NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2003-07T12003-07T1

PANSINI CUSTOM DESIGN ASSOCIATES,

LLC, and ROGER PARKIN JOINT

VENTURE,

Plaintiffs-Respondents,

v.

CITY OF OCEAN CITY and PATRICK

NEWTON, Construction Code

Official of the City of Ocean

City,

Defendants,

and

SAVING OUR STATION COALITION,

Defendant-Appellant.

________________________________________________________________

Argued telephonically October 17, 2008 - Decided

Before Judges Carchman, Sabatino and Simonelli.

On appeal from the Superior Court of New

Jersey, Law Division, Cape May County,

Docket No. L-214-07.

Clement F. Lisitski argued the cause for

appellant.

Steven D. Scherzer argued the cause for

respondents (Cooper Levenson, attorneys;

Mr. Scherzer, on the brief).

The opinion of the court was delivered by

CARCHMAN, P.J.A.D.

The narrow issue that we address on this appeal is whether the use of averaging of comparable sales by the trial judge in fixing the fair market value of the real property in issue represents an appropriate evaluation methodology and whether it fulfills a judge's fact-finding responsibility. Here, the trial judge, after excluding the high and low comparable sales presented by the expert witnesses in competing appraisals, averaged the values of the remaining comparables to arrive at a fair market value. We disapprove of the practice of averaging and conclude that it does not represent a reasoned and considered valuation technique. We reverse and remand.

The facts underlying this appeal are not in significant dispute. Plaintiffs Pansini Custom Design Associates, LLC and Roger Parkin are the owners of the property in Ocean City known as 801 Fourth Street, Lot 49, Block 303, consisting of a 100 x 130 foot (13,000 square feet) parcel improved with a single-family residence with a detached garage. The parcel was acquired on May 27, 1999, for $710,000 from Elizabeth Sheehan, who had resided on the property as her home. The property had been a former United States Life Saving Service and United States Coast Guard Life Saving Station until its retirement in 1940. The 19th century building is one of the last four lifesaving stations on the East Coast built by the United States Life Saving Services, the predecessor to the United States Coast Guard. Thereafter, additions and alterations followed as the premises was converted to a single family residence.

The property was designated as a historic structure under historic-preservation provisions of the Ocean City Zoning Ordinance. Originally located on the beach, because of changing tides and land accretion, the property is now two and one-half blocks from the beach and ocean. It is located in a developed mixed area, primarily a two-family residential zone. The property has been vacant since the sale by Sheehan to plaintiffs.

Because of the designation of the property as a historic structure, a developer must comply with the procedures set forth in Ocean City's zoning ordinance, specifically, the requirements of the historic-preservation ordinance, which controls development and requires a series of steps before a property owner can demolish a historic building. City of Ocean City Ordinance