The Osborn Home Makes Nice with The Taxman
In a follow-up to The Osborn home paying about $2 million to the city in a tax dispute, the rest of the contentious relationship between The Osborn, Rye City and the Rye school district has apparently been worked out.
The following news release was issued this morning by Rye City in regards to assessed values and property taxes. In English, that means The Osborn has agreed what it will pay the taxman.
If readers have views or interpretations on this matter, please leave a comment below.
Here is the official speak:
The Osborn, Rye City School District, and City of Rye Finalize Agreement on Property Matter
After years of litigation and a recent Appellate Division decision regarding assessed values and local property taxes, a settlement that resolves the remaining issues in the longstanding dispute among The Osborn, the City of Rye, and the Rye City School District has been reached that ultimately benefits all of the parties and their constituencies.
Originally, the matter focused on tax assessments made by the Assessor of the City of Rye dating to 1997. The Osborn sought to continue its exemption from real estate taxes that dated back to its opening in 1908 or alternatively, to reduce the assessed value attributed to the property. The State Appellate Division ruled in October of this year that The Osborn is fully taxable, yet entitled to a one-third reduction in the assessed value of its property. This decision provided the foundation for the three local partners to work together in resolution.
“The Osborn sought relief for our residents and fair treatment for all of the local taxpayers. By working cooperatively we have achieved a fair resolution and closure,” said Jack Miller, the Chairman of the Board of The Osborn. “As a non-profit entity that is also the largest taxpayer in the City of Rye, we recognize the importance of our role as protector of our elderly residents and our responsibility to be a good neighbor, and are satisfied with the resolution.
A written settlement, guided by calculations determined by the State Supreme Court, was necessitated by the complex nature of the issue due to changes in tax status and assessments during the time of the litigation and recent court rulings. For certain periods of time The Osborn was due a refund by the City and the School District, while for others, it owed a refund to the School District. The final settlement in reconciling the balances calls for a refund by the City of slightly more than $1.3 million to The Osborn, and refund by The Osborn to the School District of slightly more than $1 million.
While the court only addressed the disputes through 2003, the parties settled all outstanding issues, including pending lawsuits for each year from 2004-2010. “The Board of Education is pleased to have worked out a fair settlement, guided by the courts, that finally puts this matter to rest,” noted Board of Education President Joshua C. Nathan. “But the most important result is the positive relationship among the School District, the City, and The Osborn, as we work together in the interest of students, residents and taxpayers.”
“The community is the big winner here,” said Mayor Doug French of the City of Rye. “This is a positive step all the way around not only in terms of tax revenues for important School and City services, but the possibilities of what a good relationship can bring in the future,” concluded Mayor Doug French of the City of Rye.
“The community is the big winner here,” said Mayor Doug French of the City of Rye.
And those certain law firms that worked so very hard many years ago to prevent a possible local “Payment in Liu of Taxes” negotiation and settlement (standard for small municipalities for ages) – how did THEY make out?
And all those millions went – what – straight into the classrooms, right?
Ted – Please, get off your high horse. This litigation was driven by the parties being unable to find common ground despite protestations of a willingness to compromise. That it has been settled is a good thing. That it cost so much to arrive at the settlement is a bad thing. But this was not some simple matter of how much should filling a FOIL request cost. This was material and will provide reasonable financial benefits to the community at large. And before you go after Rye City corporate counsel, please recognize that they did not drive this litigation.
What I’d like to see is the actual settlement and the anticipated tax payments going forward by year of the settlement – in comparison to what had been paid in the past by year. That would allow us all to understand what the net impact will be on us property tax payers.
bob
Don’t forget to add in the multi million dollars in legal fees paid by the city and the school board of which you served. Once you figure out how much new revenue there will be, you can figure out how many years it will take for the taxpayers to break even.
I’m guessing about 20 years.
Really?!?, tedc –
Either you two are playing Monday morning quarterback, or you both have a rare set of skills that you believe are lacking on the council. Why not run for city council in 2011? I think it would do you good to move from critic to doer.
Matt – “Hear, Hear”. I would very much enjoy having the anon. posters on this board actually expose themselves and their ideas for full public evaluation. They probably would not appreciate the resulting community feedback.
Re the money spent to-date. Yup. It was expensive. I made reference to that in my post. And yes, while on the Board, I supported the litigation (although I made a fairly big stink about the cost, no school board member was happy with the expense.) But I think the points the anon. poster misses are:
a.) without the litigation there would have been 0 property tax collected
b.) that the cumulative taxes paid by the residents of The Osborn Home exceed the amount spent on litigation.
These points don’t mean that the litigation couldn’t have been had at lower cost. But it does support that this issue is now done with confirmation of property taxes to be paid to the city, the school district, and the county through 2013. Certainly not frivolous. Certainly a benefit for the community.
Thanks Matt and Bob. Reformers can do effective work inside or outside the power structure and I sit on enough boards. As you know, our group of long time Rye residents was very involved in actively supporting what we believed to be a clean broom slate – lower taxes, remove the lawyers soaking and cheating us, and change an opaque, secret laden city hall culture back to one of transparency. So far the new slate’s progress has been – poor.
We’re soon to make a shocking deeply documented mockery of the last crew – and of course due to inactivity – our new “ostrich” crew as well. Then the new crew may likely resort to personal smears to deflect the matter. We’re up for that also. At least they’ll have something juicy and sharp to use against Shew’s claims. We’re now fully convinced they wouldn’t go after protected others. Maybe they will if the insurance company forces them to.
A Payment in Liu of Taxes – you can look it up. Or (and I’ve of course seen Matt’s views on him) you could sit with Judge Carey and hear the history of these things in this city. The RBOE never ran the way it did today. They had lawyers and plenty of lawsuits but never would have allowed outside interests to manipulate them into launching an ambush assessment scheme against The Osborn. That’s pure progressive gang tradecraft. Over $6M has left our community’s institutions – those that serve the children and those that serve the elderly. I always thought class warfare is for chumps. Someone is always fanning them and soaking the non-combatants to pay for the battle. A PIOLT – you might say ‘how quaint.’ Btw I don’t like horses high or low. Maybe it’s because of my RBOE upbringing. We did ride our dirt bikes at the old Avon track. Do you know where it is?
TedC – Re “PILOT”, I specifically asked about whether or not a PILOT had been put in place as part of the agreement and was told “No”. Having not seen the agreement, I can’t be sure that’s right, but I am not a fan of a PILOT for multiple reasons.
I don’t understand your comment about the BoE ganging up on The Osborn home. If you’ve looked through the filings of fact, etc., the point that The Osborn home is no longer a charity – and frankly, pretty far away from the charter included in the original will – is very, very clear. The board of directors accepted the leadership of the home’s CEO to move from a fundamentally charitable organization to a quasi-profit driven organization. As such, they are liable for porperty taxes. Personally, I am also curious about how the tax free bonds used to fund their large expansion program remain tax free given the effective change in their status. But that’s not a point worth my spending much time researching.
Where does the City of Rye plan to source the funding for the $1.3M refund due The Osborn?
Does the City have a Tax Certiorari Reserve Account? If so, what is its balance?
I was under the impression, that unlike the School District, the City had not reserved against this possible settlement payment.
Notes for “Really” and “tedc”:
1.) The City of Rye paid not one red cent for Osborn-related legal fees – they took the political cover of refusing to pay their fair share of the litigation costs relating to their own defense. The School District shouldered 100% of that burden despite repeated approaches to the City regarding proportional cost-sharing.
2.) Recall that it was The Osborn that brought forth the legal actions following its placement on the tax rolls by the City Assessor. The City of Rye was the “Defendent” and the Rye City School District was the “Intervenor Respondent”.
Notes for OG – You should use more accurate descriptive terms for these failed policy actions OG.
1). – consider substituting “completely wasted” for “fair”
2). – consider substituting “unannounced ambush assessment” for “placement”
When do the taxpayers get our multi million dollar litigation fee refund from those “visionaries” on that BOE who decided to preemptively launch an attack on one of our own community institutions? NEVER is I believe the correct answer because they decided they could spend money that was not theirs to achieve “fairness.” And who exactly made those who sat on that singularly misguided board the nominal local arbitrators of “fairness?” Surely not the city taxpayer/ voters who had been gratefully relieved of the responsibility of building and supporting their own municipal senior manor care facility on the site of a now soccer field.