Upon the foregoing papers in this eminent domain proceeding, the City of New York (the City) moves for an order precluding claimant Belair Ridge Development Corp. (Belair) from offering into evidence the appraisal report prepared by Brent Lally of Master Associates, Inc., dated August 31, 2007 (the Lally Report), on the ground that it is based on the false assumption that claimant had a vested right to develop the subject property in accordance with plans approved by the City in 1990. Claimant cross moves for an order: (1) precluding the City from offering into evidence the appraisal report prepared by Bob Sterling (the Sterling Report); (2) directing the City to produce its employee, Robert E. [*2]Englert, for examination before trial; and (3) staying decision on the City's application until the completion of Englert's deposition.

The City acquired title to the subject property, Block 89, Lot 1 and Block 96, Lot 1, on June 14, 2005. The property was vacant land with an area of approximately 9.53 acres, has a hilly and steeply sloped terrain and is located in the Special Hillsides Preservation District of Staten Island.

On October 15, 2007, the parties exchanged appraisal reports. Both the Lally Report and the Sterling Report find that the highest and best use of the property is for the construction of multiple one-family housing units. Consistent with this determination, both Lally and Sterling use the buildable square foot area of a potential development as the measure of comparison and valuation. Although the unit value adopted by each appraiser is similar, i.e., Sterling found a unit value of $105 per buildable foot, while Lally found a unit value of $99, their ultimate conclusions are widely disparate in that Sterling valued the property at $10,500,000, while Lally valued it at $19,200,000.

This difference in the value of the property is attributable to the fact that the Lally Report relies upon the opinion rendered by Rampulla Associates Architects (the Rampulla Firm), who concludes that the property could be developed in a four-stage plan consisting of 163 units of approximately 1,190 square feet each, for a total buildable area of 193,970 square feet (163 units x 1,190 square feet). As is relevant herein, at page 26, the Lally Report states that:

"Based on advise from Rampulla Associates Architects, (See Architects [sic] letter in Addendum), this report takes the position that [the] subject property was approved for a large scale townhouse development that was originally intended to augment housing U.S. Navy personnel, and that such approvals remained in force up to and including the vesting date. Also, that such approvals could have been amended to accommodate 163 one family townhouse units in four stages of construction, identical to those constructed by Claimant on part of the original site in the initial construction phase of the original site, and shown on approved, modified site plan of Hamilton Park designated CP-6, revised 2/9/96 found in the addendum section of this report."

In contrast, the Sterling Report concludes that based upon a plan proposed by Henningston, Durham and Richardson Architecture and Engineering, P.C. (HDR), the property could be developed with only 74 units of 1,356 square feet each, for a total buildable area of 100,344 square feet (74 units x 1,356). In this regard, the Sterling Report states, at page 9, that:

"The Zoning Resolution includes several authorizations to modify regulations that apply in the Special Hillsides Preservation District. These special provisions included in Section 119-30 of the Zoning Resolution allow for regulations that apply in the Special Hillsides Preservation District to be varied by discretionary approvals. Evaluation of the [*3]likelihood of obtaining these discretionary approvals is outside the scope of this review. The HDR/LMS plan is as-of-right, and does not require discretionary approvals."

By way of background, the City explains that in 1989, claimant's predecessor in interest, Hamilton Park Associates (Hamilton Park), filed an application with the City Planning Commission to build 184 dwelling units on Block 96, Lot 1.^[FN1] In its application, Hamilton Park sought authorization under Article XI (Special Purpose Districts), Chapter 9 (Special Hillsides Preservation District) §§119-316 and 119-318 of the Zoning Resolution, for a modification of the grading, rear yards and distance between buildings. In 1990, the Planning Commission approved Hamilton Park's application and authorized the development of Block 96, Lot 1 pursuant to §§119-316 and 119-319. Thereafter, the Navy abandoned its plans to build a home port, Hamilton Associates never commenced construction and the property was subsequently conveyed to claimant in 1995, when claimant also acquired Block 89, Lot 1.

In 1996, the Planning Commission approved claimant's proposed modification of the development plan for Block 96, Lot 1, determining that the modification was in substantial compliance with the development plan approved in 1990. On April 20, 1997, the City Department of Buildings approved the plan to build 38 housing units on a portion of Block 96, Lot 1; the remaining portion of that block was acquired by the City in this proceeding. Building permits were thereafter issued in 1997and certificates of occupancy were issued in 1999 for the completed units.

In 1999, the Special Hillsides Preservation District chapter of the Zoning Resolution was substantially amended.

The City objects to the adequacy of the Lally Report, arguing that it contains no factual or legal basis for Lally's assertion that the City's approval of the plan for development in 1990 "remained in force up to and including title vesting date." In response to the City's request for an explanation of this assertion, by letter dated March 6, 2008, the Rampulla Firm concluded that "[s]ince thirty-eight (38) foundations or units had been completed prior to the effective date of the zoning amendment the subject development was vested and grandfathered'. Construction to complete the remaining units would have happened on an as-of right' basis in accordance with Section 11-322 ZR."

The City argues that the conclusion reached by the Rampulla Firm is erroneous, since the adoption of the 1999 amendments to the Special Hillsides Preservation District [*4]regulations preclude development of the property as proposed in the 1990 plan. Accordingly, claimant does not possess a vested right to develop Block 96, Lot 1 as proposed by the 1990 plan because it failed to obtain building permits for the entire project before the amendment. Further, inasmuch as Block 89, Lot 1 was never part of the 1990 plan, claimant does not have a vested right to so develop that lot.

Claimant

In opposition to the City's motion and in support of its cross motion, claimant argues that the Rampulla Firm successfully obtained many approvals for authorizations to modify the Special Hillsides Preservation District requirements since the inception of the district in 1987. Claimant therefore contends that it could have obtained the approvals necessary to construct housing units as proposed in the 1990 plan. Claimant further relies upon the Restrictive Declaration entered into by Hamilton Park, which committed the site to the development of 184 attached single-family units and which ran with the land, to support its contention that the property could have been developed as proposed in the Lally Report.

The Sterling Report, however, expressly states that consideration of discretionary approvals to vary the building requirements of the Special Hillsides Preservation District was not considered by HDR. Claimant thus concludes that the limitation on development, as set forth in the HDR scenario, cannot be used to value the property, since it improperly limits development to as-of-right projects. Claimant argues that from this it follows that the Sterling Report should be precluded on the ground that it does not address the issue of the maximum return that claimant could earn by developing the property.

As this court recognized in In re City of New York (2004 NY Slip Op 50052U, 1Misc 3d 913A [2004]), pursuant to 22 NYCRR 202.61(c),^[FN2] appraisal reports in condemnation proceedings must comply with the requirements set forth in 22 NYCRR 202.59(g) and 202.60(g).^[FN3] [*5]

"[T]he reports must contain a statement of the method of appraisal relied on and the appraiser's conclusions as to the property's value, along with facts, figures and calculations by which the conclusion was reached' (Bialystock & Bloom v Gleason, 290 AD2d 607 [2002], citing 22 NYCRR 202.59[g][2]). The reasoning behind this rule is that a failure to disclose such facts and source materials at the appraisal stage will effectively deny opposing counsel the opportunity to adequately prepare for cross-examination' (Golub Corp./Price Chopper Operating Co. v Assessor of Town of Queensbury, 282 AD2d 962, 963 [2001], quoting Matter of Niagara Mohawk Power v Town of Bethlehem Assessor, 225 AD2d 841, 843 [1996]).

"Thus, an appraisal that is no more than "a conclusory ultimate valuation" lacking any demonstrated foundation or factual support . . . must be rejected as without probative force' (Fleetwood Maple v State, 28 AD2d 1026, 1026 [1967], citing Fredenburgh v State of New York, 26 AD2d 966 [1966]; see also Morio v State, 34 AD2d 845 [1970] [an appraiser's opinion that is conclusory and subjective cannot sustain an award]; cf. Gullo v Semon, 265 AD2d 656 [1999] [although petitioner's appraisal was deficient with respect to the reproduction cost less depreciation method, the appraisal was not deficient, since it contained sufficient facts, figures and calculations regarding the comparable sales method so that respondent was not prejudiced in cross-examining petitioner and the appraisal was not so complex as to require more detail than was supplied])."

(In re City of New York, 2004 NY Slip Op 50052U at 4 [footnotes omitted]).

Hence, it is well established that "a trial court may properly strike an appraisal report where it is submitted without ascertainable or verifiable data supporting the appraiser's conclusions of value'" (Ames Dept. Stores v Assessor of Greenport, 276 AD2d 890, 892 [2000], quoting Matter of Orange & Rockland Utils. v Williams, 187 AD2d 595, 596 [1992]).

[*6]Discussion

Herein, both the Lally Report and the Sterling Report adequately set forth the data upon which the valuations are based. Further, neither party sufficiently establishes that either report fails to articulate the basis for the proposed developments that the appraisers rely upon in valuing the property, so that both parties may prepare for trial and cross examination. Accordingly, the court finds that both appraisals, taken as a whole, substantially meet the requirements of 22 NYCRR 202.61 (see generally Welch Foods v Town of Westfield, 222 AD2d 1053, 1054 [1995]), so that neither appraisal report will be stricken on the ground that it is not in compliance with the court rules. In so holding, the court notes that the City points to no rule or case law precedent that requires claimant to lay bare its evidentiary proof in its appraisal report.

Moreover, the City's contention that claimant should be precluded from introducing the Lally Report at trial on the ground that it fails to establish that claimant has a vested right to develop the property as proposed therein rests upon an erroneous interpretation of the law. In this regard, this court has recently held that:

"As is . . . relevant herein, [t]he general rule is that when land is taken in eminent domain, its owner is to be compensated for the market value of the property in its highest and best use' (In re County of Suffolk, 47 NY2d 507, 511 [1979], citing Matter of Rochester Urban Renewal Agency [Patchen Post], 45 NY2d 1 [1978]). Ordinarily the potential uses the court may consider in determining value are limited to those uses permitted by the zoning regulations at the time of taking' (Matter of Town of Islip [Mascioli], 49 NY2d 354 [1980], citing 4 Nichols, Eminent Domain [3d ed], § 12.322).

"It is equally well settled, however, that [t]he determination of highest and best use must be based upon evidence of a use which reasonably could or would be made of the property in the near future' (Yaphank Dev. Co., 203 AD2d 280, 281 [1994], citing Matter of City of New York [Broadway Cary], 34 NY2d 535, 536 [1974], reh denied 34 NY2d 916 [1974]; Matter of Consolidated Edison Co. v Neptune Assocs., 190 AD2d 669, 670 [1993]; Zappavigna v State of New York, 186 AD2d 557, 561 [1992]), regardless of whether the condemnee is so using the property at the time' (627 Smith St. v Bureau of Waste Disposal, 289 AD2d 472, 473 [2001], appeal dismissed 98 NY2d 646 [2002], appeal denied 98 NY2d 611 [2002]; accord County of Suffolk v Firester, 37 NY2d 649, 652 [1975]; In re the Acquisition of Real Property by the County of Clinton, 204 AD2d 898 [1994]). A use which is no more than a speculative or hypothetical arrangement in the mind of the claimant may not be accepted as the basis for an award' (HBP Assocs. v County of Orange, 277 AD2d 237 [2000]), quoting Matter of City of New York [Shorefront High School-Rudnick], 25 NY2d 146, 149 [1969]; Matter of City of New York [Broadway Cary], 34 NY2d at 536). [T]he condemnee has the burden of proving the highest and best use of the condemned property' (In re New York, 61 NY2d 843, 845 [1984], citing Matter of City of New York [Franklin Record Center], 59 NY2d 57, 63 [1983]; Heyert v Orange & Rockland Utils., 17 NY2d [*7]352, 362 [1964]; accord IIT Realty v State, 120 AD2d 706 [1986]). As is also of particular relevance herein:

"While it is not essential to demonstrate either that the property had been used as its projected highest and best use or that there had been an ante litem plan for such use (Keator v State of New York, 23 NY2d 337, 339 [1968]), it is, of course, necessary to show that there is a reasonable probability that its asserted use could or would have been made within the reasonably near future (Matter of City of New York [Wilson], 21 AD2d 652, 653 [1964], affd 16 NY2d 814 [1965]).

"(New York v Broadway Cary, 34 NY2d 535, 536)."

(Matter of City of New York, 2008 NY Slip Op 50124U, 23, 18 Misc 3d 1118A [2008]; accord In re City of Syracuse Indus. Dev. Agency, 20 AD3d 168, 170-171 [2005] [the record of the trial established that a commercial use "reasonably could or would be made of (the property) in the near future" and was not merely "a speculative or hypothetical arrangement in the mind of the claimant"]).

Accordingly, to succeed in establishing that the Lally Report properly relied upon the development potential posed by the Rampulla Firm, claimant need only prove that the property could reasonably be used for the proposed development in the near future. Hence, claimant need not establish that it had a vested right to so develop it or that plans for the proposed development had already been approved. In fact, in arguing that claimant will not be able to prove that its proposed use of the property is reasonable and not purely speculative, the City's motion is more properly characterized as one seeking summary judgment, not one seeking to preclude admission of the Lally Report.

In so charactering the motion, it is well established that "a condemnation proceeding [is] a special proceeding', not an action', that . . . had been specially created by the Legislature for the condemnation of real property and that the whole proceeding formed an independent and complete system of procedure'" (Central Hudson Gas & Electric v Newman, 35 AD2d 989, 990 [1970], quoting Erie R. R. Co. v Steward, 59 AppDiv 187, 188 [1902]). "It is settled that a special proceeding is subject to the same standards and rules of decision as apply on a motion for summary judgment, requiring the court to decide the matter upon the pleadings, papers and admissions to the extent that no triable issues of fact are raised'" (Karr v Black, ___ AD3d ___, 2008 NY Slip Op 6626, 3-4 [2008], citing CPLR 409[b]; Matter of Port of NY Auth. [62 Cortlandt St. Realty Co.], 18 NY2d 250, 255 [1966], cert denied sub nom McInnes v Port of NY Auth., 385 US 1006 [1967]; accord 10 West 66th Street v New York State Div. of Housing & Community Renewal, 184 AD2d 143, 148 [1992] [where no triable issue of fact is raised, a summary determination is appropriate based on the pleadings, papers and admissions in accordance with the standards for granting summary judgment]). [*8]

Accordingly, if the City's motion is treated as a motion for summary judgment, the burden is on the City to show its entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case (see e.g. Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]). Hence, to be entitled to summary judgment, the City would have to make a prima facie showing that claimant could not obtain the approvals and/or variances necessary to develop the property as proposed by the Rampulla Firm. The City cannot, therefore, sustain its burden by merely pointing to gaps in claimant's proof, arguing that claimant will not be able to establish a right to develop the property as proposed in the Lally Report, rather than affirmatively demonstrating the merit of its claim (see e.g. Vittorio v U-Haul Co., 52 AD3d 823 [2008]; Gonzalez v Beacon Term. Assoc., 48 AD3d 518, 519 [2008]; Velasquez v Gomez, 44 AD3d 649, 650-651 [2007]).

Similarly, claimant's contention that the Sterling Report should be precluded on the ground that it improperly values the property developed as-of-right is also lacking in merit. Inasmuch as the burden of proving that the use of the property as proposed in the Lally Report is reasonable in the near future is on claimant (see generally In re New York Urban Develop. Corp., 308 AD2d 414 [2003] [the court exercised its discretion appropriately in concluding that claimant's potential sale of transferable development rights was too speculative to be included in the valuation of the condemned property]; City of New York v Estate of Levine, 196 AD2d 654 [1993], appeal dismissed 84 NY2d 864 [1994], lv denied 88 NY2d 803 [1996] [trial court properly rejected claimant's appraisal, since claimant failed to demonstrate that it was reasonably probable that the subject property, which was designed for use as a sanitation garage, could or would feasibly be converted for use as an air cargo facility in the near future]), in the event that claimant is unable to sustain its burden, the City would be entitled to value the property as it is developed as-of-right (see Broadway Assocs. v State, 18 AD3d 687, 688 [2005], lv denied 5 NY3d 710 [2005] [where the evidence was insufficient to support a finding of highest and best use for a high-density multi-family residential development, the State's appraiser provided the only other valid evidence of the best use to which the property could be put, i.e., for commercial development consistent with the uses permitted in the zoning district in which it was located]). Hence, in establishing the value of the property, if developed as-of-right, the City may properly rely upon the Sterling Report.

Accordingly, for the above discussed reasons, claimant will not be precluded from introducing the Lally Report at trial, nor will the City be precluded from introducing the Sterling Report. Having so held, disposition of the instant motion need not be held in abeyance pending the deposition of Englert. The court must determine, however, whether claimant is entitled to obtain the deposition that it seeks.

In support of that branch of its motion seeking an order directing the City to produce Englert for deposition, claimant alleges that Englert was extensively involved in the [*9]development of the subject property as its architect, so that he possesses unique knowledge and records which bear directly upon the development potential. Englert, however, will not testify or provide an affidavit because he is presently employed by the City as the Director of Land Use for the Borough of Staten Island. Claimant thus argues that this court should issue an order directing Englert to appear for deposition.

The City opposes claimant's request to depose Englert, arguing that the deposition will not serve to establish that claimant had a vested right to develop the property as proposed in the Lally Report.

Discussion

The court finds that claimant is entitled to take Englert's deposition pursuant the New York City Administrative Code §5-311 (see generally West Bushwick Urban Renewal Area, Phase 2, Kings Co Sup Ct, Index no. 35057/04, June 27, 2007; Columbia Street Second Amended Urban Renewal Area, Kings Co Sup Ct, Index no. 44797/98, Feb 18, 2004).

In the alternative, it is well established that:

"[D]iscovery in condemnation proceedings is available pursuant to CPLR 408, the provision which governs discovery in special proceedings. In addressing an application to compel discovery, the rules are "to be interpreted liberally to require disclosure, upon request, of any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity"' (Mobil Oil v City of New York, 2002 WL 32255112 [NY Sup Ct 2002], quoting CMRC v State, 270 AD2d 27, 30 [2000], citing Allen v Crowell-Collier Publ. Co., 21 NY2d 403, 406 [1968]). Pursuant to CPLR 3101 (a), "[t]here shall be full disclosure of all evidence material and necessary in the prosecution or defense of an action, regardless of the burden of proof." The test of what information is "material and necessary" within the meaning of this subdivision "is one of usefulness and reason"' (American Tel. & Tel. Co. v Salesian Soc., 85 AD2d 816, 816 [1981], quoting Allen, 21 NY2d at 406). Hence, [p]retrial disclosure may be allowed in a condemnation proceeding when warranted by the circumstances of the case and in the interest of justice' (White Plains Urban Renewal Agency v 56 Grand St. Assocs., 47 AD2d 536, 536 -537 [1975], citing Matter of Huie [Friedman's Lake View Hotel], 208 Misc 82 [1955])."

(Columbia Street, id. at 7 [footnote omitted]).

Herein, since claimant has the right to attempt to prove that the property could be developed as proposed by the Rampulla Firm, it is beyond dispute that Englert, as the architect employed by claimant to so develop the property, would have knowledge of the details regarding the proposed development, including the plans, the efforts made to obtain the necessary approvals from the City and the likelihood that such approvals would be obtained. Accordingly, since Englert has advised claimant that he will not voluntarily appear for deposition, an allegation that is not denied by the City, who is now his employer and who could have offered to voluntarily produce him for deposition, Englert is ordered to appear [*10]for deposition as hereinafter provided.

That branch of claimant's motion seeking to compel Englert to appear for deposition is granted. Englert shall be deposed at a time and place agreed to between the parties, within 30 days of service upon the City of a copy of this order with notice of entry. All other relief requested in the motion and cross motion is denied.

This constitutes the order and decision of the court.

E N T E R,

J. S. C.