Hunt & Sons, Inc. - Page 16




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          Stigmatization can cause a reduction in the value of the property           
          even when the environmental hazards have been remediated or                 
          mitigated.  See In re Custom Distribution Servs., Inc., 216                 
          Bankr. 136, 154-155 (Bankr. N.J. 1997) (reducing fair market                
          value of property by 20 percent to account for environmental                
          stigma); Inmar Associates Inc. v. Borough of Carlstadt, 549 A.2d            
          38, 45 (N.J. 1988) (“not reasonable to conclude that contaminated           
          property is unmarketable, but stigma of contamination and other             
          factors suggest that capitalization rate may have to be altered             
          to reflect condition” (citing Patchin, “Valuation of Contaminated           
          Properties”, The Appraisal Journal 7 (Jan. 1988))).                         
               A landlord takes on much greater risk when leasing property            
          to an independent operator of cardlocks (such as petitioner) than           
          when leasing the same property to a major oil company, because of           
          the difference in the lessee’s financial strength.  An                      
          independent operator may not have the financial wherewithal to              
          respond to a significant environmental problem, which would leave           
          the landlord primarily liable for the cost of the cleanup.  A               
          landlord would thus likely require a greater return (by requiring           
          the payment of more rent) when leasing property to a small                  
          independent operator of underground storage tanks than when                 
          leasing the same property to a major oil company.                           
               The additional credit risk assumed by a landlord leasing               
          property to an independent cardlock operator rather than a major            






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