Superior Court of Connecticut, Judicial District of New Britain, New Britain
Flyers Three Corp.
City of Groton
MEMORANDUM OF DECISION
Arnold W. Aronson, Judge Trial Referee.
The plaintiff, Flyers Three Corp., brings this tax appeal contesting the valuation of its real estate by the assessor for the town of Groton (town) on the Grand List of October 1, 2011 and subsequent tax years. The subject property is a self-storage facility located at 451 Bridge Street. The operative complaint is a six-count Fourth Amended Appeal, dated February 18, 2014: counts one, three and five are brought pursuant to General Statutes § 12-117; counts two, four and six are brought pursuant to General Statutes § 12-119.
The subject property contains 5.39 acres and is located in a heavily-concentrated commercial zoning district (CB-15). The subject site originally contained a two-story building constructed in the 1970s known as the Grossman lumber building. The building spanned over 35, 000 square feet (SF) of gross building area (GBA). See plaintiff's Exhibit 2, p. 27.
The plaintiff purchased the subject property in 1996, remodeled the building in 1999 by adding more than 16, 000 SF, and converted it into a 751-unit self-storage facility with both interior access climate-controlled units (728 units) and exterior access non-climate controlled units (23 units). In the year 2000, the plaintiff added an additional 4, 500 SF to create a stand-alone one-story self-storage building to the rear of the original building. The newer structure has 39 exterior accessed non-climate controlled units. The total GBA of the two buildings was 108, 924 SF. However, the total net rentable area is 80, 376 SF.
This building has an exterior of primarily concrete cinder blocks and prefabricated metal. The interior of the building includes a lobby, a retail area, surveillance system, a wet sprinkler system and elevators leading to hallways with timed lighting to provide access to the storage units. There is also a rear loading dock and an unoccupied apartment in the Grossman building.
The town's assessor determined that the fair market value of the subject property, as of the revaluation year of October 1, 2011, was $4, 920, 500. See plaintiff's Exhibit 7. The plaintiff's appraiser, Robert Silverstein (Silverstein), was of the opinion that the fair market value of the subject property, as of October 1, 2011, was $4, 000, 000. See plaintiff's Exhibit 2, p. 60. The town's appraiser, Patrick Lemp (Lemp) was of the opinion that the fair market value of the subject property, as of October 1, 2011, was $4, 925, 000. See defendant's Exhibit B, p. 1.
Both appraisers were of the same opinion that the highest and best use of the subject premises, as of October 1, 2011, was its continued use as a self-storage facility. Both appraisers also used the sales approach and the income capitalization approach for their analysis in reaching the fair market value of the subject, as of the revaluation date of October 1, 2011. However, both appraisers considered the income approach to be more reliable than the sales approach.
Using the comparable sales approach, Silverstein considered five sales (see plaintiff's Exhibit 2, pp. 33-42) occurring in various locations in Connecticut, but excluded any sales in Fairfield County as he concluded that New London County had markedly different conditions. Four out of the five sales used by Silverstein were small local stand alone facilities attractive to local buyers. Sale five contained 458 self-storage units having climate-controlled spaces, four elevators and a wet sprinkler system. It consisted of two buildings with two stories each, for a total of 64, 810 SF of GBA and 54, 550 SF of rentable space. See plaintiff's Exhibit 1, p. 45. Sale five sold on December 18, 2008 for $3, 792, 000 or 58.51/SF of GBA. See plaintiff's Exhibit 2, p. 45.
Silverstein, using the comparable sales approach, was concerned about the competition for self-storage units in the area. See plaintiff's Exhibit 2, p. 32. He noted that within a five-mile radius, there were nine self-storage facilities with 4, 500 self-storage units. In addition, the subject's second-story layout in the Grossman building was not desirable since self-storage facilities are typically one story. For example, Silverstein noted that the subject's second story in the Grossman building was only 50% occupied.
Based upon a comparison of the five sales to the subject, Silverstein concluded that the fair market value of the subject was $3, 900, 000 or $36/SF of GBA. See plaintiff's Exhibit 2, p. 46.
Lemp concluded that the subject's fair market value, as of October 1, 2011, was $4, 675, 000, by relying on four sales:
1. 82 Fair Street, Norwalk, Connecticut;
2. 44 Calef Highway, Lee, New Hampshire;
3. 201 Concord Street, Pawtucket, ...