Preview
FILED: KINGS COUNTY CLERK 09/06/2019 03:26 PM INDEX NO. 510844/2016
NYSCEF DOC. NO. 474 RECEIVED NYSCEF: 09/06/2019
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KINGS
-------------------------------------X
CHBRRY HILL GOURMET, Index No. 510844/2016
INC.,
Plaintiff,
-against- APPRAISER'S AFFIDAVIT
LUNDY'S MANAGEMENT CORP.,
Defendant.
---- ---------------------
X
LUNDY'S MANAGEMENT CORP.,
Defendant and
Third-Party Plaintiff,
-against-
SHEEPSHEAD RESTAURANT ASSOCIATES INC.,
Third-Patty Defendant.
-----------..-----...-------- ----X
STATE OF NEW YORK )
):ss.
COUNTY OF KINGS )
Brian Cs Donegan, being duly sworn, deposes and says:
1. I am a licensed real estate appraiser and I have personal and actual knowledge of
the facts set forth herein. A copy of my CV isannexed hereto.
2. I am familiar with the premises located at 1901 Emmons Avenue, Brooklyn, NY
Building"
("Premises"), which includes two buildings hereinaner referred to as the "Main and the
"Annex,"
covering an entire city block.
3. I am advised that.the landlord and tenant entered into a triple net long term lease for
the Premises in 1994 and signed a settlement agreement in December of 2015, whereby the tenant
was required to pay certain liquidated damages in addition to rent in the event itfailed to obtain
certificates of occupancy for the Preminea3 and that these payments would increascperiodically.
1
FILED: KINGS COUNTY CLERK 09/06/2019 03:26 PM INDEX NO. 510844/2016
NYSCEF DOC. NO. 474 RECEIVED NYSCEF: 09/06/2019
4. Itis expert opinion that, at the time the stipulation of settlement was executed in
my
December of itwas not possible to predict the loss of value the landlord might incur in the
2015,
future due to Lundy's failure to obtain a certificate of occupancy ifthe Landlord sold the property
in the future. the Premises would be worth less without a certificate of
Simply put, substantially
and there was no reasonable to predict or this loss to the Landlord.
occupancy way quantify
5. In a premises such as the Premises at issue, which covers an entire city
my opison,
block, is worth substantially less without a certificate of occupancy for a number of reasons. A
prospective purchaser would likely not be willing to pay fair market without a certificate of
occupancy due to the increased risk and unpredictability of a property without a certificate of
occupancy. In addition, since the lack of a certificate of occupañcy reduces the amount of money
a purchaser could borrow itwould reduce the arnoüñt a puithaser would pay. More specifically,
without a certificate of occüpãücy, the property is more difficult to finance, will result in a higher
interest rate, a lower loan stment, and substantial escrow. Moreover, for a building such as the
Premises, there would be future significant unquantifiable costs that would be incurred in
obtainiñg a certificate of occupãñcy, such as costs for substantial renovations ñecessãry to obtain
the certificate of occepâñcy, including, without limitation, unknown major construction work, and
costs of retaining an cñgiaccr and architect. It was impossible to predict these costs in 2015.
Since the stipulation was executed, there have been at least 15 violations issued by the Department
of Buildings or the Enviroinacñtal Control Board the majority of which would have to be rerñoved
to obtain a certificate of occupancy. The landlord could not have predicted how many violations
would arise after 2015 or what the nature of these violations would be. Additionally, the
existence of violations decreases the value of the Premises.
6. There was no way in 2015 to accurately predict the future value of a Premises3 in
2
FILED: KINGS COUNTY CLERK 09/06/2019 03:26 PM INDEX NO. 510844/2016
NYSCEF DOC. NO. 474 RECEIVED NYSCEF: 09/06/2019
part because there was no way to predict when or if the tenant would obtain the certificate of
occupancy, the state of a future real estate market, or predict the future capitalimi;on rate of the
Promiscs, all of which fluctuates not only based on appreciation or depreciation of the Premises
but also general ecòñomic and market conditions.
7. Moreover, in the event that the tenant was evicted for its failure to obtain a
certificate of occupancy, the landlord would have been able to not only collect rent from the
tenant's current subteñants, and therefore the Premises would have been worth substantially more
as the potential income derived from the Premises would have been substantially higher.
Predicting the value of the Premises with or without the tenant in December of 2015 would have
been impossible, but it is certain that the value of the Premises would have been substantially
higher without the tenant, whose lease expires in 2043, because the rent the tenant currently
collects from itssubtenants is substantially higher than the rent presently collected by the landlord
from the tenant, and if the tenant were evicted, the landlord would be entitled to that higher rent
roll.
8. In sum, it was impossible to predict in 2015 all of the variables determiñing the
future value and damages the landlord would suffer ifLandlord were to sell.
Brian C. Don(fan
Swom to before me this
day of August, 2019
BHAMINI S KlRI
NOTARY PUBLIC Public- S.tate
ofNew York
Notary
16-nard-appraiser
v4 No.01Kl63615OS
Ouellfiedin Nassau
My Commission Exp. 07/10/2021
3
Preview
FILED: KINGS COUNTY CLERK 09/06/2019 03:26 PM INDEX NO. 510844/2016 NYSCEF DOC. NO. 474 RECEIVED NYSCEF: 09/06/2019 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS -------------------------------------X CHBRRY HILL GOURMET, Index No. 510844/2016 INC., Plaintiff, -against- APPRAISER'S AFFIDAVIT LUNDY'S MANAGEMENT CORP., Defendant. ---- --------------------- X LUNDY'S MANAGEMENT CORP., Defendant and Third-Party Plaintiff, -against- SHEEPSHEAD RESTAURANT ASSOCIATES INC., Third-Patty Defendant. -----------..-----...-------- ----X STATE OF NEW YORK ) ):ss. COUNTY OF KINGS ) Brian Cs Donegan, being duly sworn, deposes and says: 1. I am a licensed real estate appraiser and I have personal and actual knowledge of the facts set forth herein. A copy of my CV isannexed hereto. 2. I am familiar with the premises located at 1901 Emmons Avenue, Brooklyn, NY Building" ("Premises"), which includes two buildings hereinaner referred to as the "Main and the "Annex," covering an entire city block. 3. I am advised that.the landlord and tenant entered into a triple net long term lease for the Premises in 1994 and signed a settlement agreement in December of 2015, whereby the tenant was required to pay certain liquidated damages in addition to rent in the event itfailed to obtain certificates of occupancy for the Preminea3 and that these payments would increascperiodically. 1 FILED: KINGS COUNTY CLERK 09/06/2019 03:26 PM INDEX NO. 510844/2016 NYSCEF DOC. NO. 474 RECEIVED NYSCEF: 09/06/2019 4. Itis expert opinion that, at the time the stipulation of settlement was executed in my December of itwas not possible to predict the loss of value the landlord might incur in the 2015, future due to Lundy's failure to obtain a certificate of occupancy ifthe Landlord sold the property in the future. the Premises would be worth less without a certificate of Simply put, substantially and there was no reasonable to predict or this loss to the Landlord. occupancy way quantify 5. In a premises such as the Premises at issue, which covers an entire city my opison, block, is worth substantially less without a certificate of occupancy for a number of reasons. A prospective purchaser would likely not be willing to pay fair market without a certificate of occupancy due to the increased risk and unpredictability of a property without a certificate of occupancy. In addition, since the lack of a certificate of occupañcy reduces the amount of money a purchaser could borrow itwould reduce the arnoüñt a puithaser would pay. More specifically, without a certificate of occüpãücy, the property is more difficult to finance, will result in a higher interest rate, a lower loan stment, and substantial escrow. Moreover, for a building such as the Premises, there would be future significant unquantifiable costs that would be incurred in obtainiñg a certificate of occupãñcy, such as costs for substantial renovations ñecessãry to obtain the certificate of occepâñcy, including, without limitation, unknown major construction work, and costs of retaining an cñgiaccr and architect. It was impossible to predict these costs in 2015. Since the stipulation was executed, there have been at least 15 violations issued by the Department of Buildings or the Enviroinacñtal Control Board the majority of which would have to be rerñoved to obtain a certificate of occupancy. The landlord could not have predicted how many violations would arise after 2015 or what the nature of these violations would be. Additionally, the existence of violations decreases the value of the Premises. 6. There was no way in 2015 to accurately predict the future value of a Premises3 in 2 FILED: KINGS COUNTY CLERK 09/06/2019 03:26 PM INDEX NO. 510844/2016 NYSCEF DOC. NO. 474 RECEIVED NYSCEF: 09/06/2019 part because there was no way to predict when or if the tenant would obtain the certificate of occupancy, the state of a future real estate market, or predict the future capitalimi;on rate of the Promiscs, all of which fluctuates not only based on appreciation or depreciation of the Premises but also general ecòñomic and market conditions. 7. Moreover, in the event that the tenant was evicted for its failure to obtain a certificate of occupancy, the landlord would have been able to not only collect rent from the tenant's current subteñants, and therefore the Premises would have been worth substantially more as the potential income derived from the Premises would have been substantially higher. Predicting the value of the Premises with or without the tenant in December of 2015 would have been impossible, but it is certain that the value of the Premises would have been substantially higher without the tenant, whose lease expires in 2043, because the rent the tenant currently collects from itssubtenants is substantially higher than the rent presently collected by the landlord from the tenant, and if the tenant were evicted, the landlord would be entitled to that higher rent roll. 8. In sum, it was impossible to predict in 2015 all of the variables determiñing the future value and damages the landlord would suffer ifLandlord were to sell. Brian C. Don(fan Swom to before me this day of August, 2019 BHAMINI S KlRI NOTARY PUBLIC Public- S.tate ofNew York Notary 16-nard-appraiser v4 No.01Kl63615OS Ouellfiedin Nassau My Commission Exp. 07/10/2021 3