Matter of Crystal Run Galleria LLC v Town of Wallkill
Annotate this CaseDecided on January 20, 2021
Supreme Court, Orange County
In the Matter of the Application Under Article 7 of the Real Property Tax Law of Crystal Run Galleria LLC and CRYSTAL RUN NEWCO LLC, Petitioners,
against
Town of Wallkill, Respondent.
EF004035-2020
For Petitioners: Craig A. Leslie, Esq. and Daniel Maguire, Esq., Phillips Lytle LLP, Buffalo, NY
For Respondent: Andrew M. Mahoney, Esq., Jaspan Schlesinger LLP, Garden City, NY
Catherine M. Bartlett, J.
The following papers numbered 1 to 10 were read on Petitioners' motion for partial summary judgment and Respondent's cross motion to dismiss the Petition:
Notice of Motion - Affirmation / Exhibits - Affidavit / Exhibits - Memorandum 1-4
Notice of Cross Motion - Affirmation / Exhibits - Affidavit / Exhibits - Memorandum 5-8
Reply Affidavit - Reply Memorandum 9-10
Upon the foregoing papers, it is ORDERED that the motions are disposed of as follows:
This is a tax certiorari proceeding pursuant to Article 7 of the Real Property Tax Law ("RPTL") to challenge the tax year 2020 assessment for Petitioners' property, commonly known [*2]as the "Galleria at Crystal Run", in the Town of Wallkill, New York (hereinafter, the "Property"). A previous challenge to the tax year 2017 assessment was settled via a Consent Order and Judgment pursuant to which a stipulated Full Market Value of the Property was fixed for tax years 2018, 2019, 2020 and 2021, subject to certain specifically enumerated exceptions. In the wake of the Covid-19 pandemic, Petitioner contends that a reduction of the Property's 2020 assessment is warranted on three grounds:
(1) The pandemic has triggered an exception to the Consent Order, to wit:
"The Stipulated Full Market Values will be reduced if the Property is altered by fire, destruction, related demolition, or similar catastrophe."(2) The pandemic has frustrated the purpose of the Consent Order.
(3) Enforcement of the Consent Order in the face of the pandemic would violate Article XVI, Section 2 of the New York State Constitution.
FACTUAL BACKGROUND
A. The Consent Order and Judgment
By Consent Order and Judgment signed and entered on November 2, 2017, Petitioners' tax year 2017 Article 7 challenge to the assessment of their Property was resolved pursuant to
an agreement whereby the Full Market Value thereof was fixed at $132,738,000 for tax years 2018, 2019, 2020 and 2021. So far as is pertinent to the issues presently before the Court, the agreement incorporated in the Consent Order and Judgment included provisions as follows:
4. The Parties waive the provisions of RPTL Section 727, except as noted below, including those which might otherwise limit the number of years for which future assessed values may be established in the Consent Order and Judgment.
5. The Parties stipulate and agree that the Stipulated Full Market Values in paragraph 1 shall be binding on the Parties, their successors, and assigns, subject only to the limited exceptions provided in paragraph 6 below. For example, the Parties expressly agree that the following events or occurrences will not create an exception to the binding nature of this Consent Order and Judgment:
a. Upgrades. The Stipulated Full Market Values shall be unaffected by any renovations, alterations or upgrades to the interior and exterior space of the Galleria that do not increase the gross leasable area ("GLA") of the Galleria.b. Revaluation. The Stipulated Full Market Values shall not be altered or changed because of any revaluation or assessment update....c. Occupancy Rate. Except as set forth in paragraph 6 below, the Stipulated Full Market Values shall not be altered or changed regardless of any change in the Galleria's occupancy rate.d. Sale. Except as set forth in paragraph 6 below, the Stipulated Full Market Values shall survive any sale or transfer of the Galleria (or a portion thereof), and will remain binding on any successor, assigns, purchaser or transferee.6. Notwithstanding paragraphs 4 and 5 above, the Parties stipulate and agree that there are five exception that may change the Stipulated Full Market Values and the continuing binding nature of this Consent Order and Judgment:
a. Addition of Gross Leasable Area. If any new GLA is added to the Galleria, the annual assessed values of the improved parcel(s) will be adjusted by calculating as incremental addition to the agreed upon Stipulated Full Market Values of the affected parcel(s) based upon the proportion that the new GLA as a result of such expansion bears to the existing GLA of that parcel....; andb. Fire, Demolition or Destruction. The Stipulated Fair Market Values will be reduced if the Property is altered by fire, destruction, related demolition, or similar catastrophe. Crystal Run shall notify the Town of any such circumstance, and request a change of assessment effective as of the next taxable status date; andc. Lender Related Sale.d. Occupancy Rate. If, at any time during the term of this Consent Order and Judgment, the average occupancy rate, as calculated in the following sentence, is below 60% for any continuous twelve month period, then this Consent Order and Judgment may be terminated at the election of Crystal Run....; ande. Homestead / Non-Homestead Rate. If the Town adopts a Homestead/Non-Homestead real property tax rate structure, this Consent Order and Judgment shall terminate.[FN1]7. The Parties shall have the right to seek specific enforcement of the terms of this Consent Order and Judgment, and to otherwise enforce such terms by whatever means are provided by law.
8. Crystal Run agrees not to file grievance complaint (pursuant to Article 5 of New York's Real Property Tax Law) or commence real property tax assessment review proceedings (pursuant to Article 7 of New York's Real Property Tax Law) relating to the tentative or final 2018, 2019, 2020 and 2021 assessment rolls, respectively, provided that the assessed values for each such year are established in accordance with this Consent Order and Judgment.
12. It is understood and agreed that the Parties shall be deemed to have jointly drafted this Consent Order and Judgment in order to avoid any negative inference by any court as against any party to it.
14. If any provision of this Consent Order and Judgment is held illegal or unenforceable in a judicial proceeding, the remainder of this Consent Order and Judgment shall be operative and binding on the Parties. The provision(s) held to be illegal or unenforceable...shall be severed and inoperative and the beneficiary of the Severed Provision(s) shall be entitled to an alternative provision that fully restores benefits equivalent to those that were lost by such invalidation....
B. Petitioners' RPTL Article 5 Complaints
In their Complaints filed with the Board of Assessment Review for the Town of Wallkill, Petitioners alleged inter alia:
During 2019, the Galleria at Crystal Run Shopping Center...was already confronting material economic challenges that caused a significant decline in its 2018 and 2019 net income (which was in fact a continuation of a trend over the past several years). Among other, well-documented challenges it was facing were the pressure on our "bricks and mortar" business from ecommerce, as well as sales declines and record bankruptcies and store closures (particularly for department stores and fashion retailers, which were once the primary focus of our business). These challenges have been particularly acute in Upstate New York....As of March 1, 2020, the condition of the Shopping Center was already affected by allof the adverse impacts discussed above. And, as of March 1, 2020, the condition of the Shopping Center was further and materially altered by the Covid-19 outbreak, which WHO had declared to be a global public health emergency on January 30, 2000. ByMarch 1, 2020, New York had its first confirmed positive case of Covid-19, had approx-imately 10,000 other cases of Covid-19, and was unfortunately evolving into the epicenter of the pandemic catastrophe....Thus, in light of the underlying nature of our business as a largely enclosed, multi-tenant public access facility, the condition of the Shopping Center had changed suddenly and precipitously as of the March 1, 2020 taxable status date.The Board of Assessment Review declined to reduce the assessment on the Property and dismissed the Complaints.
C. The Article 7 Petition
Petitioners assert first that:
20. Based upon the Property's declining financial performance, other adverse metrics applicable to the Property, increasing capitalization rates for assets such as the Property, and increased market risks applicable to shopping centers such as the Property, the fair market value of the Property is significantly less than the fair market value ascribed to the Property by the Town and used by the Town to set the assessed value of the Property.Petitioners further allege: 25. Petitioners were (and are) also entitled to a reduction of the assessed value of the Property because, as of the March 1, 2020 taxable status date and beyond, the condition of the Property was adversely affected by the Covid-19 pandemic catastrophe, and the wide-spread presence of the virus in New York.
In support of its Covid-related claim, Petitioners recited the general history of the Covid outbreak in late 2019 / early 2020 (Petition ¶¶26-31), then alleged:
32. New York's Covid-19 outbreak followed a similar pattern to the outbreaks in Europe. Although numerous Covid-19 infections have been confirmed to have been present in New York by no later than late January or early February, the first confirmed case of Covid-19 was not recorded in New York until March 1, 2020.
33. Due at least in part to its proximity to New York City, the area served by the Galleria at Crystal Run was particularly hard hit in the early days of the pandemic as Covid-19 spread across New York.
34. Indeed, by mid-February, New York had hundreds of Covid-19 cases — and had approximately 11,000 Covid-19 cases by March 1, 2020.
35. That community spread had already occurred in New York State was confirmed on March 2, 2020, when New York State recorded its second confirmed case of the virus — in an attorney from New Rochelle who had not traveled to any known areas affected by Covid-19 outbreaks, had become symptomatic on February 22, 2020, and had been admitted to hospital on February 27, 2020.
36. By that time, Covid-19 was so widespread in New York State that it has since been confirmed to have been the source of other outbreaks across the country, as thousands of travelers from New York to other areas carried the virus that causes Covid-19 with them, and seeded numerous outbreaks in other cities and states.
37. Covid-19 can be spread both from person-to-person and through contact with surfaces contaminated by the Covid-19 coronavirus, which also results in physical damage to the affected property.
38, Further, the Property functions as an enclosed shopping mall with more than 800,000 square feet of retail space available for lease and, as such, was subject to a targeted and extended period of closure pursuant to Executive Order of the Governor of the State of New York as a result of the Covid-19 coronavirus.
39. Notably, because of the Covid-19 pandemic catastrophe, the Property was closed by Executive Order effective on March 19, 2020, and remained closed up to and including July 10, 2020. The impact of that closure, and of the continuing market risks arising from the still ongoing Covid-19 pandemic catastrophe, will continue to impact the value of the Property for the foreseeable future.
40. In sum, as of the taxable status date of March 1, 2020 and beyond, the condition and value of the Property was already adversely affected by the Covid-19 outbreak, and the final assessment of the Property must be reduced because the Property was not properly and lawfully assessed based upon its condition as of March 1, 2020.
In support of their claim, Petitioners proffered the affidavit of Robert Utter, the Vice President of Pyramid Management. The affidavit states in pertinent part:
4. On March 19, 2020, Governor Cuomo issued an Executive Order closing all large enclosed malls and "non-essential" businesses on March 20, 2020. This included the Property.
5. On April 6, 2020, Stephen Congel, CEO of Pyramid Management (the managing agent for Crystal Run), wrote a letter to the Town of Wallkill Supervisor notifying him that the Covid-19 pandemic had had an unprecedented impact on the Property due to a substantial decrease in the amount of rents collected from tenants as compared to those pre-pandemic....
In opposition to the Petition, Respondent proffered the affidavit of Town of Wallkill [*3]assessor Lisa Chutka, who in pertinent part avers:
15. My office is located just down the road from the Mall and I am personally aware that the Mall property was fully functioning and not subject of any government access restrictions as of March 1, 2020. The Mall was open and functioning as normal on March 1, 2020, and the market value of the Mal could not have been affected by Covid-19 because Covid-19 did not yet exist as of July 1, 2019, the tax valuation date.
16. Based upon my personal knowledge of the Property, at no time has the physical improvements to the Property (i.e., the Mall) been altered by Covid-19 and the Mall remains structurally intact. At no time relevant to this proceeding, has the Mall been altered by fire, destruction, related demolition or a similar catastrophe. Instead, any alleged economic impact caused to the Mall by the Covid-19 pandemic was as a result of the closing of the Mall and not as a result of the Property being "altered" in any way.
LEGAL ANALYSIS
A. The "Catastrophe" Exception to the Consent Order's Assessment Lock and Tax Certiorari Moratorium Is Not Applicable in the Circumstances Presented
Petitioners contend that the Covid-19 pandemic has triggered the ¶6[b] exception to the Consent Order's assessment lock and tax certiorari moratorium, to wit:
The Stipulated Full Market Values will be reduced if the Property is altered by fire, destruction, related demolition, or similar catastrophe.
As Petitioners observe, because parties voluntarily negotiate and enter into consent orders, courts view them as "in the nature of a contract" and construe them in accordance with the principles governing contract interpretation. See, BIC Cables Corp. v. AKZO Am., 227 AD2d 425, 426 (2d Dept. 1996). Three basic principles of contract interpretation bear most acutely upon the construction of the provision at issue here.
First, the Consent Order must be construed in light of the parties' purpose, the objectives they were trying to accomplish in entering into the transaction, as reflected in the words they used in the document. Second, the Consent Order must be interpreted as a whole, the words parsed in context and not in isolation. The meaning and significance of the words "Property", "altered", and "by fire, etc.", and "catastrophe" must be determined in relation to each other and to the Consent Order as a whole, and not individually, word-by-word. Third, pursuant to the rule ejusdem generis, the general term "similar catastrophe" is limited in scope by the class of specific instances preceding it.
1. Purpose
A contract should be construed in light of the objective that the parties were trying to accomplish. In interpreting contract language, besides considering the common meaning of the language employed, a court must consider the parties' expectations and purposes in [*4]view of the factual context in which they made the agreement, with due regard for their sophistication. The reasonable expectations and purpose of an ordinary business person making an ordinary business contract serve as the guideposts to determine the intent of the parties.A written contract will be interpreted to give effect to its general purpose. A court should construe contract language to conform with the purpose of the agreement. Contract construction requires consideration of the business purposes sought to be achieved by the parties. The manifest purpose the parties sought to accomplish is of paramount significance. It takes precedence over all other canons of construction...The function of the court is to effect that purpose....New York Practice Series - New York Contract Law (Banks), §10.3 (citing cases).Respondents assert that the purpose of the Consent Order was to provide the parties with a measure of certainty with respect to, on the one hand, the taxes payable on the Property, and
on the other, the revenues thereby generated by the taxing authority. Petitioners assert that the purpose of the Consent Order was to lock in the assessed value of the Property provided that the actual value remained stable within certain parameters.
While both assertions are correct, the parties' emphasis was unmistakably on certainty.
This is quite evident from the manner in which they modified the provisions of RPTL §727 to effectuate their purpose. First, they extended the duration of the assessment lock and tax certiorari moratorium. (See, Consent Order ¶¶ 4, 8) Second, they eliminated altogether six (6)
of the RPTL §727(2) exceptions (subdivisions "a", "b", "d", "f", "h", "i"), and carefully defined and circumscribed three (3) others (subdivisions "c", "e", "g"). (See, Consent Order ¶¶ 5, 6)
Indeed, the parties in a remarkably subtle way fine-tuned and tightened up the very exception at issue here. RPTL §727(2)(e) provides for an exception to the assessment lock and tax certiorari moratorium where:
Such property has been altered by fire, demolition, destruction or similar catastrophe.
As noted above, the parties modified that provision (Consent Order ¶6[b]) to allow for an exception only if: ...the Property is altered by fire, destruction, related demolition, or similar catastrophe.
"Demolition" was thereby eliminated as an independent basis for reducing the assessment:
only if related to "fire" or "destruction" would "demolition" qualify as grounds for a reduction.Thus, the parties' approach to RPTL §727 bespeaks a careful effort by sophisticated parties with highly astute counsel to provide for a stable and certain assessment of the Property, modifiable only on tightly defined and circumscribed grounds. Inasmuch as the manifest purpose of the parties is of paramount significance, the Consent Order must be so construed as to give effect to their objective.
2. Construction as a Whole
A contract should be read as a whole with every part of it construed with reference to the whole....The contract should be read as a whole to ensure that excessive emphasis is not placed upon particular words or phrases. The meaning of a writing may be distorted if undue force is given to a single word or phrase. Particular words should be considered, not as if isolated from the context, but in light of the obligation as a whole and the intention of the parties manifested thereby. In examining a contract to determine the parties' intent concerning particular language, a court should read the entirety of the agreement in the context of the parties' relationship rather than isolating distinct provisions of the agreement. A court must consider the entire writing and may not view particular words in isolation. Because contract construction is an exercise in common sense rather than formalistic literalism, words should not be considered isolated from context but in light of the obligation as a whole. In reading the contract as a whole, the court must interpret it to give effect to the general purpose of the contract....New York Practice Series - New York Contract Law (Banks), §10.4 (citing cases).
To properly ascertain the meaning of the triggering event — "the Property is altered by fire, destruction, related demolition, or similar catastrophe" — the terms "Property" - "altered" - "fire, destruction, related demolition" - "similar catastrophe" must be parsed in context, and
their meaning determined in relation to each other, not individually, word-by-word, and in relation to the Consent Order as a whole.
The term "altered" is general, signifying a change. The quality or nature of the required change is determined by two additional questions, answers to which are specified precisely by
¶6[b] of the Consent Order, to wit: Q. What is it that must be altered ?A. The "Property"Q. How must the alteration be effected ?A. "By fire, destruction, related demolition, or similar catastrophe"
It follows that: (1) The exception is triggered only if the "Property" itself is altered; a mere change in the value, use or function of the Property does not fall within the scope of the exception absent an alteration to the Property itself. (2) This change must involve physical damage to the Property. That is unambiguously signified by the requirement that it be caused "by fire, destruction, related demolition, or similar catastrophe."(3) By characterizing the triggering events as "catastrophes", the parties plainly intended that qualifying physical damage be material or substantial.
This construction best accords not only with the specific language employed in ¶6[b] of the Consent Order, but also with the underlying purpose of the Consent Order as a whole, which as noted above was to provide for a stable and certain assessment of the Property, modifiable only on tightly defined and circumscribed grounds.
Petitioners repeatedly violate this canon of contract interpretation by construing in isolation each of the terms in which the ¶6[b] exception to the Consent Order's assessment
lock and tax certiorari moratorium is expressed.
Petitioners begin by asserting that the Covid-19 pandemic is a catastrophe. (Mem. 11-13) Whether or not that is so is immaterial, for only a catastrophe "similar" to "fire, destruction, related demolition" which has "altered" the "Property" — i.e., one that has physically damaged the Property — triggers the ¶6[b] exception to the Consent Order. Hence, Petitioners' heavy reliance on the case of Friends of Danny DeVito v. Wolf, 227 A.2d 872 (Pa. 2020) is utterly misplaced. While the Pennsylvania Court did indeed find the Covid-19 pandemic to be a "catastrophe," it did so within the meaning of a statute defining such an event as one "which results in substantial damage to property, hardship, suffering or possible loss of life." See id., 227 A.2d at 887. Since that notion of what constitutes a "catastrophe" is far broader than the
one defined by ¶6[b] of the Consent Order, DeVito has no bearing on the case at bar.
Petitioners then purport to apply the doctrine of ejusdem generis in defining a "similar catastrophe" as one which causes "unusual and significant damage to the value of the Property."
(Mem. 14 [italics added]) While the contractually specified catastrophes would affect the value of the Property, Petitioners ignore that fact that ¶6[b] expressly requires that the "Property" be "altered", not that its value be diminished. Petitioners also advert to caselaw which holds in other contexts that the general term "alteration" may encompass a change in function or use. (Mem. 16-17) However, ¶6[b] is much more specifi" target="_blank">Retail Property Trust v. Board of Assessors, 17 AD3d 471 (2d Dept. 2005), like Petitioners here, claimed that an RPTL §727 tax certiorari moratorium could not constitutionally be applied because the stipulated property value was in excess of fair market value. The Second Department disagreed, holding that "[b]y entering into the stipulation of settlement,... the petitioner waived any constitutional defect in the settlement." Id. See also, ELT Harriman, LLC v. Assessor of Town of Woodbury, 128 AD3d 201, 207 (2d Dept. 2015); Corporate Woods 11, LP v. Board of Assessment Review, 83 AD3d 1250, 1253 (3d Dept. 2011); Mallinckrodt Medical Inc. v. Assessor of Town of Argyle, 292 AD2d 721, 722 (3d Dept. 2002).[FN4]
Petitioners conclusorily assert that the foregoing authority is distinguishable on the grounds that the parties here waived the provisions of RPTL §727 (see, Consent Order ¶4). However, the Consent Order and Judgment was quite plainly intended to create an assessment lock and tax certiorari moratorium modeled on Section 727, with (a) an extended lock-in period, and (b) a modified set of exceptions, designed nonetheless to serve the purpose of Section 727 exceptions, that is, to address situations where a change in circumstances defeats the goal of locking-in the status quo because circumstances have altered the status quo. See, ELT Harriman, LLC v. Assessor of Town of Woodbury, supra, 128 AD3d at 209. The Court accordingly concludes that the waiver analysis employed by the Second and Third Departments in the cases referenced above is applicable here, and holds that Petitioners waived the protection afforded [*6]Article XVI, Section 2 of the New York State Constitution by executing the Consent Order and Judgment.
D. The Covid-19 Pandemic Did Not Affect The Value of the Property for Purposes of the Tax Year 2020 Assessment
RPTL §301 provides:
All real property subject to taxation, and assessed as of a March 1st taxable status date, shall be valued as of the preceding 1st day of July.RPTL §302(1) provides:
The taxable status date of real property in cities and towns shall be determined annually according to its condition and ownership as of the 1st day of March and the valuation thereof determined as of the applicable valuation date.Construing these provisions, the Court in Bronco Dev. Corp. v. Assessor of Town of Bethlehem,
26 Misc 3d 1219(A) (Sup. Ct. Albany Co. 2010) observed, "[p]ursuant to RPTL §§ 301 and 302, the taxable status of the property, including its condition and ownership, is determined as of March 1, 2008, whereas the property must be valued as of July 1, 2007, taking into account the property's status as of the later taxable status date." Id., at *2. See, Gran Dev., LLC v. Town of Davenport Board of Assessors, 124 AD3d 1042, 1043 (3d Dept. 2015) (per RPTL 301 and 302,
real property's condition is determined as of March 1 taxable status date, and assessed value thereof determined as of July 1 of the preceding year).
"Property is assessed for tax purposes according to its condition on the taxable status date without regard to future potentialities or possibilities..." See, Hampshire Recreations, LLC v. Board of Assessors, 137 AD3d 1029, 1031 (2d Dept. 2016); Addis Co. v. Srogi, 79 AD2d 856, 857 (4th Dept. 1980), appeal denied 53 NY2d 603 (1981). Indeed, even if the Galleria were completely destroyed after March 1, 2020, Petitioners would still be assessed based on the condition of the Property as it existed on March 1st. See, Spiegel v. Board of Assessors,
161 AD2d 627 (2d Dept.), appeal dismissed 76 NY2d 889 (1990).
While the Petition baldly asserts that "as of the March 1, 2020 taxable status date
and beyond, the condition of the Property was adversely affected by the Covid-19 pandemic catastrophe, and the wide-spread presence of the virus in New York" (Petition ¶25), that claim
is not substantiated by the concrete factual allegations therein, and it is belied by the evidence.
Petitioners have neither alleged nor shown that the Galleria was contaminated with the Covid-19 virus as of March 1st, and they have not contradicted the sworn affidavit of Respondent's assessor, based on personal knowledge, that the Galleria was open and functioning normally as of March 1, 2020. Indeed, Petitioners acknowledge that it was not until April 6th — after the Governor had on March 19th issued an Executive Order closing the Property effective March 20th (i.e., post-taxable status date) — that Stephen Congel, CEO of Pyramid Management, notified the Town of Wallkill Supervisor that "the Covid-19 pandemic had had an unprecedented impact on the Property due to a substantial decrease in the amount of rents collected from tenants as compared to those pre-pandemic." (Utter Aff. ¶¶ 4-5)
As of March 1, 2020, the Covid-19 pandemic may well have financially impacted the [*7]profitability and value of the Property, whether due to customers' fears of congregating in enclosed retail spaces, the risky business climate or otherwise. However, the pandemic had not, as yet, altered the "condition" of the Property for purposes of RPTL §302(1). As of the taxable status date, the condition of the Galleria was what it had always been — an open, intact, functioning shopping mall. Per RPTL §301, its value as such had to be determined as of July of 2019, prior to the existence of the Covid-19 pandemic. Since the pandemic did not exist as of the Section 301 valuation date, its financial impact is wholly irrelevant to determining the Property's assessed value for purposes of the tax year 2020 assessment roll.
Consequently, even if Petitioners' arguments with respect to the "frustration of purpose" doctrine and the constitutionality of the Consent Order's assessment lock and tax certiorari moratorium were otherwise meritorious — and the Court has held that they are not — those arguments are premature, for the financial impact of the Covid-19 pandemic is irrelevant to
the tax year 2020 valuation of Petitioners' Property.
It is therefore
ORDERED, that the Petitioners' motion is denied, and it is further
ORDERED, that the Respondent's motion is granted, and it is further
ORDERED, ADJUDGED and DECREED that the Petition herein is dismissed.
The foregoing constitutes the decision, order and judgment of the Court.
E N T E R
Dated: January 20, 2021
Goshen, New York
_____________________________________
HON. CATHERINE M. BARTLETT, A.J.S.C. Footnotes
Footnote 1:By way of comparison, the statutory exceptions to RPTL §727's assessment lock and tax certiorari moratorium consist of the following: (a)There is a revaluation or update of all real property on the assessment roll; (b)There is a revaluation or update in a special assessing unit of all real property of the same class; (c)There has been a physical change (improvement) to the property; (d)The zoning of such property has changed; (e)Such property has been altered by fire, demolition, destruction or similar catastrophe; (f)An action has been taken by any office of the federal, state or local government which caused a discernible change in the general area where the property is located which directly impacts on property values; (g)There has been a change in the occupancy rate of 25% or greater in a building located on a property which is not eligible for an assessment review under Title one-A of this article (small claims assessment review); (h)The owner of the property becomes eligible or ineligible to receive an exemption; or (I)The use or classification of the property has changed. See, RPTL §727(2).
Footnote 2:In conjunction with their claim that ¶6[b] was triggered by an alteration of function or use of the Property, Petitioners advert to the closure of the Galleria by Executive Order effective March 20, 2020. (Mem. 17) Inasmuch as this closure occurred after the taxable status date, it has no bearing on the tax year 2020 assessment of the Property. (See, Point "D" below)
Footnote 3:It is quite apparent from Petitioners' own submissions that a substantial precipitating cause of the Property's alleged decline in value was, and is, the closure or partial closure of the Shopping Center by Executive Order of the Governor of the State of New York. Petitioners nonetheless disavow any reliance on the effect of these Orders, presumably because (1) they have waived the "governmental action" exception to the assessment lock and tax certiorari moratorium, and (2) the Executive Orders were issued after the March 1, 2020 taxable status date (see, Point "D" below).
Footnote 4:The limited constitutionally-based exception to the enforcement of the Section 727 tax certiorari moratorium — articulated in Susquehanna Dev., LLC v. Assessor of the City of Binghampton, 185 Misc 2d 267 (Sup. Ct. Tompkins Co. 2000), and endorsed by the Second Department in ELT Harriman, LLC v. Assessor of Town of Woodbury, supra (128 AD3d at 207-209) — is not applicable here.
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