Hunt & Sons, Inc. - Page 17




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          oil company should be reflected in the “capitalization” rate, or            
          otherwise accounted for in determining the fair market value and            
          fair market rental value of the property.  Cf. In re Custom                 
          Distribution Servs., supra at 155 n.17 (“The New Jersey Supreme             
          Court appears to favor an approach that accounts for the stigma             
          of environmental contamination via an adjustment to the                     
          capitalization rate”.); Inmar Associates, Inc. v. Borough of                
          Carlstadt, supra at 45 (suggesting that environmental stigma                
          should be reflected in higher capitalization rate).                         
               Mr. Harris improperly used a flat 10-percent                           
          “capitalization” rate, relying on information concerning the                
          “capitalization” rates used in leases between landowners and                
          major oil companies.  We disagree with Mr. Harris’s use of a flat           
          10-percent “capitalization” rate in light of the special risks              
          borne by the lessor when leasing property to an independent                 
          cardlock operator.  We also have greater uncertainty about Mr.              
          Harris’s conclusions than we would if the “comparable” properties           
          were more similar to the subject properties.  Despite these                 
          misgivings, we give substantial weight to Mr. Harris’s                      
          conclusions of value because his report is professionally                   
          prepared, he is well qualified to make adjustments to equate the            
          comparable properties, and he fully disclosed his methodology and           
          analysis.                                                                   








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