Carant LP v. West Caldwell Township

TAX COURT OF NEW JERSEY
JOSHUA D. NOVIN Dr. Martin Luther King, Jr. Justice Building
Judge 495 Dr. Martin Luther King, Jr. Blvd., 4th Floor
Newark, New Jersey 07102
Tel: (609) 815-2922, Ext. 54680

NOT FOR PUBLICATION WITHOUT THE APPROVAL
OF THE TAX COURT COMMITTEE ON OPINIONS

October 3, 2022

James T. Ryan, III, Esq.
Stavitsky & Associates, LLC
350 Passaic Avenue
Fairfield, New Jersey 07004

Joseph J. McGlone, Esq.
O’Toole Scrivo, LLC
14 Village Park Road
Cedar Grove, New Jersey 07009

Re: Carant LP v. West Caldwell Township
Docket Nos. 007541-2018, 002803-2019, 008467-2020, and 004882-2021

Dear Mr. Ryan and Mr. McGlone:

This letter shall constitute the court’s opinion following trial of the local property tax

appeals instituted by plaintiff, Carant LP (“Carant”). Carant challenges the 2018, 2019, 2020, and

2021 tax year assessments on its unimproved property located in West Caldwell Township (“West

Caldwell”).

For the reasons stated more fully below, the court affirms the 2018, 2019, 2020, and 2021

tax year assessments.

I. Findings of Fact

Pursuant to R. 1:7-4, the court makes the following findings of fact and conclusions of law

based on the evidence and testimony presented during trial.

A. The subject property

Carant is the owner of the unimproved real property located at 1200 Bloomfield Avenue,

West Caldwell, Essex County, New Jersey (the “subject property”). The subject property is

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JUSTICE
Carant LP v. West Caldwell Township
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identified on West Caldwell’s municipal tax map as block 1700, lot 2. The subject property is

situated along the south side of Bloomfield Avenue between Fairfield Township and Johnson

Avenue, approximately 366 feet east of the Fairfield Township and West Caldwell Township

border. As of the valuation dates, the subject property comprised a rectangular shaped,

unimproved lot containing 1.72-acres or 75,000 square feet of land. The subject property has

approximately 150 feet of frontage along Bloomfield Avenue, and a depth of approximately 500

feet. The subject property is bordered on its east and west by automobile dealerships.

As of the valuation dates, the subject property was in West Caldwell’s B-3 General

Business zoning district. Permitted uses in the B-3 General Business zoning district include: (a)

the retail sale, display, or rental on the premises of commodities or services predominantly to the

ultimate consumer; (b) office and professional buildings; and (c) restaurants.

Conflicting testimony was offered regarding the subject property’s Special Flood Hazard

Zone designation. According to Carant’s expert (as defined herein), the subject property is in

Special Flood Hazard Area AE, possessing a “1-percent annual chance [of] flood[ing] . . . or 100-

year flood,” and requiring flood insurance. 1 However, according to West Caldwell’s expert (as

defined herein), the subject property is principally located in Special Flood Hazard Area X, with

a “small portion of the rear” section of the subject property in Special Flood Hazard Area AE-5. 2

Carant timely filed complaints with the Tax Court challenging the subject property’s 2018,

2019, 2020, and 2021 tax year assessments. West Caldwell did not file any counterclaims.

1
https://www.fema.gov/glossary/flood-zones.
2
The court’s review of the flood hazard maps annexed to Carant’s expert’s report and West
Caldwell’s expert’s report, discloses that the subject property is principally excluded from the
“floodway” designation. Therefore, the court finds West Caldwell’s expert’s Special Flood
Hazard Zone designation to be more accurate. However, the subject property’s location in either
Special Food Hazard Area X or AE does not impact the court’s value determination.
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B. The experts

During trial, Carant and West Caldwell each offered testimony from a New Jersey certified

general real estate appraiser, who were each accepted by the court as experts in the field of real

property valuation (referred to collectively as the “experts,” or individually as “Carant’s expert,”

or “West Caldwell’s expert”). Each expert prepared an appraisal report containing photographs of

the subject property and expressing opinions of the subject property’s true or fair market value.

As of each valuation date, the subject property’s local property tax assessment, implied equalized

value, and the experts’ value conclusions are set forth below:

West
Average ratio Implied Carant’s Caldwell’s
Valuation Tax of assessed to equalized expert’s expert’s
date assessment true value value value opinion value opinion
10/1/2017 $1,875,000 90.48% $2,072,281 $1,340,000 $2,625,000
10/1/2018 $1,875,000 89.59% $2,092,868 $1,340,000 $2,625,000
10/1/2019 $1,875,000 90.63% $2,068,851 $1,340,000 $2,625,000
10/1/2020 $1,875,000 91.00% $2,060,440 $1,340,000 $2,625,000

C. Site plan approval, minor subdivision approval, and building permit

In or about 2013, Carant received final site plan and minor subdivision approvals from the

West Caldwell Planning Board. The minor subdivision approval contemplated the conveyance of

approximately 80,114 square feet of the adjacent rear property (identified as block 1700, lot 10)

and its merger with the subject property (block 1700, lot 2). 3 Following the subdivision, the site

plan approval envisioned construction of a one and part two-story retail/office building containing

3
The minor subdivision map, bearing the stamp “Approved” and annexed to Carant’s expert’s
appraisal report, discloses the proposed conveyance of approximately 80,114 square feet from
block 1700, lot 10 and its merger with the subject property. However, no evidence or testimony
was offered that said conveyance and merger was undertaken. Instead, during trial, the experts
each offered testimony and evidence that the subject property comprises 75,000 square feet of
vacant land.
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24,170 square feet of leasable area, to be known as “Cobblestone Plaza” (the “Project”). 4

On or about October 28, 2016, West Caldwell furnished Carant with a copy of the duly

executed Developer’s Agreement between Carant and West Caldwell for the subject property.

Thereafter, in late 2016, Carant commenced site work on the subject property including grading,

curbing, and construction of a detention basin. 5

However, a dispute subsequently arose between West Caldwell and Carant involving the

use or installation of asphalt millings on the subject property, resulting in the cessation of

construction. Carant alleged that the curbing involved installation of a “4-inch-thick subbase

comprised of dense graded aggregate . . . and in or about November 2016 [Carant] spread

approximately 4 inches of recycled asphalt millings over the [dense graded aggregate] also as a

subbase material.” 6

Carant asserted that on February 14, 2017, an inspector from the Essex County Department

of Health (“ECDOH”) conducted an “unannounced” site visit in response to “an alleged

anonymous complaint of improper storing of asphalt millings at the site.” The ECDOH apparently

4
According to West Caldwell’s expert, the Project was approved by West Caldwell’s Planning
Board with improvements comprising 24,170 square feet. However, according to Carant’s expert,
“I believe that it was originally 24,170 [square feet], I think that’s what was in the approvals, but
when we looked at the [proposed building] plans it was actually developed at 23,935 [square feet].”
The court’s review of the “Layout & Dimensioning Plan,” “Minor Subdivision,” “Grading &
Utility Plan,” and “Cross Section Layout Plan” each bear the stamp “Approved” and reflect that
the building’s retail area is 17,649 square feet, and the building’s office area is 6,521 square feet,
or 24,170 square feet (17,649 + 6,521 = 24,170). The “Proposed Retail and Office Building” plans
dated November 8, 2013, not approved by West Caldwell, recite a first-floor area of 17,650 square
feet and second-floor area of 6,285 square feet, or 23,935 square feet.
5
The detention basin was constructed on that portion of block 1700, lot 10 that was to be merged
with the subject property.
6
Carant’s Counterstatement of Undisputed Materials Facts, Carant Limited Partnership; Anthony
Pio Costa, III v. Essex County Construction Board of Appeals, Township of West Caldwell, et
als., Superior Court of New Jersey, Essex County, Law Division, Docket No. ESX-L-5800-20 (the
“Second Law Division Action”).
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issued a notice of violation to Carant, alleging that unauthorized landfill was installed on the

subject property. Carant contested the notice of violation.

Carant further asserted that on or about June 8, 2017, a second complaint was registered

with the ECDOH “alleging the unauthorized operation of landfill” at the subject property. On

June 8, 2017, the ECDOH apparently issued Carant a second notice of violation. Carant also

contested the second notice of violation.

Carant alleged that on or about July 25, 2017, West Caldwell denied Carant’s building

permit application for the subject property asserting that “[t]he applicant deposited undocumented

asphalt millings as fill on the site which resulted in an enforcement action being filed by the

[ECDOH]. This enforcement action remains pending.”

In early 2018, Carant apparently retained a Licensed Site Remediation Professional

(“LSRP”) to conduct a subsurface investigation of the asphalt millings. The LSRP issued a report,

dated March 9, 2018, finding that the presence of the millings did not cause any soil contamination

or present a danger to human health or the environment. A copy of the LSRP’s report was

apparently furnished to West Caldwell and the NJDEP.

Carant maintained that between 2017 and 2018 representatives from the NJDEP conducted

site inspections of the subject property and found no “land use violations” or violations of Carant’s

Flood Hazard Control Act Permit.

Carant further alleged that on or about May 21, 2018, it again applied to West Caldwell

for a building permit. However, West Caldwell declined to issue a permit, instead apparently

concluding that it would retain its own environmental expert to review the LSRP’s findings. As

a result of West Caldwell’s failure to issue a building permit, Carant allegedly filed an appeal with

the ECDOH.
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Over the ensuing two years, issues apparently arose involving conflicts with ECDOH

board members, the availability of a quorum of eligible ECDOH board members to hear Carant’s

appeal, requests to transfer venue from the ECDOH, and delays occasioned by COVID-19. 7

In or about 2020, Carant apparently instituted the Second Law Division Action (as defined

above) seeking, inter alia, to compel West Caldwell to issue a building permit for the subject

property.

In sum, as of the October 1, 2017, October 1, 2018, October 1, 2019, and October 1, 2020,

valuation dates, no building permit was issued by West Caldwell enabling Carant to commence

construction of the Project. 8

II. Conclusions of Law

A. Presumption of Validity

“Original assessments and judgments of county boards of taxation are entitled to a

presumption of validity.” MSGW Real Estate Fund, LLC v. Mountain Lakes Borough, 18 N.J.

Tax 364, 373 (Tax 1998). “Based on this presumption, the appealing taxpayer has the burden of

proving that the assessment is erroneous.” Pantasote Co. v. Passaic City, 100 N.J. 408, 413 (1985).

7
In or about 2019, West Caldwell apparently initiated an action captioned West Caldwell
Township v. Carant Limited Partnership, et als., Superior Court of New Jersey, Essex County,
Law Division, Docket No. ESX-L-5584-19 (the “First Law Division Action”). The First Law
Division Action raised allegations that Carant violated environmental laws, regulations, and
ordinances resulting from their use of the asphalt millings on the subject property.
8
West Caldwell’s expert’s report states that, “according to municipal official[s], the development
approvals [granted to Carant] remain valid as of each date of valuation. However, I have been
informed that pending litigation between the municipality and [Carant] has been on-going for
several years. The litigation was initiated as the result of the property owner installing unapproved
and uncertified millings and other materials on the site in direct violation of state laws as well as
the municipal development approvals. Furthermore, it is my understanding that portions of
environmentally sensitive (wetlands) were filled. Therefore, the property owner [Carant] is
considered to be responsible for the delays encountered in developing the parcel due to the pending
litigation. Nonetheless, the parcel remains an approved commercial development site.”
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“The presumption of correctness . . . stands, until sufficient competent evidence to the contrary is

adduced.” Little Egg Harbor Twp. v. Bonsangue, 316 N.J. Super. 271, 285-86 (App. Div. 1998).

A taxpayer can only rebut the presumption by introducing “cogent evidence” of true value.

Pantasote Co., 100 N.J. at 413. That is, evidence “definite, positive and certain in quality and

quantity to overcome the presumption.” Aetna Life Ins. Co. v. Newark City, 10 N.J. 99, 105

(1952). Thus, at the close of the proofs, the party challenging the local property tax assessment

must have presented the court with evidence raising a “debatable question as to the validity of the

assessment.” MSGW Real Estate Fund, LLC, 18 N.J. Tax at 376.

Here, at the close of Carant’s proofs, West Caldwell moved to dismiss these matters, under

R. 4:37-2(b), arguing that Carant failed to overcome the presumption of validity. Affording Carant

all reasonable and legitimate inferences which could be deduced from the evidence presented, the

court concluded that Carant produced cogent evidence sufficient to overcome the presumption of

validity. See MSGW Real Estate Fund, LLC, 18 N.J. Tax at 376 (citing Brill v. Guardian Life Ins.

Co. of Am., 142 N.J. 520 (1995)). The court found that the opinions of Carant’s expert, if accepted

as true, raised debatable questions as to the validity of the subject property’s local property tax

assessments. Accordingly, the court denied West Caldwell’s motions and placed a statement of

reasons on the record.

However, concluding that the presumption of validity has been overcome does not equate

to a court finding that the local property tax assessments are erroneous. Once the presumption has

been overcome, “the court must then turn to a consideration of the evidence adduced on behalf of

both parties and conclude the matter based on a fair preponderance of the evidence.” Ford Motor

Co. v. Edison Twp., 127 N.J. 290, 312 (1992). The court must be mindful that “although there

may have been enough evidence [presented] to overcome the presumption of correctness at the
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close of plaintiff’s case-in-chief, the burden of proof remain[s] on the [party challenging the tax

assessment] . . . to demonstrate that the judgment under review was incorrect.” Id. at 314-15 (citing

Pantasote Co., 100 N.J. at 413).

B. Highest and Best Use

“For local property tax assessment purposes, property must be valued at its highest and

best use.” Entenmann's Inc. v. Totowa Borough, 18 N.J. Tax 540, 545 (Tax 2000). Therefore, the

starting point in the court’s journey to discern a property’s true or fair market value is the highest

and best use analysis. See Ford Motor Co. v. Edison Twp., 10 N.J. Tax 153, 161 (Tax 1988)

(concluding that the highest and best use analysis is “the first and most important step in the

valuation process.”). The phrase highest and best use has been defined as:

The reasonably probable and legal use of vacant land or an improved
property that is physically possible, appropriately supported,
financially feasible, and that results in the highest value. . .
Alternatively, the probable use of land or improved property –
specific with respect to the user and timing of the use – that is
adequately supported and results in the highest present value.

[Appraisal Institute, The Dictionary of Real Estate Appraisal, 93 (5th
ed. 2010).]

Thus, the highest and best use analysis comprises the “sequential consideration of the

following four criteria, determining whether the use of the subject property is: 1) legally

permissible; 2) physically possible; 3) financially feasible; and 4) maximally productive.”

Clemente v. South Hackensack Twp., 27 N.J. Tax 255, 267-269 (Tax 2013), aff’d, 28 N.J. Tax

337 (App. Div. 2015). See also County of Monmouth v. Hilton, 334 N.J. Super. 582, 588 (App.

Div. 2000). However, a “crucial element [to be considered] in [conducting a] highest and best use

analysis is the timing for a specific use. Timing refers to when the improvements might be built

as well as the future expectations of occupancy and rent levels.” The Appraisal of Real Estate at
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341.

Importantly, a property’s highest and best use is not static; rather, it is shaped by economic

and market forces. A property’s highest and best use may change over time based on economic

changes, a market that is in transition, from underdevelopment or overdevelopment, or from

zoning changes. Thus, the highest and best use of a property “is not determined through subjective

analysis by the property owner, the developer, or the appraiser; rather, the highest and best use is

shaped by the competitive forces within the market where the property is located . . . the analysis

and interpretation of highest and best use is an economic study of market forces focused on the

subject property.” Entenmann's Inc., 18 N.J. Tax at 545 citing Appraisal Institute, The Appraisal

of Real Estate 298 (11th ed. 1996)). See also Acocella v. Cedar Grove Twp., 29 N.J. Tax 325, 335-

36 (2016).

In sum, the highest and best use analysis is a concept rooted in the market's perceptions of

value, because the question it answers is “[w]hat use would the market make of that property?”

Ford Motor Co., 127 N.J. at 302 (citation omitted). However, to appropriately answer that

question, an appraiser must conduct “a comprehensive market analysis to ascertain the supply and

demand characteristics of alternative uses,” including considerations of the timing when an

improvement may be constructed. Clemente, 27 N.J. Tax at 269.

After sequentially analyzing the highest and best use criteria, both experts concluded that

the subject property’s highest and best use “as vacant” was for development with a retail/office

building in accordance with Carant’s major site plan approval and minor subdivision approval.

However, Carant’s expert opined that the timing of the subject property’s highest and best

use plays a pivotal role in the determination of its true or market value. Because the subject

property “is subject to litigation, and right now the legal limitation that is impeding its development
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moving forward with the project, is the fact that there is this litigation going on and the site can’t

be developed until that litigation is resolved one way or another.” He further explained, “typically,

when you’re approved and you’re in a fairly stable market, the timing for an approved property is

imminent, it’s not going to take years after you get your approvals to do it, it should take a fairly

short period of time to pull the permits and develop, . . . in this case the site cannot be developed

until the litigation is resolved, and at this point we do not know when a development would be

able to occur until the litigation is resolved. . . .” Therefore, although Carant’s expert concluded

that the subject property’s highest and best use was for development with a retail/office building

in accordance with the major site plan and minor subdivision approvals, in arriving at the subject

property’s value, Carant’s expert applied a “timing” discount.

Here, the court finds, as did the experts, that the subject property’s highest and best use “as

vacant,” was for development with a retail/office building in accordance with Carant’s major site

plan and minor subdivision approvals.

C. Valuation methodology

“There is no single determinative approach to the valuation of real property.” 125 Monitor

Street LLC v. City of Jersey City, 21 N.J. Tax 232, 237-238 (Tax 2004) (citing Samuel Hird &

Sons, Inc. v. City of Garfield, 87 N.J. Super. 65, 72 (App. Div. 1965)); ITT Continental Baking

Co. v. East Brunswick Twp., 1 N.J. Tax 244, 251 (Tax 1980). “There are three traditional

appraisal methods utilized to predict what a willing buyer would pay a willing seller on a given

date, applicable to different types of properties: the comparable sales method, capitalization of

income and cost.” Brown v. Glen Rock Bor., 19 N.J. Tax 366, 376 (App. Div. 2001), certif.

denied, 168 N.J. 291 (2001) (internal citation omitted)).

The “decision as to which valuation approach should predominate depends upon the facts
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of the particular case and the reaction to these facts by the experts.” Coca-Cola Bottling Co. of

New York v. Neptune Twp., 8 N.J. Tax 169, 176 (Tax 1986) (citing New Brunswick v. Tax

Appeals Div., 39 N.J. 537 (1963)). See also WCI-Westinghouse, Inc. v. Edison Twp., 7 N.J. Tax

610, 619 (Tax 1985), aff’d, 9 N.J. Tax 86 (App. Div. 1986). However, when the proofs submitted

in support of one approach overshadow those submitted in support of any other approach, the

court may conclude which approach should prevail. See ITT Continental Baking Co., 1 N.J. Tax

at 244; Pennwalt Corp. v. Holmdel Twp., 4 N.J. Tax 51 (Tax 1982).

Here, the experts considered all three valuation methods and concluded that the sales

comparison approach was the proper method to derive an opinion of the subject property’s true or

fair market value. The sales comparison approach derives an opinion of market value “by

comparing properties similar to the subject property that have recently sold, are listed for sale, or

are under contract.” Appraisal Institute, The Appraisal of Real Estate, 377 (14th ed. 2013). This

approach requires an appraiser to dissect and weigh market data, including trends in the

marketplace, to derive a credible opinion of value. To do this, an appraiser conducts a

“comparative analysis of properties,” focusing on the “similarities and differences that affect

value . . . which may include variations in property rights, financing, terms, market conditions and

physical characteristics.” Id. at 378.

The court concludes, as did the experts, that the sales comparison approach is the most

appropriate method to determine the subject property’s true or fair market value.

Despite having concurred that the sales comparison approach was the most appropriate

method for valuing the subject property, the experts disagreed on the unit of comparison that

should be employed to discern the subject property’s true or market value.

According to Carant’s expert, the most appropriate unit of comparison for the subject
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property is the sale price “per building square foot.” For example, if a 1-acre parcel of vacant

land sold for $1,000,000 with development approvals to construct a 10,000 square foot building,

the unit value Carant’s expert would assign to the sale would be $100.00 “per building square

foot” ($1,000,000/10,000 square foot building = $100.00 per building square foot). In Carant’s

expert’s opinion, “developers of projects like this are most concerned with cost per square foot

and the developability of the site.” He further expressed that, in conducting their economic and

feasibility studies, developers will consider the size of the improvement to be constructed, the

associated costs to construct the improvement, and the “site yield,” to gauge whether a project is

profitable. In his estimation, “that’s what drives this [retail/office] market.”

Conversely, West Caldwell’s expert maintained that the most appropriate unit of

comparison for the subject property is the sale price “per square foot of land area” or “per square

foot of usable lot area.” 9 For example, if a 1-acre parcel of vacant land (43,560 square feet) sold

for $1,000,000 with approvals to construct a 10,000 square foot building, the unit value West

Caldwell’s expert would assign to the sale would be $22.96 “per square foot of usable lot area”

($1,000,000/43,560 square feet of vacant land = $22.96 per square foot of usable lot area). In

West Caldwell’s expert’s opinion, following a property sale, the purchaser will often seek

modification of the development approvals. Therefore, valuing a property based on the square

footage of the usable land area will produce a more consistent result.

Accordingly, in determining the subject property’s true or fair market value, Carant’s

expert applied his concluded “per building square foot” value to the proposed building plans for

9
West Caldwell’s expert’s appraisal report identified the unit of comparison selected as “per
square foot of usable land area.” However, during trial he frequently referred to the unit of
comparison as “per square foot of land area.” The court uses the phrases interchangeably.
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construction of a 23,935 square foot building. 10 Conversely, in calculating the subject property’s

true or fair market value, West Caldwell’s expert applied his concluded “per square foot of land

area” value to the subject property’s 1.72-acres or 75,000 square feet of land.

The unit of comparison selected by an appraiser “depend[s] on the appraisal problem and

nature of the property. . . .” Appraisal Institute, The Appraisal of Real Estate, 386 (14th ed. 2013).

Although the price “per building square foot” and price “per square foot of usable area” are both

acceptable units of comparison under the sales comparison approach, the court is mindful that the

unit of comparison selected should “indicate[s] the least amount of variance when applied to the

comparable sales.” Ibid. Stated differently, all potential units of comparison should be thoroughly

analyzed, and the “variable with the least variation would be a likely candidate for the best unit

of comparison. . . .” Ibid.

The court finds that the contrasting units of comparison selected by the experts each

possess their own unique advantages and disadvantages. Carant’s expert’s unit of comparison

affords meaningful insight into how a prospective developer may value a site based on its potential

developability and yield. West Caldwell’s expert’s unit of comparison similarly affords

substantial understanding about the development potential of a site, omitting the developer’s

subjective considerations as to what suits the site best. One of the potential disadvantages of

Carant’s expert’s unit of comparison is that it presumes, sometimes incorrectly, that in seeking

land use approvals, the developer will seek to construct the largest improvement possible as

permitted under applicable land use ordinances. Additionally, one of the disadvantages of West

Caldwell’s expert’s unit of comparison is that it may be impacted and/or influenced by site

10
West Caldwell’s site plan approvals were issued for a 24,170 square foot retail/office building.
Carant’s proposed building plans were apparently for a 23,935 square foot retail/office building.
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configuration issues, as well as environmental considerations, including wetlands, flood hazard

areas, and topographical issues, rendering portions of a property undevelopable.

1. Carant’s expert

In Carant’s expert’s opinion, the subject property “is a mid-block site, that’s long and

narrow . . . located outside the main-stream of [the] traditional retail” areas in West Caldwell.

Moreover, because the subject property is not located in a downtown business area with pedestrian

foot traffic, Carant’s expert found that it is “car-centric” relying principally on vehicular traffic.

Thus, in conducting his sales comparison approach, Carant’s expert focused on land sales for

proposed neighborhood retail developments that were not corner sites, not in downtown business

areas, and that were similarly “car-centric.”

Carant’s expert identified six comparable land sales that sold between January 2015 and

August 2019. Two sales were in Passaic County, two sales were in Middlesex County, one sale

was in Morris County, and one sale was in Bergen County. The unadjusted sale prices of the six

sales ranged from $755,000 to $3,000,000, or $50.79 to $72.96 “per building square foot.”11

Carant’s expert applied demolition cost adjustments to comparable land sale one ($200,000) and

comparable land sale four ($20,000) to account for the estimated demolition costs associated with

existing improvements. In addition, Carant’s expert applied adjustments for perceived differences

in: (i) location (ranging from -10% to 10%); (ii) access/exposure (ranging from -20% to 5%); and

11
Cross-examination of Carant’s expert disclosed that, “the developer of the site [comparable sale
one] believed that he could get 35,000 square feet there, and that [it] would comply with the
zoning.” Thus, Carant’s expert’s reported unadjusted $51.43 “per building square foot” price for
comparable sale one was premised on the developer’s subjective estimate of the building size that
he “believed” could be constructed, and not on any engineering plans, empirical evidence, or
developmental approvals in place to construct a 35,000 square foot building. Accordingly, the
court finds comparable sale one of dubious usefulness in determining the subject property’s true
or fair market value.
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(iii) development approvals (ranging from 5% to 10%). After applying the adjustments, the

adjusted sale prices of the six comparable land sale transactions ranged from $52.19 to $70.15 “per

building square foot.” Carant’s expert relied on comparable land sales 1, 2, 3, and 4 to derive his

concluded value as of the October 1, 2017, and October 1, 2018 valuation dates, and relied on all

six comparable sales to derive his concluded value as of the October 1, 2019, and October 1, 2020

valuation dates. Ultimately, Carant’s expert concluded that a true or fair market value of $60.00

“per building square foot” should be employed in valuing the subject property as of each valuation

date.

Carant’s expert applied his concluded land value “per building square foot” to the Project’s

building area. 12 Carant’s expert then added the estimated cost of the granite curbing installed by

Carant (approximately 1,500 linear feet of granite curbing) at a cost of $35.00 per linear foot, or

$52,500 (1,500 lf x $35.00 = $52,500). 13 However, according to Carant’s expert, the “detention

basin in the southwest corner of the site, . . . looks to be in very poor condition, I’m not quite sure

it was completed, or was completed to the point that it would be functional.” 14 Therefore, he did

not add the detention basin cost to his land value conclusion.

Accordingly, Carant’s expert concluded that the subject property had an indicated value of

12
Carant’s expert used the unapproved proposed building plans area of 23,935 square feet, instead
of the approved major site plan and subdivision approvals building area of 24,170 square feet.
13
Based on Carant’s expert’s review of the Subdivision Development Costs set forth under
Marshall & Swift’s Cost Manual data for granite curbing.
14
As stated above, the detention basin is not located on the subject property. Rather, based on the
court’s review of the minor subdivision map, the detention basin is located on the approximately
80,114 square feet of land comprising block 1700, lot 10, which was to be subdivided and merged
with the subject property. However, during trial, no evidence was introduced that the subdivision
and merger was accomplished.
Carant LP v. West Caldwell Township
Docket Nos. 007541-2018, 002803-2019, 008467-2020, and 004882-2021
Page -16-

approximately $1,490,000, as of each valuation date involved herein. 15

Finally, after reviewing PwC survey data of national discount rates for varying property

types, Carant’s expert applied a 10% discount rate to the subject property’s indicated value. In

Carant’s expert’s opinion, because “construction at the subject property has been halted and [is]

subject to ongoing litigation,” the reasonable expectation of when construction can commence and

tenant occupancy occur, remains uncertain. Therefore, Carant’s expert opined that a 10% discount

rate should be applied to his indicated value. In sum, Carant’s expert concluded that the subject

property had a true or fair market value of $1,340,000, as of each valuation date involved herein.

2. West Caldwell’s expert

In valuing the subject property, West Caldwell’s expert testified that he examined land

sales bearing a highest and best use comparable to the subject property, or a use that is permitted

in West Caldwell’s B-3 General Business zoning district. Moreover, according to West Caldwell’s

expert, valuing the subject property on a “per square foot of land area” or “per square foot of usable

lot area” was most appropriate because, in his opinion, “most times when properties are sold with

approvals those approvals change, they are either revised upward or downward for building size,

in some cases . . . the use of the property that it was approved for never gets built . . . so your

analysis would be skewed at that point.” Thus, West Caldwell’s expert opined that a property’s

per square foot of land area or usable lot area offered a more consistent estimate of value.

West Caldwell’s expert identified four comparable land sales that sold between January

2017 and February 2018. All four sales were in Essex County. The unadjusted sale prices of the

15
Carant’s expert’s indicated value was $1,488,600 based on the proposed building plans area of
23,935 square feet (23,935 x $60.00 = $1,436,100 + $52,500 = $1,488,600). Employing the major
site plan approvals building area of 24,170 square feet, the indicated value would have been
$1,502,700 (24,170 sq. ft. x $60.00 = $1,450,200 + $52,500 = $1,502,700).
Carant LP v. West Caldwell Township
Docket Nos. 007541-2018, 002803-2019, 008467-2020, and 004882-2021
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four land sales ranged from $1,150,000 to $3,250,000, or $28.56 to $75.25 “per square foot of

usable lot area.” West Caldwell’s expert applied demolition cost adjustments to comparable land

sale two ($50,000), comparable land sale three ($250,000), and comparable land sale four

($50,000), to account for the estimated demolition costs associated with the existing

improvements. In addition, West Caldwell’s expert applied adjustments for perceived differences

in: (i) corner lot location (-20%); (ii) overall property location (10%); (iii) lot size (-15%); and (iv)

development approvals (10%). After applying the adjustments, the adjusted sale prices of the four

comparable land sale transactions ranged from $27.13 to $56.44 “per square foot of usable lot

area.” West Caldwell’s expert relied on all four comparable land sales to reach his conclusion of

the subject property’s true or fair market value as of the October 1, 2017, October 1, 2018, October

1, 2019, and October 1, 2020 valuation dates. 16 Ultimately, West Caldwell’s expert concluded

that a true or fair market value of $35.00 “per square foot of usable lot area” should be employed

as of each valuation date involved herein.

West Caldwell’s expert applied his concluded $35.00 “per square foot of usable lot area”

value to the subject property’s 75,000 square feet. According to West Caldwell’s expert, although

he was verbally advised that portions of the subject property may be impacted by wetlands, he was

never presented with any documentation evidencing the size of the area impacted by wetlands. 17

According to West Caldwell’s expert, he valued the subject property “unencumbered [and] without

16
West Caldwell’s expert testified that he placed the most emphasis on comparable sale one,
comparable sale two, and comparable sale three.
17
The court’s review of the “Existing Conditions Map,” “Layout & Dimensioning Plan,” “Minor
Subdivision Plan,” and “Grading & Utility Plan,” annexed to Carant’s expert’s appraisal report
discloses that an area along the subject property’s northerly lot line comprising approximately fifty
to seventy-five square feet, are designated as wetlands. However, the court’s review of those maps
and plans further discloses that areas of the rear adjacent property (block 1700, lot 10) that was
proposed to be subdivided and merged with the subject property, comprise wetlands.
Carant LP v. West Caldwell Township
Docket Nos. 007541-2018, 002803-2019, 008467-2020, and 004882-2021
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any adverse environmental conditions.” Thus, he made no deduction for that portion of the subject

property impacted by wetlands, if any.

Accordingly, West Caldwell’s expert concluded that the subject property had a true or fair

market value of $2,625,000 (75,000 x 35.00 = $2,625,000), as of each valuation date involved

herein.

3. Court’s analysis

Due to the differing units of comparison employed by the experts in evaluating the

comparable land sales and valuing the subject property, it was not possible for the court to precisely

reconcile their respective valuation approaches. Thus, the court’s analysis of the evidence and

testimony focused on the similarities and differences identified by the experts between the subject

property and the comparable land sales. In examining the comparable land sales, the court

scrutinized the comparable land sales to discern which possessed the least variations from the

subject property. In addition, the court weighed and considered the adjustments applied by the

experts to account for perceived differences, including the sufficiency of the evidence, data, and

market support for the adjustments, to gauge the reasonableness and reliability of the experts’

value conclusions.

It is well-settled that “[a]djustments must have a foundation obtained from market-derived

sources or objective data and not be based on subjective observations and/or personal experience.”

VBV Realty, LLC v. Scotch Plains Twp., 29 N.J. Tax 548, 571 (Tax 2017). An appraiser’s

adjustments “must have a foundation obtained from the market. . . .” Greenblatt, 26 N.J. Tax at

55. “[T]he opinion of an expert depends upon the facts and reasoning which form the basis of the

opinion. Without explanation as to the basis, the opinion of the expert is entitled to little weight

in this regard.” Id. at 55
Carant LP v. West Caldwell Township
Docket Nos. 007541-2018, 002803-2019, 008467-2020, and 004882-2021
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a. Carant’s expert

Here, cross-examination revealed that Carant’s expert’s comparable land sale one, two, and

five were sold without development approvals. Moreover, during cross-examination, Carant’s

expert acknowledged that a property sold with development approvals generally secures a higher

purchase price than a property sold without development approvals. Thus, to account for the lack

of development approvals for comparable land sales one, two, and five, Carant’s expert applied a

10% upwards development approvals adjustment.

However, Carant’s expert’s report offered no market data or analysis enabling the court to

gauge the accuracy and reliability of such adjustment. During cross-examination, Carant’s expert

acknowledged that his appraisal report contains no data or analysis supporting his 10%

developmental approvals adjustment stating, “I don’t believe there’s anything specific [data or

analysis] in the report.” In response to further cross-examination questioning how his appraisal

report arrived at the development approvals adjustment, Carant’s expert could only identify the

statement, “[s]ales [1], 2 and 5 were sold without approvals and a larger upward adjustment was

applied to account for the additional risk of obtaining entitlements.” In sum, Carant’s expert’s

report offers no meaningful market data or analysis demonstrating that the development approvals

adjustment accurately accounted for the difference in sales price of a property sold with

development approvals and a property sold without development approvals.

Moreover, the only testimony elicited from Carant’s expert during trial in support of his

development approvals adjustment was, “we took a look at the [comparable land] sales and what

happened during the course of those sales, the complexity of getting the approvals, the cost of

which those adjustments tend to relate to the adjustment, and we made our adjustments based on
Carant LP v. West Caldwell Township
Docket Nos. 007541-2018, 002803-2019, 008467-2020, and 004882-2021
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that analysis.” 18 However, Carant’s expert offered no meaningful testimony regarding what events

occurred during those sales impacting the development approvals, the length of time that it took

to obtain the approvals with the comparable land sales, the actual costs incurred in obtaining the

development approvals, the complex issues faced in obtaining the development approvals, etc.,

and how those considerations translated into a 10% development approvals adjustment.

Effective cross examination further disclosed that Carant’s expert’s comparable land sale

one was resold less than three years following its sale, on December 6, 2017, with developmental

approvals in place to construct a 35,962 square foot grocery store, for reported consideration of

$4,650,000, or approximately $129.30 “per building square foot.” 19 Thus, despite Carant’s

expert’s opinion that a 10% upwards development adjustment, and final adjusted price of $56.57

“per building square foot,” accurately accounted for the value attributable to development

approvals, the property actually resold with development approvals in place for approximately

$129.30 “per building square foot.” 20

18
During cross-examination, in support of his 5% upwards adjustment to comparable land sales
three, four, and six, to account for the estimated costs associated with the purchaser obtaining
development approvals, Carant’s expert credibly testified that, “buying subject to [approvals]
essentially eliminates the risk, that might not be apparent in a property purchased without subject
to, which is the reason why most properties in New Jersey are purchased that way, it eliminates
the risk, the only risk that the developer really is subject to, is whatever they spend on their
development applications, and so the 5% adjustment is based on . . . taking a look what some of
the costs associated might be with obtaining some of the approvals. . . .”
19
Carant’s expert’s comparable land sale one consisted of 3.34 acres and resold on December 6,
2017, to LIDL US Operations, LLC for reported consideration of $4,650,000, or $129.30 “per
building square foot.” The adjacent lot, consisting of approximately 0.47 acres (per the Hanover
Township Planning Board Resolution), sold on December 6, 2017, to LIDL US Operations, LLC
for reported consideration of $775,000. Thus, the two lots sold on December 6, 2017, for a total
reported consideration of $5,425,000, or $150.85, “per building square foot.”
20
Carant’s expert acknowledged that his comparable land sale one subsequently sold on
December 6, 2017, during the valuation periods involved herein, with development approvals in
place. However, according to Carant’s expert, because the subsequent sale was not “exposed to
the market,” he did not rely on that sale in determining the subject property’s true or market value.
Carant LP v. West Caldwell Township
Docket Nos. 007541-2018, 002803-2019, 008467-2020, and 004882-2021
Page -21-

Carant’s expert also offered no empirical data or analysis demonstrating that his 10%

development approvals adjustment to comparable land sale two appropriately accounted for the

difference in price between a property sold with and without development approvals in place.

Moreover, cross-examination further revealed that, based on Carant’s expert’s office’s

discussions with comparable land sale two’s purchaser, “a 27,000 square foot auto dealership is

planned for the site.” However, Carant’s expert’s report states that the municipal zoning “permits

a buildable square footage of 34,813 square feet on the site.” Because development involved

construction of a car dealership, Carant’s expert opined that the improvements being constructed

were not to the property’s full potential. Accordingly, in computing his “per building square foot”

value for comparable land sale two, Carant’s expert employed the 34,813 buildable square feet to

discern his estimated $72.96 “per building square foot” price. 21 However, comparable land sale

two was the only sale that Carant’s expert used the municipal ordinance’s “buildable square

footage.”

Interestingly however, Carant’s expert used the subject property’s unapproved and

proposed building plans, reciting a 23,935 square foot building area, rather than employing West

Caldwell’s major site plan approvals permitting a 24,170 square foot building. Moreover, effective

cross-examination revealed that in calculating the subject property’s value, Carant’s expert did not

use West Caldwell’s ordinance, permitting a 37,500 square foot building to be constructed on the

subject property (75,000 lot area x .25 building coverage x 2 story height = 37,500). According

to Carant’s expert, he did not use West Caldwell’s ordinance because he believed the subject

21
Cross-examination disclosed that Carant’s expert’s comparable sale two was resold on
September 22, 2021, with developmental approvals in place (after obtaining bulk and use
variances), to construct a 99,000 square foot self-storage facility, for consideration of $3,500,000.
Carant LP v. West Caldwell Township
Docket Nos. 007541-2018, 002803-2019, 008467-2020, and 004882-2021
Page -22-

property was negatively impacted by wetlands. However, as detailed above, the court’s review of

the major site plan and minor subdivision approvals disclosed that only a de minimus portion of

the subject property was impacted by wetlands. 22 In sum, the court questions Carant’s expert’s

selective use and application of the permitted building area in identifying and relying on

comparable land sale two as evidence of market value.

Finally, Carant’s expert again offered no empirical data or analysis demonstrating that his

10% development approvals adjustment to comparable land sale five appropriately accounted for

the difference in price between a property sold with and without development approvals.

Moreover, cross-examination disclosed that Carant’s expert’s comparable land sale five

was previously granted qualified farmland status. According to Carant’s expert, the purchaser

assumed responsibility for and paid the rollback taxes attributable to its purchase of the property.

However, Carant’s expert elected to make no adjustment to comparable land sale five’s purchase

price to account for the additional cost associated with three years of rollback taxes. In addition,

Carant’s expert did not furnish the court with any information regarding the rollback taxes actually

paid, to enable the court to independently apply said additional consideration to the purchase price.

In sum, the court finds that Carant’s expert failed to furnish the court with any market

derived data, support, analysis, or empirical evidence demonstrating the accuracy and reliability

of his development approvals adjustments to comparable land sales one, two, and five.

Accordingly, for all the reasons set forth above, the court finds that Carant’s expert’s reliance on

22
The court’s review of the “Layout & Dimensioning Plan,” “Minor Subdivision,” “Grading &
Utility Plan,” and “Cross Section Layout Plan” each bearing the stamp “Approved” revealed that
an area of approximately fifty to seventy-five feet of the subject property was impacted by
wetlands. However, the approximately 80,114 square feet of land comprising block 1700, lot 10,
which was to be subdivided and merged with the subject property was impacted by wetlands.
However, no evidence was introduced at trial that the subdivision and merger was accomplished.
Carant LP v. West Caldwell Township
Docket Nos. 007541-2018, 002803-2019, 008467-2020, and 004882-2021
Page -23-

comparable land sales one, two, and five is misplaced and that those sales are not credible evidence

of the subject property’s true or market value as of any valuation date involved herein.

Moreover, Carant’s expert offered testimony that his “access/exposure” adjustments were

based on his review of a New Jersey Department of Transportation traffic count study and a

comparison of the median household income of the municipalities where the subject property and

the comparable land sales were located. After reviewing the traffic studies and median household

income figures, Carant’s expert applied a downward 10% access/exposure adjustment to

comparable land sale three. However, cross-examination disclosed that comparable land sale

three’s traffic count was 62,111 vehicles, approximately 214% greater than the subject property’s

traffic count of 19,777. Moreover, the median household incomes of the municipalities where

comparable land sale three is located and where the subject property is located were very similar;

$127,979 versus $120,546. However, Carant’s expert failed to adequately explain how the 214%

difference in the traffic count study translated into a downward 10% access/exposure adjustment

to comparable land sale three.

In addition, effective cross-examination further disclosed that Carant’s expert’s

comparable land sale three obtained development approvals in September 2020, approximately

three years following its sale, for the construction of a 48,240 square foot extended stay lodging

facility. 23 Thus, the court questions whether comparable land sale three possessed a highest and

best use akin to the subject property. As stated above, the highest and best use of a property is

23
Cross-examination disclosed that in 2021, following receipt of the hotel development approvals,
comparable sale three resold for $1,875,000, or approximately $1,040,000 more than it sold in
2016. However, Carant’s expert did not consider the 2021 resale of comparable land sale three
because it was “subsequent to our valuation date . . . and it’s for a different use, so it wouldn’t be
relevant, since it’s not the same highest and best use.”
Carant LP v. West Caldwell Township
Docket Nos. 007541-2018, 002803-2019, 008467-2020, and 004882-2021
Page -24-

dictated by an analysis of the marketplace and the marketplace’s perceived reaction to a property.

Here, the purchaser of comparable land sale three seemingly thought that the highest and best use

of the property was not for a retail use, but rather as an extended stay hotel, and sought

development approvals to use the property for that purpose.

In sum, the court finds Carant’s expert’s comparable land sale three possessed a highest

and best use determined by the market to be different from the subject property’s highest and best

use. See Ford Motor Co., 127 N.J. at 302 (stating that the highest and best use analysis involves

examination of the question “[w]hat use would the market make of that property?”). Moreover,

Carant’s expert failed to furnish the court with any analysis or support demonstrating the accuracy

and reliability of his 10% access/exposure adjustment to comparable land sale three. Accordingly,

for all the reasons set forth above, the court finds Carant’s expert’s reliance on comparable land

sale three is also misplaced and it is not credible evidence of the subject property’s true or market

value as of any valuation date involved herein.

However, the court finds that Carant’s expert’s comparable land sale four and six are both

located in a similar “car-centric” community, have median household income like West Caldwell,

are in zoning districts akin to the subject property, and have traffic counts similar to the subject

property. Therefore, the court concludes that comparable sale land four ($70.15 per square foot)

and comparable land sale six ($69.46 per square foot) are credible evidence of the subject

property’s true market value. Accordingly, employing Carant’s expert’s “per building square foot”

unit of comparison, the court concludes that a $70.00 “per building square foot” value is reasonable

and supported by the evidence for all tax years at issue.

b. West Caldwell’s expert

West Caldwell’s expert testified that he developed his corner lot location adjustments and
Carant LP v. West Caldwell Township
Docket Nos. 007541-2018, 002803-2019, 008467-2020, and 004882-2021
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lot size adjustments by analyzing his comparable land sales and several other land sales identified

in the addenda of his appraisal report. In developing his downward 20% corner lot location

adjustment, West Caldwell’s expert stated that he,

looked at this sale [on page a20 of his appraisal report], as well as
the sale on page a26 [of his appraisal report], which is another
interior location and I also looked at . . . [comparable] sale 2 . . . in
the grid on page 35 which is a non-corner location. I compared those
to sales one and three in the [appraisal] report to develop my 20%
adjustment for a corner location.

More specifically, West Caldwell’s expert testified that he,

analyzed [comparable land] sale 2, sale a20, and the sale on a26, and
I compared those with sale one and sale three in the appraisal
[report] on page 35 . . . I compared those two with the adjustments
just to isolate what the corner location adjustment would warrant,
and after my adjustments to those sales, I developed a difference of
approximately $9.00 a square foot being the difference for the
corner location, and that reflects approximately 18½%, and I
rounded [it] to [a] 20% downward adjustment.

Similarly, in developing his lot size adjustment, West Caldwell’s expert testified that he

examined the sale prices of comparable land sales one, two, and four, each having a lot size

significantly smaller than the subject property’s lot size. Next, he examined the sale price of

comparable land sale three, having a lot size nearly identical to the subject property. West

Caldwell’s expert further testified that,

the average of the three [comparable land] sales 1, 2, and 4 was
found at around $55.14 a square foot, compared that with the sale
price of lot size sale 3 of $46.59, the difference was approximately
$8.55, that reflects 15.5% based on the $55.14 average, which I
rounded to 15%, that’s how I developed my [lot size] square foot
adjustment.

The court finds West Caldwell’s expert’s analysis, market derived evidence, and testimony

in support of his corner lot location and lot size adjustments to be credible and reliable. West
Carant LP v. West Caldwell Township
Docket Nos. 007541-2018, 002803-2019, 008467-2020, and 004882-2021
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Caldwell’s expert’s corner lot and lot size adjustments were supported by his detailed analysis of

land sales in the marketplace, and not made from subjective observations or personal experience.

However, the court finds that West Caldwell’s expert’s inferior location adjustment

(applied to comparable land sale two) and development approvals adjustment (applied to

comparable land sale four) lack an analysis based on market data. With respect to comparable

land sale two, West Caldwell’s expert’s appraisal report states only that “this is an interior parcel

which is situated immediately west of the City of Newark border and in this regard is considered

inferior to the subject in terms of location.” Moreover, during trial West Caldwell’s expert testified

that,

I felt [comparable sale two] was inferior to the subject property, as
far as general location, it’s in the eastern portion of the Township of
Bloomfield, . . . along the border of the City Newark and City of
East Orange, I felt it was inferior in that regard, . . . I made an
upwards adjustment of 10% for [inferior] location.

However, other than opining that he “felt” an upwards adjustment was warranted, West

Caldwell’s expert offered no meaningful testimony or evidence identifying any market data or

analysis supporting his inferior location adjustment to comparable land sale two. 24 25

In addition, with respect to the upwards 10% development approvals adjustment applied to

comparable land sale four, West Caldwell’s expert’s appraisal report states only, “the subject

property has development approval[s] for a commercial building . . . Sale four was conveyed

24
During trial West Caldwell’s expert acknowledged that comparable land sale two is a corner
location. However, West Caldwell’s expert did not apply a downward 20% corner lot adjustment
to comparable land sale two in his appraisal report, nor did he offer any testimony during trial as
to why he did not apply a corner lot adjustment to comparable land sale two.
25
Moreover, effective cross-examination revealed that comparable land sale two is in a more urban
mass-transit oriented neighborhood, approximately ½ mile from a New Jersey Transit commuter
rail station, and adjacent to a redevelopment area experiencing the construction of several new
large-scale residential buildings.
Carant LP v. West Caldwell Township
Docket Nos. 007541-2018, 002803-2019, 008467-2020, and 004882-2021
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without development approvals and therefore I have applied an upward adjustment.” However,

West Caldwell’s expert offered no meaningful testimony or evidence identifying the market data

that he analyzed in deriving his development approvals adjustment for comparable land sale four.

Accordingly, for the above-stated reasons, the court finds that West Caldwell’s inferior

location adjustment (to comparable land sale two) and development approvals adjustment (to

comparable land sale four) are not credible and reliable. Therefore, without adequate evidence in

the trial record to discern the appropriate adjustment amounts, if any, to account for the perceived

inferior location and lack of development approvals, the court must exclude from consideration

West Caldwell’s expert’s comparable land sale two and four.

In addition, cross-examination further disclosed that the land use ordinances in the taxing

districts where comparable land sale two and three are located permit building lot coverages

disparate from West Caldwell’s building lot coverage. Cross-examination disclosed that

comparable land sale two permits 100% building lot coverage. Similarly, cross-examination

revealed that comparable land sale three permits 60% building lot coverage. In sharp contrast,

West Caldwell’s land use ordinance permits only 25% building lot coverage for the subject

property. 26

As credibly offered by Carant’s expert, developers of retail/office centers like the subject

property are predominantly concerned with issue like the “developability of the site” and “site

yield.” Because building lot coverage is an issue that impacts the “developability of the site” and

“site yield,” appraisers should be mindful of its potential impact on the market value of land. For

26
Building lot coverage, also known as building coverage ratio, is a land use term referring to that
percentage of a lot that may be covered by a building. Stated differently, it is the portion of a lot,
when viewed from above, that may be covered by a building or buildings.
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Docket Nos. 007541-2018, 002803-2019, 008467-2020, and 004882-2021
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instance, land sold in a municipality having a land use ordinance permitting greater building lot

coverage may be viewed as more advantageous and profitable because it will afford the developer

the ability to construct a larger improvement. Conversely, vacant land sold in a municipality with

a land use ordinance that is more restrictive and limits a developer’s ability to develop the site may

be viewed as less profitable, and thus, less valuable.

Here, the evidence disclosed that comparable land sale two allows 100% building lot

coverage and comparable land sale three allows 60% building lot coverage, while the subject

property is limited to 25% building lot coverage. However, in selecting his comparable land sales,

West Caldwell’s expert failed to give any consideration to how the building lot coverages impacted

these sales. Accordingly, for all the above-stated reasons, the court finds that West Caldwell’s

comparable land sale two, three, and four are not reliable and credible evidence of the subject

property’s true or fair market value.

However, the court finds that West Caldwell’s expert’s comparable land sale one is in the

same municipality as the subject property, located on the same road, is timely, and in the same B-

3 zoning district as the subject property. Moreover, the court finds that West Caldwell’s expert’s

adjustments to comparable land sale one for corner lot location and lot size were reasonable and

were based on his detailed analysis of market data. Accordingly, employing West Caldwell’s

expert’s “per square foot of usable lot area” unit of comparison, the court finds that a $35.00 “per

square foot of usable lot area” value is reasonable.

c. Reconciliation

Reconciling the court’s findings that: (i) a $70.00 “per building square foot” value is

reasonable under Carant’s expert’s valuation method; and (ii) a $35.00 “per square foot of usable

lot area” value is reasonable under West Caldwell’s valuation method, discloses a value range of
Carant LP v. West Caldwell Township
Docket Nos. 007541-2018, 002803-2019, 008467-2020, and 004882-2021
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$1,744,400 to $2,677,500. 27 According both valuation methods equal weight, the court concludes

that the subject property had an indicated value of $2,200,000, as of all valuation dates involved

herein.

However, the court further finds credible Carant’s expert’s testimony that a discount rate

must be applied to the subject property’s indicated value to account for the “timing” considerations

involving the subject property’s litigation and uncertainty regarding when it may be able to achieve

its highest and best use. The court’s review of the PwC “National Development Land Market”

data reveals that discount rates ranged from 10% to 25% during the tax years at issue with an

average rate between 15.40% to 15.90%. The court concludes that Carant’s expert’s 10% discount

rate is reasonable, considering the subject property’s ongoing litigation. Accordingly, the court

will apply a 10% discount rate to the subject property’s indicated value.

Therefore, the court finds that the true or fair market value of the subject property was

$1,980,000, as of the October 1, 2017, October 1, 2018, October 1, 2019, and October 1, 2020

valuation dates ($2,200,000 - $220,000 = $1,980,000).

D. Corrected local property tax assessment

Having reached conclusions of the subject property’s true or fair market value, the court

will turn its attention to determining the correct assessment for the 2018, 2019, 2020, and 2021 tax

years.

Under N.J.S.A. 54:51A-6(a), commonly referred to as Chapter 123, when the court is

satisfied in a non-revaluation year by the evidence presented “that the ratio of the assessed

valuation of the subject property to its true value exceeds the upper limit or falls below the lower

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Computed as follows: (i) 24,170 sq. ft. building x $70.00 = $1,691,900 + $52,500 (curbing) =
$1,744,400; (ii) 75,000 sq. ft. lot x $35.00 = $2,625,000 + $52,500 (curbing) = $2,677,500.
Carant LP v. West Caldwell Township
Docket Nos. 007541-2018, 002803-2019, 008467-2020, and 004882-2021
Page -30-

limit of the common level range, it shall enter judgment revising the taxable value of the property

by applying the average ratio to the true value of the property. . . .” N.J.S.A. 54:51A-6(a). This

process involves application of the Chapter 123 common level range. N.J.S.A. 54:1-35a(b). When

the ratio of assessed value exceeds the upper limit or falls below the lower limit, the formula for

determining the revised taxable value of property, under N.J.S.A. 54:51A-6(a), is as follows:

true market value x average ratio = revised taxable value

For the 2018 tax year, the ratio of assessed value, $1,875,000, to true market value,

$1,980,000, yields a ratio of 0.947% ($1,875,000/$1,980,000 = 0.9469%), which falls between the

lower limit (76.91%) and upper limit (104.05%) of West Caldwell’s Chapter 123 common level

range. Consequently, no reduction in the subject property’s tax assessment is warranted for the

2018 tax year.

For the 2019 tax year, the ratio of assessed value, $1,875,000, to true market value,

$1,980,000, similarly yields a ratio of 0.947% ($1,875,000/$1,980,000 = 0.9469%), which falls

between the lower limit (76.15%) and upper limit (103.03%) of West Caldwell’s Chapter 123

common level range. Consequently, no reduction in the subject property’s tax assessment is

warranted for the 2019 tax year.

For the 2020 tax year, the ratio of assessed value, $1,875,000, to true market value,

$1,980,000, similarly yields a ratio of 0.947% ($1,875,000/$1,980,000 = 0.9469%), which falls

between the lower limit (76.15%) and upper limit (103.03%) of West Caldwell’s Chapter 123

common level range. Consequently, no reduction in the subject property’s tax assessment is

warranted for the 2020 tax year.

For the 2021 tax year, the ratio of assessed value, $1,875,000, to true market value,

$1,980,000, similarly yields a ratio of 0.947% ($1,875,000/$1,980,000 = 0.9469%), which falls
Carant LP v. West Caldwell Township
Docket Nos. 007541-2018, 002803-2019, 008467-2020, and 004882-2021
Page -31-

between the lower limit (77.35%) and upper limit (104.65%) of West Caldwell’s Chapter 123

common level range. Consequently, no reduction in the subject property’s tax assessment is

warranted for the 2021 tax year.

Contemporaneously with the issuance of this letter opinion, the court is entering the above-

referenced judgments.

III. Conclusion

For the foregoing reasons, the court affirms the subject property’s 2018, 2019, 2020, and

2021 tax year assessments.

Very truly yours,

Hon. Joshua D. Novin, J.T.C.