The Edgemont School District last week agreed to settle the largest tax certiorari claim in Edgemont history — a claim for a whopping 90% reduction in assessed value for each of the years 2009 through 2014 for the Midway Shopping Center on Central Avenue, which is the single largest assessed property in the entire school district.
The settlement, which will be formally approved this Wednesday by the Greenburgh Town Board, calls for a reduction in the current annual assessment of about 31% — thus giving the owners of the Midway Shopping Center, which is worth an estimated $100 million, about a third what they asked for, based on current assessed values, and less than that in prior years, when assessed values were proportionately less.
In terms of actual dollars, the Edgemont School District, which had been facing the potentially crippling risk of having to refund millions of tax dollars, will instead have to pay Midway’s owners a total of only $683,555; the Greenville fire district’s cost is estimated to be $202,883, while the Town itself is expected to refund the sum of $349,918.
In its resolution approving the settlement, the Town Board states on its agenda that the Edgemont School District’s share of refunds will be $1,193,272, but school officials say that figure is wrong. The correct figure, they say, is only $683,555, because the timing of the settlement allows the school district to adjust the property’s assessed value for the current year and thereby avoid having to collect money, which it would then immediately have to refund.
School officials say they’ve been planning for years to cover the Midway settlement and that even though the amount of money to be refunded to Midway is relatively high, it will not adversely affect this year’s school budget or projected spending needs for next year.
The fire district meanwhile had likewise been warned by town officials that the year 2015 would see a record high number of tax certiorari settlements and, for that reason, agreed to float a bond to cover the cost of the payouts. Edgemont voters last December approved the bond to cover the fire district’s tax certs for 2015.
A tax certiorari is a legal proceeding by which owners of commercial property in New York may contest a local municipality’s assessed value of its property for property tax purposes. Such proceedings can be quite expensive because commercial property owners can file for refunds for up to a six consecutive years.
Residential property owners, by contrast, may only “grieve” their taxes, which allows them to contest their home’s assessed value — but only for one year at a time. As a result, residential property owners who grieve their taxes may get a reduction in their property taxes going forward, but generally do not qualify for refunds.
In the case of Midway, the shopping center’s owners filed a claim last year for a reduction of up to 90% of its assessed value going back to 2009. The Midway petition set off alarm bells in Edgemont, but asking for a 90% reduction is fairly standard practice in the region for commercial property holders. Here, the reduction of about 31% is also at around the same level as prior settlements with Midway.
Specifically, the settlement with Midway will reduce its assessed value for property tax purposes in 2015 from $2,464,490 to $1,701,850, which is a reduction of 31%. That is roughly what the assessed value of the property was in 2010. School officials said the Town’s tax assessor had increased Midway’s assessed valuation by 45% since 2010 without an apparently strong enough basis to defend its numbers.
The value of the property itself was enhanced substantially during that period of time with the addition of the Shop Rite supermarket to the site. While that may have a factor justifying an increase in assessed value, other factors, such as average rents in the area during the Great Recession may have contributed in part to a reduction in assessed value.
One benefit of the school district cutting the deal now, as opposed to next year, was that the school district avoided having a big refund to pay out next year.
Midway’s tax certiorari settlement comes at a time when Midway is seeking permission from the Town to expand the shopping center by constructing a new building. The Town’s Planning Board has twice heard the shopping center’s proposal for site plan approval and has twice rejected it, by votes of 5-2 and 4-3, respectively. Midway’s owners are now hoping to get a better result from the Town Board, which this week will be scheduling a public hearing on the proposal for the end of the month.
Town Supervisor Paul Feiner this weekend notified the Edgemont Community Council that Midway’s owners had invited him to a private meeting to discuss their application before the Town Board and asked the ECC what types of “compromises” it would find acceptable. ECC president Bob Bernstein asked Mr. Feiner not to attend any such backroom meetings and urged instead that the process take place in public and be completely transparent. Mr. Feiner said he “advised the people who asked for the meeting that [he] will not participate in a private meeting to discuss the application.”
Around ten years ago, Town Attorney Tim Lewis invited then ECC president Michelle McNally to a meeting at Town Hall to discuss Midway’s requests at that time for various zoning changes. Also attending the meeting was current ECC president Bob Bernstein.
Mr. Lewis said at the meeting that the Town would agree to a tax certiorari settlement with Midway that would be more beneficial to Edgemont taxpayers if the ECC would not object to Midway’s zoning requests. The ECC leadership declined to participate in any such backroom discussions.