F. W. Woolworth Company v. Commission Taxation and Assessment City Plattsburgh

Under consideration are four appeals from judgments reducing the assessed valuations of respondents' respective properties for the tax years 1963 and 1964, in proceedings instituted under article 7 of the Real Property Tax Law. Respondent Woolworth owned the property at 14-18 Margaret Street and respondent Kresge owned property located at 10-12 Margaret Street in the City of Plattsburgh, New York, that street being the main business street in the city. Both properties were owner occupied and used as retail stores. Woolworth's assessment for the year 1963 was as follows: Land, $81,290; Building, $119,740; Total, $201,030. Kresge's assessment for the year 1963 was as follows: Land, $46,090; Building, $36,340; Total, $82,430. It is conceded by all parties that the City of Plattsburgh assessed its real property at 50% of its true value. The only issue involved in the proceeding was the question of whether or not the assessments made by the appellant were based on over-valuations of the properties. It was stipulated that the trial court could base its decisions in the 1964 assessment proceedings on the record in the 1963 assessment proceedings and that, in addition, the court could also consider as evidence the fact that the Kresge property was under contract of sale dated September 29, 1964 for $75,000. A comprehensive statement of the facts is reported in the trial court's opinion at 45 Misc. 2d 701. The evidence established that since 1958, three large shopping centers had been constructed in the Plattsburgh area with large off-street parking areas resulting in syphoning off business from the former central shopping area on Margaret Street. It was further established that the gross annual sales for the Woolworth store fell from $815,026 in 1958 to $475,059 in 1963 and for the Kresge store from $233,688 in 1958 to $126,619 in 1963. Respondents' expert real estate witness, Clute, testified that the full value of the Woolworth property was $277,600 and that the full value of the Kresge property was $107,500 using, as a method of appraisal, reproduction costs less depreciation. In addition he took into consideration, in relation to depreciation, the economic obsolescence and physical depreciation of the properties. Respondents' second expert real estate witness, Webb, who was qualified as having wide experience in national chain variety store rentals and appraisals, testified that national chain variety stores paid annual rentals of 5% of annual gross sales and, applying that method to the annual gross sales for 1963 of the Woolworth and Kresge stores after deducting insurance and repair expenses, and capitalizing at a rate of 10.75%, he arrived at a value for the Woolworth property of $200,000, and for the Kresge property a value of $60,000. He also applied the same method by using the average three year annual gross sales (1961-62-63) and arrived at a value for the Woolworth property of $240,000, and the Kresge property of $74,000. Appellant's real estate expert, Birmingham, testified that his appraisal of the properties was arived at by using reproduction costs less depreciation and that he did not take into consideration the factor of economic obsolescence. In addition he testified that he averaged four different methods of valuation, namely, cost