VESTAL — Town officials are appealing a Broome County court’s decision that some experts say could have far-reaching implications on how landlords and nonprofits pursue property tax
exemptions.
exemptions.
In July, Supreme Court Justice Robert Mulvey granted United Health Services Hospitals Inc. a real property tax exemption on the value of its multimillion dollar walk-in clinic building at 4417 Vestal Parkway East.
Mulvey concluded a lease agreement between the nonprofit health care organization and a private company, FGR Vestal LLC, supported awarding the tax exemption from a $5.8 million assessment, court documents show.
show.
David Berger, Vestal town attorney, filed a notice of appeal on Sept. 4. He reiterated the town’s position that the lease agreement was insufficient to support granting an exemption among other issues.
“We’re not satisfied with the decision,” Berger said, declining to discuss further details.
Under the lease, UHSH owns the building and FGR owns the land. Mulvey ruled the land would remain taxable based on its $2.4 million assessment.
Michael West, an attorney for the New York Council of Nonprofits, said the ruling could be used as a legal precedent by other for-profit companies.
for the New York Council of Nonprofits, said the ruling could be used as a legal precedent by other for-profit companies.
“You have hundreds and even thousands of landlords who are paying property taxes, despite the fact that they are renting to nonprofits,” West said. “Why wouldn’t they pursue a similar agreement?”
Officials with UHSH, including their attorney Paul Sheppard, of Hinman, Howard & Kattell, would not comment on the appeal. George Akel, a principle of FGR, also declined to comment on the matter.
Paul Battaglia, a Buffalo-based attorney and 20-year adjunct professor specializing in tax law at SUNY Buffalo Law School, said it appears the town is contending the exemption is invalid because UHSH doesn’t own the land, despite its ownership of the building.
, said it appears the town is contending the exemption is invalid because UHSH doesn’t own the land, despite its ownership of the building.
Essentially, similar tax exemptions in New York are generally only granted when nonprofits own the land, regardless of other circumstances.
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