Hekemian Expert Says "Development Will Have No Significant Impact On House Values"
Expert on appraisal and land valuation analyzed three towns with shopping centers across from residential areas to determine affect on property values.
In seeking site plan approval for the proposed mixed-use development of the United Water property, attorneys for New Milford Redevelopment Associates, whose managing director is Peter Hekemian, called Mark Sussman, an expert in appraisals and land valuations, to testify whether the proposed development will adversely affect the property values of houses located adjacent to the site.
Sussman based his testimony on an analysis of three shopping centers located in Bergen County that contained the sale of single family residences in close proximity to the commercial properties. The value of the sale of the properties adjacent to the shopping centers was compared to the value of the sales of similar properties located away from the commercial property.
The first shopping center analyzed was the Washington Township Town Center. Using data from 2005, Sussman testified that a house located across the street from the center sold for $370,000. Sales of comparable homes in the neighborhood, but not in close proximity to the center, sold in a range from $367,000 to $372,000. In Sussman's opinion, this reflects no significant difference in the house sales. He said the analysis demonstrated that the commercial development had no negative impact on the value of the property located directly across from the commercial zone.
The second shopping center analyzed was Boulder Run in Wyckoff which is a mixed-use development -- a zoning that Hekemian is trying to obtain for the proposed development of the United Water property. However, whereas Boulder Run's mixed use includes 16 residential units, Hekemian's proposed development in New Milford calls for 221 residential units, with 40 set aside for affordable housing.
Using data from 2006-2007, the singe-family house directly across the street from Boulder Run sold for $540,000. Comparable houses sold in a range from $537,000 to $545,000. Again, Sussman said that there was no significant difference in the property values of the houses sold.
The third shopping center analyzed was the Emerson Shopping Plaza on Old Hook Road that borders both Emerson and Westwood. Since the house across the street from the center that sold was located in Westwood, Westwood homes were used in the analysis.
Based on data from 2004 to 2005, the house across the street from the center sold for $355,000. Other house sales in the same neighborhood, but located away from the center, sold in a range from $350,000 to $360,000.
Based on the results of the analysis for all three sites Sussman said, "Market data is telling me that house sale values are not affected by being across from a shopping center."
Zoning Board member Lou Denis asked Sussman how many of the houses used in his analysis were located in a flood plain.
"Many of these houses [near the United Water property] were affected by floods and this affects property values," Denis said.
Sussman responded by saying that the affect of flooding was not the focus of his study.
Board member Joseph Binetti stated that 2005, one of the years used in Sussman's analysis, does not accurately reflect today's real estate market.
"2005 was the real estate bubble; those prices are not comparable now," Binetti said. "In 2005, people were buying anywhere; houses were going like hotcakes, so I don’t think [your analysis] is applicable."
Because real estate values are not part of the board's consideration in granting variance approvals, Patch asked Zoning Board attorney Scott Sproviero what weight Sussman's testimony carries with the board.
"It is indeed unusual to have an expert on land valuations testify," Sproviero said, emphasizing that property values are not criteria considered by the board in its decision-making process.
"I think they are trying to allay concerns, rather than establish any factual predicate," he said.
The hearing of the proposed development of the United Water property will continue with a special meeting of the zoning board on Thursday, June 21 at 7:30 pm in the council chambers of Borough Hall.
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