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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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