Exhibit 99.2
FILED
COURTESY COPY JUL 29 2008
STATE COURT OF CLAIMS
ALBANY, NY
STATE OF NEW YORK COURT OF CLAIMS
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GYRODYNE COMPANY OF AMERICA, INC.,
Claimant, DECISION AND ORDER
-V-
THE STATE OF NEW YORK(1), Claim No. 112279
Motion Nos. M-74174
M-74909
Defendant.
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BEFORE: HON. JAMES J. LACK
Judge of the Court of Claims
APPEARANCES: For Claimant:
Robinson & Cole, LLP
By: Joseph L. Clasen, Esq. and
David E. Ross, Esq.
For Defendant:
Andrew M. Cuomo, New York State Attorney General
By: J. Gardner Ryan, Assistant Attorney General
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This claim involves the appropriation of 245 acres of land and improvements
belonging to Gyrodyne Company of America, Inc. (hereinafter "claimant"). The
land is located in St. James, New York. The appropriation of the 245 acres is a
partial taking of a 310 acre parcel of land.
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(1) The Court sua spante amends the caption to read The State of New York
as the properly named Defendant.
Claim No. 112279, Motion Nos. M-74174, M-74909 Page 2
By two motions, defendant seeks an extension of time to file appraisals
until November 10, 2008.
The land was appropriated by the State ofNew York (hereinafter "defendant")
on November 2, 2005. Claimant served its claim on May 10, 2006. According to the
Uniform Rules for the Court of Claims ss.206.21(b), the parties' appraisals were
to be filed in the Clerk's Office by November 10, 2006. The parties stipulated
to extensions of time to file the appraisals. The first extension was until May
2, 2007 and the second was until November 5, 2007. On November 5, 2007,
defendant filed a motion (M-74174) for an extension of time to file its
appraisal until May 6, 2008(2). Thereafter, on May 5, 2008, defendant filed a
second motion (M-74909)(3) for an extension of time to file its appraisal until
November 10, 2008.(4)
In support of the first motion, defendant submitted the Affidavit of its
appraiser, Kenneth Golub. Mr. Golub states that beginning in August 2007, his
work schedule was constrained due to an illness in his family and his father's
death in October 2007. In addition to Mr. Golub's personal
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(2) The following papers have been read and considered on defendant's
motion: Notice of Motion dated November 5, 2007 and filed November 5, 2007;
Affirmation in Support of J. Gardner Ryan, Esq. dated November 5, 2007 and filed
November 5, 2007; Affidavit of Kenneth L. Golub sworn to November 1, 2007 and
filed November 5, 2007; Affirmation of David E. Ross in Partial Opposition to
Defendant's Motion for Extension of Time dated November 5, 2007 and filed
November 7, 2007.
(3) The following papers have been read and considered on defendant's
motion: Notice of Motion dated April 30, 2008 and filed May 5, 2008; Affirmation
of J. Gardner Ryan, Esq. dated April 30, 2008 and filed May 5, 2008; Affidavit
of Kenneth L. Golub sworn to April 30, 2008 and filed May 5, 2008; Affirmation
of Joseph L. Clasen in Opposition to Defendant's Second Motion for an Extension
of Time to Exchange Expert Discovery dated May 7, 2008 and filed May 8, 2008;
Affidavit of David E. Ross in Opposition to Defendant's Second Motion for an
Extension of Time to Exchange Expert Discovery sworn to May 7, 2008 and filed
May 8, 2608; Affidavit of Timothy Barnes in Opposition to Defendant's Second
Motion for an Extension of Time to Exchange Expert Discovery sworn to May 7,
2008 and filed May 8, 2008.
(4) As the Court had yet to decide the first motion, the parties treated
the first motion as if it had been granted. Therefore, defendant filed the
second motion prior to the expiration of the May 6, 2008 extension period.
Claim No. 112279, Motion Nos. M-74174, M-74909 Page 3
reasons, he cites the complexities associated with this piece of property which
require more time.
Specifically, at paragraph 5 of his Affidavit, Mr. Golub states:
5. The Gyrodyne appraisal is a very complicated one and will require
much more time than typical because:
a) the property is one of the largest contiguous parcels in its
market so the valuation requires a geographically
broad-based, time-consuming search for comparable land
sales. I want to be sure that I present a full spectrum of
relevant sales information for the Court to consider.
b) Gyrodyne has formulated an elaborate development scheme
involving a golf course surrounded by luxury homes. Its
eminent domain claim posits this as the property's highest
and best use. The property is zoned for industrial use, so
Gyrodyne's development plan may or may not be reasonable. A
proper appraisal requires that I meet with public officials
to determine if Gyrodyne's plan can be realized, and I have
already held some of those meetings. I need time to arrange
other such meetings.
c) Gyrodyne later formulated some alternative residential
development schemes, with different numbers of homes, and
some plans without the golf course. Those alternate housing
plans also merit consideration and may merit value
estimates.
d) depending on the outcome of the highest and best use
analysis, I may need to appraise this property based on
industrial use or residential use, or both. My objective
with an eminent domain appraisal is to appraise the highest
market value, so it may be necessary to make several
appraisals and let the highest value prove which use is
highest and best.
e) I have been collaborating with a professional engineering
firm retained by the New York State Attorney General's
Office, to evaluate Gyrodyne's development scheme. We have
discussed alternate development schemes for industrial and
Claim No. 112279, Motion Nos. M-74174, M-74909 Page 4
residential use, and the engineers' insights influence my
appraisal assumptions. My collaboration with the engineering
firm has been time-consuming and that will continue to be
the case.
f) the property has a number of industrial buildings, occupied
by more than 50 tenants. Those buildings may be valuable if
the property's industrial use is worth the most, or they
could be liabilities if the land is most valuable for
housing. The buildings may also have an interim value, based
on their rents until they are razed to build new homes. The
industrial buildings are another complication in this
appraisal.
Mr. Golub's Affidavit in support of the second motion is similar to the first as
to his concerns for the size and unique nature of the property. In addition, he
has been attempting to meet with claimant's expert for a formal inspection of
the property. As of the date of his Affidavit, the experts' schedules had not
allowed for an inspection. In addition, Mr. Golub is awaiting information from
claimant to allow him to properly assess the tenants and industrial area of the
property.
Claimant opposes the extensions of time sought by defendant. According to
Timothy Barnes, a consultant employed by claimant, the delay in obtaining
information and setting an inspection has been due to Mr. Golub. Mr. Barnes
describes sporadic contact by Mr. Golub with claimant's expert or
representative. There was a ten-month delay between two of Mr. Golub's phone
calls, with no excuse given to Mr. Barnes for the delay.
According to the Uniform Rules for the Court of Claims ss.206.21(g)(2), a
party may obtain an extension of time by motion to the assigned judge. The Court
may grant the extension, in its discretion, upon terms and conditions that maybe
just. An application for an extension of time must satisfy different standards
depending on whether it is made before the filing deadline expires (22
Claim No. 112279, Motion Nos. M-74174, M-74909 Page 5
NYCRR ss. 206.21 [g] [2], "showing good cause") or after the expiration (22
NYCRR ss. 206.21 [g] [3], "showing unusual and substantial circumstances"; Dufel
v State ofNew York, 187 AD2d 792). The burden of proof rests with the movant to
demonstrate the circumstances which warrant the exercise of the Court's
discretion (Fiesinger v State of New York, 88 Misc 2d 557, 561, citing Hogan v
State of New York, 43 AD2d 876).
In re Matter of Acquisition of Real Prop. by the Town of Guilderland, 244
AD2d 604, claimants asked for an extension of time based upon the complex and
time consuming nature of the appraisal. The parties agreed to an extension of
time until September 1, 1995 as the last date to file. Claimants filed their
report in April 1996. The Court held:
While claimants' dilatory conduct is not to be condoned, we are not
disposed to say that Supreme Court abused its discretion by granting
the requested relief. In exercising its discretion to determine
whether a party has shown "good cause" for relieving a default in
filing (see, 22 NYCRR 202.61 [a] [3]), the trial court must consider
all of the relevant circumstances, not merely the excuse or reason
proffered for the delay. Though it has been held otherwise with
respect to the filing of an amended or supplemental report (see,
Matter of Country Knolls Water Works [Hoffman], 229 AD2d 859, 860;
Matter of City of Amsterdam v Board of Assessors, 111 AD2d 1017;
Salesian Socy. v Village of Ellenville, 98 AD2d 927, 928), when the
belated filing involves an initial report, the obvious and severe
hardship that accrues to the offering party as a result of rejection
of that report--namely, preclusion of the introduction of "any
appraisal testimony on value" (22 NYCRR 202.61 [e]; see, Matter of
G.T.I. Co. v Assessor &Assessment Bd. of Review, 88 Misc 2d 806,
809)--has been deemed sufficient basis for granting the relief sought
(see, Gustafson v State of New York, 56 AD2d 695, 696). If an arguably
tenable excuse is proffered as well, ample foundation exists for a
decision favoring the movant.
See also Matter of Honess 52 Corp. v Assessor of Fishkill, 295 AD2d 429.
Claim No. 112279, Motion Nos. M-74174, M-74909 Page 6
The Court notes that the first motion was filed before the appraisal
deadline passed. Thus, defendant must show good cause for the extension. After
examining the parties' papers, the Court grants defendant's motion to extend the
time to May 6, 2008.
The granting of defendant's first motion means that defendant's second
motion was filed prior to the deadline passing. The Court notes claimant's
frustration with defendant in not completing its appraisal. While the Court
believes defendant has been a bit dilatory, it also accepts the explanation of
defendant's expert as to the complexity of the instant appraisal. The property
is 245 acres with mixed zoning of industrial and residential use. In addition,
part of the property is located within the Town of Smithtown and part is in the
Town of Brookhaven. The result of precluding the defendant's appraisal would be
harsh and prejudicial. The result would be that no range of value would exist
and claimant's value would stand as the sole evidence of the value of the
property.
While the Court grants defendant's second motion on the basis that it has
shown good cause, the Court also finds unique and special circumstances (22
NYCRR ss. 206.21[g][3]) based upon the reasoning previously stated.
Based upon the foregoing, defendant's motions (M-74174 and M-74909) for an
extension of time to file its appraisal until May 6, 2008 and thereafter until
November 10, 2008, are granted.
Claim No. 112279, Motion Nos. M-74174, M-74909 Page 7
While the Court grants the extensions, the Court shares claimant's
frustration. The Court sets the date of November 10, 2008 as the final date for
submission of appraisals. No further applications for an adjournment of the
appraisal deadline will be accepted.
Hauppauge, New York
June 25, 2008
/s/ James J. Lack
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JAMES J. LACK
Judge of the Court of Claims