Zesiger v. City of Norwalk
A court may use the cost approach to valuation and consider the value of the land, plus improvements to the land, when there are no really comparable sales. The City of Norwalk assessed the fair market value of Tavern Island, which is a 3.5-acre island with a Tudor-style residence with 6 bedrooms and 4 bathrooms, as well as a caretaker's cottage, a boat house, a tea house, a fresh water swimming pool, a sandy beach and a dock, as $10.7 million, as of Oct. 1, 2008. The city also assessed the fair market value of a separate, mainland property, 75 Bluff Avenue, which is a waterfront property in a residential zone with a boat dock, located two-thirds of a mile from Tavern Island, as $3.14 million. The plaintiff owner appealed and argued that the properties were over assessed. The plaintiff's appraiser, Michael Gold, opined that the fair market values were $5.03 million and $560,000, respectively. Gold concluded that the highest and best use of 75 Bluff Avenue is as an accessory use for Tavern Island, because the plaintiff owner uses the boat dock at 75 Bluff Avenue when traveling back and forth to Tavern Island. The municipality's appraiser, Christopher Kerin, opined that the fair market values were $10 million and $2.9 million, respectively. Kerin opined that the highest and best use of 75 Bluff Avenue is as a residence, because it includes a one-room apartment. The court preferred the use of the cost approach to valuation for the island, because it was difficult to find comparable sales of property that were sold in arms-length transactions and that did not require large adjustments. The court multiplied 3.5 acres by $1.75 million per acre to reach a value for the land of $6.12 million. The court valued the improvements at $1.86 million, for a total value of $7.98 million for the island. The court agreed with Michael Gold that 75 Bluff Avenue is an accessory use. The court found that the fair market value of 75 Bluff Avenue was $1.41 million, with the land valued at $1.15 million and improvements at $260,000.