Matter of Trump Parc Condominium v Tax Commission of the City of N.Y.

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Matter of Trump Parc Condominium v Tax Commission of the City of N.Y. 2006 NY Slip Op 30671(U) December 19, 2006 Sup Ct, NY County Docket Number: 210132/94 Judge: Walter B. Tolub Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] SCANNED ON 1211312006 SUPREME COURT OF THE STATE bF NEW YORK - NEW YORK COUNTY I -%Ex EBLIL-.~A-- 210732/7994 __-Number: -- TRUMP PARC vs TAX COMMISSION Sequence Number : 001 * L MOTION S&. NO. VACATE NOTE OF ISSUE/READINESS 1 . L . I > .- MOTION CdI/.,WO. were read on this motion to/for The followlng papers, numbered 1 to PAPERS NUMBERED Notice o f Motion/ Order to Show Cause Answering Affidavits - - Affidavlts - Exhibits ... Exhibits Replying Affidavits Cross-Motion: U Yes @ No Upon the foregoing papers, it is ordered that this motion X I - CT 0 L WALTERCheck one: n FINAL DISPOSITION Check if appropriate: J,S. C. 0 NON-FINAL DISPOSITION DO NOT POST [* 2] SUPREME COURT OF THE STATE OF N E W YORK COUNTY OF NEW YORK: IAS PART 1 5 ----____----_--__---________________I___ X In the M a t t e r of the Application of T R U M P PARC CONDOMINIUM Index No. 2 1 0 1 3 2 / 9 4 Mtn S r q . 001 Petitioners, -againstTHE TAX COMMISSION OF THE C I T Y O F NEW YORK, E T . A L . , Respondents. WALTER B. TOLUB, J. : Petitioner, Trump Parc located at property"). 106 Central Park South ("the building" Once the site of the Barbizon Plaza or Hotel, "the the building was converted into a condominium i n t h e mid-1980's and is presently comprised of 3 4 4 residential units, 76 storage units, and f o u r commercial units.' The property's residential units were nearly fully occupied by 1992, with t h e remaining t h r e e units sold in 1 9 9 5 and 2 0 0 0 (Affirmation in Opposition ¶6). Petitioner asserts that t h e p r o p e r t y n e v e r operated as a residential r e n t a l building (u.) For purposes o f taxation, the residential portions of the building, including t h e storage units, are designated a s B l o c k 1011, Lots 4 0 0 4 - 4 4 2 3 . 'The court recognizes t h a t both p e t i t i o n e r and respondents have provided two d i f f e r e n t numbers w i t h respect to the number of condominium residential units. Inasmuch as the a c t u a l n u d e r b e a r s no effect on this decision, for simplicity, the court h a s c h o s e n to use the numbers o f f e r e d by petitioner. [* 3] Petitioner commenced p r o c e e d i n g s pursuant t o Article 7 o f t h e R e a l P r o p e r t y Tax law for review of t h e assessments levied by respondents on the residential and s t o r a g e units of the p r o p e r t y f o r t a x years On A p r i l 2 8 , 1994/1995 through 2005/2006.2 2000, petitioner f i l e d a Request f o r Judicial Intervention a n d Note of Issue for the petition related to t h e 1994/1995 t a x year. 21 and 24, 2006, respondents filed Requests for On J u l y Judicial Intervention a n d Notes of i s s u e for the remaining years u n d e r review. One month a f t e r filing the RJIs a n d Notes of Issue for the remaining years under review, respondents filed the instant application s e e k i n g , p u r s u a n t t o 22 NYCRR 2 0 2 . 6 0 ( e ) and CPLR 408, to have this court v a c a t e all of t h e aforementioned N o t e s o f Issue, i n c l u d i n g the Note of Issue f i l e d by petitioner in 2 0 0 0 . The application further s e e k s an order directing petitioner to disclose (1)rent r o l l s for u n s o l d apartments, including income information and a description apartment; of t h e apartments and number of rooms per ( 2 ) information regarding t h e l e v e l of combined annual income realized by the owners/tenants of e a c h residential unit f o r each year to allow the City's e x p e r t to determine w h i c h , if any, of the u n i t s would have been eligible for r e n t deregulation and in which years; 'The 210132/94, 210526/00, and (3) income and expense information for the index numbers o f these p e t i t i o n s a r e a s f o l l o w s : 2 1 0 0 0 2 / 9 5 , 2 1 0 7 8 4 / 9 6 , 2 1 1 8 9 8 / 9 7 , 210163/98, 210058/99, 209017/01, 211401/02, 2 0 3 4 1 7 / 0 3 , 2 0 3 6 6 4 / 0 4 , 2 0 0 8 4 6 / 0 5 . 2 [* 4] Lastly, respondents seek a n o r d e r commercial units. property's dismissing a n y a n d all of the petitions f i l e d pursuant to CPLR 3126 for which petitioner fails to provide d i s c o v e r y . Discussion The valuation of condominium p r o p e r t i e s i s l a r g e l y governed by Real Property Tax Law 5581 a n d Real P r o p e r t y L a w § 3 3 9 - y . B o t h of these provisions direct t h a t a condominium "must be v a l u e d for assessment purposes a s if it were a rental p r o p e r t y " East Medical Center, L.P. 1119, 1121 [ 4 t h Dept. V. Assessor 20051; Matter (platter o f w n o f Manlius, 16 AD3d Of of GKe e n t r e e A t Lv nbrook Condominium NQ, 1 v , Bo a s d of A S S ~ S Q Q ~ S t h e Villaqe of L v n b r o o k , of et a l . , 81 N Y 2 d 1036 [1993]) . Since condominiums a r e g e n e r a l l y n o t rent p r o d u c i n g p r o p e r t i e s , RPTL S 5 8 1 [l] [ a ] ,asserting a p r e f e r e n c e for the income capitalization approach to valuation, d i r e c t s that the value of the unit be fixed "at a sum g o t exGeedinq the assessment which would be placed upon such p a r c e l were It not owned o r leased on [ . . . I a condominium basis (RPTL 5581 [ 1 3 [ a ] (emphasis a d d e d ) ; see a l s o , pat; ter of R i v e r House - Bronxville v . Ho f fmaq, 100 A D 2 d 970, aggregate of 973 the [1984]). However, " [ i l n assessment of the units no e v e n t shall the plus their common interests e x c e e d the t o t a l valuation of t h e property were the Respondents claim that t h i s formation was previously s o u g h t i n correspondence d a t e d J a n u a r y 13, 2 0 0 3 , April 4, 2003, December 13, 2005, F e b r u a r y 10, 2 0 0 6 , June 21, 2 0 0 6 and June 22, 2006. 3 [* 5] p r o p e r t y assessed as a parcel" (RPL 5 3 3 9 - y [l] [b]). Both parties concede t h a t RPTL S 5 8 1 and RPL 5 3 3 9 - y g o v e r n the assessment of the s u b j e c t property. However, relying on Matter of Greentree At Lvnbrook Condominium No. 1 v. Board p-f Assessors Qfl t h e Vi,lJciue s;f L v n b r o Q k , et al., (81 N Y 2 d 1036 [1993]), respondents further assert t h a t petitioner's p r o p e r t y should be assessed a s t h o u g h it were s u b j e c t t o the l a w s of rent stabilization. A s such, respondents claim t h a t they are e n t i t l e d to additional financial discovery from the residential a n d commercial owners a n d tenants of T h i s c o u r t disagrees. each condominium u n i t . A s a preliminary matter, s i n c e it appears that the commercial assessments were not there challenged, supporting respondents' additional financial contention information is that they from the valid no are reason entitled commercial to tenants. Respondents already possess t h e information which generated the calculation calculations, of the commercial if necessary, can assessments. be generated Any from further the same information w h i c h is already in their possession. Respondent is also n o t entitled t o a n y financial records f r o m t h e residential condominium owners and tenants. Although t h e Court of A p p e a l s c o n c l u d e d t h a t it was appropriate in M a t t e 1 o f Greentree to a s s e s s t h a t condominium p r o p e r t y a s if it were rent stabilized, the C o u r t did so o n l y because & of the r e n t a l buildings i n the V i l l a g e of Lynbrook w i t h a t l e a s t s i x u n i t s were subject to s e n t 4 [* 6] stabilization: in the Village of Lynbrook w i t h a t l e a s t six u n i t s a r e subject t o r e n t regulation under the E T P A . Thus, it f o l l o w s t h a t i f t h e condominium status of the s u b j e c t properties is to be disregarded, t h e properties are r e q u i r e d to be assessed a s if they a r e rent stabilized" (Matter ~f Green t r e e , 81 N Y 2 d 1036 at 1 0 3 9 . ) A l l rental apartment b u i l d i n g s reliance Respondent's misplaced. on Matter of GreentTee is therefore The same l o g i c expressed b y the Court of Appeals i n Matter of Gre e n t r e e i s simply n o t applicable t o the New York City housing market which has rent-stabilized, unregulated residential r e n t a l apartments. deregulated, and Indeed, petitioner has conceded that n o n e of its u n i t s are subject to rent stabilization and therefore, petitioner cannot claim t h a t the r e n t s in t h e building would be lower t h a n rents attainable in the unregulated market. Moreover, e v e n i f it were considered appropriate to a s s e s s petitioner's stabilized property in a manner consistent w i t h assessing r e n t properties, respondents' Corn, for additional Much l i k e the respondents in 1111 d i s c o v e r y would still be denied. P a r k Avenue R e a l t y application v. The Tax CQqi&.Ssioner of t h e C j t v o f N W e York, e t a l . , (Index No. 2 0 1 8 7 1 / 9 3 (DeGrasse, J.), the s o u g h t after discovery in t h e instant application i s identical to t h a t which would be sought in a deregulation p r o c e e d i n g ' 4 and, as noted by Pursuant to N e w York City Administrative Code, if the combined threshold income of t h e apartment occupants exceeds t h e 5 [* 7] J u s t i c e DeGrasse in h i s recent decision involving similar discovery demands : The r e l i e f respondents s e e k w o u l d morph discovery into a burdensome q u a s i administrative p r o c e e d i n g . It w o u l d a l s o be unnecessary f o r purposes of a p r o p e r assessment. (1111 F a r k Avenue Rea l t y Corg, , Decision Dated July 21, 2006, p. 3 [DeGrasse, J. ) . This c o u r t is inclined to a g r e e . ways There are other a p p r o p r i a t e in w h i c h to determine the value of a condominium p r o p e r t y without s u b j e c t i n g the individual owners to a burdensome, time consuming and unwarranted invasion of privacy. Indeed, it is v e r y d i f f i c u l t to escape the conclusion t h a t the sole purpose of t h i s excercise is to harass the owners and tenants of condiminium units assessments. Accordingly, respondents' motion t o v a c a t e t h e Notes of Issue in t h i s matter and for a n o r d e r directing additional discovery r e p l e t e with conditional dismissal orders, is denied. Counsel for the parties a r e directed t o appear in IA Part 15, Room 335, 6 0 Centre Street, New York, New York, at 9 : 3 0 a.m. on January 29, 2007 at which time this court w i l l set a deadline for t h e statutory maximum ( c u r r e n t l y $175,000 and pre-1998, $ 2 5 0 , 0 0 0 ) for each of t h e two y e a r s p r e c e d i n g an owner's petition, and the l e g a l regulated rent of the apartment is at least $ 2 0 0 0 per month, the a p a r t m e n t is e l i g i b l e f o r deregulation ( s e e , New York C i t y Administrative Code § § 26-504.3, 26-403.1, 2 6 - 5 0 4 . 2 ) 6 [* 8] exchange of appraisals and a t r i a l d a t e for this matter. This memorandum o p i n i o n constitutes t h e decision and o r d e r of t h e Court. Dated: I\ /of GI 1 I HON. WALTER B. TOLUB, J . S . C . 7

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