
    NEWARK AND ESSEX BUILDING CORPORATION, A NEW JERSEY CORPORATION, PROSECUTOR, v. CITY OF NEWARK, A MUNICIPAL CORPORATION, ET AL., RESPONDENTS.
    Submitted January 16, 1945
    Decided April 11, 1945.
    Before Justices Case, Bodine and Poetbe.
    Eor the prosecutor, Harry Schaffer.
    
    Eor the City of Newark, Philip J. Schotland and Vincent J. Oasale.
    
   The opinion of the court was delivered by

Bodine, J.

This is a tax case. It involves taxes ior the year 1912. The property in question is the large store and office building occupying a large tract oí land situate at 736-753 Broad Street in the City of Newark.

On January 4th, 1944, the State Board of Tax Appeals rendered a judgment reducing the assessment to $5,760,500, allocated $1,560,500 to land and $4,200,000 to building.

GerHoruri was allowed.

Franklin Ilannoch, prosecutor’s expert, testified before the State Board that the true value of the property as of the assessing date as between a willing buyer and a willing seller, neither compelled to buy or sell, was $4,727,000; he allocated $1,527,000 to land and $3,200,000 to building.

The testimony of Mr. Ilannoch shows that he valued the property in the following manner: the gross rentals, if fully occupied would be $957,502 and from this figure, although actual vacancies amounted to $228,000 and the building had a vacancy history of 35 to 40 per cent, from 1930 to 1942, there was deducted for vacancies 10 per cent, or $95,750, which left an effective gross income of $861,752. From this figure deducting $310,995, the actual operating expenses for the taxable year (excluding taxes, interest on mortgage and depreciation), left a net income of $550,747 before depreciation and taxes. He felt that the amount required to support a land value of $1,527,000 was 5 per cent, for interest and 5.3 per cent, for taxes, or $157,281. Deducting this sum from the net income left $393,466 to apply to the building. Capitalizing the building at 5 per cent, for interest, 5.3 pier cent, for taxes and 2 per cent, for depreciation resulted in a building value of $3,200,000.

A careful review of all the other evidence satisfies us that the views of Mr. Ilannoch are persuasive.

The National Newark and Essex Banking Company pays a rent in excess of that paid for similar premises. In determining true value between a willing seller and a willing buyer, replacement cost and income return are not the sole criterion. All the factors considered, we can only conclude that the assessment should be reduced to comply with the views expressed by Mr. Hannoch.

The judgment is reversed.  