Condemning authorities do not always take an entire parcel in an eminent domain proceeding. Indeed, in the Court of Claims, the majority of the appropriation claims are partial takings arising in the context of a highway project. Partial takings may also occur in the context of takings for sewer lines, electrical transmission lines, or as is the subject of recent nationwide proposals, pipelines.
As a general rule, the measure of damages in a partial-taking case is the difference between the fair market value of the whole property before the taking and the fair market of the remainder after the taking. Acme Theatres Inc. v. State of New York, 26 NY2d 385 (1970); Diocese of Buffalo v. State of New York, 24 NY2d 320, 323 (1969).
What is done is to perform a two-step appraisal process. First, the entire property is valued based on its highest and best use on the date of the taking, regardless of whether the property is being put to such use at the time. Chemical Corp. v. Town of East Hampton, 298 AD2d 419, 420 (2d Dept 2002). Then direct damages are calculated by valuing the property which was acquired. The next part of the formula is valuing the remainder which results after the partial taking. This is where the appraiser will determine whether or not the remainder has sustained consequential damages which are damages occasioned to the property remaining (the remainder), not only by reason of the direct taking, but also by virtue of the use to which the appropriated property is put by the condemnor. These damages are known as consequential damages.
Many decisions, in describing the damages that may occur as a result of a partial taking, use consequential damages as a generic term. More properly, damages that occur as a result of a partial taking are either severance or consequential.
Severance damages are damages that occur simply because the property acquired is no longer a part of what was once the whole property, it has been severed. The property may have been improved with a structure which may have been partially demolished. Obviously, the part not taken has lost value, maybe all of its value. A taking may cause the remainder to be of a size that no longer can be used under zoning laws for its highest and best use, or it may have been left with unsuitable access to a street for its highest and best use.
In Priestly v. State of New York, 23 NY2d 152 (1968), the court defined ‘suitable’ as meaning “that which is adequate to the requirements of or answers the needs of a particular object. The concepts are not mutually exclusive and, therefore, a finding that a means of access is indeed circuitous does not eliminate the possibility that that same means of access might also be unsuitable in that it is inadequate to the access needs inherent in the highest and best use of the property involved.” Priestly at 156.
A partial taking may decrease the amount of available parking spaces essential for a shopping mall. One of the surest guides in measuring damages occasioned by a partial taking is the diminution in rental value resulting there-from. Humble Oil & Refining Co. v. State of New York, 12 NY2d 861 (1962). Further, a deterioration of the quality of the income in the after situation merits the award of substantial consequential damages. This often occurs when the property has had its access severely limited by a street widening so that it no longer supports a prime retail tenant. In the after taking, an owner may be lucky to rent the property at all. Star Plaza v. State of New York, 79 AD2d 746 (3rd Dept 1980).
True consequential damages on the other hand come from the manner or use that the property directly taken is put to by the condemnor. Some examples: South Buffalo Ry. Co. v. Kirkover, 176 NY 301 (1903) (railroad use); Dennison v. State of New York, 28 AD2d 28, aff’d 22 NY2d 409 (1968) (damages to remainder caused by loss of view and noise); Criscuola v. Power Authority of the State of New York, 81 NY2d 649 (loss of value to remainder caused by high voltage power line). Judge Joseph Bellacosa wrote in Criscuola that, “evidence of fear in the marketplace is admissible with respect to the value of property taken without proof of the reasonableness of the fear.” Criscuola at 652.