TaxCity: Former IBM site’s owner suing for lower assessment

TechCity's Alan Ginsberg. (Photo by Dan Barton)

TechCity’s Alan Ginsberg. (Photo by Dan Barton)

The ongoing power struggle between the Town of Ulster and local commercial and light-industrial campus TechCity is still going strong, with the latter recently heading back to court to seek significant assessment reductions for the past three years.

With trial court arguments already completed, attorneys representing both sides will have 30 days after the receipt of transcripts of testimony to submit their briefs to Michael H. Melkonian, an acting justice of the state Supreme Court Third Judicial District in Ulster and Sullivan counties. Melkonian will then make a decision on TechCity’s attempts to seek an assessment reduction from $34.1 million to $10.9 million on its 138-acre east campus for 2013, along with similar reductions for the prior two years. Based on the 2014 town tax rate of $7.84 per $1,000 of assessed property value, the bill on a $34.1 million assessment would be $267,344. The bill on a $10.9 million assessment would be $85, 456. The total town 2014 levy is $7.98 million.

According to Town of Ulster Supervisor James E. Quigley III, it’s not likely a conclusion will be reached until “sometime in the end of the first quarter of 2014.” Quigley noted that this was not the first time TechCity has sought to reduce its assessment — efforts to reduce their 2010 assessment from $34 million to $14 million were unsuccessful — but that he was still disappointed, given town officials helped the development make zoning changes in an attempt to make the east campus more valuable by giving it its own Redevelopment Overlay District designation.


According to TechCity plans, a revitalization of the campus would be undertaken in the hopes of attracting new tenants. Included in the plan are a series of demolitions, repurposing of old buildings and erecting new buildings.

TechCity owner Alan Ginsberg said that the shaky economy has been partly responsible for the need for the assessment reduction, as well as the business hub’s ability to contribute to helping bring the local economy back.

“The success of TechCity is important to UlsterCounty and the region,” Ginsberg said. “We’ve continued to invest in the property and we believe it can be an economic engine for the entire region because of its strategic location and robust infrastructure. The deep economic recession has presented many challenges for TechCity and we believe the assessed value of the property is currently too high.”

There is also the question of scrutiny from the state Department of Environmental Conservation on account of contamination from back when IBM used the property as a computer manufacturing concern. Though IBM sold the property to Ginsberg in 1998, Big Blue still remains responsible for the cleanup of the contamination, which was initially detected in 1978. The contamination was a piece of the zoning puzzle, and while Quigley acknowledged that, he added that the thorny history between TechCity and the town goes back nearly as far.

“In their 16 years of ownership this has been a constant battle,” Quigley said. “It’s safe to say this is not the first time we’ve had to go to court over this issue.”

Where Judge Melkonian lands on the matter may not be known for months, but whatever the decision, Quigley said the two parties will have to work harder at working together.

“I would say that the relationship between the town and TechCity could be better,” Quigley said. “In the end, I think it is to the benefit of both parties that the real estate is leased up or sold to new users to be developed, thus completing the economic cycle for Mr. Ginsberg and providing the town with a secure tax base.”

Quigley added that something would have to give for the relationship to work for the benefit of everyone.

TechCity’s real estate has one of the lowest per-square foot tax burdens from the town of any property in the town,” Quigley said. “It is always challenging when it comes down to real estate, especially when you’re talking about a parcel of real estate that at one time provided 30 percent of the tax revenues of the entire town, and it’s now down to such a small percentage. But how low can you go? We have an obligation as elected officials to provide the economic resources to pay for the services that the community wants. And it’s a challenging situation.”

There is one comment

  1. gerald berke

    That property was sold at fair market value (willing buyer/willing seller)… for about $3 million dollars. The elephant in the room might be all the people on both sides of the equation that did not fairly benefit from the sale.

    That being said, there is reasonable tax policy in any jurisdiction that says the owner is required to make economic use of that property rather than sit on it and speculate… and not only will taxes stay high, but they will be raised for the economic loss a failure to utilize may incur.

    The jurisdiction can accumulate the tax dollars and then purchase the property and put it to good use… offering a fair market price…

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