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One NY Plaza victory affirmed.

The owners of One New York Plaza are expected to receive a $30 million refund in a property tax case that was unanimously affirmed by a New York State appeals court last week.

The three-judge Appellate Division, First Department, upheld the lower court decision to award One New York Plaza $360.3 million in assessment reductions with regard to six tax years in the 1980's. The building paid on the actual assessment for 1001, which was $158.22 million. the higher transitional assessment was $166.74 million. Both of those will go down under the recalculation of past years and transitions.

Joel R. Marcus, currently a tax certiorari partner with Pottish & Freyberg, tried the case when he was a Shea & Gould partner.

Marcus said: "This is an important day for property owners because it demonstrates that you can achieve a fair result by going to trial. In these troubled economic times, this case will represent an opening of the door which will enable hard pressed properties to get the tax relief they desperately deserve."

Marcus said the refund should amount to around $30 million with an additional $5 million in reduced taxes for the property, now owned and occupied by Chase Manhattan Bank, over the next two and a half years.

The city has no room to negotiate a limitation on the award, Marcus said, "because both the trial court and the unanimous Appellate Division stand behind the taxpayers award."

"It's a fabulous decision," said Adam B. Gilbert, the Shea & Gould litigation partner who tried the case. "I can't improve upon what the Appellate Division said. They recognized that the trial court had addressed all of the relevant considerartions and gave effect to those things which affect value, particularly, in this case, the widespread presence of asbestos. I think the fact that the court affirmed unanimously within three weeks of the argument, is quite telling."

Many cases that have been prepared for trial will likely either go to trial or be settled on a much more equitable basis, Marcus said. In fact, he added, the City of New York may benefit from the decision.

"It will give the city further justification to increase settlement proposals to taxpayers," he said, "because a trial could easily result in greater tax refunds."

Joseph B. Giminaro, a tax certiorari associate with Shea & Gould, said the judges did not qualify the lower court decision and went right along with its findings. The judges stated in their decision.

"The court could properly reject both the petitioners income capitalization approach and the respondent's reproductive cost approach and instead arrive at a value based on an analysis of both approaches that emphasized a pragmatic adjustment to the economic realities of the particular building," he said.

The judges affirmed the findings of fact made by Supreme Court Justice Stanley Parness, and, Giminaro said, the appeals court judges analyzed the case in a traditional way.

He added that the judge's findings on the tax calculation is an important part of the decision that other taxpayers might be able to use in their situations.

"It seems like they will entertain a vague test as long as you can show that it's based in reality," he said. "They're not applying some fixed test (to the calculations.)"

Edith I. Spivack, the executive assistant corporation counsel who argued the case before the three-judge panel, refused comment on the latest decision.

One New York Plaza is a 50-floor, 2.5-million square-foot office tower at Broad Street at South Ferry. Chase Manhattan Bank, Salomon Brothers and Oppenheimer & Co. were the primary tenants during the years under review. Shea & Gould attorneys argued the case on behalf of Sandra Bass and the estates of Sol Atlas and John P. McGrath and New York Plaza Associates, the owners of the building until 1989, at which time it was sold to Chase. The former owners of the building will get the refund.

The last tax reduction trial recorded in New York City was in 1980 involving the owners of 425 Park Avenue. The building owners eventually settled with the City and did not carry the case to decision.

The Department of Finance said they are reviewing the decision with the Corporation Council.
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Title Annotation:owners expect to receive $30 million refund in property tax case
Author:Weiss, Lois
Publication:Real Estate Weekly
Date:Jan 15, 1992
Previous Article:Sales broker teams with Hong Kong firm.
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