Town of New Paltz and Zero Place reach tax settlement

When Zero Place was built, there weren’t a lot of comparable buildings around for determining a fair property tax assessment. There still aren’t, but the trend toward addressing climate change and a housing shortage by increasing population density could mean that New Paltz will look very different in 10 or 20 years. Nevertheless, the owners of the net-zero-energy building on North Chestnut have reached a settlement with town leaders to reduce the building’s assessment for the past two years and to freeze it for three into the future. 

For 2021, the assessment was lowered $2,456,630, to $3,200,000. The 2022 number was dropped $2,030,383, down to $5,000,000. That will remain the assessed amount for 2023, 2024, and 2025. 

Council members authorized their attorney “to sign such documents as are necessary to effectuate the settlement.” One of the documents that attorney Kyle Barnett submitted for review is a consent judgment, which will be signed by both attorneys and then submitted to the judge overseeing the case. Upon the judge’s signature, its conditions will have to be met. In the consent judgment, the petitioner—Net-Zero Development, LLC—waives the right to any refund of town tax payments “in excess of what said taxes would have been if said assessments had been made as determined,” but refunds of other taxes are not waived. The consent judgment specifically requires that the money paid to village, school district, and county be returned. 

According to Supervisor Neil Bettez, the rationale for having the town refund waived is because only the town has to bear the legal costs associated with this kind of tax certiorari challenge. 

Keith Libolt, a member of Net-Zero Development, LLC, confirmed that “we reached a settlement with the town regarding our taxes.” The developer went on to say, “If people want to scale and promote net-zero living or passive house standards, we have to come up with a way to assess these properties that does not negatively impact the owners.” Assessment standards for commercial buildings consider rental income, but not debt payments. Libolt noted that Zero Place had a much higher construction cost due to the solar panels, geothermal wells, and high-performance insulated concrete walls that allow for that eco-friendly net-zero-energy lifestyle. The rent for living in most of the units is set to cover those costs, and while it’s costlier it also includes all utilities. However, the assessment formula doesn’t contemplate factors such as net profit after covering those utility bills and debt payments.