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Taxes due prior to most hearings.

While the final property tax roll for the coming fiscal year 1993 was to be released this week in preparation for the final budget and tax fixing resolutions, most property owners will be disappointed because the Tax Commission was unable to schedule the majority of protest hearings.

The courts, experts say, are concentrating instead on high value cases and individual taxpayers who, they say, spend more time making their cases. While 53,000 hearings needed to be scheduled with 10,000 of those for taxpayers representing themselves, the Tax Commission did not know last week what remained after the roll closed.

Certiorari attorneys report that Tax Commission hearings are so delayed that even a few buildings worth $20 mil!ion and more have not had hearings, nor have most condominiums. These properties normally would have had hearings in late March or early April, they said.

"We understand, due to the resources, they have not been able to hear as many cases, " explained Jeffrey Golkin, chairman of the Bar Association of the City of New York Committee on Condemnation and Certiorari and a partner with Herzfeld & Rubin. "Past performance shows they can accomplish that."

Joel R. Marcus, president of the Real Property Tax Review Bar and a partner with Pottish & Freyberg said he would have expected that at least half of his firm's cases would have been heard but it has only been less than five percent.

"I have surveyed the other firms that are members of the Tax Certiorari Bar and their experiences are the same," he said. "It's very difficult for most property owners in these economic times, for the resolution of their just tax claims to be delayed. If their property is close to the line, this delay could push them over. "

Dan Margulies, executive director of the Community Housing Improvement Program said: "The city is taking on an interest free loan from all the people who paid and it is a fiscal gimmick on the city's part. There should be more attention to this both from property owners and fiscal observers."

The bottom line for many owners is

that they must pay the full amount of their first half property taxes and should their property receive a reduction later this summer or fall, wait for a refund to come through by the remission process.

"We have requested that the remission orders be processed within 60 days of a settlement and that interest be paid on settlements thereafter," said Marcus. This, he admitted, was not received well by the administration.

Golkin expressed hope that due to the number of cases that must go through the remission process, the refunds would be handled expeditiously and the second half tax bill lower amount would be reflected automatically. "We have to understand that there are certain realities dealing with the City Administration and we have to focus on obtaining an automatic bill," Golkin said. "The Tax Commission has been exceptional in the past in reflecting remissions on the second half tax bill."

That bill is payable on Jan. 1, 1993. Even this past January, a number of properties received second half bills that still showed the higher number since the city had not finished processing the remission paperwork.

Once a cut is received at a hearing after the roll closes, the Tax Commission puts through the smaller assessment "by remission." In order to obtain the refund from the Department of Finance, that remission order must be received by the attorney and is sent to the city with proof of payment--normally a copy of both sides of the cancelled check obtained from the bank--together with a refund application.

Aside from the administrative burden of making refunds, the City must also account for the money, known as reserves, to be set aside in the budget for these refunds. A spokesperson for the Department of Finance said there are no surprises and the projections come within the budgeted reserves. The reserves for remissions which include cancellations went from a low of $59 million in 1985, to an estimate of an all-time high of $148 million under this administration.

The city is also grappling with Olympia & York's fiscal problems. They cut a deal last week to stretch out the company $63 million of $75 million in expected payments. The city will receive $10.5 million each month beginning in July, plus $2 million in interest. Meyers Frucher, executive vice president, Olympia & York, said there are two buildings which cannot be part of the deal because "the documents don't allow it." Frucher said they will be paying 2.5 percent interest each month.

City officials said the deal was made based on the tentative roll and any cuts in assessment would not be significant enough to affect much of that amount. The City Council, they said, will also keep the 18 percent interest rate in order not to encourage people from "borrowing from the City."

This is, however, another reason the City would not be sorry to have extra money up front and in hand from other owners.

"The Olympia & York situation points out that the certiorari awards should be higher," Margulies noted. "There are buildings which have sold for half of their mortgages and there are thousands of buildings which cannot be sold at any price. The optimism at City Hall is unfounded."
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Title Annotation:Tax Commission unable to schedule majority of protest hearings for final property tax for fiscal year 1993
Author:Weiss, Lois
Publication:Real Estate Weekly
Date:May 27, 1992
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