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From Speakupwny.com Editorials The amount of property tax a municipality needs to balance its annual budget is a set figure. For instance, the Town of Lancaster set it’s 2008 property tax needs at $17.4 million dollars. That figure is divvied up between property owners based on the individual owner’s taxable valuation. The taxable valuation is not the market value of property; it is the portion of property value that is taxable. Tops Markets, LLC (Morgan Stanley Private Equity and certain other equity investors) Requests Mortgage Tax Abatement and Continuation of Existing REAL PROPERTY TAX ABATEMENT According to a Legal Notice(*) in the March 13, 2008 edition of the Lancaster Bee, Tops Markets, LLC is seeking IDA assistance in the amount of $50 million dollars. The assistance will be used towards mortgage tax abatement and real property tax abatement. Apportionment of the $50 million between the two abatements is not specified in the notice. In October of 2007, Morgan Stanley Private Equity purchased Tops Markets from Dutch supermarket retailer Royal Ahold for $310 million dollars.(**) Morgan Stanley Private Equity is a worldwide investment firm specializing in large and middle-market private equity transactions. According to the Legal Notice, the abatements are necessary to allow Tops to continue to operate in the Town of Lancaster. If Tops/Morgan Stanley is granted property tax abatement, their portion of the Town’s property tax requirements will be reduced. Because the Town needs to collect a set amount of property tax, the abatement Tops/Morgan Stanley receives will be passed on to other property owners. Marrano/Marc Equity 339y Request Could Cost Town Six Million in Taxable Valuation During Monday night’s Town Board work session, Lancaster’s Assessor, Dave Marrano discussed the negative impact on tax rolls from the misapplication of Section 339y of New York State’s Real Property Tax Law. Marrano cited Pleasant Meadows request that townhouses in the mixed-use development be granted 339y status. The original intent of Section 339y exemptions was to grant property tax abatements to condominium buildings three or more stories in height. The proposed Pleasant Meadows townhouses will not be three or more stories in height. If the exemption were granted, a home that would sell for $180,000 would have a taxable valuation of $108,000. If the townhouse sector is granted 339y status, the Town could lose up to $6 million dollars in taxable valuation. To underscore the unfairness of the situation, Marrano gave examples of comparable houses. He cited a single-family home on Chicory Lane that sold for $239,000. It has a taxable valuation of $228,000. He then cited a similar sized patio home on Pelham that sold for $237,000. Since it qualifies for a 339y exemption, it has a taxable valuation of $142,000. Marrano told the Board that there is proposed legislation in both houses of the State government to restore the original intent of 339y. Residents ask Board to Support State efforts to restore 339y to Original Intent During the Public Comment session of the regular meeting, Lancaster resident Lee Chowaniec and this writer asked the Board to support efforts to restore 339y to its original intent. Three years ago, the Town passed a resolution to do just that. That bill died in committee. With new efforts to restore 339y to its original intent, it makes sense to again lend support to the State’s effort. Supervisor Giza responded to Chowaniec’s comments by describing how hard it is for upstate Legislators to carry legislation in the State. Upstate legislators are outnumbered by downstate legislators. Due to the high number of 339y projects downstate, downstate legislators support expanded 339y exemptions. This writer told the Board that expanded 339y exemptions are unfair and that I would like to see the Board support efforts to restore the law to its original intent. I used my 80 year-old home as an example to demonstrate the unfairness of 339y misapplication. I purchased my home 10 years ago for $115,000 dollars. In the 2007 tax year, it carried a taxable assessed value of $133,900 dollars. Its taxable valuation is $3,900 dollars less than the home on Pelham that sold for $227,000. My home does not qualify for 339y exemption and may no longer be worth its taxable assessed value. Yet, I pay almost as much in property taxes as a person who recently paid two hundred twenty-seven thousand for their home. Afterwards, Councilman Daniel Amatura told attendees that even if the Town turned down Marrano/Mark Equity’s request, the developer could go to the State and have them override the Town’s decision. Granting continuing property tax abatements to the third owner, Tops/Morgan Stanley, of the Genesee Street warehouse is pointless and unfair to other property tax payers. Regardless of who owned it, the project never lived up to its potential. Despite requests from residents, no agency has provided documentation that any of the three owners ever met hiring goals set down in the original agreement. That agreement stipulated the hiring of approximately 800 people. According to confidential, inside sources, the facility currently employs approximately five hundred and twenty workers. Former owners Tops Markets, Inc. sued the Town of Lancaster and the Lancaster School Board to have their taxable assessment reduced from $46,500,000 to $8 million dollars. The facility currently carries a $42,500,000 taxable assessment.(***) According to the Town of Lancaster Assessor’s office website, Tops property taxes are as follows: Library Purpose $0.00, NYS Mandate Medicaid $0.00, General Town Tax $0.00, Highway tax $0.00, Police Fund $0.00, Consolidated Water $11,065.49, General Light $7,418.67, General Fire Protection $78,553.94, Erie County Sewer District 4 $14,055.05, Erie County Sewer District 4 $165.00, ECSD #4 User Charge $10,146.40, ECSD #4 User Charge $0.00. Their property taxes total $121,404.55.(****) 339y exemptions, extended to patio homeowners, are an unfair, but legal, distortion of the original intent of the exemptions. Purchasers of patio homes and townhouses with 339y exemptions pay disproportionately less in property taxes than residents who own properties with similar market values. To View Video Clips of the Town Board Meeting and Read What Others Have to Say on This Issue, CLICK HERE (*) Contents of Legal Notice: Notice of Public Hearing Town of Lancaster Industrial Development Agency Please take notice that the Town of Lancaster Industrial Development Agency will hold a public hearing on April 17, 2008, at 4:00 p.m. at the Lancaster Town Hall, 21 Central Avenue, Lancaster, New York, to consider the following proposed financial assistance requested of the Agency. 1. Tops Markets, LLC. Project – Request for Agency Assistance in the form of a fee and leasehold mortgage of the project in an amount not to exceed $50,000,000. The assistance contemplated by the agency will include mortgage tax abatement previously granted in accordance with the 1997 Tops Markets, Inc. Project. Tops Markets, Inc originally constructed the Project and the leasehold interest was subsequently assigned to Tops Markets, LLC. Buffalo Logistics LLC then acquired the leasehold interest of Tops Market, LLC pursuant to Lease Assignment and Assumption Agreement, dated August 4, 2002 but the leasehold interest was reacquired by Tops Markets, LLC pursuant to a subsequent Lease Assignment and Assumption Agreement in 2007. The 1997 Tops Markets, Inc. Project included an approximately 136 acre parcel of land located at 5897 Genesee Street, Lancaster, New York, the existing approximately 867,713 square foot warehouse distribution facility and the machinery, equipment, furniture and fixtures. Tops Markets, LLC (the “Applicant”) requests Agency assistance in connection with mortgaging the Project per the requirements of the senior secured credit facility entered into in connection with the acquisition of Tops Markets, LLC by Morgan Stanley Private Equity and certain other equity investors. Applicant is requesting mortgage tax abatement and the continuation of the existing real property tax abatement and the continuation of the existing real property tax abatement. The project is already leased to the Tops Markets, LLC. And is subleased by Buffalo Logistics LLC. Applicant has an existing Payment in Lieu of Taxes Agreement, which will not be changed. The Project is necessary to allow the Applicant to continue to operate in the Town of Lancaster. The Agency will present information relative to this project and application at the hearing. Persons interested may attend and will be given an opportunity during the hearing to make statements. Also written comments may be submitted to the Agency at or before the hearing. Additional information can be obtained from and written comments may be addressed to: Paul Leone Consultant to Town of Lancaster Industrial Development Agency 21 Central Avenue Lancaster, New York 14086 (**) Morgan Stanley Private Equity Completes $310 Million Acquisition of Tops Markets, Names Frank Curci CEO, Dec 03 2007 | New York (***) Town of Lancaster Online Assessment System, Tops Warehouse. (****) Town of Lancaster Online Assessment System, Tops Tax Bill © Copyright 2003 by Speakupwny.com |