IN RE: WA HIGH INVESTOR (2026)

DECISION & ORDER

In a proceeding pursuant to CPLR article 78 to review a determination of the Department of Finance of the City of New York dated June 6, 2023, which denied the petitioner's application for tax reassessment and reclassification of the subject property from tax class four, building class V1, to tax class one, building class V0, for the fiscal years 2017 to 2019, the petitioner appeals from a judgment of the Supreme Court, Kings County (Francois A. Rivera, J.), dated January 4, 2024.  The judgment denied the petition and, in effect, dismissed the proceeding.

ORDERED that the judgment is reversed, on the law, with costs, the petition is granted, the determination dated June 6, 2023, is annulled, and the petitioner's application for tax reassessment and reclassification of the subject property from tax class four, building class V1, to tax class one, building class V0, for the fiscal years 2017 to 2019 is granted.

In December 2021, the petitioner submitted a clerical error application to the New York City Department of Finance (hereinafter the DOF) for tax reassessment and reclassification of its property located in Brooklyn (hereinafter the property) from tax class four, building class V1, to tax class one, building class V0, for the fiscal years 2017 to 2019, during which time the property was vacant.  In a determination dated June 6, 2023, the DOF denied the application on the grounds that the issue raised in the application was not a clerical error or an error in description of the property (hereinafter the June 2023 determination) and, in effect, that it should be challenged in an RPTL article 7 proceeding.  Thereafter, the petitioner commenced this CPLR article 78 proceeding against the DOF's Commissioner and City of New York (hereinafter together the City respondents) to annul the June 2023 determination.  By judgment dated January 4, 2024, the Supreme Court denied the petition and, in effect, dismissed the proceeding.  The petitioner appeals.

Administrative Code of the City of New York § 11–206 provides that “[t]he commissioner of finance may correct any assessment or tax which is erroneous due to a clerical error or to an error of description contained in the several books of annual record of assessed valuations, or in the assessments-rolls.”  Pursuant to the Rules of the City of New York Department of Finance in effect at the time of the subject determination (see 19 RCNY former §§ 53–01, 53–02), an “[i]naccurate building class that affected assessed value” constituted a clerical error or error of description (id. former 53–02[b][10] ).  The rules then in effect provided that such errors of description may be corrected by application to the City of New York within six years of the error (see id. former §§ 53–01, 53–02).  Contrary to the City respondents' contention, the challenge raised by the petitioner may be raised in a CPLR article 78 proceeding (see Matter of Emmons Realty, LLC v Soliman, 247 AD3d 891, 892;  Matter of Wavebrook Assoc. v. Niblack, 243 AD3d 669, 670;  Matter of Panagopoulos v. Niblack, 243 AD3d 666, 667).

“Judicial review of an administrative determination not made after a quasi-judicial hearing is limited to whether the determination was made in violation of lawful procedure, was affected by an error of law, or was arbitrary and capricious or an abuse of discretion” (Matter of Wavebrook Assoc. v. Niblack, 243 AD3d at 671 [internal quotation marks omitted];  see CPLR 7803).  New York City is a “special assessing unit” (RPTL 1801[a];  see 102[a] ) in which all real property is classified into one of four classes (see RPTL 1802[1] ).  Tax class one property includes “all vacant land located within a special assessing unit which is a city” that is either zoned residential or situated immediately adjacent to qualifying residential property, “other than such land in the borough of Manhattan” (id. § 1802[1][d][i];  see Matter of Emmons Realty, LLC v Soliman, 247 AD3d at 893;  Matter of Wavebrook Assoc. v. Niblack, 243 AD3d at 671;  Matter of Panagopoulos v. Niblack, 243 AD3d at 668).  Tax class four property consists of “all other real property which is not designated class one, class two, or class three” (RPTL 1802[1] ).  “Accordingly, vacant land that is zoned residential and located within New York City but outside of the borough of Manhattan is properly classified as tax class one, regardless of any commercial overlay” (Matter of Wavebrook Assoc. v. Niblack, 243 AD3d at 671;  see Matter of Emmons Realty, LLC v Soliman, 247 AD3d at 893;  Matter of Panagopoulos v. Niblack, 243 AD3d at 668).

Here, for the fiscal years 2017 to 2019, the property was a vacant lot located in Brooklyn that was zoned R7A residential.  Thus, the DOF should have classified the property as tax class one, regardless of any commercial overlay (see Matter of Emmons Realty, LLC v Soliman, 247 AD3d at 893;  Matter of Wavebrook Assoc. v. Niblack, 243 AD3d at 671;  Matter of Panagopoulos v. Niblack, 243 AD3d at 668;  Matter of N.Y. EZ Prop. Holdings, LLC v Niblack, 243 AD3d 665, 666;  Matter of 64–11 QB Owner, LLC v Niblack, 243 AD3d 651, 653).  Accordingly, the Supreme Court should have granted the petition, annulled the June 2023 determination, and granted the petitioner's application for tax reassessment and reclassification of the property from tax class four, building class V1, to tax class one, building class V0, for the fiscal years 2017 to 2019.

DILLON, J.P., BRATHWAITE NELSON, LOVE and MCCORMACK, JJ., concur.