2012 tax appeals cost city half-million dollars

Successful tax appeals this year will cost the city a half-million dollars in refunds to more than 350 properties, dropping the city’s assessed value by $8 million. City Council at its November meeting approved the refunding of taxes due to tax appeal judgments by the county Board of Taxation.

Overall, more than $505,000 in property taxes will be refunded to 352 properties, which had a cumulative original assessment of about $45.75 million, reduced almost 19 percent to $37.1 million. The appealed properties had an average assessment of about $130,000 reduced by about 20 percent to an average $105,000. The average property tax bill among the properties saw an average reduction of $1,434 — from $7,592 to $6,157.

The city had about 570 tax appeals filed this year which was up considerably over last year’s 224 filed appeals (of which about 104 won, costing about $120,000). Increasing numbers of tax appeals is a trend seen across the state since the collapse of the housing market in 2008. That doesn’t include the 2010-12 tax appeal settlement with Merck, which cost the city more than $4.5 million.

Sky View at Carriage City Plaza accounted for 168 of the 352 tax appeals and more than half of the assessed value cuts. All but one of the units were among those that went into foreclosure before being acquired by 80 E. Milton Ave., LLC, a subsidiary of a pension fund, of which Amalgamated Bank is a trustee and was the original lender. These appeals dropped the assessments on 168 units by more than $4 million, from $17.1 million to about $12.8 million, reducing the tax bills by $254,000, from about $1 million to $747,000.

Assessments at Sky View were reduced by an average of about 24 percent, with new assessments ranging from $60,700 to $80,700, and tax bills cut by about $1,500. The building accounted for more than 25 percent of the $505,000 in property tax refunds and almost 38 percent of the lowered assessments in the 2012 round of appeals.

When first completed, the Carriage City Plaza project was assessed at almost $60 million overall, with $2 million on the retail space, $6 million on the hotel, and the remainder on the 222 residential units. It was projected to pay about $1 million in property taxes. These latest appeals dropped the assessments on 168 units by more than $4 million, from $17.1 million to about $12.8 million, reducing the aggregate tax bills by $254,000, from about $1 million to $747,000.

The color-coded Google Map of tax assessments offers a glimpse of where appeals were granted and some sense of what neighborhoods saw the biggest reductions. It looks like most reductions were less than 20 percent, with just a handful of spikes of more than 30 percent.

Here’s an approximate breakdown of tax appeals by ward, which you can also view in the Google Map:

1st Ward — 18 [East end of Linden border]

2nd Ward — 35 [West end of Linden border]
3rd Ward — 30 [Inman Heights]
4th Ward — 189 (21) [East of train station to across Route 1]
5th Ward — 31 [West of train station to hospital]
6th Ward  — 44 [Milton Lake]

SkyView units impact the 4th Ward number immensely but if you don’t include them the 4th Ward saw about 21 appeals, more in line with other wards. Even still, of those 21, about eight were at the Riverwalk townhouse complex. Inman Heights saw a fair number of appeals but didn’t seem as if the reductions weren’t quite as drastic as other areas. Very few properties on the east side of Route 1 won appeals while little Cora Place, near the Linden border, has only about 30 properties, eight of which won tax appeals..

The average home in Rahway is assessed at $133,000 with a property tax bill of $7,768, based on 2012 tax rates.

To cover the $505,000 in lost revenue, the city reserved $225,000 for tax appeals refunds last year and will charge the balance to surplus for this year, according to Chief Financial Officer Frank Ruggiero, attributing the increase in appeals to the economy. Towns all across the state have been facing skyrocketing numbers of tax appeals.

Tax Assessor Richard Kulman resigned and was replaced by Thomas Mancuso, as of Sept. 1. It’s unclear how much of a role the tax appeals played in the turnover of this post.

7 thoughts on “2012 tax appeals cost city half-million dollars”

  1. Thanks Colin.Skyview Owner, I'll rewrite to make it clearer: these assessments were part of a resolution passed by City Council in November authorizing the refunding of taxes due to the judgments of the Union County Board of Taxation. If you'll notice, there were 352 among these, but 570 appeals filed in all, so not all of the assessments might get to the county tax board stage. Perhaps the city settled with you before reaching that stage? Or maybe you appealed to the state Tax Court? Email or call me if you wanna chat.

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