Testimony of Hekemian's Land Appraisal Expert Comes Under Fire
Hekemian expert undergoes public cross-examination on prior testimony stating that there is no negative impact on residential sales in direct proximity to large commercial developments.
In an effort to refute the testimony of Mark Sussman, Hekemian's expert in appraisals and land valuations, members of SOD, Stop Over Development, along with other residents concerned with the size and scope of the proposed development of the United Water property, came fully prepared with researched questions for him at Thursday's special meeting of the Zoning Board. In prior testimony, Sussman maintained that the proposed mixed-use development of the United Water property will not adversely affect the property values of single family residential houses located directly across from the site on River Road, and adjoining properties.
Sussman used what he described as "three comparable commercial and mixed-use developments in Bergen County" as the basis for his analysis that the sale price of a single family residential house across from a development is not negatively impacted by its location.
The three properties Sussman used in his data analysis were:
- Washington Towne Center on Pascack Road in Washington Township. (A&P supermarket.)
- Boulder Run Shopping Center on Godwin Avenue in Wyckoff. (Stop & Shop supermarket.)
- Emerson Shopping Plaza on Old Hook Road in Westwood. (Shop Rite supermarket.)
Using the years 2004 through 2007 as the basis for his analysis, Sussman concluded that the selling prices of houses located in direct proximity to the commercial developments were not negatively impacted by their location when compared to sales of houses sold within the same time frame located away from the development.
Marc Leibman, the attorney representing Councilman Austin Ashley in the proceedings, grilled Sussman on the residential property data used in his analysis.
Leibman contended that the proposed development of the United Water property, with its significant low-income housing component of 40 units, cannot be considered comparable to Boulder Run with only 16 units. Additionally, Leibman asked Sussman if the affordable housing component within the residential portion of the proposed development would negatively impact the sale prices of single family homes located in close proximity to the development.
“I did not study that," Sussman responded.
Leibman raised a flaw he found in Sussman's data. Leibman said that in his research he discovered that the June 2005 sale date of the house in Washington Township located across from the shopping center was not the most recent sale date.
Leibman reported that the property sold in 2005 for $370,000, but sold again in 2010 for $253,500--approximately $117,000 less.
Sussman said that he used 2005 as his baseline for that property because that was when other comparable properties in that area sold.
Leibman continued to cite similar examples where the property values of residential houses located across from one of the three commercial developments used in the analysis fell, as evidenced in the final sale price.
Antimo "Andy" DelVecchio, the attorney representing Hekemian before the Zoning Board, raised an objection to Leibman submitting his materials as exhibits saying that there is "no foundation upon which to base his evidence."
"It's the same documents your expert relied on, including the SR-1A government documents," Zoning Board attorney Scott Sproviero said.
DelVecchio said that, unlike Sussman, Leibman has not been certified as an expert in land valuations and real estate appraisals, nor has he put forth an expert in that field who can support the data he has presented.
"You can't have it both ways," Sproviero said in overruling DelVecchio and allowing Leibman to submit his documents as exhibits.
Lori Barton, Communications Chair for SOD, informed Sussman that she performed a physical inspection of the properties used in his analysis. Barton said that none of the commercial or mixed use properties in his report are comparable to the proposed development in New Milford of a 70,000 sq. ft. supermarket, 4300 sq.ft. bank, 221 residential housing units with a pool and 428 space multi-level parking garage.
Michael Gadalata asked Sussman if, in his analysis, he considered the impact not only on the properties immediately surrounding the development, but on traffic and pollution on other properties throughout the town.
Sussman responded that his analysis was focused primarily on the sales of properties located directly opposite shopping centers and maintained that there was no significant affect on the value of those properties.
Gadalata asked Sussman if he knew of any development in Bergen County like the mixed use plan proposed in New Milford that includes a 221 unit residential housing component. Sussman responded that there are apartment complexes all over Bergen County; however, he said that he could not off-hand name any comparable sites.
Using the flood map contained on the borough's website, SOD member Ulises Cabrera questioned Sussman about the affects of flooding on property values.
When asked by Cabrera if homes located in a flood prone area are assessed for less, Sussman replied, "Not necessarily. All it means is that to get a mortgage you need flood insurance."
"I’d have to look at specific property," he added. "It depends."
Objecting to both the use of the map and the line of questioning, DelVecchio said, the map is not an "authoritative document that can be substantiated," and that the questioning was "outside the scope" of Sussman's testimony.
New Milford resident Mary McElroy questioned Sussman on the importance of location in the sale of real estate.
"It's location, location, location," she said. She asked Sussman that if, in real estate, the success of the sale relies heavily on location, "Tell me as an expert appraiser in Bergen County, does a house located on a quiet street and residential area have more or less value than one on a busy street?"
Sussman answered there may be other factors involved aside from location.
McElroy reported that she recently sold a house in New Milford on a busy street and was told by the real estate agent that because of the house's location, she should expect to get less.
"Were they wrong or right?" she asked Sussman.
"In your case they may have been right," he said, but he added that in many places in northern Bergen County, the closer the location to Manhattan, where it's more congested--more apartments, traffic, noise--values remain high.
Sussman's testimony is expected to continue at the next regular meeting of the Zoning Board on Tuesday, July 10 at 7:30pm in the Council Chambers of Borough Hall.
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