Matter of Bertelsmann Prop. Inc. v Tax Commn. & Commr. of Fin. of City of N.Y.

[*1] Matter of Bertelsmann Prop. Inc. v Tax Commn. of City of N.Y. 2007 NY Slip Op 52249(U) [17 Misc 3d 1133(A)] Decided on Nov. 27, 2007 Supreme Court, NY County Lehner, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. As corrected in part through November 30, 2007; it will not be published in the printed Official Reports.

Decided on November 27, 2007
Supreme Court, New York County

In the Matter of BERTELSMANN PROPERTY, INC., Petitioner,

against

The TAX COMMISSION and the COMMISSIONER OF FINANCE OF THE CITY OF NEW YORK, Respondents.



206245/1995



Herman & Katz, attorneys for petitioner

166 Fifth Avenue, New York, NY 10010, (212) 337-1255 (Jay M Herman and Robert S. Katz, of counsel)

Michael Cardozo, attorney for respondent

100 Church Street, New York, NY 10007, (212) 788-0434 (Barbara Moretti, of counsel)

Edward H. Lehner, J.

Respondents herein move to reargue so much of the court's decision of May 3, 2007 as (a) reduced assessed values for the theater condominium unit of the subject real property to zero for tax years 1995-96 and 1996-97, and (b) found the rentable area of the office condominium to be 762,035 square feet.

That branch of the motion to increase the rentable area to 868,868 square feet is denied. Respondents have not demonstrated that the court has "overlooked or misapprehended the relevant facts, or misapplied any controlling principle of law." (Foley v. Roche, 68 AD2d 558, 567 [1st Dept. 1979])

That branch of the motion to increase the values of the theater condominium component for the aforesaid two tax years is granted to the extent of the parties' stipulation, spread upon the record before this court on October 12, 2007 (tr. pp. 3, 6), agreeing that theater income for said years should be $300,000 per year. Accordingly, the court recalls its decision of May 3, 2007, and substitutes the following in its place and stead to reflect the changes in valuation resulting from the aforesaid stipulation.

This is a consolidated tax certiorari proceeding, pursuant to Article 7 of the Real Property Tax Law, to review the assessed values of the building known as 1540 Broadway in Manhattan (the "Building") for the nine tax years from 1995/96 to 2003/04. The valuation date for each year was January 5.

Received in evidence were the appraisal reports of petitioner's expert, Jerome Haims (the "Haims appraisal"), and respondents' expert, Peter Brooks (The "Brooks appraisal"). The parties stipulated that for each year the ratio of assessed value to market value was 45% (Tr. p. 28, 8/1/06).

The Building is situated on an irregularly shaped lot of approximately 38,686 square feet and contains 44 stories. It was constructed in 1987 and is divided into five condominium units, each a separate tax lot. Lot 1001 consists of the garage located in the third sub-basement. Lot 1002 is a theater located below grade. Lots 1003 and 1004, which the parties stipulated may be treated by the court as a single lot, are occupied for retail use and are found partially in the basement, the first sub-basement, and the 1st, 2nd and 3rd floors. Lot 1005, the office space component, was primarily occupied by the petitioner building owner. The area measurements of the individual units are opined by the respective appraisers as follows (Haims' appraisal, p. 2; Brooks' appraisal, p. 44):

CONDO UNITGR. SQ. FT. HAIMSGR. SQ. FT. BROOKSRENTABLE SQ. FT. HAIMSRENTABLE SQ. FT. BROOKS Lot 100138,95338,95336,85736,857 Lot 100240,42140,42139,10239,102 Lots 1003 & l004137,180137,180130,695116,914 Lot 1005728,822728,824713,211868,868 Totals945,378945,378919,8651,061,741< /tr>

Based upon the aforesaid stipulated 45% of market value equalization rate, the appraisers respectively opined the following assessed valuations for the Building (Haims' appraisal, p. 6; Brooks' appraisal, p. 3):

TAX YEARACTUAL ASSMT.HAIMS' ASSMT.BROOKS' ASSMT. 1995/9675,315,60025,732,00077,580,000 1996/9775,330,00035,618,00079,245,000 1997/9878,738,75038,945,00083,970,000 1998/9981,956,25050,163,00099,630,000 1999/0083,353,50065,950,000113,130,000 2000/0186,476,50078,631,000133,650,000 2001/0292,191,50057,850,000153,990,000 2002/0392,362,50059,772,000145,845,000 2003/0495,899,50055,017,000136,395,000

Applying the said 45% equalization rate, the following are the appraised market values of the Building:

TAX YEARCITY'S MKT. VALUEHAIMS'MKT. VALUEBROOKS' MKT. VALUE 1995/96167,368, 00057,183,000172,400,000 1996/97167, 400,00079,150,000176,100.000 1997/98174,975,00086,544,000186,600,000 1998/99182,125,000111,473,000221,400,000 1999/00185,230,000146,556,000251,400,000 2000/01192,170,000174,736,000297,000,000 2001/02204,870,000128,855,000342,000,000 2002/03205,250,000132,826,000324,100,000 2003/04213,110,000122,261,000303,100,000< /table> [*2]

Both experts adopted the income capitalization approach to valuation, which they agreed was most appropriate for appraising an office building which here was [*3]seventy percent owner occupied (see, Matter of Saratoga Harness Racing, Inc. v. Williams, 91 NY2d 639, 644 [1998]; Merrick Holding Corp. v. Board of Assessors of the County of Nassau, 45 NY2d 538, 543 [1978]).

Brooks sought first to determine the potential market rent in each tax year for the owner occupied space based on a survey of the market for comparable office leases current for each tax year at issue. He opined that the use of market rents, based on comparable leases, was the proper starting point for the tenant occupied retail space, but adopted the lease rents for the tenant occupied garage and theater spaces. From these various sources he derived an annual income from the Building, from which operating expenses were deducted. Brooks opined that actual operating expenses reported by petitioner were sufficiently consistent with the market to warrant adoption for appraisal purposes. He found that further deductions were required for vacancy and collection loss, as well as the landlord's stabilized costs of obtaining and retaining tenants. These deductions included estimated brokerage commissions, landlord contribution to tenant improvements and replacement reserves. The resulting figure, the net operating income (NOI), was then capitalized to derive a market value for the property .

Haims' application of the income capitalization approach was similar. He also estimated a market office rent for each appraisal date by "assembling a group of leases from similar midtown, Class A office buildings..." (Haims' appraisal, p. 85). Haims, however, employed the actual rents for all of the Building components other than the office component, but estimated stabilized expenses for the Building. This was opposed to Brooks' adoption of the landlord's actual reported expenses. Haims made adjustments to his comparable lease data for the time elapsed between the date of the commencement of the lease and the tax status date; i.e., January 5 of each tax year at issue. Further adjustments were made for differences in location, site, and age and condition.

While a valuation by a tax assessor is presumptively valid, such presumption disappears when an owner comes forward with "substantial evidence" to the contrary. A detailed appraisal report, such as presented herein by petitioner, is sufficient to meet its initial burden and thus overcome the presumption as to the validity of the assessment. The ultimate issue then for the court is whether the owner has, by a preponderance of the evidence, established that its property has been overvalued, and market value is the most reliable measure of a property's full value for assessment purposes [see, FMC Corporation v. Unmack, 92 NY2d 179, 188-190 (1998); Gibson v. Gleason, 20 AD3d 623 (3d Dept, 2005)].

OFFICE COMPONENT-LOT 1005 [*4]

In deriving a market rent per square foot for the office component, Haimes presented a vast number of comparable leases, 45 just for the first tax year status date of January 5, 1995 (Haims' appraisal, p. 95). Applying all of the conditions for which adjustments were applied, the rents range from a five percent upward adjustment to in excess of a forty-five percent downward adjustment (Id). Similar results are presented for all of the tax years at issue, with a large number of comparables adjusted downward by double-digit percentages (Id). The resultant market rents found by Haims are as follows (Id, p. 93):

TAX YEARMKT. RENT PER SQ. FT. 1995-96$25.50 1996-9729.50 1997-9830.70 1998-9933.30 1999-200040.25 2000-0149.50 2001-0239.50 2002-0342.50 2003-0440.50

By contrast, Brooks presented, at most, six comparable leases for each tax year. For 1995-96 he had no adjustment for the lease at 1325 Avenue of the Americas, and downward adjustments of 5%, 15%, 25%, 30% and 33 % for the other five comparables (Brooks' appraisal, p. 63). For 1996-97, Brooks presented comparable leases with adjustments of upward 35%, and downward 5%, 13%, 25%, 31% and 31% (Id, p. 65). Brooks' greatest adjustment for any of the six comparables in the 1997-98 tax year was a downward 30% (Id, p. 67). For 1998-99, Brooks presented three comparables adjusted downward, 17%, 20%, and 24%, respectively (Id, p. 69). He offered five comparable lease transactions for the tax year 1999-

2000, with these adjustments upwards 6%, downward 4%, 6%, 24% and 27% (Id, p. 71). For tax year 2000-2001, only two comparable leases were offered, adjusted downward 5% and 22% (Id, p. 73). Finally, Brooks' six comparables offered for tax year 2001-2002, his two offered for 2002-2003, and the four offered for 2003-2004, had no downward adjustment of more than 18% and no upward adjustment greater than 10% (Id, pp. 75,77,79).

"The best comparable(s), from both an appraisal standpoint and legal standpoint, are those that are most similar. To the appraiser this means the [*5]properties requiring the fewest adjustments to equalize them to the property under appraisal" (J.D. Eaton, Real Estate Valuation in Litigation, 2nd ed., Chicago, Appraisal Institute, 1995). Additionally, "(i)n the absence of actual rents, the rental income of comparable property may be used as evidence of the value of the subject property. However such evidence should be rejected if the purported comparables are not sufficiently similar in structure, location and as many other features as possible [Manno v. Finance Administrator, 92 AD2d 896 (2d Dept 1983)]." (Henry O. Lee and Wilford A. LeForestier, Review and Reduction of Real Property Assessments in New York, 3rd ed. Albany, New York State Bar Association, 1988). "In reviewing an appraiser's adjustment factors, one should be alert for any large adjustment, since the greater the adjustment, the less reliable the (comparable)" (Jon Santemma, editor, Condemnation Law and Procedures in New York, Albany, New York State Bar Association, 2005). It has been indicated that when real estate comparables "required extensive adjustment" their "evidentiary value" was diminished [In re Bialystock & Bloom v. Gleason, 290 AD2d 607, 610 (3d Dept 2002)].

Petitioner argues that the "paucity" of lease transaction reported by the City's appraiser is "startling"(petitioner's post-trial memorandum, p. 21), inasmuch as Brooks relied on only forty leases over nine years. Haims, by contrast, presented between forty and forty-five leases for each year. The court finds that the petitioner's abundance of comparables is far more "suspect" than the "paucity" of those submitted by respondents given that the weight of good appraisal practice places reliance on the most similar properties requiring the least adjustment, and Haims' selection appears to require the contrary. Why present such a vast number if so many adjustments in the thirty-plus and forty-plus percent downward modification range are required, when a smaller number of comparables, more selectively chosen, would appear to be consistent with the best professional practice?

In comparing the market rent adjustment grids offered (Haims' appraisal, pp. 95-103; Brooks' appraisal, pp. 63-80), it appears that the comparables selected by Haims required adjustments of more than 30% from the contract rent in 58% of the examples for tax year 1995-96. Brooks, by contrast, presented comparables that required adjustment in excess of 30% from the contract rent in only 33% of the examples. For tax year 1997-98, Haims' comparables required adjustment in excess of 30% from the contract rent 29% of the time, as opposed to Brooks' comparables, which required 30% or more adjustment in only 20% of his offering. For tax year 1998-99, the comparative figures are 22% for Haims, 0% for Brooks. [*6]For tax year 1999-2000, Haims requires 30% plus adjustments 5% of the time, while for Brooks, it was 0%. For 2001-02, the 30% plus adjustments are 16% of Haims' examples, and none in those provided by Brooks. For 2002-03 and 2003-04, the figures are 12.5% for Haims, 0% for Brooks and 21.6% for Haims, 0% for Brooks, respectively. Only for tax year 1996-97 are Brooks' adjustment percentages higher than those of Haims. In that year, 50% of Brooks' comparables required adjustment of more than 30%, while Haims' remained at 39%. For tax year 2000-01, neither appraiser has any adjustment in excess of 30%.

The court finds that the methodology employed by Brooks is more reliable and adopts respondents' findings for comparable rents for the office component, as set forth in Brooks' adjustment grids for each tax year respectively (Brooks' appraisal, pp. 63, 65, 67, 69, 71, 73, 75, 77, 79). They are as follows:

TAX YEARMKT. RENT PER SQ. FT. 1995-96$36.00 1996-9734.00 1997-9834.00 1998-9939.00 1999-200040.00 2000-0149.00 2001-0254.00 2002-0355.00 2003-0447.00

The court declines to adopt Brooks' additional upward adjustment for each of the above values based on a weighted averaging of an additional $3.50 premium per square foot for the proportionate share of the office component's square footage located on the upper floors of the Building (Brooks appraisal, pp. 64, 66, 68, 70, 72, 74, 76, 78, 80). The high floor factor appears adequately provided for in the adjustment grid applied to all the comparables considered by respondents' appraisal.

Having adopted an appropriate rental value per square foot for the office component, that value for each year must be multiplied by the total square foot area of the office component to derive a stabilized gross income therefor. Haims opines that the correct multiplier is the rentable area of 713,211 square feet, as set forth in the original condominium offering plan (Haims' appraisal, p. 63). Brooks opines that the net rentable area of the office component is 868,868 square feet, based on various documents setting forth that figure, all claiming some modicum of reliability e. g.: a letter sent to the landlord's representative by the New York City Economic Development Corporation; a stacking plan used to market space in [*7]the subject building obtained from CoStar Group, a source of New York real estate data; and a lease entered into between the landlord and D. E. Shaw &Co. dated September 22, 1997 setting forth a rentable area for the 27th floor which, when projected to the total area of the office component, amounts to the figure asserted by respondents (Brooks' appraisal, p. 44-45).

Both appraisers testified that it is the practice in the New York commercial real estate market for landlords and tenants to negotiate a rentable area that is larger than the actual space that the tenant will occupy as an alternative to raising the actual rent per square foot for the actual space (Tr. pp. 109-114, 8/1/05; pp. 108-111, 8/3/05). Haims testified that, based on his experience, such an "add-on" factor would be no more than 20% (Tr. p. 97, 8/1/05). On the other hand, Brooks maintained that the differential is computed as a 25% loss factor , which translates to a 33% add-on (Tr. pp. 107-110, 8/3/05). With these customary add-ons, it appears that this can result in the somewhat remarkable assertion that a building contains more rentable square footage than its total gross square footage. In fact, here respondents' expert opined, in calculating the rentable square footage of the office component, that such area does exceed the gross area of that component.

Petitioner's architect, Alfonso S. D'Elia, submitted a report, in which he set forth the usable square footage areas of the subject building. He made calculations for usable area for both single tenant and multi-tenanted floors at 634,262.93 square feet and 570,535.50 square feet respectively. If these figures are averaged to reflect a mix of single and multi-tenant floors, the usable square footage calculates to 602,399.21 square feet of usable space.

In considering the evidence on this issue, the court will adopt an add-on factor of 26.5%, and apply it to the square foot calculations of Mr. D'Elia, whose testimony was uncontradicted. Thus, a 26.5% add-on to the aforesaid 602,399.21 square feet yields a total of 762,035 rentable square feet for the office component. When this figure is applied to the stabilized rental rates per square foot set forth above, the court concludes that the stabilized gross effective income for the office component for each of the tax years at issue is as follows: TAX YEARSTABILIZED GROSS INCOME 1995-96$27, 433, 260 1996-9725, 909, 190 1997-9825, 909, 190 1998-9929, 719, 365 1999-200030, 481, 400 2000-0137, 339, 715 2001-0241, 149, 890 2002-0341, 911, 925 2003-0435, 815, 645

THE THEATER COMPONENT LOT 1002

The theater component consists of a gross area of 40,421 square feet and a rentable area of 39,102 square feet. It is located primarily on the third level below grade, and is accessible only from an easement through a retail store, and has no lobby or marquee. The space was subject to a ten-year lease which commenced at the time the theater opened in 1996. The lease provides for an annual rent of $300,000.00, plus fifteen percent of box office receipts above the first $300,000.00 (Brooks' appraisal, p. 97). Both appraisers agree that the theater is severely disadvantaged by its inconvenient location, resulting in a very negative market impact (Brooks' appraisal, p. 99; Haims' appraisal, p 114). Based upon this location and layout, uniquely unfavorable as they are, the court concludes that the actual rents reported for the theater component are best reflective of market value, however much they are below the value of comparable theater leases.

"(O)ther factors may tend to qualify the reliability of actual income as a sole measure of value ... (f)or, though realized income will turn out to be the surest indicator of full value (citations omitted), when fair market rents exceed rental income the latter may ... be made to defer to more precise means of fixing a base on which to compute capitalization" [In re Merrick Holding Corp. v. Board of Assessors of the County of Nassau, supra, at pp. 542-543]. Consideration of the Brooks sixteen comparable theater leases (Brooks' appraisal, p. 98) does not provide sufficient information to indicate if any of them are as severely disadvantaged as the subject theatre in terms of location. Therefore, the comparable being of insufficient value in this particular instance, the actual rents would tend to offer the most reliable measure of value. Accordingly, the court adopts the actual reported rents as set forth by Brooks and declines to adopt any uncollected estimated rents in excess of the base (Brooks' appraisal, p 100). The actual rents are as follows:

color="FF0000">[*9]

TAX YEARBASE RENTPERCENTAGE RENTTOTAL RENT 1995-96$300,000 (per stipulation)-0-$300,000 (per stipulation) 1996-97$300,000 (per stipulation)-0-$300,000 (per stipulation) 1997-98$300,000$12,282$312,282 1998-99300,000269,820569,820 1999-2000300,000291,580591,580 2000-01300,000253,244553,244 2001-02300,000-0-300,000 2002-03300,000-0-300,000 2003-04300,000-0-300,000

GARAGE COMPONENT-LOT 1001

Both experts agree that the following income for the garage component, as actually reported by the landlord, fairly reflects the market (Brooks' appraisal, p. 102; Haims' appraisal, pp. 140, 142, 144, 146, 148, 150, 152, 154, 156):

TAX YEARGARAGE INCOME AS REPORTED BY LANDLORD 1995-96$480,000 1996-97474,395 1997-98495,210 1998-99516,535 1999-2000516,535 2000-01539,779 2001-02563,023 2002-03563,023 2003-04568,259

RETAIL COMPONENTLOTS 1003-1004

The expert witnesses agreed that the retail component consists of a rentable area of 116,914 square feet. Although Haims' appraisal reported a higher rentable area (130,695 square feet), he conceded during trial that a reconfiguration of the space subsequent to the original offering plan might more accurately reflect Mr. Brooks' lower number (Tr., 8/3/05, pp. 58-59). Haims opined that the retail space was so disadvantageously configured that there were no valid comparable properties (Id, 64-65). Thus, he attributed the rentals for the space as the rentals that were negotiated pursuant to the actual leases, or when vacant, estimated rents based on the actual leases (Id, Haims' appraisal, pp. 140, 142, 144, 146, 148, 150, 152, 154, 156).

Brooks opined that comparable rents were a more appropriate basis of valuation, and offered seventeen leases from 1994 through 2003, with adjustments for above and below grade space (Brooks' appraisal, pp. 82-96). [*10]

Giving due consideration to the opinions of two qualified experts, the court will adopt an average of the comparable rents found by Brooks and the actual rents

found by Haims, and attribute this average to the retail space :

YEARHAIMES ACTUAL RENTSBROOKS COMPARABLE AVG. RENTSADOPTED 1995-96$3,920,850$4,284,015$4,102,433 1996-974,574,3254,284,0154,429,170 1997-984,326,6244,712,4174,519,520 1998-993,219,3545,140,8184,180,086 1999-20004,208,2475,140,8184,674,533 2000-014,088,0516,426,0235,257,037 2001-024,576,4648,568,0306,572,247 2002-035,757,43710,710,0388,233,738 2003-044,572,78311,781,0418,176,912

ALL OTHER INCOME

Brooks opines that the petitioner's other sources of income, including signage rental, utilities service sales to tenants, "other" services, and "other" income, should be adopted as reported by the petitioner (Brooks' appraisal, p. 104). However, Brooks opines that for the years in which no signage income was actually received, a market estimate should be included (Id). The court declines to adopt an estimate where no actual income was received and will credit actual income as set forth in petitioner's appraisal (Haims' appraisal, pp. 140, 142, 144, 146, 148, 150, 152 and 156): TAX YEARSUM OF ALL OTHER INCOME 1995-96$99,686.00 1996-97142,634.00 1997-98704,996.00 1998-991,584,652.00 1999-20002,659,186.00 2000-012,914,856.00 2001-022,707,360.00 2002-033,050,518.00 2003-043,177,930.00 [*11]

INCOME CONCLUSION

Adding income from all sources together, the court finds that the subject property has a potential gross income in each disputed tax year as follows, and will show it in comparison with the appraisers' respective opined potential gross incomes (PGI) (See Brooks' appraisal, p. 104 and Haines' appraisal, pp. 140, 142, 144, 146, 148, 150, 152, 154 and 156):

TAX YEARHAIMS' PGIBROOKS' PGIADOPTED PGI 1995-96$24,915,583$39,074,857$32,415,379 1996-9728,574,37639,204,02031,255,389 1997-9829,691,52739,760,25231,941,198 1998-9933,032,51443,814,04436,570,458 1999-200038,417,39745,321,98438,923,234 2000-0144,617,98454,140,40246,604,631 2001-0237,723,88260,892,91551,292,520 2002-0342,393,40559,349,36354,059,204 2003-0439,855,91757,844,20148,038,746

VACANCY AND COLLECTION LOSS

The experts opined vacancy and loss factors based upon their respective analyses of the market, which were widely disparate. However, neither was especially persuasive on the subject, and the court will adopt an average of their respective vacancy and collection loss (VCL) percentage conclusions. The court adopts Brooks' approach to application, in that the rate will only be applied to reduce the potential gross income from estimated rents credited herein, and not to actual rents (Brooks' appraisal, p.108). Estimated rents were adopted for the office and retail components of the subject property, but actual rents were adopted for the garage and theater components, and for other income (Id). It would be inappropriate to apply a vacancy and collection loss estimate to actual income, inasmuch as actual income already necessarily has all of its loss factors included (Id, compare with Haims' appraisal, p. 115).

TAX YEARHAIMS' VCL %BROOKS'VCL%ADOPTED VCL%COMBINED RETAIL & OFFICE GP I (ADOPTED)RETAIL & OFFICE VCL REDUCTION 1995-9615.957.3311.64$31,535,693 $3,670,755 1996-9714.795.4910.1430,338,3603, 076,310 1997-9811.853.817.8330,428,7112,3 82,568 1998-998.752.275.5133,899,4511,86 7,860 1999-20007.73.954.3435,155,9331,5 25,736 2000-016.771.594.1842,596,7521,78 0,544 2001-028.781.024.9047,722,1372,33 8,385 2002-0311.912.427.1750,145,6633,5 95,444 2003-0412.133.958.0443,992,5573,5 37,002

EFFECTIVE GROSS INCOME

When vacancy and collection losses are deducted from potential gross income, the Building's effective gross income is as follows:

TAX YEAR INCOMEPOTENTIAL GROSS INCOMEVCL REDUCTIONEFFECTIVE GR. 1995-96$32,415,379$3,670,755$28,744,624 1996-9731,255,3893,076,31028,179,079 1997-9831,941,1982,382,56829,558,630 1998-9936,570,4581,867,86034,702,598 1999-200038,923,2341,525,73637,397,498 2000-0146,604,6311,780,54444,824,087 2001-0251,292,5202,338,38548,954,135 2002-0354,059,2043,595,44450,463,760 2003-0448,038,7463,537,00244,501,744

OPERATING EXPENSES [*13]

Respondents agree that the actual operating expenses reported by the petitioner are within the range of comparable expenses as determined by the market in each disputed tax year (Brooks' appraisal, p 122). Accordingly, the court will adopt the operating expenses as set forth by respondents (Id) and deduct them from the effective gross income as found by the court hereinabove.

TAX YEAR INCOMEEFFECTIVE GROSS REDUCTIONOPERATING EXPENSERESULT 1995-96$28,444,624$8,099,574$20,345,050 1996-9727,879,0798,750,32619,128,753 1997-9829,558,6309,825,83219,732,798 1998-9934,702,5989,972,99924,729,599 1999-200037,397,49810,051,38927,346,109 2000-0144,824,08710,524,10634,299,981 2001-0248,954,13511,641,86737,312,268 2002-0350,463,76011,982,28238,481,478 2003-0444,501,74412,381,29232,120,452

ESTIMATED LEASING COMMISSIONS

Inasmuch as the office component was primarily owner occupied, stabilized leasing commissions must be estimated. Brooks makes a persuasive argument for computing the estimate as a standard 2.7% of office and retail rents in every tax year (Brooks' appraisal, pp. 109-110). Haims' methodology demonstrates less clarity (Haims' appraisal p. 120, et seq.). Accordingly the court will calculate a 2.7% commission based on the court's rental conclusions for office and retail income and deduct that amount from effective gross income as follows:

[*14] TAX YEARCOMBINED ADOPT. RETAIL & OFFICE RENTSMULTIP. by .027EGI LESS OPEREXPENSESRESULT 1995-96$31,535,693$851,464$20,645,050$19, 793,586 1996-9730,338,360819,13619,428,75318,609, 617 1997-9830,428,711821,57519,732,79818,911, 223 1998-9933,899,451915,28524,729,59923,814, 314 1999-200035,155,933949,21027,346,10926,39 6,899 2000-0142,596,7521,150,11234,299,98133,14 9,869 2001-0247,722,1371,288,49837,312,26836,02 3,770 2002-0350,145,6631,353,93338,481,47837,12 7,545 2003-0443,992,5571,187,79932,120,45230,93 2,653

TENANT CONCESSIONS

It remains only to calculate and deduct an estimated cost of tenant concessions in order to determine the subject property's net operating income. The court will adopt Brooks' methodology for calculating tenant rent concessions, and landlord's contribution to tenant improvements ("TI"), as a percentage of rent based on comparable leases in other buildings and discount the combined percentage by fifty percent (Brooks' appraisal, pp. 105-107, 111-113) as more nearly reflective of the market. The court will make this deduction against the adopted rents for both the office and retail components of the Building, crediting Haims' opinion that "retail and office space will command a similar leasing concession package under stabilized market conditions." (Haims' appraisal, p. 120).



TAX YEARTI ALLOWANCE % OF RENT x .50FREE RENT % OF RENT x .50COMB. RETAIL & OFFICE GPITENANT IMP. & FREE RENT REDUCTION 1995-967.32%7.31%$31,355,893$2,293,684 1996-978.466.8830,338,3602,326,952 1997-988.115.9630,428,7112,140,660 1998-996.755.0733,899,4512,003,458 1999-20006.653.6335,155,9331,807,015 2000 -015.502.7442,596,7521,754,986 2001-023.932.1247,722,1371,443,595 2002-033.771.5450,145,6631,331,367 2003-042.903.0643,992,5571,310,978

NET OPERATING INCOME

[*15] TAX YEAREFF. GR. INC. LESS OPER. EXP.FREE RENT & TI. REDUCTIONNET OPERATING INC. 1995-96$19,793,586$ 2,293,684$17,499,902 1996-9718,609,6172,326,95216,282,665 1997-9818,911,2232,140,66016,770,563 1998-9923,814,3142,003,45821,810,856 1999-200026,396,8991,807,01524,589,884 2000-0133,149,8691,754,98631,394,883 2001-0236,023,7701,443,59534,580,175 2002-0337,127,5451,331,36735,796,178 2003-0430,932,6531,310,97829,621,675

CAPITALIZATION RATE

The rate of return on investment that a property owner may expect from the market is the factor by which the net operating income is employed to determine the market value of the building (Brooks' appraisal, p. 124). After establishing a basic capitalization rate, both experts agree that such rate must be augmented by the product of the 45% equalization rate times the Building's Class IV tax rate ("loaded cap rate") (Haims' appraisal, p. 123; Brooks' appraisal p. 127). Following are the basic capitalization rates opined by the respective experts (Haimes' appraisal, pp. 127-135; Brooks' appraisal, p. 127):

TAX YEARHAIMS' CAP RATE AS A PERCENTAGE BROOKS' CAP RATE AS A PERCENTAGE 1995-9610.809.25 1996-979.609.00 1997-9810.308.45 1998-998.808.39 1999-20009.607.84 2000-0110.008.64 2001-029.808.75 2002-039.608.35 2003-048.108.02

Brooks, however, formulates his basic capitalization rate by first applying the Band of Investment analysis, as defined in The Appraisal of Real Estate, Twelfth Edition, Appraisal Institute, which results in higher capitalization rates, much closer to the rates opined by Haims, as follows (Brooks' Appraisal, pp. 124-126):

TAX YEARHAIMES' BASIC CAP.RATEBROOKS' BAND OF INVEST. CAP. RATE 1995-9610.8010.45 1996-979.609.43 1997-9810.309.77 1998-998.809.16 1999-20009.608.86 2000-0110.009.66 2001-029.809.87 2002-039.609.30 2003-048.109.03

To derive the lower basic capitalization rates which Brooks adopted, he compared the rates derived from the band of investment method by weighting them against recognized mortgage surveys and rates that applied to recent comparable sales (Id, p. 126). Brooks' purpose in doing so is unclear, inasmuch as he already has a recognized method of calculating capitalization rates in the band of investment analysis. The consequence of doing so results in lower capitalization rates computed against the net operating income, thus raising the market value for tax purposes. Accordingly, the court will adopt petitioner's capitalization rates, augmented by the loaded cap rate, and apply that against the net operating income to derive the subject property's market value and assessments, as follows:

TAX YEARNET OP. INC.CAP. RATEMARKET VALUATION 1995-96$17,499,90214.38%$121,696,119 1996-9716,282,66514.15115,071,837 1997-9816,770,56314.63114,631,326 1998-9921,810,85613.82157,820,955 1999-200024,589,88413.60180,807,971 2000-0131,394,88314.44217,416,087 2001-0234,580,17513.90248,778,237 2002-0335,796,17814.68243,843,170 2003-0429,621,67513.99211,734,632

VALUATION CONCLUSIONS

When the market valuations are multiplied by the 45% equalization rate stipulated to by the parties, the result is the assessed valuation for the Building as [*16]determined by the court. The court's findings are shown for comparison with the current assessments as follows:

TAX YEARCOURT ASSESSED VALUATIONCURRENT ASSESSMENT 1995-96$54,763,258$75,315,600 1996-9751,782,32675,330,000 1997-9851,584,09778,738,750 1998-9971,019,43081,956,250 1999-200081,363,58783,353,500 2000-0197,837,23986,476,500 2001-02111,950,20797,191,500 2002-03109,729,42892,362,500 2003-0495,280,58495,899,500

VALUATION OF THE INDIVIDUAL LOTS

Having thus determined the value of the Building, the court must next determine the value of each lot as RPL § 339-y[1](b) provides that the aggregate of the assessments of the units shall in "no event exceed the total valuation of the property were the property assessed as a parcel." See, East Medical Center, L.P. v. Town of Manlius, 16 AD3d 1119 (4th Dept. 2005).

THE RETAIL UNIT

Regarding the vacancy and collections loss, the court has determined above that this deduction would be made only from the office and retail components of the property. Also, the court adopted a vacancy and loss reduction rate for each disputed tax year and reduced the combined gross potential income for the retail and office components accordingly. To determine the amount to be deducted from the retail component's gross potential income, the court must apportion the combined loss based on the rates of the retail gross potential income, to the combined gross potential income for the retail and office components, and reduce the effective income accordingly as follows:

[*17] TAX YRRETAIL GPI% OF C'BINED GPIX OF C'BINED VCLRETAIL VCL REDUCTNRETAIL GROSS EFFECTIVE INCOME 1995-96$4,102,43315%$3,670,755$550,613$3,551,820 1996-974,429,17017%3,076,310522,973 3,906,197 1997-984,519,52017.5%2,382,568416,9494,102,571 1998-994,180,08614%1,867,860261,500 3,918,586 1999-20004,674,53315%1,525,767228,8654,445,668 2000-20015,257,03714%1,780,544249,2765,007,065 2001-20026,572,24716%2,332,385373,1826,199,065 2002-20038,233,73820%3,594,444713,1827,514,849 2003-20048,176,91223%3,572,002821,5607,355,352

The gross effective income must be reduced further by the cost of brokers' commissions, which the court previously found to be at the rate of 2.7% of the combined

office and retail rents. The combined brokers' commission must be apportioned to the retail component based on the ratio of the retail gross potential income to the combined gross potential income, as shown previously herein in relation to the vacancy and loss deduction, and the result deducted from the effective gross income as follows:

TAX YRRETAIL GPI AS A PERCENTAGE OF COMBINED GPIX COMBINED RETAIL & OFFICE COMMISSIONSLEASING COMMISSION REDUCTIONADJ. GROSS EFFECTIVE INCOME 1995-9615%$851,464$127,720$3,424,100 1996-9717%819,136139,2533,766,944 1997-9817.5%821,575143,7763,958,795 1998-9914%915,285128,1403,790,446 1999-200015%949,210142,3824,303,286 2000-0114%1,150,112161,0164,846,745 2001-0216%1,288,498206,1605,992,905 2002-0320%1,353,933270,7877,244,062 2003-0423%1,187,799273,1947,082,158

The retail adjusted gross effective income must be reduced further by the allowance for tenant concessions. The court determined above that the allowances for free rent and tenant improvements would be applied only to the retail and office components gross potential incomes combined. Therefore, the portion attributable to the retail component must be deducted according to the ratio previously applied, as follows:

TAX YR RETAIL FREE RENT & TENANT IMP. AS A PERCENTAGE OF COMBINED RETAIL & OFFICE ALLOWANCEX COMBINED FREE RENT & T.I. REDUCTIONAMT OF T.I. & FREE RENT RETAIL REDUCTIONFURTHER ADJ GROSS EFFECTIVE INCOME 1995-9615%$2,306,836$346,025$3,078,075 1996-9717%2,326,952395,5823,371,362 1997-9817.5%2,140,660374,6163,584,179 1998-9914%2,003,458280,4843,509,962 1999-200015%1,807,015271,0524,032,234 2000-0114%1,754,986245,6984,601,047 2001-0216%1,443,595230,9755,761,930 2002-0320%1,331,367266,2736,977.789 2003-0423%1,310,978301,5256,780,633

It remains only to deduct the operating expenses attributable to the retail component, fixed by stipulation between the parties dated January 19, 2007, and hereby incorporated into the record.

TAX YEARFURTHER ADJ. GR. EFFECTIVE INCOMEREDUCED BY STIP. RETAIL OPERATING EXPENSESNET OPERATING INCOME 1995-96$3,078,075$505,408$2,572,667 1996-973,371,362518,3672,852,995 1997-983,584,179531,6583,052,521 1998-993,509,962545,2912,964,671 1999-20004,032,234559,2733,472,961 2000-014,601,047573,6134,027,434 2001-025,761,930588,3215,173,609 2002-036,977,789603,4066,374,383 2003-046,780,633619,3036,161,330

Dividing the net operating income by the capitalization rate previously determined will show the market value of the retail component, and when that quotient is multiplied by the stipulated 45 per cent equalization ratio, the assessed valuation of this tax lot is determined.

[*19] TAX YEARNET OPER. INCOMELOADED CAP. RATEMKT VALUEMULTIPLIED BY .45=A.V. 1995-96$2,572,66714.38%$17,890,591$8,050, 766 1996-972,852,99514.15%20,162,5099,073,129 1997-983,052,52114.63%20,864,8059,389,162 1998-992,964,67113.82%21,452,0339,653,415 1999-20003,472,96113.60%25,536,47811,491, 415 2000-014,027,43414.44%27,890,81712,550,86 8 2001-025,173,60913.90%37,220,20916,749,09 4 2002-036,374,37414.68%43,422,22819,540,00 3 2003-046,161,33013.99%44,040,95819,818,43 1

The corrected assessed valuations for Lots 1003 &1004 may be compared to current assessed valuations as follows:

TAX YEARCURRENT ASSESSED VAL.CORRECTED ASSESSED VAL.AMT OF OVER ASSESSMENT 1995-96$8,685,000$8,056,766$634,234 1996-978,685,0009,073,129-0- 1997-9810,743,0009,389,1621,353,838 1998-9911,193,7509,653,5871,540,335 1999-200011,218,50011,491,415-0- 2000-0111,934,00012,550,868-0- 2001-0213,059,00016,749,094-0- 2002-0313,545,00019,540,003-0- 2003-0416,038,00019,818,431-0-

THE GARAGE

For the garage component Lot1001 the court previously determined herein that no deductions were to be made against the income for vacancy and loss, leasing commissions or free rent and tenant improvements. Accordingly, the only deduction that needs to be made from garage component income is that portion of the operating expenses to which the parties stipulated.

TAX YEARTOTAL RENTOPERATING EXP. REDUCTIONNET OPERATING INCOME 1995-96$480,000$18,429$461,571 1996-97474,39518,429455,966 1997-98495,21018,797476,413 1998-99516,53519,166497,369 1999-2000516,53519,534497,001 2000-01539,77920,271519,508 2001-02563,02320,640542,383 2002-03563,02321,377541,646 2003-04568,25922,114546,145

With the net operating income fixed, the market value and the assessed value of [*20]

Lot 1001 may be calculated as follows:

TAX YEARNET OPER INCOMELOADED CAP RATEMKT VALUEMULTIPLIED BY .45=A. V. 1995-96$461,57114.38%$3,209,812$1,444,41 5 1996-97455,96614.15%3,222,3751,450,069 1997-98476,41314.63%3,256,4111,465,385 1998-99497,36913.82%3,598,9071,619,508 1999-2000497,00113.60%3,654,4191,644,489 2000-01519,50814.44%3,597,7011,618,965 2001-02542,38313.90%3,902,0361,755,916 2002-03541,64614.68%3,689,6871,660,359 2003-04546,14513.99%3,903,8241,756,721

The corrected assessments may be compared to the current assessments as follows:

TAX YEARCURRENT ASSESSED VALCORRECTED ASSESSED VALAMT OF OVER ASSESSMENT 1995-96$1,080,000$1,444,415-0- 1996-971,170,0001,450,069-0- 1997-981,170,0001,465,385-0- 1998-991,237,5001,619,508-0- 1999-20001,260,0001,644,489-0- 2000-011,350,0001,618,965-0- 2001-021,440,0001,755,916-0- 2002-031,530,0001,660,359-0- 2003-041,566,0001,756,721-0

THE THEATRE

Concerning Lot 1002, the theater component, the court previously determined, as with the garage component, that there would be no deductions against potential gross income for vacancy and loss, leasing commissions, or for tenant improvements and free rent. Therefore the only deductions to be made against net operating income will be for operating expenses as per the aforesaid stipulation between the parties.

TAX YEARTOTAL RENT REDUCTIONOPERATING INCNET OPERATING INCOME 1995-96$300,000$35,192$264,808- 1996-97$300,00035,192$264,808 1997-98$312,28236,365$275,917 1998-99569,82037,558532,262 1999-2000591,58038,711552,869 2000-01553,24439,884513,360 2001-02300,00041,057258,943 2002-03300,00042,230257,770 2003-04300,00043,403256,597

Upon the foregoing net operating income, the capitalized market values

TAX YEARNET OPER. INCOMELOADED CAP RATEMKT.VALUEMULTIPLIED BY .45= A.V. 1995-96$264,80814.38%$1,841,502$828,675< /td> 1996-97$264,80814.15%$1,871,435$842,145< /td> 1997-98$ 275,91714.63%$ 1,885,967$848,685 1998-99532,28213.82%3,851,5341,733,190 1999-2000552,86913.60%4,065,2131,829,346 2000-01513,36014.44%3,555,1251,599,806 2001-02258,94313.90 %1,862,899838,305 2002-03257,77014.68%1,755,926790,167 2003-04256,59713.99%1,834,146825,366

The corrected assessments (determined by the consistent application of actual rentals and expenses) may be compared to the current assessments as follows:

[*21] TAX YEARCURRENT ASSESSED VALCORRECTED A.V.AMT OF OVER-ASSESSMENT 1995-96$2,025,000-0-$2,025,000 1996-972,025,000-0-2,025,000 1997-982,025,000$848,6851,176,315 1998-992,025,0001,733,190291,810 1999-20002,025,0001,829,346195,654 2000-012,092,5001,599,806492,694 2001-022,092,500838,3051,254,195 2002-032,137,500790,1671,347,333 2003-042,245,500825,3661,420,134

THE OFFICE UNIT

The court previously apportioned vacancy and loss deductions, leasing commission

deductions and free rent and tenant improvements reductions against the retail component based on proportion of rent contributed by the retail and office components to the total for both. The court will apply the same methodology to the computation of deductions from the office gross potential income.

TAX YEARCOMBINED RETAIL & OFFICE VAC & CREDIT LOSSOFFICE SHARE OF COMBINED GPI AS A PERCENTAMT OF OFFICE VCL REDUCTION 1995-96$3,670,75585%$3,120,142 1996-973,076,31083%2,553,337 1997-982,382,56882.5%1,965,619 1998-991,867,86086%1,606,360 1999-20001,525,76785%1,296,902 2000-011,780,54486%1,531,268 2001-022,332,38584%1,959,203 2002-033,594,44480%2,875,555 2003-043,572,00277%2,750,442

When the amount of the vacancy and credit loss is deducted from the gross potential income for the office component, the resulting gross effective income is shown as follows:

[*22] TAX YEAROFFICE GPIOFFICE VCL REDUCTIONOFFICE GROSS EFFECTIVE INC. 1995-96$27,433,260$ 3,120,142$24,313,118 1996-9725,909,1902,553,33723,355,853 1997-9825,909,1901,965,61923,943,571 1998-9929,719,3651,606,36028,113,005 1999-200030,481,4001,296,90229,184,498 2000-0137,339,7151,531,26835,808,447 2001-0241,149,8901,959,20339,190,687 2002-0341,911,9252,875,55539,036,370 2003-0435,815,6452,750,44233,065,203

The office gross effective income will be reduced by the expenses of leasing commissions as follows:

TAX YRGR. EFF. INCOME (OFFICE)COMBINED RETAIL & OFF. COMMISSIONSOFFICE SHARE AS A %LEASING COMM. REDUCT.ADJ. GR. EFF. OFFICE INCOME 1995-96$24,313,118$851,46485%$723,744$23,589,374 1996-9723,355,853819,13683%679,883< td>22,675,970 1997-9823,943,571821,57582.5%677,79923,265,772 1998-9928,113,005915,28586%787,145< td>27,325,860 1999-200029,184,498949,21085%806,82928,377,669 2000-0135,808,4471,150,11286%989,09634,819,351 2001-0239,190,6871,288,49884%1,082,33838,108,349 2002-0339,036,3701,353,93380%1,083,14637,953,224 2003-0433,065,2031,187,79977%914,60532,150,598

The proportionate reduction for free rent and tenant improvements is now applied.

TAX YRCOMBINED OFFICE & RETAIL ALLOWANCE FOR T.I. & FREE RENTOFFICE SHARE AS A PERCENTT.I. & FREE RENT RE DUCTIONFURTHER ADJ. GR. EFF. INC. 1995-96$2,306,83685%$1,960,811$21,628,56 3 1996-972,326,95283%1,931,37020, 744,600 1997-982,140,66082.5%1,766,04521,499,727< /td> 1998-992,003,45886%1,722,97426,602,886 1999-20001,807,01585%1,535,96326,841,706 2000-011,754,98686%1,508,51433,310,837 2001-021,443,59584%1,212,62036,895,729 2002-031,331,36780%1,049,99436,903,230 2003-041,310,97877%1,009,45331,141,145

To the further adjusted gross income must now be added "all other income reported," which the parties agree is attributable to the office component.

[*23]
TAX YEARFURTHER ADJ. OFFICE GR. EFF. INCOMEALL OTHER EFF. OFFICE INCOMEFINAL ADJ. GR. INC. 1995-96$21,628,563$99,686$21,728,249 1996-9720,744,600142,63420,887,234 1997-9821,499,727704,99622,204,723 1998-9925,602,8861,584,65227,187,538 1999-200026,841,7062,659,18629,500,892 2000-0133,310,8372,914,85636,225,693 2001-0236,895,7292,707,36039,603,089 2002-0336,903,2303,050,51839,953,748 2003-0431,741,1453,177,93034,319,075

Finally, the, operating expenses, stipulated by the parties, is deducted to realize the

net operating income:

TAX YEARFINAL GR. EFF. OFFICE INC.STIP. OFFICE OPERATING EXP. REDUCTIONNET OPERATING INC. 1995-96$21,728,249$7,540,546$14,187,703 1996-9720,887,2348,178,33912,708,895 1997-9822,204,7239,239,01212,965,711 1998-9927,187,5389,371,00517,816,533 1999-200029,500,8929,433,87120,067,021 2000-0136,225,6939,890,33826,335,355 2001-0239,603,08910,991,84928,611,240 2002-0339,953,74811,305,26928,648,479 2003-0434,319,07511,696,47222,622,603

The market value and corrected assessed valuation are then calculated as follows:

TAX YEARNET.OPER. INCOMELOADED CAP. RATEMKT.VALUEMULTIPLIED BY .45= A.V. 1995-96$14,187,70314.38%$98,662,747$44,3 98,236 1996-9712,708,89514.15%89,815,51240,416,9 80 1997-9812,965,71114.63%88,624,13539,880,8 61 1998-9917,816,53313.82%128,918,47358,013, 313 1999-200020,067,02113.60%147,515,62566,3 98,231 2000-0126,335,35514.44%182,377,80582,070, 012 2001-0228,611,24013.90%205,836,25992,626, 317 2002-0328,648,47914.68%195,153,12787,818, 907 2003-0422,622,60313.99%161,705,55372,767, 499 [*24]

The corrected assessed valuations may be compared to the current assessed valuations as follows:

TAX YEARCURRENT A. V.CORRECTED A. V.AMT. OF REDUCTION 1995-96$63,525,600$44,398,236$19,127,364 1996-9763,450,00040,416,98023,033,020 1997-9864,800,00039,880,86124,919,139 1998-9967,500,00058,013,3139,486,687 1999-200068,850,00066,398,2312,451,769 2000-0171,100,00082,070,012-0- 2001-0275,600,00092,626,317-0- 2002-0375,150,00087,818,907-0- 2003-0476,050,00072,767,499328,250

As mandated by RPL § 339-y[1](b), the individual lot assessed valuations must be totaled for each year to determine if they exceed the valuation for the building as a whole:

TAX YEARTOTAL OF INDIV. LOTSWHOLE BUILD. ASS'D. VALUEEXCESS AMOUNTPERCENT OF EXCESS>WHOLE BUILDING (ROUNDED) 1995-96$54,722,092$54,763,258-0--0-% 1996-9751,782,32351,782,327-0--0- 1997-9851,584,09351,584,100-0--0- 1998-9971,019,42671,019,430-0--0- 1999-200081,363,48181,363,484-0--0- 2000-0197,839,65197,837,2392,412.002 % 2001-02111,969,632111,950,20719,425.02% 2002-03109,809,436109,729,42880,008.07% 2003-0495,168,01795,280,584-0--0- [*25]

Accordingly, all assessed valuations found herein must be reduced by the same

percentage of excess over the total assessed valuations for the whole building for all years in which an excess is indicated.

RETAIL COMPONENT
LOTS 1003-1004 TAX YEARCORRECTED A.V.PERCENT OF REDUCT.FINAL CORR. A.V.AMOUNT OF ASSESSMENT REDUCTION 1995-96$8,050,766.1%$8,042,715$642,285 1996-979,073,129.2%9,054,983-0- 1997-989,389,162-0-9,389,1621,353,838 1998-999,653,415-0-9,653,4151,540,335 1999-200011,491,415-0-11,491,415-0- 2000-0112,550,868.002%12,550,617-0-< /tr> 2001-0216,749,094.02%16,745,244-0- 2002-0319,540,003.07%19,526,325-0- 2003-0419,818,431-0-19,818,431-0

THEATER COMPONENT

LOT 1002

TAX YEARCORRECTED A.V.PERCENT OF REDUCTIONFINAL CORR. A. V.AMOUNT OF A. V. REDUCT. 1995-96$828,675-0-$828,675$1,196,325 1996-97$842,145-0-$842,1451,182,855 1997-98$848,685-0-$848,6851,176,315 1998-991,733,190-0-1,733,190291,810 1999-20001,829,346-0-1,829,346195,654 2000-011,599,806.002%1,599,774492,726 2001-02838,305.02%838,1371,254,363 2002-03790,167.07%789,2981,348,202 2003-04825,366-0-825,3661,420,134

GARAGE COMPONENT

LOT 1001

TAX YEARCORRECTED A.V.PERCENT OF REDUCTIONFINAL CORR. A. V.AMOUNT OF A. V. REDUCT. 1995-96$1,444,415.1%$1,429,971-0- 1996-971,450,069.2%1,447,169-0- 1997-981,465,385-0-1,465,385-0- 1998-991,619,508-0-1,619,508-0- 1999-20001,644,489-0-1,644,489-0- 2000-011,618,965.002%1,618,933-0- 2001-021,755,916.02%1,755,565-0- 2002-031,660,359.07%1,659,197-0- 2003-041,756,721-0-1,756,721-0

OFFICE COMPONENT

LOT 1005

[*26]
TAX YEARCORRECTED A.V.PERCENT OF REDUCTIONFINAL CORR. A. V.AMOUNT OF A.V. REDUCT. 1995-96$44,398,236.1%$44,353,838$19,171,7 62 1996-9740,416,980.2%40,336,14623,113,854< /td> 1997-9839,880,861-0-39,880,86124,919,139 1998-9958,013,313-0-58,013,3139,486,687 1999-200066,398,231-0-66,398,2312,451,769< /td> 2000-0182,070,012.002%82,053,571-0-< /tr> 2001-0292,626,317.02%92,607,792-0- 2002-0387,818,907.07%87,757,434-0- 2003-0472,767,499-0-72,767,4993,282,501

Accordingly, the assessments are reduced for all lots in all years in which the final corrected assessed valuations show a reduction from the current assessed valuations, and are otherwise confirmed. The respondent will pay to the petitioner a corresponding refund for all lots in all years in which the assessments are reduced, together with such interest as provided by law.

Settle judgment on ten days notice.

Dated: November 2007

J.S.C.