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Home Schools Judge to Osborn Home: Pay Up

Judge to Osborn Home: Pay Up

UPDATE: Here is a copy of the judge's ruling in the Osborn litigation.

A judge has ruled in the Osborn Litigation finding the Osborn Home is 100% taxable – meaning the home will need to fork over a whole lot of school taxes. Here is the release from the Board of Ed:

For Immediate Release
October 18, 2010

Appellate Court Rules in Favor of Rye City School District,

Holds The Osborn Home 100% Taxable
Joshua C. Nathan, president of the Rye City School District Board of Education, today announced receipt of the Appellate Court's decision in what has been known locally as the Osborn Litigation.

The Appellate Division of the Second Judicial Department of the Supreme Court of the State of New York issued a 27-page decision dated October 12, 2010, finding in favor of the Rye City School District and holding The Merriam Osborn Home (The Osborn) to be 100% taxable and rejecting The Osborn's claim to a 100% charitable exemption.

In 1997, following a $135 million build-out and changes in the mission of The Osborn, the Assessor for the City of Rye revoked The Osborn's 100% exemption from real estate taxes. A Board of Assessment Review then granted a partial exemption to The Osborn for the years 1997-2003.  The Osborn filed a lawsuit seeking a full 100% exemption from real estate taxes and challenging the City's valuation of The Osborn property. Given its majority stake in the tax revenues at issue in the case, the School District took the lead in the defense against The Osborn's lawsuit.

In 2007, the trial court held that The Osborn was only entitled to a partial tax exemption and issued a determination of the value of The Osborn property.

The Appellate Court, in its October 12, 2010 decision, held that The Osborn is not entitled to any charitable use tax exemption because too few of its residents rely on the facility's charity to support the conclusion that the property is being used principally or primarily for a charitable purpose. The Appellate Court stated that the main purpose of The Osborn is to cater to the needs of "healthy and wealthy senior citizens" and, therefore, the property is 100% taxable.

The Appellate Court found that the total tax value for the years 1997-2001 was correctly assessed but that The Osborn owes the Rye City School District additional tax monies because it was improper for the trial court to grant The Osborn a partial exemption for the property for those years. The Appellate Court also found that The Osborn is owed a refund for overpayment of property taxes for the years 2002 and 2003. (To avoid having to pay interest on the refund it would be required to make if the trial court's valuation decision was upheld on appeal, The Rye City School District previously paid The Osborn the School District's portion of the refund The Osborn would be due based on the trial court's valuation decision.) The Appellate Court remanded the matter to the trial court to calculate the amount of the refund for 2002-2003 and the amount of the taxes owed by The Osborn for the years 1997-2001.

Acknowledging the work of recent Boards of Education as well as those led by former board presidents Jim Culyer, Steve Feeney and Michael Ice in diligently defending the School District against The Osborn's lawsuit, Nathan stated: "This case has always been about tax fairness. It is gratifying that the Appellate Court has affirmed our position that The Osborn is a taxable entity and is responsible for its fair share of taxes so that other taxpayers in the community are not unduly burdened. This Appellate Court ruling demonstrates that decisions made by this Board and previous Boards were fiscally prudent and appropriate to protect the community. With the Appellate Court's decision in hand we can move forward from here to resolve the remaining details, as directed by the Court. It is our sincere hope that the School District and the City can now have a positive and stable relationship with The Osborn; the resulting benefits to the community will be long lasting."



  1. The ruling says that the monies to be exchanged are to be defined by the court … that could take awhile, but I’d expect that the schools and county to get money back due to the removal of the tax exemption and their having previously re-paid the Osborn’s taxes up to the exemption at the court-assigned valuation. The city is another matter altogther.

    I believe the court said the city owed about $1million back in 2007, but I believe the city never paid. That amount would have grown at 9%/year.

    So I’m curious about where the City will find a 7 digit figure when it’s already looking for $5million plus for the old CVS building.


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