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State agrees to pay $167.5M to Gyrodyne

The $35-million Advanced Energy Research and Technology Center

The $35-million Advanced Energy Research and Technology Center at Stony Brook, which was built on former Gyrodyne property. (Nov. 28, 2011) Credit: Newsday / John Paraskevas

After a string of court defeats, New York State this week finally agreed to pay Gyrodyne Co. $167.5 million for 245.5 acres it condemned for a research and development park at Stony Brook University.

The payment, which included damages, legal costs and interest, comes atop the $26.3 million the state initially paid when it acquired the property in St. James and Stony Brook. Gyrodyne, a real estate investment trust, challenged that payment from the start, and considered it a down payment.

In addition to the $98.68 million that courts determined the land was actually worth after the state's initial payment, the state was forced to pay $1.47 million in costs and $67.34 million in interest, according to Gyrodyne.

The interest ultimately was the cost of the state's decision to appeal a series of court judgments in Gyrodyne's favor, starting with the state Court of Claims in June 2010. Interest started accruing November 2005, when the land was taken.

The payment raises exponentially the cost of the research park, which currently is home to just two research and development facilities: a wireless and Internet tech center, and an advanced energy center. Both facilities have been slow to fill with prospective clients of their research teams and technology, Newsday has previously reported.

Stony Brook's plans to build other R&D facilities on the property appear to be on hold, and are no longer listed on the park's website.

In a statement, Stephen Maroney, Gyrodyne's chief executive, said the company was "thrilled for our shareholders, whose patience has been greatly rewarded."

With the court victory and payment, he said, "We have now achieved our larger objective of positioning the company so that we can seek one or more liquidity events for our shareholders. We can now move forward with the final steps of that strategy."

A spokeswoman for state Attorney General Eric Schneiderman, who argued the case for the state, did not immediately have a comment, and referred questions to the state budget office, which made the payment.

Morris Peters, a spokesman for the state budget division, confirmed, "$167,501,656.95 was wired to Gyrodyne's account."

In a prepared statement, Stony Brook University spokeswoman Lauren Sheprow said while it "disagrees with the court's valuation of the Gyrodyne property, it nonetheless was a wise investment critical for the growth of the university and the economy of Long Island."

She said the research facility "has been pivotal to the university's ability to compete for public and private funding; to promote the development, transfer and commercialization of technology; and to incubate high-technology and science-based companies."

Desmond Ryan, executive director of the Association for a Better Long Island, a developer's lobbying group, was sharply critical of the settlement amount.

"Not since the Dutch bought Manhattan has there been such a land deal," he said. "It's an outrageous waste of taxpayer money across the board and there's nothing anybody can do about it."

Ryan added: "Government will use this case for generations to come as an example of how not to do an eminent domain process."

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