Robert H. Valenti et al. v. Town of Stonington (2011)

MEMORANDUM OF DECISION

This is an appeal by plaintiffs, Robert H. Valenti, Ferdinand Valenti and JBRB, LLC, from an assessment by the Board of Assessment of defendant, Town of Stonington, on the List of October 1, 2008, on their real estate located at 72 Jerry Brown Road, Stonington, Connecticut.   The property consists of an improved site with two automobile dealership buildings containing four automobile dealerships.   It was appraised by the defendant at a fair market value of $8,800,300 and assessed for 70% of fair market value, or $6,160,300.   The plaintiffs claim that the property is overvalued and overassessed.

In valuing the property in issue, the appraisers testifying for both the plaintiffs and the defendant relied on the sales comparison approach.   The plaintiffs' appraiser also used the cost approach, but indicated it “is generally a less reliable indicator of market value.”   The defendant's appraiser relied solely on the sales comparison approach.   Based on the appraisers' reliance on the sales comparison approach, the court will only address itself to the sales comparison approach as developed by the appraisers.

Each appraiser used sales of five automobile dealerships located in Connecticut in developing comparable sales.   Three of the dealerships used by each appraiser are located in New Haven, Hartford and Fairfield counties.   The values for real estate in these counties exceed values for real estate in New London County and do not furnish reliable estimates of value for the subject property.

Each of the appraisers used two comparables located in New London County.   A dealership used by the plaintiffs' appraiser located in Colchester, Connecticut, is much smaller than the subject property and is located a considerable distance from it.   A dealership used by the defendant's appraiser located in East Lyme, Connecticut, was not an arm's length transaction and is not a reliable indicator of fair market value.

The remaining comparison used by both appraisers is a dealership located at 450 West Main Street, Norwich, Connecticut.   The Norwich property is about one-half the size of the subject property.   It is located on Route 32, a local highway, and lacks access or visibility from an interstate highway.   The subject property is located adjacent to, and has excellent visibility from, I–95, a very heavily traveled interstate highway.   The subject property has easy access to I–95. The court finds that because of its visibility from, and access to, I–95, the subject property has a very superior value to the Norwich property.

The plaintiffs' appraiser found the price per square foot of the Norwich property to be $109.46 per square foot and the defendants' appraiser found the price per square foot of the Norwich property to be $109.14 per square foot.   The average of the two square foot findings is $109.30 per square foot.   The plaintiff's appraiser adjusted the price per square foot of the Norwich property in comparison with the subject property upwards by 5% because of the inferior location of the Norwich property.   He adjusted the price per square foot of the Norwich property downwards by 10% because of the size of the buildings on the subject property, 62,860 square feet, compared with the size of the building on the Norwich property, 34,620 square feet, due to the lower cost of the construction for larger buildings.   However, the subject property consists of two buildings with square footages of 44,292 square feet and 24,932 square feet, respectively.   In view of the sizes of the buildings on the subject property in comparison with the size of the building on the Norwich property, any construction costs would appear to be roughly equivalent and an adjustment for size of buildings is not in order.   The plaintiff's appraiser also adjusted the square foot value downwards by 5% for the older age of the buildings on the subject property.   The defendant's appraiser made no adjustments in the square foot value of the Norwich property, although he found the location and the land area to be inferior to the subject property.

The court finds that the average square foot value of the Norwich property should be adjusted upwards by 10% because of the very superior location of the subject property and should be adjusted downward by 5% because of the age of the buildings on the subject property, or a net adjustment upwards by 5%. Accordingly, the average square foot value of the Norwich property, $109.30, should be increased by 5%, or $5.47, to adjust the Norwich property to the subject property for an adjusted per square foot value for the subject property of $114.77.

There was a dispute between the appraisers in the determination of the square footage of the subject property.   The plaintiffs' appraiser determined the total square footage to be 62,860 square foot and the defendant's appraiser determined the total square footage to be 68,924 square feet.   The plaintiffs' appraiser did not include in his determination 8,384 square feet of mezzanine space in the two buildings on the site used for offices and a parts area.   The plaintiffs' appraiser's total square foot calculation was based on building plans and the defendant's appraiser's total square foot calculation was based on the assessor's property maps.   The court finds that the plaintiffs' appraiser's determination of 62,860 square feet is proper, subject to adjustment for the mezzanine space in the buildings.

The plaintiffs' appraiser included an adjustment of 5% upwards for the mezzanines in his determination of the value of the Norwich comparables.   The court finds that the mezzanines should be included in the calculation of the value of the subject property, but only to the extent of 50% of the square footage of the mezzanines, or 4,192 square feet, to reflect their reduced value compared to first floor space in the buildings.

In addition, the plaintiffs' appraiser found that a cell tower lease on the property adds $156,531 to the value of the property.

Accordingly, the court finds the fair market value of the subject property to be $7,852,089 determined as follows:

Value of first floor space

62,860 x $114.77= $7,214,442

Value of mezzanines

4,192 x $114.77= $ 481,116

Value of cell tower lease $ 156,531

Total Fair Market Value $7,852,089

The court finds the assessed value of the property to be $5,496,462, 70% of $7,852,089.

No costs are awarded.

Seymour L. Hendel, JTR

Hendel, Seymour L., J.T.R.