Commissioner of Transportation State of Connecticut v. Domenic S. Paniccia et al. (2013)

MEMORANDUM OF DECISION

FACTS

The State of Connecticut Commissioner of Transportation filed a Notice of Condemnation and Assessment of Damages, pursuant to S. 13a–73(b) ¹ and S. 13a–73(e) 2 of the General Statutes with this court on January 9, 2012 (Ex. 2).

The notice concerned property owned by the Defendant, Domenick S. Paniccia, known as 25 Easton Road, Monroe.   Easton Road is a state highway, known as Route 59, which runs in a generally east and west direction from Route 25, Monroe, into the Town of Easton.   The Paniccia parcel consists of approximately 6.92 acres, and is situated on the southerly side of Route 59.

The Notice of Condemnation (Ex. 2), which is recorded at Volume 1572, page 282–83 of the land records of the Town of Monroe, did not involve the acquisition of any land by the State of Connecticut in fee.   Instead, by virtue of the taking, the State acquired an easement to slope, within a portion of 25 Easton Road, consisting of 685 square feet, more or less, located in the northeasterly portion of the property (Ex. 3).   The easement also included the right to install sedimentation controls.

25 Easton Road is approximately 500 feet west of the intersection of Route 59 and Main Street, Monroe, a portion of Route 25.   Route 59 and Route 25 intersect in Stepney Center, slightly north and west of Stepney Green.

The subject property is located in a residential zone.   It is zoned Residence and Farming District C, which requires a one-acre minimum for residential building lots.   Abutting the parcel to the east, is a Design Business District 1(DB1) Zone. Main Street, at its junction with Route 59, is a commercial zone.

The Notice of Condemnation (Ex. 2) assessed damages to be one thousand seven hundred dollars ($1,700).

The Defendant, Domenick S. Paniccia, claims to be aggrieved by the assessment of damages, in this appeal.

STANDARD OF REVIEW

In a condemnation proceeding, the trial court is not simply the trier of fact, or an arbiter of differing opinions.   The court is charged, by the General Statutes and judicial decisions, with the duty of making an independent determination of value and fair compensation, in light of all of the circumstances, and the evidence.  D'Addario v. Commissioner of Transportation, 180 Conn. 355, 366 (1980);  E & F Realty Co. v. Commissioner of Transportation, 173 Conn. 247, 253 (1977);  White Oak Excavators, Inc. v. Burns, 172 Conn. 478, 484 (1977).   The court determines reasonable compensation, and is charged with drawing its own conclusions from all the evidence.  Birnbaum v. Ives, 163 Conn. 12, 21 (1972).

A court is required to determine just compensation for a property owner whose land has been taken.   The person whose property is condemned shall be put in as good a condition pecuniarily, as he would have been had the property not been taken.  Northeast Ct. Economic Alliance, Inc. et al. v. ATC Partnership et al., 272 Conn. 14, 25 (2004).   The amount of money that constitutes just compensation is the market value of the condemned property when put to its highest and best use, at the time of taking.  Cappiello v. Commissioner of Transportation, 203 Conn. 675, 681 (1987).   In determining fair market value, a court may consider all of those elements which an owner or a prospective purchaser could reasonably urge as affecting the fair price of the land.   Budney v. Ives, 156 Conn. 83, 88 (1968).   The fair market value is the price that a willing buyer would pay to a willing seller, based upon the highest and best possible use of the land, assuming a market exists for such optimum use.   Mazzola v. Commissioner, 175 Conn. 576, 581–82 (1970).

Fair market value of a piece of property is determined in light of the use to which it is being put at the time of the taking, or to which it could be put most advantageously.  Transportation Plaza Associates v. Powers, 203 Conn. 364, 375–76 (1987).   The use to which a property is committed at the time of a taking is not conclusively presumed to be the highest and best use.   Even where a parcel has been committed to a particular use for an extended period of time, the court may consider the impact on present market value of other more profitable uses to which the property may be devoted, based upon a future contingency.  Tandet v. Urban Redevelopment Commission, 179 Conn. 293, 301 (1979);  Stamford v. Minchin–Buick, Inc., Superior Court, judicial district of Stamford–Norwalk at Stamford, Docket No. CV 05–4004767 S (June 2011) (Mottolese, J.T.R.).

DEFENDANT CLAIMS POTENTIAL USE OF 25 EASTON ROAD FOR COMMERCIAL DEVELOPMENT SHOULD CONTROL FAIR MARKET VALUE DETERMINATION

The Defendant, Domenick Paniccia, argues that the value of the property taken should be determined, based upon the use of the parcel for commercial development.

Mario Paniccia, a licensed architect, drafted a proposed development, depicting two commercial office buildings on the site.   The plans, which are dated January 5, 2006, three years prior to the date of taking (Ex. A), envision 93,500 square feet of office space, encompassed within two buildings, each of which contains two stories.   The proposed buildings are accessed from Route 59.

The Defendant claims that as a result of the taking of the easement to slope, and the identification of wetlands on the property, by agents of the State of Connecticut during the taking process, two buildings can no longer be constructed on the property.   Instead, Domenick Paniccia maintains, only a single building of 44,432 square feet is possible, due to the presence of wetlands (Ex. E).

The Defendant must acknowledge, that commercial development of the site (Ex. G1) is not permitted, in a Residence and Farming District C Zone. He further admitted, at trial, that no application was filed with the Monroe Planning and Zoning Commission prior to the date of taking, seeking to change the zoning classification to Design Business District 1 (DB–1).   Nor has any request for a change of zone been filed subsequent to the January 2009 taking.

Furthermore, no application to conduct a regulated activity on the site has been filed with the Inland Wetlands and Watercourses authority of the Town of Monroe, since the date of taking.

A 2005 application to the Inland Wetlands and Watercourses Commission concerning 25 Easton Road provides some interesting information, concerning the impact of any wetlands upon future development.

In 2005, Panvest Corporation, an entity controlled by members of the Paniccia family, filed an application with the wetlands authority.   The August 1, 2005 application (Ex. 16), signed by David Paniccia, described grading, landscaping and parking within a portion of the “upland review area.”

The application contained a representation that the site “does not maintain inland wetlands or watercourses.”   It identifies wetlands to the south of the property.   Activities to be performed within the one hundred (100) foot upland review area are listed as “grading, landscaping, parking.”   The upland review area is estimated to be .46 acres, or 20,000 square feet.  (Ex. 16, p. 5.)

A public hearing concerning the Panvest application was scheduled for November 9, 2005 (Ex. 17), but was continued until January 11, 2006 (Ex. 23.)   Before the public hearing could be held, the application was withdrawn.  (Ex. 18.)

Prior to the taking of the slope easement in January of 2009, wetlands were identified on the property for the first time, and were designated on the Department of Transportation's project plans.   However, a site inspection of the property by members of the Monroe Inland Wetlands Commission determined that the presence of wetlands on the property was “questionable.”  (Ex. 31.)   At trial, Monroe Town Engineer Scott Schatzlein testified that the continued presence of wetlands on the property was unclear, following completion of the Route 59 road widening project.

The widening of Route 59 shifted the southernmost portion of the pavement approximately 20 feet toward the Paniccia property, thus requiring a slope to support the roadway.  (Ex. 13.)   Fill was placed in a small pocket wetland in the northeast corner of the property, in order to construct the slope.  (Ex. 10.)

The Defendant cannot maintain, that any possible presence of wetlands on the property, will have an impact upon the development of the parcel as residential real estate.   Therefore, in order for the possible location of wetlands to have any impact, the property must be available for commercial development.

Our courts have recognized, that in an arms length transaction for the purchase and sale of real property, both a prospective buyer and a prospective seller would consider a change in zoning classification and restrictions, when valuing the property.   Where such a change is reasonably probable, and is not merely a remote or speculative possibility, under the circumstances, the change in zoning classification may properly be considered when determining the fair market value of the property taken by eminent domain.  Budney v. Ives, supra, 88.   However, wishful thinking, optimistic conjecture, speculation, rumor and unfounded predictions, cannot provide a basis for a finding that a contemplated change in zoning classification is reasonably probable.   Northeast Ct. Economic Alliance, Inc. et al. v. ATC Partnership et al., supra, 30;  Budney v. Ives, supra, 90–91.

In determining market value, it is proper for a court to consider all of the elements which an owner or prospective purchaser could reasonably urge as affecting the fair price of land.  Greene v. Burns, 221 Conn. 736, 745 (1992).   Even though a parcel has been committed to a particular use for an extended period of time, it is proper to consider a more profitable use to which the property could be put, based upon a future contingency.  Tandet v. Urban Redevelopment Commission, supra, 301.

In this case, no request has been made of the Monroe Planning and Zoning Commission to change the zoning classification of 25 Easton Road. The property is assessed by the Town of Monroe based upon its Residence and Farming District C classification.

However, the property is located on a state highway, and abuts a parcel which is zoned as Designed Business District (DB–1).   The Paniccia property is a short distance (approximately 500 feet) west of the intersection of Route 59 and Route 25 (Main Street).   Main Street can be seen from the property, looking east on Route 59.  (Ex. 2.)

It must be acknowledged, that Monroe's Plan of Conservation and Development (Ex. 24) contemplates that future business and industrial development will continue to occur along major travel corridors, with particular emphasis on Route 25 and Route 111 (Ex. 24, p. 61), both of which are state highways.   While Route 59, otherwise known as Easton Road, is not designated for development in the plan, the location of this parcel in close proximity to Route 25, abutting a DB–1 zone, renders a future change of zone more than wishful thinking.

Therefore, although the fair market value of 25 Easton Road should not be determined as if a change of zone was predictable, or a fait accompli, the possibility should be given some consideration.   Any change of zone enthusiasm, however, must be tempered based upon the absence of an application by the property owner, or action by the Monroe Planning and Zoning Commission on its own motion, to effect a change of zone.

EXPERT TESTIMONY AT TRIAL

Both the Plaintiff and the Defendant presented expert appraisal testimony at trial.

The Plaintiff engaged Norman Benedict (Ex. 4), while the Defendant relied upon the testimony of Peter Vimini (Ex. B).

Vimini, using facts assumed at the request of the property owner, his client, determined that the value of the slope rights taken by the State of Connecticut is two million fifty thousand dollars ($2,050,000).

Benedict appraised the property based upon its existing zoning status, although he did not totally discount the possibility of a change of zone to DB–1 at a future date.

Both appraisers assessed the property using the comparable sales analysis.

Benedict, however, assumed that the property was vacant land, based upon the fact that the existing improvements had little or no value.

Benedict used a formula to arrive at his conclusion.   He admitted that the fact that an easement, rather than a fee interest was acquired, complicated the assessment process.   He placed the value of the property taken, a 685–foot easement to slope, as two thousand dollars ($2,000).

VIMINI APPRAISAL AND TESTIMONY FOUND NOT CREDIBLE

In his analysis, the Defendant's appraiser made several assumptions, which resemble leaps of faith.

He assumed that a change of zoning classification was in place in January of 2009, and that the property was designated Design Business District 1 (DB–1).   He went on to assume that all necessary approvals from the Town of Monroe and any state agency had been secured, for the construction of a 93,500 square foot commercial development consisting of two buildings, of two stories each.

Vimini further assumed, that the proposed building area had been reduced to 42,434 square feet, due to the taking of the slope easement by the State of Connecticut.   He further assumed that, as a consequence of the taking of the easement, that wetlands had been created on the site, where none existed prior to the taking.   This assumption, he posited, prevented the construction of a second commercial building, due to the “wetland setback.”  (Ex. B p. 6.)

Utilizing the sales comparison approach, Vimini estimated the value of the property prior to the taking at three million, seven hundred fifty thousand dollars ($3,750,000).   He provided an after taking value of one million seven hundred thousand dollars ($1,700,000).   He therefore estimated that damages resulting from the taking were two million, fifty thousand dollars ($2,050,000) (Ex. B, p. 42, 8).

The court finds the opinion rendered both in Vimini's written appraisal, and his testimony in court, to be utterly incredible.   Preposterous, might be a better description, given the fact that the entire parcel is assessed at six hundred sixty-seven thousand three hundred eighty dollars ($667,380), a figure which represents seventy percent of its actual value.

While a change in zoning classification might be possible, it cannot be said that the change is inevitable, or reasonably predictable.   The Monroe Plan of Conservation and Development (Ex. 25) has not specifically targeted Route 59 for commercial development, notwithstanding its status as a state highway, linking Stepney Center and the Town of Easton.

Furthermore, no site plan or special permit has ever been submitted concerning the use of the property for commercial development.   Any such approval would require a change of zoning classification, and a public hearing on the proposal.

The assumption that wetlands are present on the property, and the alleged impact of the assumed wetlands, is also fatally flawed.

While a small wetland near Route 59 in the northeast corner of the property was identified on the Department of Transportation (DOT) project plans, the presence of wetlands following the project's completion has been found to be questionable by the Monroe town engineer (Ex. 31).   Furthermore, the presence of a wetland would not necessarily impact development of the property.

The taking which occurred in January of 2009, and is the subject of this proceeding, did not involve the taking of title to any of the Defendant's property by the State of Connecticut.   Therefore, the slope easement did not reduce the size of the parcel owned by the Defendant.

In valuing his property, the Defendant makes an a priori conclusion, when he assumes approvals in place for two buildings of a combined 93,500 square feet.   He then compounds this implausible fantasy, by maintaining that the presence of wetlands renders construction of a second building impossible (Ex. C).

The Defendant seems to believe that a wetland's “buffer,” is synonymous with a zoning “setback,” and that any construction or activity within the buffer area is not allowed.

As demonstrated by the 2005 Panvest application to conduct a regulated activity, this assumption, even assuming the presence of wetlands on the site, represents a misunderstanding and misapplication of the applicable law.

A prerequisite to regulation by the wetlands authority involves the identification of wetlands or watercourses on the property.   In that event, S. 22a–42c(f) 3 of the General Statutes, recognizes that proposed activities outside the physical boundaries of a wetland or watercourse, may impact wetland or watercourses, and are a proper subject of regulation.   Avalon Bay Communities, Inc. v. Inland Wetlands Commission, 266 Conn. 150, 161–62 (2003);  Queach Corporation v. Inland Wetlands Commission, 258 Conn. 178, 197–98 (2001);  Aaron v. Conservation Commission, 183 Conn. 532, 551–52 (1981).   The statute, by its terms, does not preclude activities which are conducted within the actual wetland or watercourse.

When regulating activities which will take place within an upland review area or “buffer” area, a municipal wetlands agency is charged with evaluating the impact of the regulated activity on the wetland or watercourse, not its impact on the environment in general.  River Bend Associates, Inc. v. Conservation and Inland Wetlands Commission, 269 Conn. 57, 71–72 (2004);  Connecticut Fund for the Environment v. Stamford, 192 Conn. 247, 250 (1984).   Impacts on the upland review or buffer area, even if in close proximity to a wetland or watercourse, are insufficient to deny a permit to conduct a regulated activity, absent a finding that there is a likely impact on wetlands and watercourses.   Cornacchia v. Environmental Protection Commission, 190 Conn.App. 346, 357–58 (2008).

In order for a municipal wetlands authority to deny an applicant a permit to conduct a regulated activity, it must determine that the proposed activity will have a likely adverse impact on a wetland or watercourse.  River Bend Associates, Inc. v. Conservation and Inland Wetlands Commission, supra, 357–58.   Evidence of potential damage, based on a mere possibility, or a “worry” are insufficient, when stated as a reason for denying a permit.  Estate of Machowski v. Inland Wetlands Commission, 137 Conn.App. 830, 840 (2012);  Lord Family of Windsor, LLC v. Inland Wetlands & Watercourses Commission, 103 Conn.App. 354, 365 (2007).

Vimini's assumption that no activity would be permitted in the upland review area, assuming, arguendo, the presence of wetlands on the parcel, is not credible.   His entire analysis, when subjected to scrutiny, collapses like a house of cards.

BENEDICT METHODOLOGY PROVIDES A BASIS FOR DETERMINING VALUE OF THE ACQUIRED EASEMENT

Benedict, in his appraisal, did not assume that a change in zoning classification had been approved, or that approvals were in place for commercial structures.

He recognized the difficulty in assessing the value of a taking, and assessing damages, in a situation where title to the affected property remains in the property owner.   However, he attempted to value the property taken using the sales comparison approach, both prior to and subsequent to the taking of the slope easement.

Benedict seems to have given little weight to the possibility of a change in zoning classification, although he does not completely rule out the prospect.

While it would be pure speculation to suggest that the zone would be altered, particularly in the absence of an application to approve the change, the court believes that Benedict gave too little weight to the possibility of commercial development on the parcel.

The property is located on a state highway, within sight of Route 25, and Stepney Center.   It is bounded to the south by a Y.M.C.A. facility, and therefore a change in zoning classification would not impact any single-family residences on that property.   The abutting property to the east is in a DB–1 zone, and Benedict did recognize that the highest and best use of the property would involve non-residential development.  (Ex. 4, p. 16.)

For all of these reasons, the court gives significant weight to the possibility of a rezoning of the property, while recognizing and respecting both the existing residential zone, and the right of the Town of Monroe, acting through its Planning and Zoning Commission, to retain that classification.

Benedict performed a comparable sales analysis, and concluded that the value of the easement, at the time and place of the taking, was two thousand dollars ($2,000).   He made this determination based upon the total square footage of the property (6.92 acres converted to 301,435 square feet), and the size of the area impacted by the slope easement (685 square feet).

Benedict calculated a total commercial value of one million, two hundred seventy-five thousand dollars ($1,275,000), and a residential value of four hundred thirty-six thousand dollars ($436,000).   He determined a pre taking value of eight hundred fifty-five thousand five hundred dollars ($855,000), a figure within the “differential” he attributed to the two zoning classifications.   Benedict arrived at the two thousand dollar ($2,000) figure, by multiplying the square footage of the area impacted by the easement (685 square feet), by $2.84 dollars per square foot, which was determined based upon a square footage of 301,435 square feet.

Therefore, because the only evidence presented at trial produced a damages figure in excess of the one thousand seven hundred dollars ($1,700) referred to in the certificate of taking, it is found that the Defendant, Dominick Paniccia, is aggrieved for purposes of this proceeding.

FAIR COMPENSATION FOR THE TAKING FOUND BASED UPON A TOTAL VALUE OF ONE MILLION DOLLARS ($1,000.000)

The court has adopted the methodology employed by Benedict, but believes that Benedict undervalued the subject property.

The assessed value of the property is six hundred ninety-nine thousand seven hundred ninety dollars ($699,790), which yields a fair market value of nine hundred ninety-nine thousand, seven hundred dollars ($999,700).

While the court realizes that the value placed on the property by the Town of Monroe for tax purposes is entitled to no special deference, in this case, that figure falls squarely within the ranges for commercial and residential use, developed by Benedict when using the comparable sales analysis.

Considering both the current zoning, and the value of the property if zoned for commercial purposes, it is found that the fair market value of 25 Easton Road, Monroe, on the date of the taking of the slope easement, January 9, 2009, is one million dollars ($1,000,000).

It is further found, that the fair market value yields a $3.32 dollar per square foot value, based upon 301,435 square feet.

It is further found, that the portion of the Defendant's property adjacent to Route 59, impacted by the slope easement, is 685 square feet.

It is therefore found that damages, as of the date of taking, are two thousand three hundred dollars ($2,300).

CONCLUSION

Damages are assessed in favor of the Defendant, Domenick S. Paniccia, in the amount of two thousand three hundred dollars ($2,300).

Judgment may enter accordingly.

RADCLIFFE, J.

FOOTNOTES

FN1. Section 13a–73(b), C.G.S.—”The commissioner may take any land he finds necessary for the layout, alteration, extension, widening, change of grade or other improvement of any state highway ․ and the owner of such land shall be paid by the state for all damages, and the state shall receive from such owner the amount or value of all benefits, resulting from such taking, layout, alteration, extension, widening, change of grade or other improvement ․ The assessment of such damages and of such benefits, shall be filed with the clerk of the superior court for the judicial district in which the land affected is located ․”.  FN1. Section 13a–73(b), C.G.S.—”The commissioner may take any land he finds necessary for the layout, alteration, extension, widening, change of grade or other improvement of any state highway ․ and the owner of such land shall be paid by the state for all damages, and the state shall receive from such owner the amount or value of all benefits, resulting from such taking, layout, alteration, extension, widening, change of grade or other improvement ․ The assessment of such damages and of such benefits, shall be filed with the clerk of the superior court for the judicial district in which the land affected is located ․”

FN2. Section 13a–73(e), C.G.S.—”The commissioner may take any land (1) which is necessary for the construction of any ditch, drain, gutter or other structure which is required for the purpose of draining any state highway ․”.  FN2. Section 13a–73(e), C.G.S.—”The commissioner may take any land (1) which is necessary for the construction of any ditch, drain, gutter or other structure which is required for the purpose of draining any state highway ․”

FN3. Section 22a–42c(f), C.G.S.—”If a municipal wetlands agency regulates activities within areas around wetlands or watercourses, such regulation shall (1) be in accordance with the provisions of the inland wetlands regulations adopted by such agency related to application for, and approval of, activities to be conducted in wetlands or watercourses, and (2) apply only to those activities which are likely to impact or affect wetlands or watercourses.”.  FN3. Section 22a–42c(f), C.G.S.—”If a municipal wetlands agency regulates activities within areas around wetlands or watercourses, such regulation shall (1) be in accordance with the provisions of the inland wetlands regulations adopted by such agency related to application for, and approval of, activities to be conducted in wetlands or watercourses, and (2) apply only to those activities which are likely to impact or affect wetlands or watercourses.”

Radcliffe, Dale W., J.