An appellate court has ruled that Forest City Enterprises was not entitled to a $327,866 tax credit in 2009 for employing a project manager on the Ridge Hill construction undertaking in Yonkers.
The Third Appellate Division in Albany ruled Nov. 5 that the state Tax Appeals Tribunal correctly found that the project manager was employed by the wrong Forest City affiliate.
Forest City had applied for a state Empire Zones tax credit for the $840 million Ridge Hill retail-residential construction project.
To qualify, the Cleveland, Ohio developer had to show that FC Yonkers Associates, the affiliate that owned and developed Ridge Hill, increased its workforce from zero to one employee in 2009.
The Tax Appeals Tribunal found that Theron Russell, the project manager, was actually employed by Forest City Ratner Companies, another affiliate, and not by FC Yonkers.
FC Yonkers had reimbursed Forest City Ratner for Russell”™s salary and expenses, but the issue, according to the appellate decision, is who directed and controlled Russell.
The record shows that Forest City Ratner paid Russell and listed him as its employee, the court found, and that Forest City Ratner executive Robert Sanna hired Russell, reviewed his performance and supervised his work on the Ridge Hill project.
Forest City Ratner “exercised direction and control over Russell”™s job duties,” the court ruled, “including the means by which he carried out his responsibilities.”
Therefore, Russell was not employed by FC Yonkers and Forest City Enterprises did not qualify for the Empire Zones tax credit.
Rochester attorney Kevin S. Cooman represented Forest City Enterprises. Owen W. Demuth, of the New York State Office of Attorney General, represented the Commissioner of Taxation and Finance.
