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WPCNR QUILL & EYESHADE. By John F. Bailey. April 17, 2006: Around Education House and 255 Main Street, the “A” word for “assessments” is said in whispers. The school district wants to know when the city development is going to pay off in more property taxes and assessments. The city says give it time.
WPCNR has learned that information on how assessments are determined particularly on PILOTS, those incentives to build that are dispensed with largesse by city after city, including White Plains, is hard to pin down. There is no set formula. I have been told it is both an art and a science, depending on whom I talk to. When I talked to the New York State Office of Real Property Services press office, the spokesperson told me it is up to the individual communities to determine the financial bases for assessments.
The White Plains Common Council, and previously the City Budget and Management Committee that the drop in city assessed property value to $298.3 Million and a cumulative nose dive of $20.5 Million the last three years is caused by lowering of Special Properties assessments (utilities had their assessments lowered over the last 12 years).
The Council and the Budget and Management Committee has also been told that the White Plains PILOTS granted to developers in recent years, ( contributing $2.6 Million to the city and $8.3 Million to the School District in 2006-2007) will be increasing as the properties become “fully occupied.”
WPCNR has learned through our inquiries that “fully occupied” is a very loose definition (up to individual assessors to determine in any way they see fit), based on interviews with Westchester County’s tax man, David Jackson, and a spokesperson for the New York City Department of Finance, Owen Stone.
David Jackson, Executive Director of the Westchester County Tax Commission answered WPCNR’s questions about what “fully occupied” means in March:
WPCNR: What is the definition of fully occupied for upgrading a condominium assessment for tax purposes in the county?
Jackson: There is no property assessment definition for this purpose. If the condominium is fully constructed as of the last taxable status date, December 1 in White Plains, the assessment is based on the condominium’s Full Market Value, based on the income approach, as of that Taxable Status Date.
Unless a community is conducting a reassessment, the assessment determined on the last taxable status date, when fully constructed, does not typically change unless there is new construction, a Board of Assessment Review Change, or a Court Ordered Change.
WPCNR: Does fully occupied occur when a condominium development is “sold out”, but not fully occupied?
Jackson: For assessment purposes, condition and ownership on the taxable status date is what is important. There is typically no difference in the determination of the assessment for a condominium unit that you own and a (condominium unit) you choose not to use.
WPCNR: Does the owner (developer) of the condos pay taxes on a “fully occupied” basis when A.) He is sold out, but not fully closed, or B.) when he is sold and taxes are increased with each contract closing or C.) Only when all (condominim) contracts have been closed?
Jackson: The assessment is based on the condition and ownership on the taxable status date.
WPCNR: Does the purchaser (of each individual condo unit) pay taxes on the property (the individual unit) when he has A.) purchased the contract or B.) Closed on the contract or C.) Is actually living in the unit, or is subletting the unit?
Jackson: Taxes are the responsibility of whoever owns the property on the Taxable Status Date, December 1st in the City of White Plains. Typically, proration of the taxes for sales occurring during the year are handled at the closing.
WPCNR: In the cases of residential condominiums on PILOTs, are the PILOTS generally upgraded on an “as-closed” or “as occupied” basis or “only after fully occupied basis.” What is the general accepted practice among assessors in the county?
Jackson: There is no generally accepted practice by assessors on PILOTS, some are involved with them, some are not, and some are involved in various ways.
WPCNR: Can a municipality inact a surcharge on air rights (since White Plains has set a value on air rights)? I know according to the New York State Comptroller’s office, air rights are not considered real property (for purposes of assessment), but the comptroller’s office said that individual municipalities could construct a legislative mechanism to reflect this increased (air right) value if they wanted to do so. What are your feelings on that? How do you think it could be done?
Jackson: To the best of my knowledge, air rights are real property. I’m not aware of any Municipality exacting a surcharge on air rights. This is a Tax Policy matter for the City of White Plains to address.