Stony Brook land-dispute suit rematch due

The $100-million question over how to value land seized by the state to build a high-tech incubator at Stony Brook University takes a step closer to a legal rematch this week.

Last month Attorney General Eric Schneiderman filed a brief in the state's appeal of last year's ruling that it underpaid Gyrodyne Co. of America for land taken by eminent domain in 2005. The company's brief is due in State Appellate Court by Thursday.

At issue is how to value the 245 acres.

The state offered, then paid, Gyrodyne $26 million, which the company rejected. The company said the amount was too little for the property, which it had planned to develop, and successfully sued the state last year. The state Court of Claims accepted the firm's $125-million appraisal.

In addition to a building that existed when the land was taken, the property is now home to Stony Brook's Center of Excellence in Wireless and Information Technology, a 100,000-square-foot research and educational facility that opened in 2009 and the Advanced Energy Research and Technology Center building, which is nearly complete.

The court will schedule oral arguments after the state files its reply brief, which is due by April 17, said an attorney at Robinson & Cole, which is representing Gyrodyne, a St. James-based company that owns, leases and manages real estate.

Schneiderman argued in his brief that Gyrodyne's valuation was inflated because it "failed to account for the costs of developing [the property] and relied on unrealistic assumptions about the amount of development that would be approved by local authorities."

"The difficult thing about valuing takings, and valuing takings by fair market value, is that what you're trying to do is create a market value in a context in which there is no market transaction because it's a forced sale," said Christopher Serkin, an associate professor at Brooklyn Law School who specializes in land use and property. "It becomes complicated to figure out how the market would have valued something, because it's a hypothetical, because the market didn't have a chance to value it."

The standard for determining value is to assess the property's highest and best possible use, minus the costs of development, which includes the risk that the developer might not receive necessary approvals, Serkin said.

The company had argued that it had a 70 percent or better chance of receiving approvals to build 1,232 to 1,540 housing units on the entire property from which the state carved out room for its high-tech campus, according to court filings.

Gyrodyne did not respond to calls for comment.

The company has announced plans to develop the 62 acres it was left with into senior housing, filed a zoning change application with Smithtown in 2008 and has begun an environmental impact study. The application envisioned 275 to 300 condominium units, said Frank DeRubeis, Smithtown director of planning and community development.

DeRubeis said he couldn't comment on whether Gyrodyne would have hypothetically been granted the level of density for the full site it used in its appraisal, which was comparable to what it's seeking for the retirement community. But he said that traffic is also a consideration. Route 25A, which abuts the property, is already beyond its listed traffic capacity. That's less of an issue in a retirement community, he said.

"Seniors tend to drive less, and they don't tend to drive in peak-hour travel times," he said.