Eminent Domain: Expert Opinion Regarding Wetland Permitting and Valuation Prepared by Michael Zarin & Marsha Rubin Goldstein Upheld by Second Department

Since 2017, the New York City Law Department has relied on Z&S to provide expert testimony in a series of condemnation proceedings arising out of the City’s acquisition of land for its “Bluebelt” flood control program on Staten Island. In a recent case before Hon. Wayne P. Saitta in the New York Supreme Court for Richmond County, Michael Zarin, with the help of Marsha Rubin Goldstein, provided an expert report and subsequent trial testimony covering the time and costs associated with pursuing a regulatory taking claim for property that is restricted by state freshwater wetland regulations. This opinion was necessary because under New York law, an increment is typically added to the value of a condemned property burdened by wetlands if there is a reasonable probability that a hypothetical purchaser would buy the property and succeed in bringing a regulatory takings action. Such increment must be based upon the realities of the marketplace, including that a hypothetical purchaser would adjust the purchase price to offset the time, cost and risk involved in pursuing a taking claim.

 

Here, Michael and Marsha were asked to opine on whether a property owner who purchased an unimproved parcel on Staten Island that was entirely within a regulated wetland would possess a viable regulatory taking claim, and if so, identify the cost and time associated with pursuing such claim. Based on Michael’s testimony, the Court found that the hypothetical purchaser would possess a viable regulatory taking claim, and that it would take approximately 3 ½ years and $350,000 to secure an award. By Decision & Order, dated May 11, 2022, the Second Department upheld Judge Saitta’s acceptance of Michael expert opinion that the time, cost and risks associated with ripening and litigating a regulatory takings claim are essential elements to be considered when calculating the proper increment to include in determining just compensation. In re City of New York (Galarza), 58 Misc.3d 1210(A), 95 N.Y.S.3d 124, 2018 WL 413750 *1 (Sup. Ct. Richmond Cnty. 2018), aff’d, ___ N.Y.S.3d __, 2022 WL 1481636 (2d Dep’t 2022).

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