Real Estate Value of Central Park

Let’s say I dig up a 300-year old land deed that proves that I, Lumpy own all the land that now comprises Central Park. and after the inevitable court battles my claim is upheld. If the city of New York wants to keep their park by declaring eminent domain, they have to pay me fair value for the land. Would value be estimated on what the land would be worth if developers were free to build on it, or would I only get what it’s worth as parkland?

“Just compensation” is one of the tests applied in eminent domain cases. In order to determine “just compensation,” the court has to determine the fair market value of the property, which is what would be paid by a willing buyer to a willing seller under ordinary circumstances. In deciding that, the court considers not only the use to which the property is currently being put, but what the “highest and best value” of the property is.

IANAL, but I am a municipal planner that has been invovled in several condemnation cases. The above is a very little bit about a complex issue, and comes from my memory and Reynolds Local Government Law .

As far as Eminent Domain is concerned (at least here in Canada) the fair value for the land would have little to nothing to do with the current use, rather fair value would be based on the highest and best use.

I’d say one billion+ would not be unreasonable based on the size of the park, the excellent location, and the insane manhattan rents.

Would the ‘just compensation’ work on current values for land in the Central Park area, or would it be self-referential take into account the depreciative effect on values of such a case, both in terms of the market being swamped by virgin Manhattan real estate, and also by exclusive park views no longer being particularly desirable?

I am not a billionaire, but think that I could easliy get investors to loan me a billion for Central Park. You would have incrediable leverage in negotiating developement of the Park. You would control the value of the buildings next to the Park. The city of New York would definitly attempt to buy it back from you. And then there’s that Trump guy . . .

Central park is 843 acres in size. If we assume that 67% to 75% of the area can be developed into saleable property, with the rest becoming streets, sidewalks and other “public lands”. (Maybe some park land? :slight_smile: ) I have no idea what property in New York goes for. If we further assume $100/sq ft (am I even close?), that would come to $2.46 - $2.75 billion dollars of finished value for the land. Adjust accordingly when someone comes along with better real estate values for New York. Of course, the location wouldn’t be as prime anymore because of the lack of the park.

Of course, it would cost a lot to develop the land to make it ready for building on - all of the infrastructure of sewers, water, streets, treatment plant expansion, etc. Then of course you would have the lawsuits of the adjacent property owners suing over loss of the park, but I that is getting way too speculative. Even as it is, my gut feeling is that I’ve underestimated the value by a lot.

Much of the very high value of the land & buildings around Central Park is because of the fact that they are next to the park. So the land value would go way down if you were to develop the whole park land into buildings. A court would certainly take that into account when deciding what is fair market value for the land.

If you add another zero to that $100/sq ft, you’ll have what we paid for our apartment. You also might want to take into account that the building I live in has 21 floors with over 200 apartments. You’re not just covering ground in Central Park, you’re building UP.

… although that would be kind of funny… buy Central Park, raze it, and put in tracts of single-story ramblers…

… and a mall…

Nahhh…make direct copies of every building that’s spent a century being advertised as having a view over the park…and behind them close off the park for private use of residents of those buildings. Heh hehh heh.

Or you could put up low income housing on South and West Cental Park and devleope North Central Park into your own new upscale location. Heh heh heh. . .

Everyone’s assuming you have to build apartment buildings on the land. Why not a gigantic mega-mall? Or an amusement park? Or a high-tech industrial mega-park? Or a granite quarry…I hear Manhattan has lots of good rock just inches under the dirt. :slight_smile: Or how about a nuclear reactor, or a gigantic oil refinery? How much would the land be worth then?

Of course, there’s the matter of obtaining all the required building permits – you may own it, but I’ll bet the city would fight like hell to keep you from building ANYTHING on that land. (Unless you took a loan on the property and used the money to bribe all the necessary bureaucrats…)

No Doubt! The bribery aspect alone would make it luritive and fun! :smiley: Now Mr. Trump, I would really not want to put my garbage dump here, but it’s such a location for one . . . :smiley:

First, is there not a property tax in NY? I would assume that the decades of back property taxes- even if the interest & penalties were waived, would exceed the market value of the park.

Secondly, much of the value of the surrounding properties is tied to Central Park not being at its highest and best use. Once there are plans to develop the park, the value of the comparable properties drops.

Finally, another component of the high values of comparable properties is scarcity of raw land in Manhattan. Throwing CP into the market in one big chunk would increase the supply of raw land in Manhattan on the order of 100-fold, at least. The market value of the raw land would drop.

Wouldn’t the doctrine of adverse possession come into effect here? The City of New York has been using that park for a long time. No one else bothered to challenged its title to it.

I only bring this up because I remember this topic from helping a friend study for the bar exam.