Matter of VGR Assoc. LLC v Assessor Bd. of Assessment Review of the Town of New Windsor
Annotate this CaseDecided on October 5, 2006
Supreme Court, Orange County
In the Matter of the Application of VGR Associates, LLC & Price Chopper Operating Co., Inc., Petitioners,
against
The Assessor, The Board of Assessment Review of the Town of New Windsor and The Town of New Windsor, Respondents.
2002/5074
TO: Matthew J. Cronin, Esq.
Cronin, Cronin & Harris, P.C.
Attorneys For Petitioners
200 Old Country Club Road, Suite 570
Mineola, NY 11501
Paul J. Goldman, Esq.
Segal, Goldman, Mazzotta & Siegel, P.C.
Attorneys For Respondents
9 Washington Square
Albany, NY 12205
Thomas A. Dickerson, J.
In this latest examination of shopping centers [FN1] this Court must [*2]determine the true market value of a shopping center [FN2], the Price Chopper Plaza located in the Town of New Windsor, New York [ " subject
property " ]. This tax certiorari proceeding was commenced by the Petitioner, VGR Associates, LLC [ " VGR " ] and Price Chopper Operating Co., Inc. [ " Price Chopper " ] to review the 2002 and 2003 tax assessments imposed by the Town of New Windsor, New York [ " the
Town " ] on the subject property. Following a trial which took place on January 30 & 31, 2006 and April 14, 2006 and after a careful review of the excellent Memoranda of Law [FN3] and findings of fact and conclusions of law [FN4] submitted by the parties, the Court is now prepared to render its Decision on the true value of the Price Chopper Plaza.
FACTUAL BACKGROUND
Price Chopper Plaza
The subject property is a 121,000 square foot, 11 acre shopping [*3]center located in the " Five Corners " area of the Town of New Windsor, New York. It is identified on the Town's Tax Map as ID No.69-1-6 and is situated at the corner of Route 32 and State Route 300. The subject property was built in 1969 and renovated in 1995. For the tax years under review, the subject property included a 61,500 square foot Price Chopper Supermarket as an anchor, a 15,200 square foot Eckerd store as a secondary anchor, along with 11 satellite stores totaling 41,049 square feet, averaging 3,730 square feet per store [FN5]. An HSBC Bank which is still operating under the original 1969 lease sits on a separate pad. In 2000, a 7,000 square foot store was built adjoining the Price Chopper Supermarket and is currently occupied by Advanced Auto [FN6].
Golub, VGR, Vails Gate & Price Chopper
When originally built in 1969, the subject property was occupied by a Grand Union Supermarket. Subsequently, Waldbaums occupied the supermarket space and expanded the Grand Union space. On or about March 15, 1995, Golub Corporation [ " Golub " ] paid $3.1 million for the Waldbaums leasehold interest [FN7]. On September 30, 1995, VGR Associates
[ " VGR " ], as fee owner, entered into a ground lease with Vails Gate, LLC [FN8] [ " Vails Gate " ]. Vails Gate simultaneously entered into a twenty-five year sublease with Price Chopper which lease is guaranteed by its parent corporation, Golub [FN9].
The Sublease & Tenant Improvements
The Price Chopper sublease to Vails Gate simultaneously reimbursed Golub the $3.1 million for its original purchase of the Waldbaum's lease and provided in the lease that the $3.1 million was to be used by Price Chopper for "tenant improvements "[FN10]. On October 1, 1995, Golub terminated its Waldbaums leasehold [*4]interest.
What Tenant Improvements?
A single change order document [FN11] by a contractor, Storm King, references a sum of $2,797,436.40 [ " the change order " ]. Other than the change order, no additional information is provided identifying what monies were actually spent on tenant improvements.
The Mutual of Omaha Mortgage
In 1995, Vails Gate obtained a $4.4 million mortgage from Mutual of Omaha for twenty years which was guaranteed by the Price Chopper sublease which was guaranteed by Golub [FN12].
Stipulations
The parties stipulated that the applicable equalization rates, assessed valuations, tax rates and equalized fair market values
[ " FMV " ] for the tax years at issue are as follows [FN13]:
Tax YearsEqu. RatesAssessed ValuesTax Rates
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