Gardiner officials invite public input on Riverside Trust property tax assessment challenge

wallkill SQIf a certain well-known local landowner gets his way in court regarding the assessed value of his property, New Paltz Central School District taxpayers in general and Gardiner residents in particular will be paying through the nose to pick up the slack in property taxes for all posterity: That’s the takeaway message that Gardiner Town Board members and supervisor Carl Zatz now want you all to know, after three years of behind-closed-doors discussions while a lawsuit played out in court.

The initial 2010 legal action, whose intent was to compel the town to make a drastic reduction in the assessed value of what councilman Mike Reynolds described in the October 7 Town Board meeting as a “unique” and “high-profile property,” was rejected in Ulster County court, but is currently under appeal. Now the legal team representing the property-owner has filed a second lawsuit seeking a comparable devaluation for 2013, according to Zatz, which again puts a “three-year freeze” on collection of taxes on the large parcel.

Contesting the first lawsuit has already cost Gardiner a great deal of money — estimated by councilman Warren Wiegand as “at least $100,000 in legal fees on this particular case over three years” — and a settlement offer by the town intended to put an end to the protracted litigation was rejected. Faced with the question of how much more to invest in the battle, town officials have decided at this juncture to go public with the issue, taking the pulse of Gardiner taxpayers before they choose among several potential strategies. “We could proceed or not proceed. We could buy it; we could try a settlement,” said C.

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The property in question — a Wallkill riverfront parcel at the western end of Phillies Bridge Road that town tax maps identify as comprising 77.6 acres — is legally owned by an entity known as Riverside Trust. Noting that personal comments would be inappropriate while litigation is ongoing, town officials declined to confirm or deny the contention of Gardiner resident Jack Habersberger when he pointed out at last Tuesday’s meeting, “Riverside Trust is, as everybody in town knows, Robert De Niro.” But that relationship can be easily confirmed by Googling the name of the holding company, which yields press accounts of past controversies between the actor and a former employee.

“Frankly, we don’t know who the driver of this lawsuit is. We just deal with the attorneys. The attorneys speak for the Trust,” said Zatz after the meeting, noting in a spirit of fairness that the officers of such a financial entity have a mandate to try to make or save money on it on behalf of the person who set up the trust. Nonetheless, the knowledge that a celebrity with very deep pockets is trying to reduce his contribution to the local tax base is likely to raise the ire of many neighbors who lack De Niro’s financial resources.

“They are grieving for a much lower assessment than we say the property is worth,” said the supervisor. He estimated the market value of the parcel at $8.9 million, and said that the Riverside Trust was trying to get its assessed valuation reduced from the previous $5.65 million to $3.7 million. “That’s why we won the lawsuit: because the numbers were preposterous,” said Wiegand. Gardiner is in the midst of a townwide reassessment process, so valuations are currently in a state of flux.

Strategy discussions in executive session on next steps left councilman John Hinson — whose campaign platform emphasized improving communications with townspeople about how and why the town spends money — feeling a need for feedback from Gardinerites about their priorities in this case. Characterizing the board’s dilemma as a choice between “a business decision or a principle decision,” he indicated that he was personally leaning toward continuing the fight, but also said that, as a businessman, he understood that some taxpayers would likely be more concerned about the short-term legal expenditure.

“When you decide not to go forward with one property because of the amount of money that’s been incurred in the past and the amount of money going forward, you’re setting a precedent where every other property that’s over two million dollars can turn around and say, ‘I’m not going to do this,’ and push and push and push. I’m somebody that, on principle, does not like to be pushed. If I get pushed, I’m going to stand my ground and hold it,” said Hinson. “On the business side, at what point do we reduce the liability of our taxpayers for doing something that we may or may not win? It’s a tough decision.”

“I was the only one who was on the Town Board when the decision was made to go after this, and it seemed like the right decision at the time. I have to be honest and say, ‘If I knew then what I know now, I wouldn’t have fought it’,” said councilman Warren Wiegand, but added, “If you don’t fight it, then that piece of taxes that are coming in have to be picked up by the other taxpayers in the town, and that’s where it becomes a little unfair.”

“If we don’t spend that $100,000, then after a number of years of losing, say, $45,000, then what catches up? Will it take us 20 years to pay for the lawsuit, or will the money that we don’t make from the assessment end up being a loss of an equal amount?” asked Zatz rhetorically. “Our concern is: Once this happens, a line can form out of the door for every property that’s $2 million or more.”

The supervisor repeatedly expressed frustration that the burden of paying for the precedent-setting legal battle has fallen entirely on the town, despite the fact that only about ten percent of the property taxes paid by Gardiner residents go into the town coffers, with Ulster County taking about 12 percent and the two school districts serving the town, New Paltz and Wallkill, accounting for nearly 80 percent. “The irony for us is the school system stands to lose in the hundreds of thousands of dollars. But we’re on the front line,” said Zatz. “We’re going out and spending almost as much as what the schools or the county would receive in taxes” if the assessment of the Riverside Trust property is maintained at its current level — or increased, as the town would prefer, to reflect its market value more accurately.

“Everybody has heard of the problems of being a taxpayer,” said Hinson. “Maybe it’s time that we have a principle that we can stand on and go back to the school district and say, ‘You know, you have a horse in this race. You’d better participate and help.’”

When an audience member suggested that a posse of Gardiner residents be formed to raise the issue at the next New Paltz school board meeting, Zatz responded, “That’s an excellent idea. We have a planned meeting with the superintendent of schools, but certainly there is a time where that would be a great thing to do.” Since all school district taxpayers would ultimately be impacted by a substantial reduction in annual receivables due to the radical devaluation of a large parcel in Gardiner, the issue seems like one that might resonate with New Paltz residents as well.

Councilman David Dukler — himself a former school board member — cautioned that such a lobbying effort should be coordinated with the Town Board’s plans to produce a fact sheet summarizing the problem and providing hard financial data on the valuation of the property and the potential tax impacts of the reduction in its assessed value that the Riverside Trust is demanding. The board agreed to Hinson’s suggestion that this information be disseminated on the town website, via social media and the New Paltz Times prior to the first Town Board meeting in December, when time will be set aside on the agenda for public discussion of the issue.

“If they [Riverside Trust] want to continue to strong-arm this case, maybe the public should have a little bit more input,” said Hinson. “We can at least say, ‘Here’s a fact sheet. How do you feel about it?’…I would like to make that decision knowing that I communicated to the population of Gardiner and they are fully aware of the situation, fully aware that it’s over 100,000, fully aware that here’s the impact not only to us, but to the school district and for the county.”

Public comment during the October 7 meeting hinted that the December discussion is likely to be spirited. “I don’t believe that the taxpayers in Gardiner are aware that you spent over $100,000,” said Gardiner resident Scott Bittner. “That’s a phenomenal amount to spend on one lawsuit.” David Strauss took the opposite tack, citing the case of a town that fought a protracted battle with a natural gas company over a hydrofracking ban and ultimately won. “I don’t know if the Town of Dryden taxpayers ever got anything back, by suing the gas industry for court costs or something; but they set a precedent which is nationwide now,” said the former Gardiner Zoning Board of Appeals chair. “I would think that we would be able to find out for the taxpayers what it would cost to pay for the appeal…as opposed to us having to pick up the tab for the Riverside Trust. It might be the same amount, but it would go on forever.”

In what must have come as a surprise to some listeners, Habersberger, a Town Board meeting regular who can usually be relied upon to oppose most municipal spending proposals, took a fighting stance this time. “In for a dime, in for a dollar. As a taxpayer, I don’t want to pay any tax for a lawsuit in Gardiner; but I’m also going to pay the loss if you back out on my school taxes in New Paltz,” he said, adding that he felt optimistic that the second lawsuit would also be decided in the town’s favor: “The first question the judge is going to ask is, ‘What changed between 2013 and 2014?’” “From your mouth to God’s ear,” responded Supervisor Zatz.

The public forum on how best to proceed with the Riverside Trust litigation will be held during the Town Board meeting on Tuesday, December 2 at the Gardiner Town Hall, scheduled to begin at 7 p.m. All Gardiner residents are invited to participate.

There is one comment

  1. ron Turner

    “Welcome, Stranger?” as the saying goes. The Trust has been way overassessed for a number of years, as the tax bills show. That is because, as was recently cited in New York State Supreme Court, Gardiner is at Uniform percent of value 93% when the 1990 law states that by the year 2,000, all municipalities in the state should be at 100% Why does Mr. Deniro’s trust have to make up for the difference?

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