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IN RE: the Application of RICHMOND SI OWNER LLC, Petitioner, For a Judgment under Article 78 of the Civil Practice Law and Rules v. Sherif SOLIMAN, in his capacity as the Commissioner of Finance of the City of New York, and City of New York, Respondents.
The following papers numbered 1 to 3 were marked submitted on the 17th day of March, 2022:
Notice of Petition with Supporting Papers, Exhibits and Memorandum of Law (dated October 14, 2021) 1
Answer in Special Proceeding with Supporting Papers, Exhibits and Memorandum of Law (dated February 4, 2022) 2
Affirmation in Reply with Supporting Papers and Exhibits (dated February 23, 2022) 3
Upon the foregoing papers, the Petitioner's application pursuant to CPLR article 78 is granted and the Respondent's final determination dated June 14, 2021 is hereby annulled.
The Petitioner is the owner of two vacant land parcels in Staten Island known as 178 Richmond Terrace a/k/a Borough, Block and Lot (BBL): Richmond County, Block:13, Lot:92 and 8 Stuyvesant Place a/k/a BBL: Richmond County, Block: 13, Lot:100. On December 5, 2018, the Petitioner acquired title through a bankruptcy reorganization. According to the Petitioner, the two parcels consist of vacant and unimproved land that is zoned primarily residential in Richmond County, and therefore should be classified pursuant to RPTL § 1802(1)(d) as Building Class V0 (Zoned Residential; Not Manhattan) and Tax Class 1 (see Verified Petition, para 9).1 However, the Petitioner claims that the subject properties had been erroneously classified as Building Class VI (Zoned Commercial or Manhattan Residential), which is a Tax Class 4 commercial property, for the time period of July 1, 2015 through June 30, 2022 (id. at 9-10; see Petitioner's Exhibit “B”).
The Respondent, City of New York's Department of City Planning, maintains a composite of Zoning and Land Use maps through its website known as ZoLa. The Zoning and Land Use maps indicate the subject parcels are zoned as Zoning District R6, with is a Commercial Overlay of C2-2 (see Petitioner's Exhibit “D”). According to the Respondent's website, Zoning District R6 is a residential district and a C2-2 Commercial Overlay is defined, in part, as commercial overlays “mapped within residence districts” (see Petitioner's Exhibits “E”, “G”).
On May 24, 2021, the Petitioner submitted an administrative application seeking the retroactive reclassification and reassessment for each for the two parcels that constitute the subject property (see Verified Petition, para 36; Petitioner's Exhibit “M”). Petitioner sought alteration to seven years, tax years 2015/2016 through 2021/2022. On June 14, 2021, the Respondent the City's Department of Finance (DOF) denied the Petitioner's applications, noting that the parcels are “correctly classified as tax class 4” (see Verified Petition, para 37; Petitioner's Exhibit “N”). The Petitioner commenced the instant proceeding seeking reversal of the final determinations of the DOF.
The Petitioner refers to § 11-206 of the Administrative Code of the City of New York. This section gives the Commissioner of the Department of Finance the ability to correct any assessment or tax which is erroneous due to a clerical error or error in description. In addition, the Petitioner refers to the Respondent's promulgation of 19 RCNY § 53-02(b)(10), which provides the Commissioner of Finance authority to correct any assessment or tax due to an error in description including, but not limited to, “inaccurate building class that affected assessed value” (see Petitioner's Exhibits “K”, “L”). In this regard, the Petitioner argues that the City's rules and regulations permit the reclassification of the subject vacant and unimproved lands as Building Class V0 (Zoned Residential; Not Manhattan) and Tax Class 1 pursuant to RPTL § 1802(1)(d). Based on the foregoing, the Petitioner argues that the Respondents’ denials noting the parcels to be “correctly classified as tax class 4” as arbitrary and capricious.
The Respondents’ Answer seeks the denial and dismissal of the Petition. The Respondents argue that Petitioner's claims concerning property misclassification and overassessment must be reviewed in an RPTL Article 7 proceeding. Respondents, therefore, maintain that Petitioner's Article 78 proceeding under § 11-206 of the Administrative Code of the City of New York was improper.
Although the proper method for challenging an excessive real property tax assessment is ordinarily the commencement of a tax certiorari proceeding pursuant to Real Property Tax Law article 7, Administrative Code of the City of New York § 11-206 provides taxpayers with an alternative administrative method for seeking correction of a limited class of errors that result in overassessments (see Matter of Better World Real Estate Group v. New York City Dept of Fin., 122 AD3d 27, 29 [2nd Dept 2014]). This provision authorizes the DOF to correct a real property tax assessment that is based upon a clerical error or an error in description (id. at 29).
According to section 153(b) of the New York City Charter, the Tax Commission shall be charged with the duty of reviewing and correcting all assessments of real property in the City of New York (see Administrative Code of the City of New York § 11-201; see also NY City Charter § 1506; see Matter of Better World Real Estate Group v. New York City Dept of Fin., 122 AD3d at 33 [internal quotation marks and citation omitted]). Generally, the proper method for challenging an allegedly excessive or unlawful real property tax assessment is by the commencement of a tax certiorari proceeding pursuant to RPTL article 7 (see RPTL 706; see Matter of Better World Real Estate Group v. New York City Dept of Fin., 122 AD3d at 33). Nevertheless, RPTL 700 itself makes clear that a tax certiorari proceeding is not a taxpayer's exclusive remedy for seeking review of an excessive assessment. In this regard, RPTL 700 provides that a proceeding to review an assessment of real property shall be brought as provided in this article unless otherwise provided by law (RPTL 700; see Matter of Better World Real Estate Group v. New York City Dept of Fin., 122 AD3d at 34).
Generally, a clerical error is an error resulting from a minor mistake or inadvertence, such as in writing or copying something on the record, rather than an error in reasoning or judgment (id. at 36 citing Black's Law Dictionary [9th ed 2009]). An error of description generally refers to circumstances where a given description of real property is so vague or indefinite that it is impossible to ascertain how far the property boundaries extend, where the property is located, and whether the property belongs to the owner (see Matter of Better World Real Estate Group v. New York City Dept of Fin., 122 AD3d at 36). The ultimate goal of property valuation in any tax proceeding is to arrive at a fair and realistic value of the property involved so that all property owners contribute equitably to the public fisc (id. at 38-39 [internal quotation marks and citation omitted]).
Based on the foregoing, the Court grants the Verified Petition. The Court rejects the Respondents’ arguments that an RPTL Article 7 proceeding is an exclusive remedy or that the Appellate Division's decision in Matter of Better World Real Estate Group v. New York City Dept of Fin., was “highly controversial” (see the Respondents’ Memorandum of Law in Opposition, p 12). Thus, the Respondents failed to demonstrate that its determination was grounded upon a rational basis.
Based on the foregoing, the Respondents’ determinations dated June 14, 2021, denying the Petitioner's applications for a tax reclassification and reassessment, are deemed arbitrary and capricious (see Matter of Pell v. Board of Educ of Union Free School Dist No 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222, 231 )
Accordingly, it is hereby
ORDERED that the Verified Petition pursuant to Article 78 is granted; and it is further
ORDERED that the Respondents’ final determinations dated June 14, 2021 are hereby vacated and annulled; and it is further
ORDERED that the Petitioner's applications for tax reassessment and reclassification are hereby granted; that the subject property known as 178 Richmond Terrace a/k/a Borough, Block and Lot (BBL): Richmond County, Block:13, Lot:92 and 8 Stuyvesant Place a/k/a BBL: Richmond County, Block: 13, Lot:100 be assessed and classified as Building Class V0 (Zoned Residential; Not Manhattan) and Tax Class One, residential property; and it is further
ORDERED that the Respondents are directed to correct the clerical error and error of description with respect to the subject properties to reflect said reassessment and reclassification for the tax years 2017/2018 through 2021/2022; to refund or credit the difference between the taxes computed on the erroneous and corrected assessments; and it is further
ORDERED that the Clerk mark his records accordingly.
1. New York's Real Property Tax Law (RPTL) § 1802 outlines four tax classifications. In relevant part, RPTL § 1802(1)(d) provides that Class One will include “all vacant land located within a special assessing unit which is a city other than such land in the borough of Manhattan, provided that any such vacant land which is not zoned residential must be situated immediately adjacent to property improved with a residential structure” (see generally Matter of 194 Main, Inc v. Board of Assessors, 91 AD3d 876 [2nd Dept 2012]; Matter of Shore Dev Partners v. Board of Assessors, 82 AD3d 988, 990-991 [2nd Dept 2011]).
Wayne M. Ozzi, J.
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Docket No: Index No. 85203/2021
Decided: May 27, 2022
Court: Supreme Court, Richmond County, New York.
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