Rosendale lowers Iron Mountain’s tax assessment by $1M in settlement

The entrance to Iron Mountain. (Photo by Lauren Thomas)

For the second time since 2008, the international records storage firm Iron Mountain, Inc. has successfully pressured the Town of Rosendale into reducing the tax assessment on one of its properties at 692/694 Binnewater Road. Following about six months of legal wrangling, the Town Board voted at its February 10 meeting to authorize town attorney Mary Lou Christiana to sign a stipulation of settlement, dropping the assessed value of the larger of the two adjacent lots by nearly a million dollars.

The decision came in the wake of a petition filed by Iron Mountain and its real estate management partner, Criterion Atlantic Property, Inc., against the Town of Rosendale, its assessor and Board of Assessment Review under Article 7 of New York State’s Real Property Tax Law. The property-owners’ action originally asked for a reduction in assessed value from the original 2020 figure of $4.6 million to $3.2 million, according to councilman Ernest Klepeis, who added, “I don’t believe their assessment has changed much over the years.”

Mindful of the potential costs of a lawsuit by a large multinational corporation with deep pockets, the town’s legal team entered into negotiations with Iron Mountain and Criterion, eventually agreeing on a compromise figure of $3.625 million for the 236-acre parcel. That assessment would apply for the tax years from 2020 to 2023.

The Town Board decided to accept the attorneys’ advice that accepting the settlement was in the town’s best interests, since the legal costs of insisting on the original assessed figure would inevitably exceed the loss to the town in taxes, which deputy supervisor Ken Hassett called “negligible” at $5,300 per year. Further litigation “could cost into tens of thousands of dollars just to get this project going,” Hassett told the board.

Klepeis calls Iron Mountain “as close as we come to a living legend here in Rosendale.” The company was founded by a mushroom farmer named Herman Knaust, who purchased a depleted iron mine in the Columbia County town of Livingston in 1936. In 1951, looking to diversify, Knaust incorporated his business as Iron Mountain Atomic Storage Corporation, offering underground vaults for the secure storage of bank records. After expanding its holdings to include the former cement mine in Binnewater (called Iron Mountain at Rosendale, or IMAR), the company went bankrupt and was bought out in the 1970s by the Boston-based Schooner Capital Corporation.

In 1978, it opened its first aboveground storage facility at a former strip mall on Route 9W in Port Ewen. Manufacturer’s Hanover Bank moved all its paper records out of Manhattan to the Port Ewen facility – the first time that bar codes were used by a records management company to allow real-time access to shipped boxes and documents.

By the 1980s, Iron Mountain was thriving, lining up Fortune 500 clients and buying up competitors, first in New England and eventually across the globe. It acquired Bell & Howell Records Management, Inc. in 1988, went public in 1996 and purchased British Data Management, Ltd. in 1998. The firm’s revenues increased from $3 million in 1981 to $2.7 billion at the end of 2007.

A $2 billion merger with the Australian data protection services provider Recall Holdings, with deep market penetration in the US, Canada and the UK, was approved in 2016. Fortune magazine listed Iron Mountain at number 729 on its list of the largest 1,000 public companies in the US that year. With more than 1,500 storage locations, “They call themselves the worldwide leader” in their field, said Klepeis.

Some of the materials protected by Iron Mountain facilities are artistic treasures, such as early films on highly combustible nitrate stock. At a former limestone mine in Pennsylvania, Bill Gates stores his Corbis photographic collection and the Universal Music Group stores its US masters. The unpublished recordings of musician Prince were moved to an Iron Mountain facility in Los Angeles following water damage at his Paisley Park recording facility in Minnesota. The Rosendale facility is reportedly home to the original recordings of Frank Sinatra and master recordings from Sony Music Entertainment. The company also stores the wills of Princess Diana, Charles Dickens and Charles Darwin.

Both Hassett and Klepeis indicated that it would be a losing battle for a town as small as Rosendale to tangle with the legal department of a company with such large resources, which likely has staff assigned to challenge assessments on a routine basis. “There’s precedent for large corporations to utilize this process to reduce their taxes,” the councilman said.