Ulster town officials are discussing plans to establish a reserve account of $1.43 million to pay a tax refund in the event a reduction in the property assessment of the Hudson Valley Mall is granted by a judge. Town Supervisor James Quigley III said the assessment issue for the coming year has yet to be settled. Setting up the reserve account was simply a matter of being prudent, Quigley said.
The property’s value has been an issue for some time, with former owner PCK Development filing a lawsuit in 2016 in an attempt to have its assessment reduced from $66 million to $40 million for 2015. The mall was purchased by Augusta, Ga.-based Hull Property Group in January for $8.1 million, and that company is hoping to convince a judge to use that as its 2016 assessment value instead.
The assessment remained $66 million in the town’s tentative assessment rolls released this Monday, May 1.
Quigley said the town’s fund-balance policy requires an annual review of balances and requires the supervisor to make a recommendation for use of excess funds. In this case, the reserve account would come from accumulated fund balance of $2 million, with an additional $350,000 recommended to offset a possible assessment reduction for 2018.
“All I’m doing is saying that the town has these monies and we are identifying them so that they can be used for the worst-case tax-settlement value that might come out of any legal action underway by Hudson Valley Mall,” Quigley said.
Quigley said that the two sides remain significantly far apart in their appraisals submitted to a court in April. “It’s safe to say that our assessment supports our side of the argument and their appraisal supports their side of the argument,” he said. “That’s what we pay professionals for. And yes, there is a distance between the two. That’s a wide range.”
In January, James Hull, owner and managing principal of Hull Property Group, said future investment in the property would only be partially tied to the assessment issue, which he said was just one piece of the overall economic puzzle.
“To be fair to ourselves, we have to know what our economics are going to be before we do an investment,” Hull said. “The purchase price has very little to do with valuation. It’s one indication, but [it’s also] what’s the income of the property, what are the comparable sales of the property, and there’s a lot of methodology and procedures that you have to follow. We think we’ve got some real smart people and we’ll figure all that out.”
While he’d previously rejected the idea of an out-of-court settlement with Hull, Quigley said that would be one option discussed at an executive session of the town board with Town Attorney Jason Kovacs and Town Assessor James Maloney next Monday, May 8.
“It is going to be a wide-ranging discussion ranging from proceeding with the litigation to the opposite side of the spectrum, which would be to try to negotiate a settlement,” Quigley explained. “Our attorneys have been provided with the appraisals by our appraiser. And Hudson Valley Mall’s appraisers have provided the court [with their appraisals], which in turn have provided our attorneys the appraisals. We have documents that have estimates of value that we can sit down and go through and discuss strategy.”