45 Great Jones Street, Manhattan. Image Credit: Google Maps

Tax Commission withdrew favorable property tax assessment following audit. 45 Great Jones Street in Manhattan was constructed in 2014 and contains a retail space and five cooperative apartments. The property owner challenged the assessed value for the years 2016/2017 and 2017/2018. The Tax Commission approved a nearly 40 percent decrease in property value for both tax years. The Tax Commission reduced the assessed value for 2016/2017 from $3,244,032 to $2,012,612, and for 2017/2018 from $3,503,554 to $2,026,796.

After the owner accepted the property value reduction and filed new documentation for the property with the City’s Department of Finance, the Tax Commission audited the property value reduction that it had previously offered. Tax Commission then withdrew the offer after determining that the reduced assessment was based on a faulty assessment of the rental income and was “ill advised.” The Tax Commission proposed a modified assessment that raised the property value to $3,120,000 for each tax year.

The owner filed an Article 78 proceeding, claiming that the Tax Commission’s withdrawal of the executed agreement was without legal grounds and nullified a valid agreement. The lower court ruled that the rules of the City of New York expressly permitted the Tax Commission to withdraw “an offer at any time and for any reason.” The court also found language in the withdrawal letter that clearly stated the agreement was contingent upon Tax Commission approval.

The owner appealed, but the Appellate Division, First Department, affirmed the lower court. The Appellate Division agreed that Tax Commission had legal authority to withdraw the offer and could do so in accordance with the conditional language in the offer.

45 Great Jones Apartment Corp. v. Tax Commission, 115 N.Y.S. 3d 622 (1st Dep’t 2020).

By: Jason Rogovich (Jason is a former CityLaw fellow and a New York Law School graduate, Class of 2019.)