Rye Town tax law shows early results

A new Rye Town law required that commercial property owners wanting their taxes reduced either share income and expense reports by the end of August or pay a hefty fine. Nearly 100 percent of owners met the deadline, a dramatic uptick from previous years when compliance averaged about 25 percent.

The town”™s Board of Assessment and Review had already required the income and expense information, but the new law added a fine for uncooperative tax grievers of 3 percent of assessed value. That means that for a property assessed at $1 million, the penalty would be $30,000.

This year, 209 commercial property owners requested reduced assessments to the town”™s Board of Assessment and Review. After the law was announced earlier this year, nine owners withdrew their requests. Of the remaining 200, 197 owners submitted their information on time and three property owners successfully received an extension.

Rye Town Supervisor Joseph Carvin, a Republican, has called the process for fighting commercial property assessments a “racket for lawyers.”

“We”™re not trying to punish people, but we are trying to show how absurd they are,” he said.

Carvin said he believed attorneys file a number of unreasonable requests for reductions in an effort to “game the system,” with the goal being not a settlement at the town level but a certiorari proceeding in court, which is more lucrative for lawyers and more costly for the municipalities.

In 2013, only two commercial property owners submitted reduction requests to the town directly, with the vast majority authorizing an attorney, consultant or others to represent them. Carvin noted that six representatives brought 66 percent of all of the commercial property cases to Rye.

The new law aims to curb unnecessary requests and avoid court, Carvin said, by offering some substantiation for any reduction request. “A $10 million property certainly can”™t be worth 1 million,” he said. “We”™re going to tell you to take a hike.”

The town supervisor”™s office analyzed 80 submissions for 2013 and found that owners requested assessment reductions of 80 percent on average. Of those cases analyzed, 38 percent requested that their values be reduced by 90 percent or more and 59 percent asked that their value be reduced lower than the value indicated from their own income and expense data, according to the study from the supervisor”™s office.

When Rye reassessed in 2004, it was one of only three towns in Westchester County that had done so since the 1970s. It has kept its tax rolls updated on a biannual basis ever since, with the goal of an equitable tax roll that would reduce the amount of grievances and court battles. Instead, the amount of filings particularly from commercial properties went up.

An average of 220 commercial properties have sought assessment reductions in the decade since reassessment, with 247 in 2011 and 223 in 2012. Since 2009, the town has paid $1.1 million in settlements.

The percentage of commercial complaints that became court cases rose from 76 percent in 2004 and 35 percent in 2005 to more than 80 percent for four straight years. The percentage of all commercial cases that ended up in court was 87 percent in 2009, 80 percent in 2010 and 92 percent in 2011, which was the last year numbers from the town are available.

Stephen Davis, an attorney with White Plains-based McCarthy and Fingar L.L.P. said the problem for municipalities is not the property owners, but inaccurate assessments. Davis, who represents commercial property owners in tax proceedings, said he is only paid by clients when he successfully obtains a reduction, so there is no value for his firm to take on cases that don”™t have merit. “I”™m kind of odd, I like to get paid at the end of the day,” he said.

Davis said that some fluctuation or inaccuracies can”™t be avoided, but he said that communities have to commit to constantly finding ways to better assess value. “We”™ve got big enough municipalities in Westchester to get the job done as long as they have the resolve to do the job properly,” he said.