*1 APPEAL by the condemnor, City of New York, as limited by its brief, in a condemnation proceeding, from so much of a fifth separate and partial final decree of the Supreme Court (Wayne P. Saitta, J.), dated January 29, 2015, and entered in Richmond County, as, upon a decision of the same court dated December 1, 2014, made after a nonjury trial, finding that the claimant was entitled to an increment above the restricted value of the property on the day of the taking, that the value of the property as if unrestricted was $490,587, and that the increment to be applied was 75 percent of the difference between the property’s value as if unrestricted and its value as restricted, awarded the claimant, Baycrest Manor, Inc., the principal sum of $382,190.25.*2
OPINION & ORDERAn owner whose property has been taken in condemnation is entitled to “just compensation” (US Const, 5th Amend). At issue on this appeal is how to determine just compensation when the property at issue is subject to wetlands regulations that restrict its development. In Chase Manhattan Bank v. State of New York (103 AD2d 211), this Court held that property taken in condemnation must be valued as restricted in use by wetlands regulations, but that an owner who could prove a reasonable probability of successfully challenging the application of the regulations as an unconstitutional taking of its property would be entitled to an increment, representing the premium that a knowledgeable buyer would be willing to pay for a potential change to a more valuable use. On appeal, the City of New York, the condemnor of the subject property, contends that an owner of wetlands property taken in condemnation is no longer entitled to such an increment because Chase Manhattan Bank has been implicitly overruled by Court of Appeals cases that effectively bar a buyer of regulated property from ever bringing a successful takings claim. Thus, the City maintains that no knowledgeable buyer would be willing to pay a premium for the probability of a successful judicial determination that the regulations were confiscatory. For the reasons that follow, we hold that Chase Manhattan Bank remains good law, and that a “reasonable probability” increment may be included in valuing regulated wetlands properties where an owner makes an evidentiary showing of entitlement to it.The claimant, Baycrest Manor, Inc., owned two contiguous unimproved lots, totaling more than 7,000 square feet, near the east shore of Staten Island. The claimant acquired title in the early 1970s and, subsequently, the majority of the property was designated as wetlands. On November 3, 2006, the City acquired the property from the claimant as part of a multi-phase project to manage stormwater along the New Creek Bluebelt1. Shortly after the City acquired title, the claimant commenced this proceeding seeking compensation for the taking.
