You are signed in as
Sign in now
by Ron Davis
The administrator of a 12-acre retail site in upstate New York remains financially unscarred after reneging on the sale of the property and battling the repercussions.
The retail site is located in Ogdensburg, and the administrator is the Ogdensburg Bridge and Port Authority. Authority officials entered into a sale option agreement for the site with a prospective buyer who wanted to develop a retail factory outlet there.
The sale price of $293,750 obviously seemed quite a bargain to the developer—especially since one appraiser valued the property at approximately $800,000. So it came as a blow when, after prolonged negotiations, Authority officials ultimately refused to close on the deal.
The developer reacted by suing the Authority, seeking reparation for “lost profits, reliance, and benefit of the bargain.” What followed has been a lengthy battle in the courts of the state of New York.
Eventually, an appellate court decided that the Ogdensburg Bridge and Port Authority had breached the sales contract “in bad faith.” But Authority officials responded that the developer had failed to demonstrate a financial loss as a result of their withdrawal from the sale. And the court agreed, rejecting the developer’s request for compensation.
The developer again appealed, contending that an expert appraiser hired to determine the value of the property had appraised it at much more than the suggested sales price—at nearly three times the original agreed-to figure of $293,750. But the court found flaws in the appraiser’s research.
First, none of the appraisals of “comparable” properties was similar in size or functional use. The appraiser even admitted that he had not considered in his calculations a retail shopping center located within one mile of the property that the developer desired. Finally, the appraiser admitted that he could not recall the investigation he engaged in when preparing his appraisals and why he rejected certain seemingly comparable sales.
The appellate court therefore largely rejected the expert appraiser’s calculations, explaining, “The decision not to credit those calculations and to rely on the option contract price as the true value of the subject property represented a fair and reasonable interpretation of the evidence…. Nor was it error to fail to award damages that [the developer] purportedly incurred in reliance upon the option contract and its coordinate obligation to develop a retail factory outlet.” (St. Lawrence Factory Stores v. Ogdensburg Bridge and Port Authority, 2008 WL 731911 [N.Y.A.D. 3 Dept.], 2008 N.Y. Slip Op. 02537)
Decision: April 2008
| Terms & Conditions
| About Us