, too, utilized the income capitalization approach to check the comparable sales approach, using a 7% capitalization rate. Comparing nine (9) industrial leases, but not memorializing his analysis in a comparison grid chart for ease of reference, he found that the indicated fair market value for the subject was $810,000.00 (rd). He testified that he found the sales comparison approach more persuasive than the income approach because he had made visual inspections of the sales, and there were too many variable assumptions in the income analysis, including wide fluctuations in the mortgage rates over the lease periods studied. Mr. Golub also noted that with respect to the income approach to value, its reliability is dependent on the adequacy of the market data available. See e.g. 41 Kew Gardens Rd. Assoc. v Tyburski, 70 NY2d 325, 331 (1987).

Mr. Golub also did an analysis of the land as if vacant before the taking, and found that the land was worth $35.00 a square foot, making the total market value of the site $225,000. He opined that there were not a lot of industrial land sales in Westchester County, so he had to look back in time and outward geographically for comparables (and thus made no adjustment for time for the vacant land sales he compared) ranging in time from March 2001 to March 2006.

Upon consideration of the record, including the testimony of the two appraisers, and the justifications each provided for the several approaches taken to their methods of valuation, the Court finds that although it has examined the income capitalization approach to valuation proposed by the experts, the comparable sales of property, especially of properties in closer proximity to the subject property, and closer in time, constitute the most reliable basis in the record for the valuation of the subject property.

Given the limitations of the property as configured for rental purposes - even to a single tenant - and the age of the property, the income approach does not appear as reliable generally as indicative of value. Neither expert appeared to have obtained "thorough data, including accurate actual income and operating expenses of the subject properties." 41 Kew Gardens Rd. Assoc. v Tyburski, supra at 331.

In terms of which improved sales analyzed seemed most comparable, each expert included sales that were not sufficiently comparable to serve as appropriate indicators of value. Mr. Lane had only two (2) sales that were not too remote in time, or not overly adjusted. These were Sale Number 1, at 67 Lafayette Avenue in White Plains, which also served as Mr. Golub's comparable Sale Number 7446, [see Exhibits 4 and A] and claimant's comparable Sale Number 2 at 105 Fulton Street in White Plains. Claimant's Sale Number 3 is discarded as too remote in time - the sale occurred almost two (2) years earlier - too distant from the subject, and excessively adjusted.

Mr. Golub's comparable sales numbered 8077, 8085, 8461 and 8463 are discarded as too [*7]remote and excessively adjusted. Additionally, other aspects were simply not comparable, such as actual use, accessibility and centrality. For example, with respect to Sale 8077, no truck traffic was allowed on adjoining streets, including the street containing the building's loading dock door, although Mr. Golub claimed that despite the restriction truck deliveries were made there. [See Exhibits 20, 24, 25, 26, 28] [T-296-297; T-409]. Sale 8085 had a second floor that was exclusively offices, and a first floor which Mr. Golub only viewed through an open doorway to conclude that there was warehouse space on the first floor. Sale 8461, used entirely for offices except for a minimal storage area that Mr. Golub never examined was also less accessible and central. [T-318] [See Exhibits 30A -E]. Sale 8463, while close in time since the sale occurred in May 2006, was in far too remote a location in northern Westchester County compared to the subject, and appears to be essentially a steel shed.

The remaining sales comparables, including the common comparable sale, 67 Lafayette Avenue, analyzed by both experts, seem to be fair indications of value for the subject, with some further qualification based upon the trial testimony, and the justifications and rationale for any adjustments made.

67 Lafayette Avenue, the sale common to both appraisers, sold for $1,210,000.00 in December 2005, and had also sold four (4) years earlier [FN3] for $875,000.00. [T-283]. Mr. Golub made no time adjustments for any of his comparable sales, including this one, saying that it was difficult to measure real estate appreciation in the commercial context, versus the residential market where there were far more transactions during that period. Mr. Lane, in contrast, thought that the market conditions between December 2005 and April 2006 warranted a positive adjustment of 3%, but did not offer any particular explanation for the choice. Mr. Lane also excluded the 3,000 square foot finished basement space in this sale without explanation, while Mr. Golub included that space in his comparison.

The Court finds that the finished basement of 67 Lafayette should be included in the calculation of what space is available, thus 12,000 square feet results in a sale price per square foot of $100.83 before adjustments. As noted, Mr. Lane's adjustments generally are not supported by his testimony, including the market conditions adjustment and his failure to adjust for building size among other things. Overall, the categories for adjustment used by Mr. Golub are credited here, except they are too high for the presence of office space, and too low for the agreed custom that larger buildings reflect lower square foot values than smaller buildings. Additionally, Mr. Golub included a 10% negative adjustment for "other" [see Exhibit A], which appeared to be his assessment of the effect of some unexamined aspect of the comparable purchase involving an investor, not adequately explained during his testimony. With respect to this comparable sale, most of Mr. Golub's adjustments are credited, except that there should be a positive adjustment of 10% for size and a removal of the negative 10% adjustment for "other", resulting in a net positive adjustment of 5% or an indicated value for the subject of $110.91 per square foot.

In regard to Claimant's Sale Number 2 at 105 Fulton Street, it has the same zoning as the subject, but was viewed as inferior to the subject because it was a single story without a basement (yet the subject's basement had been discarded from Mr. Lane's consideration). The [*8]improvement was constructed in 1973, contains 2,940 square feet, and is approximately one mile from the subject. It sold on September 2, 2005 for $810,000.00, or a unit price of $275.51 per square foot. As noted, the market conditions adjustment was not sufficiently explained by Mr. Lane for any of his comparables, and the adjustments for condition and number of stories to the building are excessive. The Court finds that no adjustment for market conditions or the presence of a basement is warranted, a 5% negative adjustment for the subject's inferior condition, and for the number of stories is sufficient, and Mr. Lane's other adjustments are credited, resulting in a net negative adjustment of 30%, and an indicated value for the subject of $192.86.

In regard to Sale Number 6556, Mr. Golub made no adjustment for its more irregular lot [see Exhibit 17] and made no adjustment for its less central location. He correctly made a negative adjustment for the better parking allowed by the comparable sale, which he reflects in a category called "land/building", but made negative adjustments for the age of the building and the presence of offices, that on balance appear too high. The Court finds that a 5% positive adjustment for the subject's better location, a 5% negative adjustment for the presence of office areas in the comparable sale, and a 5% negative adjustment for the age of the subject results in a net negative adjustment of 15% - rather than the net negative adjustment of 30% - and an indicated value for the subject of $115.81 per square foot.

As noted above, comparable sales of property, especially property in close proximity to the subject would seem optimal indicators of value. In this regard, a property sold in January, 2003 that was directly across the street from the subject at 55 Lake Street. Mr. Golub had included this sale [Sale Number 7421] in an earlier appraisal of the subject made in November 2004 before the taking (and based on a different date therefor), but excluded it in the appraisal submitted here, dated November 2007. [See Exhibits 16 and 4]. No real explanation was offered for the exclusion when Mr. Golub was questioned about this comparable sale, except that the 2004 appraisal it was in was made before the actual appropriation, and involved a different configuration to the proposed appropriation. This property was improved with a 2,806 square foot structure, and sold for $650,000.00, or $231.65 per square foot. [Exhibit 16]. It has the same zoning as the subject, was built in the 1950's, has a one story concrete structure with 15 foot high clearance that the buyer used for an auto detailing business, and a small finished office area, and is on a level lot. Had this sale comparable been discussed, it is likely that some negative adjustment for size of the improvement versus the subject's size (based upon the adjustment made for other alleged comparable sales containing a smaller structure such as Claimant's Sale Number 2), and an additional negative adjustment for the age and condition versus the subject, would have changed the indicated value for the subject. Because adjustments were not discussed, however, the Court has not specifically included this sale in reaching its assessment of what would constitute a fair market value for the subject.

Based on the foregoing, and based upon the range of values that are truly comparable to the subject at the time of the taking, the indicated value for the subject is $140.00 per square foot, representing a fair market value for the subject at the time of the taking of $1,118,600.00 (7,990 sq. ft. x $140.00).

Temporary Easement

The State's appraiser, Kenneth L. Golub, valued the temporary easement taken by the [*9]State to complete demolition work on the building at 90 Lake Street at $208.00 per month [see Exhibit A], but little to no testimony was elicited concerning such temporary easement including its duration. Indeed Exhibit J - referred to by claimant's counsel in its post-trial brief - speaks only of the retail furniture store at 80 Lake Street, which is the subject of a fixture claim by the tenant, Mazur Brothers Inc. under Claim Number 112661, and a final adjustment agreement between the State of New York and this claimant, Mazur Brothers Realty, LLC for the fee taking of 80 Lake Street. [See Post-Trial Memorandum of Law by Michael Rikon, Attorney for Claimant, Appendix]. This adjustment agreement arguably includes compensation for the temporary easements that are referred to by counsel for claimant.

The State acknowledges, albeit as an aside [see Letter Reply to Claimant's Post Trial Memorandum of Law by J. Gardner Ryan, Assistant Attorney General, Page 6], the likely entitlement of Mazur Brothers Realty, LLC to compensation for the temporary easement taken with regard to 90 Lake Street, and attached to the claim regarding such property, [see Exhibit 1], denoted as Map No. 639R-1, Parcel No. 952. Indeed,

"[T]he Highway Law requires . . . [filing of] a certificate of termination when the State no longer has need of the temporary easement. The State cannot escape the consequences for failing to comply with the statute by requiring the claimants to determine when the State no longer had need for an easement. The State is in a better position than the claimants to make this determination. Moreover, the claimants would be proceeding at some peril if they restored the premises prior to the filing of a certificate of termination since the State had the right to re-enter and use the easement area at any time prior to the filing. Since the claimants were effectively deprived of the use of the easement area during the period between the completion of the demolition and the filing of the certificate, an award for damages during that period was properly made . . . (citation omitted)." Great Atl. & Pac. Tea Co. v State of New York, 22 NY2d 75, 88 (1968); see also Village of Highland Falls v State of New York, 44 NY2d 505 (1978).

In the absence of certificate of termination, or other evidence in the record of the term of the temporary easement submitted by either party, however, such as testimony concerning when construction began and ended, or the razing of the building was accomplished, the Court would be speculating to award damages. In its post-trial memoranda Claimant has only discussed the temporary easements apparently taken with regard to the 80 Lake Street property [see Exhibit J [FN4]; see Post-Trial Brief by Michael Rikon, pages 41-42], while during the trial its appraiser did not value at all the temporary easement regarding 90 Lake Street because he viewed the matter as subsumed in the total taking.

Based on the foregoing, no award for the temporary easement taken for the razing of the building at 90 Lake Street and associated construction issues noted in the instrument [see Exhibit 1] is granted, because Claimant has not sustained its burden of proof on this issue.

[*10]Counterclaim by State of New York, Claim No. 112659

The State served a counterclaim upon Mazur Brothers Realty, LLC in the claim regarding the fee taking at the warehouse at 90 Lake Street. Counsel for Defendant characterizes such counterclaim as one

"asserting a claim for contractual indemnification and setoff against any judgment in the event that damages beyond the State's pre-taking offer of $1,369,500.00 are awarded to Mazur Brothers Inc. in claim number 112661 for the taking of trade fixtures at 80 Lake Street. The counterclaim seeks to enforce against Mazur Brothers Realty, LLC its contractual undertaking that the amount of the State's offer for all damages arising from the taking at 80 Lake Street would be the total value of the property . . .appropriated, together with all legal damages caused by . . . [that] appropriation.' " [Memorandum of Law by J. Gardner Ryan, Assistant Attorney General, page 9].

Although the potential multiplicity of interests has been on the State's radar screen since serving notice of appropriation in 2005, such counterclaim was served on claimant through counsel on the eve of trial on August 6, 2009 and filed in the Office of the Chief Clerk of the Court of Claims on August 7, 2009. [Exhibit I].

Moreover, in prior motion practice this Court noted, when discussing Claimant's cause of action for breach of contract based upon same, that agreements for advance payment are not viewed as enforceable contracts, because of the unequal bargaining position as between the State and the owner facing condemnation. See Mazur Bros. Realty, LLC v State of New York, 25 Misc 3d 1221 (A) (Ct Cl 2007). The dismissal was affirmed. Mazur Bros. Realty, LLC v State of New York, 59 AD3d 401 (2d Dept 2009).

In its answer to the counterclaim, in addition to denials and responses, claimant Mazur Brothers Realty, LLC, raises several affirmative defenses, including Second, Third, Fifth and Sixth Affirmative Defenses regarding the timeliness of such counterclaim, as well as other points of law.

The Court of Claims Act itself does not contain a provision regarding service of responsive pleadings. As provided in the "special rules" section of the Uniform Rules for the Court of Claims [22 NYCRR §206.21(a)], the defendant in an appropriation claim is not required to serve and file an answer. In all other claims, an answer must be served within 40 days of service of the claim (unless the time frame is extended by stipulation) and if a counterclaim is to be asserted, it "may" be included. 22 NYCRR §206.7(a). While counterclaims are certainly authorized in Court of Claims practice [see Court of Claims Act §9(3)], there is no special provision regarding the assertion of a counterclaim by the State in an appropriation claim. By implication, however, it would seem that the more efficient practice would be to serve same within the time constraints provided for service of an answer, namely, within 40 days of service of a claim.

Certainly, the State Comptroller has a common law right of setoff "even where the State's claim has not been reduced to judgment or when the setoff is unrelated to the State's debt to the claimant." Morash v State of New York, 268 AD2d 510, 511 (2d Dept 2000) lv denied 95 NY2d 755 (2000). Nonetheless, the counterclaim herein is dismissed in part as untimely asserted, because it only further adds confusion to already confused legal postures, and also because of the Court's views regarding the role of the agreements [Agreement of Adjustment relative to 80 Lake [*11]Street; Agreement of Advance Payment with regard to 90 Lake Street] entered into by the fee owner with the State of New York as unequal bargainers. Finally, the State of New York did not sustain its burden of proof in establishing such counterclaim in any event.

Accordingly, the total damages found by the Court with regard to Claim Number 112659 for the total appropriation of a fee interest at 90 Lake Street, are $1,118,600.00 together with statutory interest thereon from the vesting date of April 4, 2006, to the date of decision herein,

and thereafter to the date of judgment for the appropriation.

TRADE FIXTURES [Claim Nos. 112658, 112661]Mazur Brothers Inc., the commercial tenant at both 90 Lake Street discussed above, and 80 Lake Street where it ran its retail furniture business, claims compensation for trade fixtures utilized in the operation of its furniture business, in claims numbered 112658 and 112661 respectively. With respect to Claim Number 112661, Mazur Brothers Inc. also seeks consequential damages with regard to trade fixtures it owns in an additional annex building at 62 Lake Street, not included in the taking, but which were purportedly rendered useless by the taking, and adjoining parking lots.

Just compensation contemplates payment by the State of whatever interest has been lost by the owner as a consequence of the taking. A tenant in possession suffers just as direct a loss as the owner, and is entitled to compensation "for his interest in any annexations to the real property which but for the fact that the real property has been taken, he would have had the right to remove at the end of [the] lease." Matter of City of New York [Allen St.], 256 NY 236, 243 (1931). This interest in its trade fixtures, versus the interest a tenant may have in any lost leasehold term, derives from laws surrounding personal, rather than real property. It is because of that genesis that a commercial tenant is not relegated to carving its legitimate trade fixtures claims out of a proposed offer of compensation made to the fee owner alone in an agreement for advance payment or an agreement of adjustment to which it was not a party, nor should an award to the fee owner assessed after trial be subject to such parceling.

In Rose v State of New York, 24 NY2d 80, 86 (1969), the Court of Appeals said:

"New York takes a broad view in evaluating what improvements are to be regarded as fixtures. Not only is machinery deemed a fixture where it is installed in such manner that its removal will result in material injury to it or the realty, or where the building in which it is placed was specially designed to house it, or where there is other evidence that its installation was of a permanent nature'. . . (citations omitted), but also those improvements which are used for business purposes and which would lose substantial value if removed . . . (citations omitted)."[FN5]

In the Second Department, the Court noted:

"It is well settled that a tenant is entitled to be compensated for trade fixtures annexed to real property that has been condemned by the State in the exercise of its power of eminent domain (see Matter of City of New York [Allen St.], 256 NY 236). As stated by the Court of Appeals over 30 years ago, a condemnor is obliged to pay for trade fixtures installed by a tenant on the basis that they are part of the real property being appropriated, but, as between the owner [*12]and his tenants, they are the property of the tenant who has retained the right to remove them' (Marraro v State of New York, 12 NY2d 285, 292 -293) . . ." Whitehall Corners v State of New York, 210 AD2d 398, 399 - 400 (2d Dept 1994).

Matter of City of New York (Kaiser Woodcraft Corp.), 11 NY3d 353 (2008), contains recent formulation for identifying what is, or is not, a separately compensable trade fixture where a commercial tenant seeks compensation for same. Citing to what it describes as the earliest application of the law of fixtures to eminent domain proceedings in Jackson v State of New York, 213 NY 34 (1914), the Court of Appeals noted that "condemnation is a forced sale that places the State and the claimant in the position of vendee and vendor and [o]n that basis [their] rights and duties . . . must be determined'. . ." Matter of City of New York (Kaiser Woodcraft Corp.), supra at 361. The Court reiterated the elements for testing "whether an item is a compensable trade fixture or noncompensable personalty" [Id. at 360] and recognized the further qualification for identifying a compensable item, as whether the disputed object would " lose substantial value if removed.' [quoting] Rose v State of New York, supra, at 86]." [Id. at 362]. "Removability. . . is not determinative in separating compensable fixtures from noncompensable personalty." Matter of City of New York (Kaiser Woodcraft Corp.), supra, at 359; see also Matter of City of New York (Merrimaker Corp.), 51 AD2d 147, 149 (2d Dept 1976), lv denied, 39 NY2d 710 (1976).

The Kaiser Court's formulation for establishing that an item is a trade fixture is that the item (1) is actually or constructively annexed to the realty, (2) is adaptable to the use or purpose of the business at the site, (3) was annexed with the intent that such annexation be permanent, such that it would lose substantial value if removed, in the sense that there is a "devaluation of [the] functional utility if the item is removed." [Id. at 363]; see also McRea v Central Natl. Bank of Troy, 66 NY 489 (1876).[FN6] In this way, items - including machinery placed in convenient organization for the work flow in the Kaiser woodshop - were excluded as trade fixtures. The Court said:

"The fact that equipment is placed in a certain order to maximize efficiency does not define an integrated operation for purposes of determining a loss of substantial value." Matter of City of New York (Kaiser Woodcraft Corp.), supra at 363.

The Court frowned upon a "kitchen sink" type approach to the determination, emphasizing that not all items or equipment used by a business are compensable trade fixtures.

Additionally, while assessment of whether a commercial tenant is the owner of trade fixtures appears fairly liberal [see e.g. Matter of Village of Port Chester v Sorto, 14 AD3d 570, [*13]571 (2d Dept 2005)],[FN7] such ownership must still be established. In this regard, while the terms of a lease may define the status, it is apparent that in practice the relative status may be established by other means. See Matter of Village of Port Chester v Sorto, supra; Marraro v State of New York, supra, at 292.[FN8] Indeed, in leases where a tenant has waived any right to share in a fee award in condemnation proceedings - such as the lease submitted in evidence here [Exhibit 8] - such a clause

"only preclude[s] claimant from asserting leasehold claims and from participating in any fee simple award payable to the landlord; they do not preclude claimant from asserting trade fixture claims (see Matter of City of New York [Allen St.], 256 NY 236, 243, [1931]; Gristede Bros. v State of New York, 11 AD2d 580, [1960]; United States v Certain Property, etc., 344 F 2d 142, 150-151 [2d Cir

1965] ). Nor do the lease clauses making fixtures and improvements the property of the landlord upon installation while reserving to the tenant the right to remove trade fixtures not attached or affixed to the building' equate or reduce trade fixtures to noncompensable personalty that is not in any manner or form attached or affixed to the building (see Marraro v State of New York, 12 NY2d 285, 292-293, [1963]; Allyn v State of New York, 11 AD2d 831, [1960]). Matter of New York State Urban Dev. Corp. v Nawam Entertainment, Inc.,57 AD3d 249 (1st Dept 2008) lv denied 13 NY3d 701(2009);[FN9] see also Matter of New York City School Constr. Auth. v Slane Co. Ltd., 61 AD3d 488 (1st Dept 2009).[FN10] [*14]

In the absence of a lease provision specifically designating trade fixtures as the property of the landlord, it seems they are viewed as the property of the tenant. Cf. Interlake Serv. Sta. v State of New York, 249 AD2d 275 (2d Dept 1998) lv denied, 92 NY2d 809 (1998).[FN11]

What is a compensable trade fixture - versus personalty, or items so merged in the real estate that they are not compensable - is a fact driven matter that will be addressed below with respect to the individual claims filed and the items listed therein. See e.g. Matter of Village of Port Chester [Megamat Laundromat], 42 AD3d 465 (2d Dept 2007). In this regard, it is far easier to find that certain machinery and equipment used by a laundromat [see id.] or in a woodshop [see Matter of City of New York (Kaiser Woodcraft Corp.), supra] is a trade fixture than a furniture warehouse and a furniture showroom.

Valuation

The proper method of valuing trade fixtures in New York is by determining their "sound value" in place. Matter of City of New York [Glantz], 55 NY2d 345 (1982), citing Matter of City of New York [Allen St.], supra. "[T]he sound value of a trade fixture in place is measured by the reproduction cost of the fixture less depreciation (Marraro v State of New York, 12 NY2d 285, 296, affg 15 AD2d 707)." Universal Empire Indus. v State of New York, 149 Misc 2d 773, 775 (Ct Cl 1990); see also Whitehall Corners Inc. d/b/a Maria's Ristorante v State of New York, Claim No. 78531, unreported, (Benza, J., March 31, 1993) affd 210 AD2d 398 (2d Dept 1994). Where the taking is direct rather than consequential, compensation is awarded on the basis of "full sound value," even if the compensable fixture is "readily removable."

Findings of Fact

According to the uncontradicted evidence presented at trial, at the time of the taking Mazur Brothers Inc. was the commercial tenant at 80 and 90 Lake Street, whose sole principal was Herman Press. According to the uncontradicted evidence presented at trial at the time of the taking, Mazur Brothers Realty, LLC was the sole owner in fee of these same properties, including 80, 90 and 62 Lake Street, whose sole owners were Herman Press and Lois Press.

By way of background, Mr. Press testified that the retail furniture store at 80 Lake Street had been in business in one incarnation or another since 1916. It was incorporated in 1948. In 1977, Mr. Press bought in as a 17% owner with one remaining family member, Joe Mazur. Joe Mazur was the owner of the real estate, and the retail furniture business paid rent to the real estate business entity.

In 1994, Mr. Press bought the remaining shares of the retail furniture business, known at the time of the taking as Mazur Brothers Inc., and continued as commercial tenant paying rent to Joe Mazur's realty company pursuant to a series of leases.

In 1998, Mr. Press and his wife Lois Press bought the realty company, and continued to rent the property to the retail furniture business pursuant to lease, the most recent one being a lease dated August 1, 1998, with a term ending in 2013. [Exhibit 8]. The lease covers 62, 80 and 90 Lake Street, and contains language in Article 8 requiring the tenant to take good care of the premises, "at its sole cost and expense" including the sidewalks, curbs and parking areas, and to [*15]make repairs. [Ibid.]. It further recites:

"Section 8:01 . . . When used in this Article, the term repairs' shall include all necessary replacements, renewals, alterations, additions and betterments. All replacements required under this Article, of personal property shall be made by Tenant but said replacements or repairs shall become the property of the Landlord." (emphasis added) [Ibid.].

Elsewhere in the lease under Article 10 the tenant commits to make "alterations" or "changes" to the interior "Section 10.01. . . at its sole cost and expense" upon written consent of the landlord (Mr. Press acknowledged in testimony that such written consent was never utilized, for self-evident reasons). This lease provision does not contain corresponding language providing that such changes or alterations become the property of the landlord the way Article 8 does.

Finally, Article 17 of the lease, entitled "Condemnation" reads at Section 17.01:

"In the event that the demised premises, or any part thereof, shall be taken in condemnation proceedings or by exercise of any right of eminent domain, Landlord shall be entitled to collect from any condemnor the entire award that may be made in any such proceeding, without deduction therefrom for any estate hereby vested in or owned by Tenant. Tenant agrees to execute any and all further documents that may be required in order to facilitate collection by Landlord of any and all such awards. Tenant, in cooperation with Landlord, shall have the right to make claim in any such condemnation proceedings for fixtures, moving expenses and for any other reason other than for its interest in this lease and the estate hereby vested in or owned by Tenant." (emphasis added) [Exhibit 8].

Mr. Press testified without contradiction that the schedule of fixtures annexed to Claims numbered 112658 [Exhibit 3], and 112661 [Exhibit 2], were owned by the tenant Mazur Brothers Inc. He said "as the tenant I made the improvements and over the years the earlier tenants made improvements to the property, the tenant owned it." [T-40]. The listed items were installed to "improve the operation of the business" and the intent had been to

"make the business easier to run . . . [W]hen we added a new heater in the warehouse [for example] it was to make our, the personnel in the warehouse more comfortable. We put in cameras, we put in a new overhead door . . . new shelving . . . [T]hey were never installed with the intention of removing them." [T-41].

After the taking, Mr. Press said that he did not remove any of the items listed in the claims because

"I had no. . . use of it. We were going out of business . . . I think once you remove many of these items they're virtually worthless. They may be very worthwhile when they're installed but . . . they certainly lose their value when you start pulling them out." [T-41-42].

On later cross-examination, Mr. Press reiterated

"It is my testimony [that the itemized lists in the claims are mine as a tenant] because that's my understanding . . . When I improved the property it's my improvement. I have the ability to take it out, put it in." [T-63]. [*16]

When defendant called Mr. Press on its direct case, he was presented with an undated schedule of assets he had apparently pledged in connection with renewing a mortgage from Bank of New York in the name of Mazur Brothers Realty, Inc. in 2001. [Exhibit 10G]. The original mortgage had been obtained in July, 1998. [T-1328]. The pledge recites that it includes all the debtor's realty and inventory, and "all fixtures now owned or after acquired by the Debtor affixed to premises located at 62 Lake Street, 80 Lake Street and 90 Lake Street, White Plains, New York and wherever else located." [Exhibit 10G]. When pursued by defendant's counsel during this "direct" examination, Mr. Press had to concede that he did not distinguish between what Mazur Brothers Realty, LLC and Mazur Brothers Inc. owned at the premises when he signed the pledge, and could not distinguish items now "without a list and going through everything." [T-1338]. He later explained, however, that this was a form document the bank required to secure the mortgage, and was not negotiated. Furthermore, Mazur Brothers Realty, LLC owned no inventory or raw material or works-in-progress (as listed by way of example in the note), and had no receivables other than rent from the tenant, Mazur Brothers Inc. [T-1363-1364].

Mr. Press agreed with the statement made by defense counsel on the "direct" examination that what he and his wife owned as Mazur Brothers Realty, LLC at 90 Lake Street was an outfitted warehouse that was occupied by the business, and that 80 Lake Street was a building outfitted as a furniture showroom. [T-1340].

He later repeated, however, that the real estate and the business of the furniture store were different and had always been distinct. Any improvements the business made to the real estate, from new specialized lighting, to repairing parking lots, was the tenant's responsibility to install and the tenant's to own. Finally, he reiterated that the August 1, 1998 lease in evidence [Exhibit 8] was a renewal lease, and was the "most recent and the latest one that I signed." [T-1936]. The Mazur Brothers furniture business tenant, in one form or another, had occupied the warehouse at 90 Lake Street, the furniture showroom at 80 Lake Street, and the annex at 62 Lake Street and the adjoining parking lot since 1948, and it was Mazur Brothers Inc. that owned all the items in the trade fixture claims filed herein.

Interestingly, the defendant notes in its post-trial argument among other things that in order to establish that the trade fixtures are owned by the tenant, it should be shown that the "fixtures were brought to the leasehold and installed by the tenant, or by some predecessor in interest." [See Memorandum of Law (Defendant), pp 26-27 (emphasis added)].

Upon review of all the evidence, including the testimony and exhibits proffered on the issue, and having had the unique opportunity to evaluate the credibility of testimony including the demeanor of the primary witness, Herman Press, the Court finds that the claimant Mazur Brothers Inc. has satisfied its burden of establishing that as the commercial tenant entity that operated its business out of properties owned by the real estate entity, Mazur Brothers Realty, LLC, claimant is the owner of whatever trade fixtures it or its predecessors installed in furtherance of running its business.

Given the extended tenancy of the commercial tenant and specifically Mr. Press as a principal of the furniture business - first with Joe Mazur from 1977 and later as sole principal - it is not surprising that claimant did not present 30 to 40 years worth of receipts to establish the purchase and installation of its trade fixtures. Only a few receipts of limited utility (and limited [*17]discussion during testimony) were presented, and poorly identified [see e.g. Exhibits 10A, 10C, 10D, 10E, 10F].

At the time of the taking in 2006, the tenancy of Mazur Brothers Inc. was pursuant to a lease extending to 2013. It had operated a business there for the better part of a century. The Court credits Mr. Press' indication that it was the furniture business entity that paid for installations for the furtherance of its business purposes, particularly where his testimony is further supported by the evaluation of claimant's expert as to the age and purpose of a given item, and the Court's own observations of the subject premises. Overall, as the commercial tenant, its right to remove such trade fixtures is "implied by the circumstances" [see Marraro v State of New York, supra, at 292]. In addition to Mr. Press' testimony, further circumstances are the indication in its lease that changes and alterations were to be at the tenant's sole expense [Exhibit 8, Article 10], and, unlike alterations or replacements under the rubric of "repairs" under Article 8, are not specifically designated as the property of the landlord upon termination of the lease. cf. Interlake Serv. Sta., supra.

Notably, in the valuation of the fee claim for 90 Lake Street above, Mr. Golub mentioned in his own appraisal that he had reviewed the fixture appraisal made by his colleague, Jack Frescoln [Exhibit D], and states therein:

"Certain items identified and valued in the fixture appraisal are definitely not trade fixtures, viz., heaters and lighting fixtures. All comparable improved properties cited in our real estate appraisal had heating systems and light fixtures when they sold or leased, so heaters and lights were included in each sale or lease transfer. The heating system and lighting fixtures in the subject property are therefore implicit in the real estate value we appraised.

We question whether some other items identified and valued in the fixture appraisal are trade fixtures. Fire extinguishers and smoke detectors are examples. Such items are commonly found in commercial buildings of this type and they are often transferred along with the real estate . . ." [Exhibit A, page 83].

Mr. Lane's appraisal is silent as to trade fixtures at 90 Lake Street, however, it is implicit in his appraisal that a basic, functioning, warehouse building was what he valued. [See Exhibit 4]. Also implicit in both fee appraisals is that what was being appraised with regard to the fee taking did not include trade fixtures per se.

Additionally, the Court is mindful of a distinction between fixtures - a broader concept - and trade fixtures. Improvements installed at tenant's expense that are not trade fixtures (that is, they do not meet the tests of constructive or actual annexation, adaptability, intended permanence, and loss of functional utility upon removal), are more properly viewed as a component of the total value of the realty.[FN12] [*18]

Anthony Rusciano, the claimant's trade fixture expert, and Jack Frescoln, the defendant's trade fixture expert, testified for five days each, concerning their examination and evaluation of purported trade fixtures, the methodology each used, and the appraisals they prepared, which were submitted in evidence. [See Exhibits 5, 6, 7, B, C, D]. Because of the depth and duration of their testimony, the Court had ample opportunity to evaluate their relative credibility, by observing their demeanor as they testified, and what they set forth as the bases for their conclusions. Inexplicably, although the filed claims served on the State contained a numbered list of alleged compensable trade fixtures, defendant's expert failed to utilize such lists in his appraisals, and did not cross-reference them in his reports, although there was some attempt to correlate the itemized list in the claims to his appraisal reports in his testimony. [See e.g. Exhibit 57, 58]. Similarly, in its post trial memorandum counsel for the State failed to make such correlations to his own expert's testimony, nor did he reference any testimony from the almost 2000 pages transcribed, or any evidence or appraisals. Despite such approach, the Court has nonetheless fully reviewed all the testimony and appraisals and memoranda in making its findings. Notably, as a result of these trade fixture claims, the Uniform Trial Court Rules for the Court of Claims were amended so that some of the confusion generated by the approach taken [*19]will not reoccur. See 22 NYCRR §206.21(c) (1) - (3). [FN13]

Overall, little of the defendant's appraiser's testimony can be credited here, based upon his minimal review of the objects - indeed, it appeared he often did not know what item was being discussed, or where it might be located - and his failure to assign a sound value to the objects appraised. He was inconsistent in his treatment of the same items, for example, fire extinguishers [FN14], and was confused as to what exactly he was supposed to be appraising generally. What objects he appraised, he valued with an eye toward calculating "market value" rather than "current sound value", and used an incorrect method of depreciation, or at least one that was inconsistently applied, without testing the object being evaluated to even determine its functionality.

On the other hand, claimant's appraiser fully described each object he appraised, analyzed its components where appropriate, and utilized the requisite methodology for depreciation to arrive at sound value. He spent six to seven days examining the properties, versus the hours attested to by defendant's expert, and further documented his observations of the alleged fixtures on site by a video recording [Exhibit 9] and photographs. [See Exhibits 13, 14, 15]. He made drawings to show distinct areas of the buildings for 80 Lake Street, for example, [Exhibits 36 and 37] and kept field notes [Exhibits 41 and 43] and pricing notes. He had considerable experience in the construction industry, and made his examinations with the assistance of his son, who is an architect, and another assistant. He credibly explained that the Marshall and Swift Valuation Services life expectancy guidelines [Exhibit G] utilized for determining economic depreciation for tax purposes were not the only basis for determining what depreciation percentage to apply to an item in condemnation proceedings. It should be [*20]

"based on the actual condition of the item. How well it's been maintained and how well it can effectively perform the function . . . [for] which it was . . . installed . . . " [T-1311].

Mr. Frescoln, while indicating (when prompted by defense counsel) that he utilized "discretion" when applying such schedules [e.g. Exhibit G], in practice appeared to apply such tables mechanically. [T-1380].

Unfortunately, Mr. Rusciano, too, tended to use the descriptive words "customized" or "custom fit" excessively, in what appeared to be an over-inclusive assessment of the items asserted to be compensable trade fixtures.

CLAIM NO. 112658

(Trade Fixtures at 90 Lake Street [warehouse])

Mazur Brothers Inc. lists 168 items as trade fixtures for which it alleges it is owed compensation as a result of the fee taking on April 4, 2006 in Claim Number 112658. [Exhibit 3]. As noted, the Court has reviewed the testimony, appraisals and other exhibits presented. [Exhibits 3, 5, 9, 15, 38 and D]. The defendant took the position that the tenant had not at all established entitlement to compensation for its trade fixtures first, because it had not established that it was the owner, and second because all the items listed in the claim were either personalty, or merged in the realty, as listed in two Addenda to defendant's post-trial brief. [See Memorandum of Law by J. Gardner Ryan, Assistant Attorney General, Addendum A; Addendum B, respectively]. While the Court agrees that at least some of the items in claimant's inventory would fall under a category of non-compensable personalty, or items that are part of the real estate [see e.g. Matter of New York City Tr. Auth. (Superior Reed & Rattan Furniture Co.), 160 AD2d 705, 706 (2d Dept 1990)],[FN15] and that claimant's list is over-inclusive, not even defendant's appraiser excluded everything, as defendant's counsel appears to be urging in its post-trial brief. [See Exhibit D].

Accordingly, the Court finds that all the items listed in claimant's inventory are compensable trade fixtures, because they were "installed by the claimant in the furtherance of its business" and "would lose substantial value if removed" [Whitehall Corners v State of New York, supra at 400], and meet the objective criteria of adaptability and intended permanence, except those objects that are either non-compensable personalty or merged in the real estate as follows: 3, 4, 5, 6, 7, 9, 10, 11, 12, 13, 14,15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 31,32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 52, 53, 57, 58, 60, 61, 63, 64, 65, 66, 67, 68, 69, 70, 71, 73, 75, 76, 77, 78, 79, 80, 81, 86, 87, 88, 89, 93, 94, 95, 96, 99, 100, 101, 103, 107, 115, 116, 130, 133, 140, 141,142, 143, 144, 145, 146, 147, 148, 149, 156, 157, 158, 159, 160, 161, 162, 163, 166, 167, 168. The items that find support as trade fixtures from this record are deemed as such either because Mr. Press specifically mentioned them as something he - in the capacity as principal of Mazur Brothers Inc. - installed at the commercial tenant's expense in furtherance of the business, such as an alarm system to protect stored goods, and the localized [*21]heating units (which nominally might seem to merge in the realty), or because of the observations of Mr. Rusciano as to their function, or the Court's own observations of the objects on site.

With regard to one example of Mr. Rusciano's observations that was not sustained, he included a motorized overhead door with "vision panels"as a trade fixture, because such an item is not necessary or "basic" to a warehouse building generally, but rather would be specifically installed to allow for regular furniture deliveries in large trucks, quicker ingress and egress for such furniture, and easier visibility given the way the business operated with a retail furniture building nearby. [T-897]. Nonetheless, it has been adjudicated elsewhere that even "custom- made" doors lose their separate identity when installed. See Matter of City of New York (Kaiser Woodcraft Corp.), 39 AD3d 131, 135 (1st Dept 2007), revd on other grounds, 11 NY3d 353 (2008). Notably, items that might be viewed as trade fixtures in a furniture warehouse, might not be viewed as such in a retail furniture store, and vice versa.

In terms of valuation, as noted, the Court credits the approach taken by Mr. Rusciano, claimant's expert. To arrive at sound value, he determined the reproduction cost [FN16] of an item, defined as an "exact replica in all salient characteristics or components," less depreciation. [Exhibit 5]. As noted in connection with contrasting the bases for one expert's expertise over another's, "a working knowledge of construction costs and methods is essential to calculating reproduction cost . . ." Matter of Central Hudson Gas & Elec. Corp. v Assessor of Town of Newburgh, 73 AD3d 1046, 1049 (2d Dept 2010). Infused in the reproduction cost are considerations of the materials and labor involved, resulting in multiple calculations for each item. For example, for the exterior sheet metal sign announcing the company name on the front of 90 Lake Street, item 1 on claimant's inventory, some "sixteen" separate calculations were made. [T-651]. The rates of depreciation were determined by an actual inspection of the physical condition of the item, which would include evaluating its actual age, how well it had been maintained, and its effectiveness in performing the function for which it was designed, as well as the life expectancy guidelines found in Section 97 of Marshall Valuation Service Publications. [Exhibit G].

Based upon the record made herein, the Court finds the claimant's appraiser's reproduction costs more reliable based on the breadth of his construction experience, and his generally more thorough examination of the premises, as well as his use of timely data. Defendant's appraiser consistently depreciated items by exorbitant percentages - indeed, in most instances depreciation of at least 50% was applied - with little to no examination as to the actual utility of the object, and an inability to identify what item was at issue in the first instance. As noted above, the Court also finds the claimant's appraiser's assessments of the appropriate depreciation percentage more reliable as well, although he, too, may have veered too far in the other direction, by being too generous, and applying at most 20% depreciation to given items. Where applicable, the Court has reviewed the figures proposed by each (when it could do so, given the problems of identification with defendant's appraisal reports) and adopted a figure in between for such items. [*22]

Additionally, depending on the type of property or materials involved, increments of various kinds are added to the amount awarded for trade fixtures. See Matter of City of New York (Salvation Army), 43 NY2d 512, 516 (1978).[FN17] Here, again, the divergent approaches taken by the appraisers creates problems. Thus, Mr. Frescoln arrived at a "market value" for the fixtures in the amount of $24,745.00 [Exhibit D], while Mr. Rusciano arrived at a "grand total" of $648,000.00 after adding increments to the total current sound value. [Exhibit 5]. While Mr. Frescoln correctly utilized his incremental multipliers reflecting indirect costs [FN18] for each item, the indirect costs he chose were ill-supported and poorly explained. [Exhibit D]. While Mr. Rusciano utilized some indirect costs that were not totally supportable based upon the item (i.e.: a 12% architectural increment for a peg board) [see Exhibit 5], and applied them at what seems to be the wrong point in the calculation [see Whitehall Corners Inc. d/b/a Maria's Ristorante v State of New York, Claim No. 78531, unreported, (Benza, J., March 31, 1993) affd 210 AD2d 398 (2d Dept 1994)], the increments chosen are credited overall, and it is nonetheless possible to parse out what indirect costs are appropriate if applied to each item as required, since it is the Court's role to assess what indirect costs are appropriately applied in the circumstances. See e.g. Matter of Central Hudson Gas & Elec. Corp. v Assessor of Town of Newburgh, supra at 1050.[FN19]Increments for sales tax in the amount of + 7.325%, for engineering, architectural and permits where applicable of +15%, and for financing of +2.5% (which Mr. Frescoln seemed to acknowledge would likely be necessary, but did not incorporate in his indirect costs calculations) are applied. The Court has not adopted Mr. Rusciano's inclusion of a 10% each general contractor's overhead and profit as an increment, since he testified to having incorporated a calculation from R.S. Means Building Construction Cost Data with a Westchester County adjustment to calculate his current reproduction cost in the first instance.

The Court adopts the current reproduction cost [CRC] listed in Mr. Rusciano's [*23]itemization after applying the additional increments above [FN20] to each item for a total of $275,200.00 (rd) less the depreciation percentages assigned, resulting in a current sound value [CSV] rounded for all the items in the total amount of $219,700.00 (rd) as memorialized in the attached chart. [Appendix A]

Based on the foregoing, claimant Mazur Brothers Inc. is awarded $219,700.00 as and for damages for the loss of its trade fixtures at 90 Lake Street with statutory interest from the vesting date of April 4, 2006 to date of filing, and thereafter to the date of decision herein, and thereafter to the date of judgment.

CLAIM NO. 112661

(Trade Fixtures at 80 Lake Street and 62 Lake Street)

Mazur Brothers Inc. lists 351 items as trade fixtures at 80 Lake Street for which it alleges it is owed compensation as a result of the fee taking on April 4, 2006, as well as 26 items located at 62 Lake Street, known as the "children's annex", that was not part of the fee taking, by way of consequential damages [see Rose v State of New York, supra]. Claimant also seeks recovery as consequential damages for improvements not located at 80 Lake Street (such as a parking lot between 62 Lake Street and 80 Lake Street).

80 Lake Street

For the same reasons of superior expertise and analysis noted above, the assessment of what constitutes a trade fixture at the 80 Lake Street premises, and the valuation therefore (including most increments and depreciation), made by claimant's expert, Anthony Rusciano, is credited over that made by Jack Frescoln, defendant's expert, as memorialized in their testimony and reports and other evidence. [See Exhibits 2, 6, 9, 14, 36, 37, 60 and B]. Indeed, as Mr. Rusciano explained when asked on cross-examination how the "process" whereby Mazur Brothers Inc., sold its furniture at its retail store differed from the "process of selling any items" [T-1108],

"[W]hen you talk about process, we're talking about fixtures and fixtures as being part of a process are physically installed and therefore reflective of the operation of the business. You cannot separate the type of fixtures or the type of layout from the process which is being done. You cannot process the sale of clothing in this premises as configured and as outfitted with fixtures . . . You do not have fitting rooms, you do not have clothing racks, you have a . . . stratified area which is designed to highlight different types of furniture. There is different type of lighting designed to highlight the furniture and display it as they want to show. A living room, a dining room, a bedroom . . . This premises is totally designed for the sale of furniture. Not the sale of clothing and not the sale of shoes and not the sale of auto parts." [T-1108-1109].

Here, again, as with Claim number 112658, there are at least some items that would fall under a category of non-compensable personalty, or as part of the real estate. Moreover, here, items such as lighting fixtures and floor surfaces (such as carpeting) or wall paneling have some significance [*24]in terms of the retail furniture business being run out of 80 Lake Street, versus the warehouse facility at 90 Lake Street. The tendency toward hyperbole on the part of Mr. Rusciano with regard to the descriptions of the items as "custom fitted" or "customized" are again noted.

Accordingly, the Court finds that all the items listed in claimant's inventory for 80 Lake Street are compensable trade fixtures, except those objects that are either non-compensable personalty or merged in the real estate as follows: 9, 10,11, 12, 18, 19, 20, 21, 22, 25, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 42, 43, 49, 57, 58, 59, 69, 70, 73, 74,75, 76, 79, 80, 81, 90, 93, 95, 101, 103, 112, 113, 114, 120, 121, 124, 125, 131, 139, 141, 142, 143, 144, 145, 146, 147, 148, 149, 150, 151, 152, 153, 154, 155, 156, 157, 158, 159, 160, 161, 162, 163, 164, 165, 166, 172, 173, 176, 179, 180, 181, 182, 183, 184, 185, 186, 187, 195, 198, 199, 200, 201, 209, 212, 213, 216, 220, 221, 222, 223, 224, 225, 226, 228, 229, 230, 233, 234, 235, 239, 240, 246, 249, 254, 257, 259, 262, 263, 265, 266, 268, 270, 271,273, 274, 283, 291, 292, 299, 300, 301, 302, 304, 305, 306, 307, 308, 309, 312, 313, 317, 319, 320, 321, 322, 324, 325, 326, 327, 328, 329, 330, 331, 332, 333, 334, 335, 336, 337, 338, 339, 340, 341, 343, 344, 345, 346, 347, 348, 350, 351.

Increments for sales tax in the amount of +7.325%, for engineering, architectural and permits where applicable of +15%, and for financing +2.5 % are applied as above. The general contractor's overhead and profit are not included.

After applying the additional increments to the reproduction cost of each item listed by Mr. Rusciano, for a total current reproduction cost [CRC] of $685,200.00 (rd) , less the depreciation percentages assigned, the current sound value [CSV] rounded for all items at 80 Lake Street is $508,600.000 (rd), as memorialized in the attached chart. [Appendix B]

Consequential Damages

Mazur Brothers Inc. seeks an additional $91,500.00 as consequential damages for the loss of the alleged trade fixtures at 62 Lake Street, caused by the taking of 80 and 90 Lake Street. Claimant also seeks recovery for improvements not taken - such as the parking lot between premises that appears to have an address of 67 Lake Street - which was referenced in the appraisal submitted with regard to 80 Lake Street without differentiation (and disposed of above). Only claimant's appraisal report is in evidence [see Exhibit 7] with regard to 62 Lake Street, although Mr. Frescoln also valued the trade fixtures he determined were found therein.

Based upon the record presented, claimant has established entitlement to consequential damages as a result of the takings at 80 and 90 Lake Street. In this regard, the mining operations discussed in Rose v State of New York, supra, and Cooney Bros. v State of New York, 24 NY2d 387 (1969) impacted fixtures on properties not taken, because of their integration with fixtures on property that was taken. Thus, when the State appropriated riparian rights the functioning of claimant's sand and gravel mine - dependent on the availability of water - forced claimant to move its mining machinery to another location. Damages were not limited to the cost of having to move such trade fixtures as urged by the State, but rather "[i]f the cost of removal is less than the difference between salvage value and present value in place, this is all the claimant is entitled to recover." Rose v State of New York, supra, at 88. In Rose v State of New York, supra, the destruction of the functional utility of the mining machinery in place was sufficient to warrant a determination of damages as though there was a taking of the lands on which the machinery was located. [*25]

To a similar effect, in Cooney Brothers v State of New York, supra, the State took 26 acres of land which divided claimant's property, forcing its sand and gravel operation to move - including all its equipment - to another site. The Court found that if a crusher machine located on an adjacent leasehold not taken was owned by claimant, an award would be proper based upon the destruction of the crusher's "economic utility. . . whether or not it is located on the appropriated property." Cooney Brothers v State of New York, supra, at 392-393.

Here, claimant argues that it is entitled to the value in place of the fixtures at 62 Lake Street, and the parking lot at 67 Lake Street, because of the takings at 80 and 90 Lake Street. Defendant argues that the functionally integrated operations involved in Rose v State of New York, supra, and Cooney Brothers v State of New York, supra, are distinguishable from the use of the 62 Lake Street building to sell children's furniture, and the use of the parking lot, and are not so functionally co-dependent that the utility is lost in the way that the functional utility of the mining and sand and gravel operations were lost. See also Matter of City of New York (Kaiser Woodcraft Corp.), supra. While the Court agrees that compensation to the tenant for the use of the parking lot is a "reach", the Court agrees that the evidence suggests that claimant's furniture retail business utilized the warehouse at 90 Lake Street, the main furniture showroom at 80 Lake Street, and children's furniture annex at 62 Lake Street as all of a piece, and as such, they constitute an integrated operation sufficient for a finding that the taking of the associated properties, rendered useless trade fixtures installed at 62 Lake Street as well.

The only appraisal in evidence is that submitted by claimant, setting forth the valuation in place of alleged trade fixtures at 62 Lake Street utilized in its retail furniture business. [Exhibit 7]. It does not contain information concerning the moving costs, or salvage value, but neither was any rebuttal presented by defendant to counter the assessment of the value of the trade fixtures in place. Mr. Press testified that the taking of the associated properties, essentially forced him out of business. Having lost the capacity for storage at the warehouse, and the main showroom - the primary business of Mazur Brothers Inc. - the incidental sale of children's furniture was prejudiced, and trade fixtures installed for the sale of same lost their functional utility.

No award is given for an adjacent parking lot at 67 Lake Street (also not taken) as an item of consequential damage to the commercial tenant.

Accordingly, the Court finds that all the items listed in claimant's inventory for 62 Lake Street are compensable trade fixtures used in the claimant's retail furniture business, by virtue of having lost their functional utility because of the taking of related properties, except those objects that are either non-compensable personalty or merged with the real estate as follows: 7, 8, 12, 13, 16, 17, 18, 19, 21, 22, 23, 24, 25.

Increments for sales tax in the amount of + 7.325%, for engineering, architectural and permits where applicable of +15%, are added, but no financing increment (as confirmed by Mr. Rusciano) and none for the general contractor's overhead and profit are included.

The Court adopts the reproduction costs listed in Mr. Rusciano's itemization after applying the additional indirect or incremental costs above to each item for a total of $45,800.00 (rd), less the depreciation percentages assigned, resulting in a current sound value rounded for all the items in the total amount of $39,700.00 (rd), as memorialized in the attached chart. [Appendix C]

Accordingly, with regard to Claim Number 112661, claimant Mazur Brothers Inc. is [*26]awarded $508,600.00 in direct damages as and for the loss of its trade fixtures at 80 Lake Street, and $39,700.00 consequential damages as and for the loss of the functional utility of trade fixtures at 62 Lake Street, for a total of $548,300.00, with statutory interest from the vesting date of April 4, 2006 to date of filing, and thereafter to the date of decision herein, and thereafter to the date of judgment.

SUMMARY OF DAMAGES

To Mazur Brothers Realty, LLC Claim Number 112659, for the fee taking of 90 Lake Street, $1,118,600.00. To Mazur Brothers Inc., Claim Number 112658, for the loss of its trade fixtures at 90 Lake Street, $219,700.00. To Mazur Brothers Inc., Claim Number 112661, $508,600.00 direct damages for the loss of its trade fixtures at 80 Lake Street, and $39,700.00 consequential damages for a total on such claim of $548,300.00.

The award to claimant Mazur Brothers Realty, LLC is exclusive of the tenant's claim for reimbursement for its trade fixtures, lost as a result of the taking as alleged in Claim Number 112658 decided herewith, and is also exclusive of the claim, if any, of persons other than the owners of the appropriated property, their tenants, mortgagees or lienors having any right or interest in any stream, lake, drainage, irrigation ditch or channel, street, road, highway or public or private right-of-way or the bed thereof within the limits of the appropriated property or contiguous thereto; and is exclusive also of claims, if any, for the value of or damage to easements and appurtenant facilities for the construction, operation or maintenance of publicly owned or public service electric, telephone, telegraph, pipe, water, sewer or railroad lines.

It is ordered that to the extent Claimants have paid a filing fee, it may be recovered pursuant to Court of Claims Act § 11-a(2).

Let judgments be entered accordingly

APPENDIX A

90 LAKE STREET - CLAIM NO. 112658

ITEM

CRC(adjusted)

DEP

CSV 1. One sheet metal sign (Mazur Brothers Warehouse)$4,224.5835% $2,745.98 2. One facade painted sign (on the brickwork)$3,089.6235%$2,008.25 8. Two steel bumper guards at truck bay entry$971.025%$922.47 [*27] 27. Two 82"W x 74"H window bar security units$2,900.465%$2,755.44 28. One 30"W x 52"H window bar security unit$378.325%$359.40 29. One elevated storage platform$1,702.445%$1,617.32 30. One elevated storage platform$567.485%$539.11 50. One bar type window security guard$428.765%$407.33 51. One 2 tier ceiling hung rack braced to wall$971.0215%$825.37 54. One heavy duty top mounted storage rack$441.3710%$397.24 55. 80 ± SF Clear plastic heavy duty sheeting$100.8920%$80.71 56. One six tier shelving unit$252.2135%$163.94 59. One wall mounted pegboard unit$422.4640%$253.47 62. One workbench/desk on heavy duty double pedestal$819.6915%$696.74 72. 60 ± SF heavy duty clear plastic sheeting$75.6610%$68.10 [*28]74. 80 ± SF cardboard divider screening paneling$100.8910%$90.80 82. One wooden wall mounted shelf$214.3810%$192.94 83. One very heavy duty workbench$756.6410%$680.98 84. One custom created and built workbench$693.5915%$589.55 85. One three tier metal shelving unit$201.7710%$181.59 90. One storage platform, 870 ± SF$11,601.8340%$6,961.10 91. Steel platform support structure$10,088.5540%$6,053.13 92. Group of vertical support lally columns$8,764.4340%$5,258.66 97. 70 ± SF Cardboard screening$88.2710%$79.45 98. Carpeting bumper on overhead low beams$94.585%$89.85 102. One three sectioned platform area storage$7,265.025%$6,901.77 104. One sign mounted to shelving assembly$378.3225%$283.74 105. One custom built shelving system$2,541.0525%$1,905.79 [*29] 106. One overhead storage rack unit 30' L x 4' W$1,387.1810%$1,248.46 108. One Aerotherms unit heater$3,707.5430%$2,595.28 109. One pipe hanger mounting$75.6630%$52.96 110. 42" L x 1" assembled connection branch schedule 40 steel pipe$252.2135%$163.94 111. One 18" diameter blower$4,413.7415%$3,751.68 112. One exhaust flue$901.6610%$811.50 113. Heater ductwork distribution assembly$1,576.345%$1,497.52 114. One heat shielding assembly$189.165%$179.70 117. 2,205 ± SF Mezzanine platform$27,239.0910%$24,515.18 118. Supportive structure$42,876.3410%$38,588.70 119. One overhead wooden rack$1,059.3035%$688.54 120. Two overhead wooden racks$3,631.8835%$2,360.72 [*30]121. One lower wooden rack$1,588.9535%$1,032.82 122. One lower storage rack$1,084.5235%$704.94 123. One storage table with framing,$5,927.0235%$3,852.57 124. One overhead storage rack$5,296.4935%$3,442.72 125. One elevated storage platform rack$5,901.8035%$3,836.17 126. One storage platform$4,035.4235%$2,623.02 127. One elevated storage rack$5,826.1435%$3,786.99 128. One staggered upper storage rack$3,467.9435%$2,254.16 129. One elevated storage rack$1,639.3935%$1,065.60 131. One elevated storage rack$4,161.5335%$2,704.99 132. One overhead storage rack$1,059.3035%$688.54 134. One space heater, gas fired, Janitrol$3,026.5735%$1,967.27 135. One pipe hanger bracket for space heater$75.6635%$49.18 [*31] 136. 15 ± LF, 8" galvanized steel exhaust flue ductwork$1,147.5735%$745.92 137. 16 ± LF 1" "Schedule 40" gas supply$617.9235%$401.65 138. One heat shield assembly$340.4935%$221.32 139. One surface mounted conduit run duplexreceptacle$315.2735%$204.92 150. 350 ± SF elevated skid type racking$5,296.4910%$4,766.84 151. Group of protective covering and storageplatforms$2,648.2410%$2,383.42 152. One over stairway platform rack$567.4835%$368.86 153. One guard rail enclosure over stairway$1,967.2740%$1,180.36 154. Two overhead storage racks$1,084.5240%$650.71 155. One single shelf unit$907.9710%$817.17 164. One alarm system$29,445.9625%$22,084.47 165. One security camera system$40,354.205%$38,336.49 [*32] TOTAL$275,200.00$219,700.00APPENDIX B 80 LAKE STREET -CLAIM NO. 112661 ITEMCRC (adjusted)DEPCSV 1. One decorative entryway canopyextension$2,711.3015%$2,304.60 2. Four exterior grade stainless steelfinished 300 watt hi-hat lighting fixtures$3,455.3315%$2,937.03 3. Two decorative wood support columnsfor canopy$1,160.1815%$986.16 4. Painting of canopy and columns$157.6325%$118.23 5. One decorative "Bronze" anodizedaluminum entry and window system$5,800.9215%$4,930.78 6. One decorative wooden facade assemblyfinish$13,997.8615%$11,898.18 7. One stainless steel extended lightingsoffit canopy unit$36,192.6730%$25,334.87 [*33]8.Stainless steel canopy lighting assembly$7,314.2015%$6,217.07 13. Facade mounted advertising lettering forstore identification$9,584.1230%$6,708.89 14. Facade mounted lettering$208.0815%$176.86 15. One decorative accent nailed to buildingfacade$252.2110%$226.99 16. One boxed metal illuminated sign$11,980.1525%$8,985.11 17. One illuminated sign electrical circuitand timer switch control$1,210.6310%$1,089.56 23. One illuminated advertising locationidentification sign$25,416.8415%$21,604.31 24. One sign post mounted exteriorfloodlight assembly$1,916.8220%$1,533.46 26. One painted sign on building facade,white field with black lettering$1,406.0915%$1,195.18 41. One rear area floodlight assembly$1,008.8615%$857.53 44. 500 ± SF Painted plywood wall paneling$4,338.0815%$3,687.37 [*34] 45. One lighting trough$2,194.2635%$1,426.27 46. Fourteen single tube 48" surfacemounted strip type fluorescent fixtures$2,900.4635%$1,885.30 47. Three conduit run lighting circuits fortrough lighting$1,059.3010%$953.37 48. One wall mounted custom lettered sign$542.2625%$406.69 50. Two wing wall partitions$1,293.8610%$1,164.47 51. 45 LF 3" x 1" wooden baseboard trim$397.2410%$357.51 52. One arched opening with "Demi-Wall"$863.8310%$777.45 53. 12 LF 1" x 4" wooden baseboard trim$52.9610%$47.67 54. Two 10' L hanging display poles$353.1030%$247.17 55. 33'6"L x 30"H wrought iron railing$8,108.6725%$6,081.50 56. Two side stair rails$1,576.3425%$1,182.25 [*35]60. Two overhead mounted hardboard signson wall$971.0220%$776.82 61. 1,525 ± SF exposed spline acousticalhung ceiling$10,769.5340%$6,461.72 62. Three track lighting units$1,103.4440%$662.06 63. Eighteen recessed hi-hat floodlightassemblies$7,440.3130%$5,208.21 64. Group of wall mounted wiring strips$5,296.4910%$4,766.84 65. Group of upper mounted individualduplex receptacle assemblies$756.6410%$680.98 66. One indirect lighting fixture$283.7410%$255.37 67. One pegboard display$2,522.1430%$1,765.50 68. Two 6" x 6" metal angle iron brackets$60.5310%$54.48 71. 1,525 ± SF elevated wooden platform$14,376.1810%$12,938.57 72. 169 ± SF, commercial grade high trafficrated nylon carpeting$13,379.9445%$7,358.97 [*36]77. Two translucent smoke grey plasticsigns$1,891.6040%$1,134.96 78. One sign$378.3210%$340.49 82. Four 10" diameter brushed aluminumfloodlights$1,620.4730%$1,134.33 83. Sixteen recessed hi-hat floodlightassemblies$6,658.4430%$ 4,660.91 84. Four 4-tube 48" fluorescent lightingfixtures$1,639.3930%$1,147.57 85. One double sided drywall partition$2,995.0410%$2,695.53 86. One louvered wooden access door$1,191.7115%$1,012.95 87. One stairwell opening$2,396.0310%$2,156.43 88. One front window display platform$453.9810%$408.59 89. Two ceiling mounted directionalcanister lighting fixtures$1,134.9625%$851.22 91. One two-sectioned stairway$34,048.8625%$25,536.64 [*37]92. 185 ± SF high traffic nylon blendcommercial grade carpeting$14,641.0145%$8,052.55 94. One mounted indirect lighting unit$283.7410%$255.37 96. 1,660 ± SF elevated wooden platform$15,700.3110%$14,130.28 97. One overhead soffit enclosure$693.5910%$624.23 98. Two 10'L - 2" diameter wooden displayrods$290.0510%$261.04 99. 35' 6" long x 28" high wrought ironpickets railing$8,600.4925%$6,450.37 100. Two 30"L x 28" H stairway handrails$1,576.3425%$1,182.25 102. 1,560 ± SF exposed spline acousticalhung ceiling$11,021.7440%$6,613.04 104. One surface mounted 2 tube 96"fluorescent fixture$517.0410%$465.33 105. One three-tier adjustable metalshelving rack$145.0240%$87.01 106. One shelving rack assembly$1,040.3840%$624.23 [*38] 107. One adjustable wall mounted shelvingrack$264.8240%$158.89 108. Four heavy duty metal brackets$302.6610%$272.39 109. Two built-in 4 drawer vertical legal filecabinets$1,790.7215%$1,522.11 110. Two integrated heavy-duty 3 drawerlegal file cabinets$1,557.4215%$1,323.81 111. One Formica finished top shelf 1"T$277.4410%$249.69 115. One two-tier adjustable metal shelvingrack$517.0440%$310.22 116. One adjustable track wall shelvingassembly$435.0740%$261.04 117. One wall mounted wooden shelf onmetal brackets$40.3540%$24.21 118. One overhead mounted plywood shelf$151.3340%$90.80 119. One five-tier adjustable metal bookcase$712.5040%$427.50 [*39]122. 1,040 ± SF exposed spline acousticalhung ceiling$7,314.2040%$4,388.52 123. 1,040 ± SF high traffic type nyloncommercial grade carpeting$9,205.8045%$5,063.19 126. Two window display platforms$504.4310%$453.98 127. Two receptacle strips$725.1130%$507.58 128. One decorative lattice work accentbackdrop demi-partition$1,513.2815%$1,286.29 129. Group of receptacle device strips$1,942.0510%$1,747.84 130. 310 ± SF painted wooden wallpaneling$2,692.3815%$2,288.52 132. One wing wall 85 ± SF$1,021.4710%$919.32 133. Two duplex receptacle assemblies(installed in wing wall)$567.4810%$510.73 134. Five 4-tube 48" recessed fluorescentfixtures$2,049.2430%$1,434.47 135. Sixteen recessed hi-hat floodlightassemblies$6,658.4430%$4,660.91 [*40] 136. Seven recessed type eyeball lightingfixtures$3,354.4430%$2,348.11 137. One directional hooded spotlightfixture$535.9525%$401.97 138. 1,040 ± SF wall to wall carpeting$9,205.8045%$5,063.19 140. One sign, ceiling hung with chains$605.3135%$393.45 167. One 1/8" T plexiglass sign 20" x 26"$189.1610%$170.24 168. 35 ± SF ½" wooden wall panel$308.9615%$262.62 169. One sectioned closet assembly$920.5810%$828.52 170. One fluorescent lighting fixture$617.9210%$556.13 171. Wrought iron railings to separateselling floor from office area$2,421.2515%$2,058.06 174. 350 ± SF plywood veneered wallpaneling$2,427.5615%$2,063.42 175. 250 ± SF double sided drywallpartition$2,679.7710%$2,411.79 [*41] 177. 14 ± SF commercial grade mediumtraffic nylon carpeting$1,134.9645%$624.23 178. One wall mounted shelf$88.2725%$66.21 188. One single line telephone jackassembly$214.3815%$182.22 189. 128 ± SF acoustical hung ceiling$1,134.9630%$794.47 190. Two 2-tube 48" recessed fluorescentfixtures$1,336.7320%$1,069.39 191. One "Two Gang" single pole toggleswitch assembly$466.6010%$419.94 192. One custom built storage closet$2,774.3510%$2,496.92 193. One custom built tool storage closet$220.6910%$198.62 194. One interior closet lighting fixture$132.415%$125.79 196. One 4-tube 48" recessed fluorescentfixture$409.8535%$266.40 [*42]197. One wall mounted adjustable wallshelving rack unit$302.6640%$181.59 202. One illuminated emergency exit light$895.3630%$626.75 203. One storage/partition unit$5,296.4935%$3,442.72 204. 240 ± SF elevated open office platform$2,950.9035%$1,918.09 205. 245 ± SF 9" x 9" composition vinyl tilefloor finish$1,311.5140%$786.91 206. One divider partition, construction is2"T plywood and veneer$2,944.6035%$1,913.99 207. One storage cabinet assembly$1,664.6135%$1,082.00 208. One safe - office type (anchored)$8,890.535%$8,446.01 210. Two wall mounted shelves$239.6010%$215.64 211. One customer service counter$11,538.7835%$7,500.21 214. One cash register station$630.5310%$567.48 215. One cash register$12,610.6920%$10,088.55 [*43] 217. Four order processing desks$7,818.6315%$6,645.83 218. Three wall mounted storage cabinets$2,269.9215%$1,929.44 219. One customer service swing door gate$605.3140%$363.19 227. One file slot unit, enameled metal,mounted on wall$302.6615%$257.26 231. Four 4-tube 48" recessed fluorescentfixtures$1,639.3935%$1,065.60 232. One incandescent light fixture$409.8510%$368.86 236. Carpeting to cover stairway$901.6645%$495.92 237. One elevated platform$8,890.5310%$8,001.48 238. 700 ± SF heavy duty decorativelinoleum carpet$6,973.7145%$3,835.54 241. 600 ± SF simulated stucco wall finishapplied to sheetrock walls$4,413.7410%$3,972.37 242. 85 ± LF 4" H vinyl base cover trim$290.0520%$232.04 [*44] 243. Twenty directional floodlight lightingfixtures$10,416.4320%$8,333.14 244. 65 ± SF annexed trim (tudor style)$983.6310%$885.27 245. Two decorative wall sconces$1,103.4425%$827.58 247. Four decorative archway beam accents$1,235.8525%$926.89 248. One recessed curtain track$662.0620%$529.65 250. Eight 24" L wall mounted adjustableshelf mounting tracks$163.945%$155.74 251. 715 ± SF recessed spline acousticalhung ceiling$6,305.3430%$4,413.74 252. Three track lighting units$3,152.6725%$2,364.50 253. Group of directional spotlight andfloodlight fixtures$2,143.8225%$1,607.86 255. 135 ± LF 3" crown molding primedand painted$958.415%$910.49 [*45]256. One overhead mounted merchandisedisplay hanger unit$542.265%$515.15 258. 700 ± SF high traffic nylon blendcarpeting$6,179.2445%$3,398.58 260. 115 ± LF power supply electrical strip$7,251.1510%$6,526.03 261. 39 ± LF wrought iron decorativerailing$9,439.1015%$8,023.23 264. Three steps$725.1110%$652.60 267. 1,500 ± SF recessed spline acousticalhung ceiling$13,241.2230%$9,268.86 269. 440 ± SF ½" plywood faced paneling$4,098.4715%$3,483.70 272. 109 ± LF power supply electrical strip$6,872.8210%$6,185.54 275. Four ceiling mounted lighting tracks$6,053.1340%$3,631.88 276. 36 track mounted large canisterfloodlights$7,490.7540%$4,494.45 277. Two built-in closets$6,179.2410%$5,561.31 [*46]278. Two shelves$252.2135%$163.94 279. Two 20-amp duplex receptacleassemblies$630.5310%$567.48 280. One illuminated exit sign indicator$819.695%$778.71 281. One dual head emergency lighting unit$1,727.6635%$1,122.98 282. 1,550 ± SF high traffic nylon blendcommercial grade carpet$13,682.6045%$7,525.43 284. 150 ± SF high traffic nylon blendcommercial grade carpet$1,324.1245%$728.27 285. Three steps down$1,210.6315%$1,029.03 286. 30 ± LF 36" H handrail with alternatedwrought iron pickets$7,263.7645%$3,995.07 287. One 2-tube surface mounted lightingfixture$302.6610%$272.39 288. 1,000 ± SF recessed spline acousticalhung ceiling$8,827.4830%$6,179.24 289. 1,000 ± SF high traffic nylon blendcarpeting$8,827.4845%$4,855.11 [*47] 290. 150 ± SF ½" plywood veneer finishedpaneling$1,305.2115%$1,109.43 293. One illuminated exit sign$756.6435%$491.82 294. One surface mounted 2-tube48" fluorescent lighting fixture$334.1835%$217.22 295. 750 ± SF recessed spline acousticalhung ceiling$6,620.6130%$4,634.43 296. 750 ± SF high traffic nylon blendcarpeting$6,620.6145%$3,641.34 297. Two ceiling lighting tracks$1,008.8625%$756.64 298. Ten large canister type floodlights$1,954.6610%$1,759.19 303. 90 ± LF electrical strip power supplydistributor with 80 ± outlets$4,993.8335%$3,245.99 310, 314, 318. Telephone system$27,112.9835%$17,623.44 311. One tork timer unit$441.3710%$397.24 315. One fire alarm system$8,827.485%$8,386.11 [*48] 316. One burglar alarm system$11,980.155%$11,381.15 323. One fence mounted sign$334.1815%$284.06 342. Five porcelain lighting fixtures$1,134.9615%$964.72 349. Two burglar alarm grids$3,196.815%$3,036.97 TOTAL$685,200.00 (rd)$508,600.00 (rd)

APPENDIX C

62 LAKE STREET - CLAIM NO. 112661

ITEM

CRC

(adjusted)

DEP

CSV 1. One building mounted sign$4,072.9815%$3,462.04 2. One sheet metal sign$2,801.7215%$2,381.46 3. Three double head incandescent floodlamps$740.5410%$666.49 4. One "Tork" electric timer clock$277.7010%$249.93 [*49]5. 1,200 ± SF Hi-traffic nylon blendcommercial grade carpeting$5,183.8030%$3,628.66 6. 1,150 ± SF plywood veneered wallpaneling$9,503.6315%$8,078.08 9. Three ceiling mounted lighting track units$9,318.4910%$8,386.64 10. Two dual head ceiling mounted hi-intensity spotlight units$2,345.0510%$2,110.55 11. Fifteen large canister floodlight unitsmounted to lighting track$4,566.6810%$4,110.01 14. Two wall mounted particle board shelves$185.145%$175.88 15. One surface mounted single tube 96" stripfluorescent fixture$506.0410%$455.43 20. One shelving rack$135.7710%$122.19 26. One burglar alarm unit$6,171.195%$5,862.63 TOTAL$45,800.00 (rd)$39,700.00 (rd)

Footnotes

Footnote 1: All quotations are to the trial transcript unless otherwise indicated, noted as "T" with the page number.

Footnote 2:Indeed, in one case where both sides presented "defective" appraisals, and advanced entirely different theories of highest and best use for the subject, there was insufficient data for the trial Court to derive a value, and the matter was remitted for additional testimony. See Yaphank Dev. Co. v County of Suffolk, 203 AD2d 280 (2d Dept 1994). The plaintiff argued the subject should be industrial against the evidence contained in deeds and the zoning code that such a use was not possible; while the defendant overstated the imminence of proposed road widening, and found that the highest and best use was as a road bed with a nominal value of $1.00.

Footnote 3: April 12, 2002.

Footnote 4: In Exhibit J, the terms for temporary easements for the removal of the retail furniture store [80 Lake Street] and other related use for a period of 36 months; and for use of the parking lot adjacent to 80 Lake Street for a period of 12 months are proposed by the representative of the New York State Department of Transportation. There is nothing said concerning the temporary easement taken with regard to 90 Lake Street at issue.

Footnote 5: It is noted that the owner of the real estate taken, and the owner of the commercial concerns were "convenience" corporations wholly owned by Mr. Rose as the sole-stockholder.

Footnote 6: "The criterion of a fixture is the union of these three requisites: First. Actual annexation to the realty or something appurtenant thereto. Second. Application to the use or purpose to which that part of the realty to which it is connected is appropriated. Third. The intention of the party making the annexation to make a permanent accession to the freehold."

Footnote 7: "[Claimant] presented evidence that, although the lease to the subject parcel was in the name of his brother-in-law, he had operated the restaurant on the parcel with the knowledge and consent of his brother-in-law and the landlord (whose office was also located on the property) for several years prior to the condemnation. Further, during that time, he made and paid for significant improvements to the restaurant, including the installation of valuable fixtures taken in the condemnation. These assertions, if credited, would be sufficient to support a finding that the [claimant] was a condemnee within the meaning of EDPL 103 (c) as to the fixtures. The Village's focus on the fact that [claimant] was not the named tenant and did not have a written assignment or sublease was misplaced in light of the broad and inclusive definition of condemnee . . . (citations omitted)."

Footnote 8: "Between these extremes are articles which are sufficiently annexed to the freehold so that they would pass between vendor and purchaser yet may be held to be removable by a tenant if the right to remove them is expressly reserved in the lease or implied from the circumstances."(emphasis added).

Footnote 9: While the appellate court then dismissed the trade fixture claims premised upon a lack of proof, the statement of the governing law is nonetheless accurate.

Footnote 10: "The clause in claimant's lease waiving its right to compensation in condemnation awards precludes it from asserting leasehold claims and from participating in any fee simple award payable to the landlord . . ."

Footnote 11: Where lease provision expressly provided that alterations or additions or permanent improvements became property of landlord, commercial tenant not entitled to bring trade fixture claim against State of New York.

Footnote 12: Special distribution proceedings commenced by the fee owner before Judge Ruderman, were remanded by the Appellate Division with the instruction that before any distribution of monies held in special accounts could be directed, a determination had to be made of what items claimed as trade fixtures by the noticed tenant, were actually trade fixtures. Matter of Mazur Bros. Realty LLC v State of New York, 69 AD3d 726, 728 (2d Dept 2010). The commercial tenant was not a party to either an Agreement for Advance Payment [Eminent Domain Procedure Law §304 (A)(3)] offered to the fee owner with regard to 90 Lake Street, nor an Agreement of Adjustment [Eminent Domain Procedure Law §304(A) (2)] executed with regard to 80 Lake Street by the fee owner, and does not appear to have been offered a separate advance payment or adjustment in any event. See e.g. Matter of West Bushwick Urban Renewal Area, Phase 2, 69 AD3d 176 (2d Dept 2009). It is the fee owner who entered into such agreements with the language contained therein, and the State was fully aware that there was a commercial tenant at both 80 and 90 Lake Street, yet the State of New York, other than requiring that the fee owner secure assignments from the trade fixture tenant in order to be paid the advance payment (90 Lake Street) as well as for the agreed adjustment (80 Lake Street), did not directly offer payments to the trade fixture tenant although it, too, is a "condemnee"under the statute. [See Matter of Village of Port Chester v Sorto, supra at 571 (condemnee includes "owners of fixtures"); Eminent Domain Procedure Law §103 (C)]. The Appellate Division directs on remand that with respect to both such agreements the Court was not free to distribute the monies held in special accounts because "the agreements provided that the compensation paid by the State was for the total value of the property appropriated, which included both the real property and the trade fixtures" [Matter of Mazur Bros. Realty, LLC v State of New York, supra, at 728], thus a determination needed to be made as to what did, or did not, constitute the tenant's trade fixtures. Since the claims heard before this Court were already sub judice when the remand by the Appellate Division was issued, the distribution proceedings have not been heard. It would seem that the resolution of the claims before this Court have impliedly determined the issue of what constituted the commercial tenant's trade fixtures, so that the fee owner is entitled to the settled upon amounts as advance payments or as agreed adjustments, subject to the validity of whoever else claimed entitlement to such funds. Reportedly, and consistent with its position in proceedings before this Court, Mazur Brothers Inc. has not claimed an interest in the monies held in special accounts.

Footnote 13: See Section 206.21 Appropriation claims; special rules

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(c) All appraisals of fixtures submitted on behalf of the claimants and the Defendant for which claim is made shall be filed and distributed as provided by these rules with respect to appraisal reports and shall set forth the appraisal value of each item in the same numerical order as in the inventory annexed to the claim.

(1) Where the Defendant puts in issue the existence of any item in the inventory, the appraisal submitted on its behalf shall so state.

(2) Where the Defendant puts in issue the description of any item in the inventory, the appraisal submitted on behalf of the Defendant shall state its appraiser's description of such item and his or her estimate of value.

(3) Where the Defendant puts in issue the compensability of any item in the inventory, the appraisal report submitted by the Defendant shall so state and shall state the ground therefor, as well as its appraiser's estimate of the value of such item for consideration in the event that the court should determine that it is compensable.

Footnote 14: Notably, the Court has excluded fire extinguishers from consideration as trade fixtures herein because they are not adapted to the particular business use of the commercial tenant, but rather an item required to be part of the realty by local fire codes. While certainly a fixture if affixed to the building in a permanent fashion, fire extinguishers are not trade fixtures.

Footnote 15: "Certain building items which had lost their identity by becoming a structural part of the building were also properly excluded by the trial court (see, Marraro v State of New York, 12 NY2d 285, 292)."

Footnote 16: The "current reproduction cost" is: "The cost to reproduce an item as built and installed, including all associated methods of annexation labor, materials, delivery costs, equipment required and where appropriate sales tax on the valuation date . . . " [Exhibit 5].

Footnote 17: "[T]he inclusion not only of payments for material, equipment, labor and other obvious physical ingredients which go directly into construction, but also of those charges which may be termed indirect or less direct, such as architect's fees, contractors' profits, interest and taxes on land value during the period of construction, cost of procuring necessary licenses and the miscellany of other essential overhead or incidental expenses. For a fair and realistic appraisal of reproduction costs must embrace in its reckoning all expenditures that reasonably and necessarily are to be expected in the re-creation [of the item]."

Footnote 18: He used "location multiplier" of 1.29%, "estimated survey, permit & engineering" of 1.27%, "general condition" of 1.10%, State sales tax of 8.25% to arrive at his "total replacement cost new" and then generally utilized extreme depreciation percentages such as 60 or 70% with little regard for the functionality of a listed item.

Footnote 19: "Thus, while the easements are not subject to tax as real property, the costs of acquiring the easements, which are costs undeniably necessary to re-creation of functioning transmission lines, are properly considered in calculating the reproduction cost of the subject transmission lines..."

Footnote 20: The direct and indirect costs "should be included in each item's sound value and should not be added to the total value of the items . . ." See Whitehall Corners Inc. d/b/a Maria's Ristorante v State of New York, Claim No. 78531, unreported, (Benza, J., March 31, 1993) affd 210 AD2d 398 (2d Dept 1994).