Cramer & Anderson Partner Kim Nolan secured a major victory for the City of Danbury when a New Britain Superior Court judge dismissed Stew Leonard’s substantial tax appeal of the City’s assessment of its landmark Federal Road property.
In its appeal, Stew Leonard’s had sought to shave millions off the City’s tax assessment of the 35.81-acre property located at 99 Federal Rd.
Judge Matthew J. Budzik dismissed the appeal on Sept. 25, ruling that Stew Leonard’s failed to demonstrate aggrievement and that its argument for a reduction in value based in part on the functional obsolescence of the grocery store building on the property “is unsupported by the credible trial evidence.”
In fact, the judge wrote that when the deductions improperly claimed by Stew Leonard’s were stripped away, the fair market value of the entire property would be $24,733,559, and $19,251,337 for the grocery store building alone – both higher than the fair market values underpinning the City of Danbury assessments being contested in the appeal.
“Kim tried the case and briefed it brilliantly,” said Partner Dan Casagrande, who also serves as Corporation Counsel for the City of Danbury. The matter was tried to the court on May 2, and the parties filed post-trial briefs on June 2.
According to the court record, approximately 50 percent of the property consists of a three-building shopping center, with the grocery store building occupying the vast majority. The two other buildings on the property are a Walgreen’s and a Chase Bank. The remaining 50 percent of the property consists of wetland areas that are undeveloped and unsuitable for development.
The Danbury tax assessor set the fair market value (FMV) of the entire real property and improvements at $24,377,300 as of the assessment date, October 1, 2022, and the FMV of the grocery store building alone at $16,850,400.
Both sides submitted appraisals of the property to the court as part of the tax assessment appeal.
Danbury’s appraiser for the appeal appraised the FMV of the entire subject property at $25,300,000 and did not value the grocery store building separately.
Stew Leonard’s appraiser found the FMV of the entire subject property to be $21,630,000 as of the date of assessment and set the FMV of the grocery store building alone at $12,250,000.
In reaching his estimate of value, Stew Leonard’s appraiser deducted $3,100,000 from the FMV of the grocery store building as part of an argument that the grocery store building’s unique characteristics (a silo, barn facade, serpentine aisles, large refrigeration and prep equipment, large warehouse space) would mean that any likely purchaser would need to significantly reconfigure and renovate the grocery store building to fit the needs of a more conventional grocery store.
“In its role as fact finder, the court concludes that this analysis is unsupported by the credible trial evidence,” the judge wrote in dismissing the appeal. He further wrote that Stew Leonard’s appraiser provided no analysis as to why the grocery store building could only be sold to another grocery store business and thus require the suggested renovations.
Stew Leonard’s appraiser also claimed a $3.9 million deduction for the value of the land in his income analysis, which the judge ruled improper, writing that “[t]he grocery store building does not exist in a vacuum. Without the land upon which the grocery store building is physically situated and, most importantly, without access to the parking spaces and other land sufficient to facilitate inventory deliveries and customer access and egress, the grocery store building could not and would not exist either physically or as a business. To attempt to value the grocery store building without considering how the surrounding real property makes that value possible simply blinks reality and ignores the elements required for any grocery store to generate income, and, therefore, exist.”
In summary, the judge said that without the reconfiguration deduction improperly claimed by Stew Leonard’s appraiser, the value of the whole subject property would be $24,733,559, and $19,251,337 for the grocery store building alone when the improper deduction for land value and unsupported reconfiguration costs were added back.
“Based on all of the foregoing, the court concludes that Stew Leonard’s has not presented credible evidence that the subject property was over assessed and therefore that Stew Leonard’s is aggrieved,” the judge wrote.
Cramer & Anderson’s History of Major Tax Appeal Wins for Danbury
Attorney Casagrande, who served as outside Assistant Corporation Counsel for the City from 1990 until being appointed Corporation Counsel by Mayor Roberto Alves following his election victory in 2023, has a long history of delivering successful outcomes for the City of Danbury in tax and land use cases.
One signature example is Union Carbide’s 1998 appeal of the municipal tax assessment valuation of its Danbury, Conn., headquarters, equating to a $307 million market value.
In his role as outside Assistant Corporation Counsel, Attorney Casagrande was joined by Attorney Nolan in trying and briefing the case as they squared off against a highly experienced tax attorney representing Union Carbide.
The trial court upheld the City’s valuation after a 24-day trial, Union Carbide appealed, and Attorney Casagrande ultimately prevailed before the Connecticut Supreme Court, safeguarding $10 million in tax revenue for the City.
About Cramer & Anderson
Cramer & Anderson provides sophisticated legal services, close to home, with regional offices in New Milford, Litchfield, Danbury, and Ridgefield. For more information, see the website or call the flagship office in New Milford at (860) 355-2631.