New Haven Independent

Posted by: Darnell | January 3, 2008 9:03 AM

I want to build an miniture railroad in my house. I need a tax exemption.

Posted by: cedarhillresident | January 3, 2008 11:11 AM

maybe some private citizen would like to sue.

Ok legal beagles of NHI what ground can the citizens sue??

Posted by: Robert Pines | January 3, 2008 1:02 PM

Actually it's up to the Surface Transportation Board. Maybe the schools, libraries, fire houses, who are getting screwed should vote in more PEOPLE friendly people. CSXs $25 million a year CEO Michael Ward says thank you suckers.

Posted by: heavyd | January 3, 2008 1:17 PM

This family has been walking all over the city for some time. After hastening along the environmental degradation of Fair Haven with the "Circle of Life" eyesore on Middletown, they now have the cojones to bilk residents of their rightful proceeds from the property.

Exclusively railroad property? That just doesn't pass the straight face test. Maybe this legal challenge seems risky, but at some point the city needs to stand up rather than encourage this and other businesses to bankrupt the city to death by a thousand small cuts. The alders owe their voters a detailed explanation of the "case law" that guided this decision. Otherwise, there's room for valid skepticism about how such a politically connected business got off the hook.

Posted by: Hartford Johnson | January 3, 2008 1:22 PM

There appears to be no prohibition on the application of the statute to HO scale hobby railroads. Go for it.

Posted by: robn | January 3, 2008 1:38 PM

Sec 12-255 of the Connecticut statues
...but the real estate in this state owned by such corporation, or by a corporation whose property is operated by it, when not used exclusively for railroad purposes, shall be assessed and taxed where it is located.

I'm not a lawyer, but the Anastasios appear to hinge their argument upon two things...

1) that their company is a "railroad company" and not a solid waste management company.

2) that the property is used exclusively for railroad purposes.

Railroads transport materials, so the Anastasios can reasonably argue that that is what they're doing.

On the other hand, if portions of the property are used for storage, handling and processing the city can reasonably argue that those portions of the property should be prorated out from the railed portion of the property as taxable. You could take it further and say that the existance of ANY non-rail-transportation function on the property effectively sullies the Anastasiso WHOLE claim because the ENTIRE property isn't used "exclusively for railroad purposes" as the law states.

Do our public officials actually read any of the laws pertaining to their decisions? This feel a bit like the recent Westville chcken debacle when the LCI and BZA were enforecing a livestock regulation that didn't exist for that particular area.

Posted by: DEZ | January 3, 2008 1:45 PM

Unreal. ALL of the properties are exempt? Even the trucking company? This appears to be business as usual for politically connected persons. BTW, take a look at the "Circle of Death" the next time you drive north on 91. The 'great white mushroom' adjacent to the meadows of the Quinnipiac River is sporting a caved-in, shredded roof. How about a 'spot check' Mr. Ambose?! DEP? Anyone? Have the doors to 'mushroom' ever been closed during normal operation as the community and city were promised would be the case? And now rain water spills in creating havoc with whatever contaminants the mushroom grows on. Disgusting.

Posted by: LevelHeadedAndObjective | January 3, 2008 2:10 PM

How about the number of jobs associated with this company. The amount of cars and trucks that are taken off the road (you remember the road right?) and pollution that is spared from rail cars being loaded and unloaded everyday. How about the extra income tax, federal payroll taxes, and fuel taxes that are being created here. Hmmm sounds like it could be a good thing. Nahh..who would want progress and prosperity in New Haven..I think I would rather sue too..much easier. How many of you bloggers ever made ''payroll'' anyway? Complaining is much easier don't you think?

Posted by: Carole | January 3, 2008 2:29 PM

Calling yourself "level-headed and objective" doesn't make it so. Mr./Ms. L-H&O, do you have objective, factual answers to any of these questions you pose? Or are we just supposed to accept your assertion that these businesses are creating benefits?

There are three businesses on the property. One is a trucking firm. Taking trucks off the road? Quite the opposite. One is a real estate firm. Creating jobs? I doubt it; if I'm wrong, bring some facts to correct me. The third is a transfer station. Construction & demolition waste comes in by truck, is loaded onto rail cars, and gets shipped out again. From a New Haven perspective, that doesn't save air pollution but rather creates new pollution by bringing trucks here from all over Connecticut -- perhaps beyond. As far as I can tell, that is the only part of the three businesses that is rail-related. How that translates into a property tax exemption for "exclusive" railroad use is a question that I have not seen answered.

As for state and federal income, payroll, and fuel taxes, these don't create "progress and prosperity in New Haven." Jobs and local property taxes do that. And it's local property taxes that Anastasio is ducking by claiming this railroad exemption.

Posted by: DEZ | January 3, 2008 2:41 PM

Ugh...L, H & O...do YOU live in Fair Haven where the incidence of childrens asthma is the highest in the city and vies for the highest in CT? Are you KIDDING when you suggest that the Anestasio's firms have benefited the REMOVING of pollutants from the air? Circle of Life operates with the doors OPEN. Anastasio Trucking uses...guess what...TRUCKS. Big ones! Polluting the air in an impacted neighborhood. I agree with your input on "progress and prosperity". It's all "progress and prosperity" for one politically connected family. It's the same old cloud of pollution for the community. Get real!

Posted by: fairhavendoc | January 3, 2008 5:29 PM

so, here's the lesson folks. get in good with the mayor. give substantially to his campaigns. show him hospitality at your restaurant. threaten to sue when the city thinks about taking what is probably fairly theirs. save $500K.

like i have said before, the city needs to learn that to have more money in the long run, you have to risk a little money in the short term. but i guess it is a whole lot easier to go around with tow trucks and collect car taxes from the average folks out there.

now that they have said they won't pursue collecting the taxes, the city's lawyers' defense of not talking so they won't reveal their legal strategy is irrelevant. we should demand the city show accountability for their actions and reveal why they made this decision. jorge perez, start talking. alders, especially those in fair haven (sturgis-pascale and rhodeen) take note. this still smells bad (even jorge perez thinks so) and deserves a little more investigation. and until someone starts looking harder, or being a little more open to the public, everyone in the city government looks complicit.

Posted by: observer | January 3, 2008 11:12 PM

I'm not a lawyer, but it seems ridiculous to think the city could not contest the assertion that this family was running a "railroad company". The city has contested other cases where it didn't have solid legal footing, yet chose to pass on this one? Someone is getting taken care of.

Posted by: Gary Doyens | January 4, 2008 7:49 AM

I don't buy the legal arguement or the prostestations that political influence did not color the legal advice or the votes to give away a half million dollars now, and across the next 10 years, more than a million more to benefit the Anastasio family. It's a matter of credibility. An administration who does not believe in accountability, open government, robust discussion of public policy, but defends double dipping city employees pretending to be consultants, sleazy behavior by Sal Brancati, questionable vote pulling by Brian McGrath and at other times, just plain incompetence - it's a heroic leap of faith to believe the assertion that political influence via campaign dollars is not paying off. As always, I am amazed at how little money, in this case about $6K, it takes to buy that influence. Taxpayers just got another lump of coal in a post holiday stocking.

Posted by: Fedupwithliberals | January 4, 2008 8:55 AM

What a scam! Tony Soprano would be blushing right now.

Posted by: cedarhillresident | January 4, 2008 7:27 PM

I am still lost people!
Why did we not go after this money? Not just the half mill. but does this mean we gave up the right to taxes from them in the future to?? I mean maybe it may it would cost alot to fight them for the half mill but this sat there for 4 years..why? But over a ten year span how much more will they save because we did not fight?

Is this company expanding and bringing more jobs to New haven? Do the people that work there live here and spend there money here? Is this company a stepping stone for growth that may bring in bigger tax payers? I just don't get it?? What does New Haven tax payers get from letting this desperately needed income go?? Are we getting a discount on the clearing of downtown?

Posted by: Joe | January 5, 2008 2:37 AM

Just glanced at Sec 12-250 (the definitions section) to see what "for railway purposes" means. The statute references "40 C. 498" - which is the 1873 case Osborn v. Hartford & New Haven R. Co. Here's key language from the decision:

"We think that if the property is designed for the appropriate business of the railroad company, and is primarily and mainly so used, it does not become subject to local taxation by reason of incidental and occasional use for other purposes. The words of the statute subject property not used by the company for its appropriate business. These docks are so used, but not exclusively so used. The statute does not in words nor in spirit require such exclusive use."

The decision goes on to note subsections of a property that are clearly NOT used for railroad purposes MIGHT raise red flags, except for the fact that there is "no occasion to decide that point, for the assessment is not upon this room, but upon the entire wharves and docks of the defendants; and it is clear, we think, that neither the use of this room by the steamboat company, nor the occasional use of the wharves for freight in which the defendants are not interested, properly subjects the entire property to local taxation."

Anyway, I could be off, but my (very quick) read of this caselaw (which is THE law) is that the land must be generally designed to serve a RR purpose, but not every aspect must conform (in other words, there's no requirement of exclusive use). Presumably the city based at least a good part of their decision on this case. Thus, the majority members of the city litigation committee probably made the correct decision, since ultimately the property probably fits the CT court's rather loose notion of "railroad use" (there's a slight chance this might have been a close-call, but my bet is too many still-present factors scream RR use). As for the Nay vote -- it just doesn't seem justified by what seems a pretty straightforward )albeit counter-intuitive) 130+ year old legal precedent.

So, what appears to ACTUALLY "suck" is that the NHI wrote a bad story that quite reasonably inflamed a lot of people (including me -- I'm not the biggest fan of Anastasio et al). But instead of looking a little closer at the legal question (which despite all the potential insider politics here, IS THE KEY to the story), the NHI just throws the raw meat out here for all of us to consume. So NHI - try to use your powers to help us understand stuff, not to just tell us one side of the story and get us outraged for no good reason.

Posted by: cedarhillresident | January 6, 2008 8:55 AM

Joe
Good point and that covers 1 of three of the companys but not all three. Why not tax the other two?

Posted by: however | January 6, 2008 10:37 AM

Very good research Joe, however I bel;ieve you may have overlooked one key element between the situation of the case law and Anastasio. The wharves were not leased they were occasionally used. The RR company, CSX, leased the land to seperate company Nicessa LLC, thus the right to use is the interest of Nicessa LLC. An example might be; if a church uses the basement of a tag sale that does not make the church, nor the area used, not exempt. However, if the church leases a space to a seperate entity, such as the city of New Haven, or a for profit business, then the leased space is taxable, because it is not longer used exclusively for church purposes.

Regardless, the city obviously was not willing, or able to ask these questions for $480,000 plus all lost income going forward. Additionally, there was also a case in New Jersey that dealt with the same conditions as Nicesssa LLC, and the court ruled the land was subject to taxation by the municipality, and location or leased land of a RR company does not morph any user into a RR company. The city needed more experienced legal opinions. The nay vote knew the city did not have the representation. It was far more political

Posted by: cedarhillresident | January 6, 2008 12:25 PM

I found this old News story interesting.
It does not mention that is is a railroad company. And look at the names tied into all of it.

http://query.nytimes.com/gst/fullpage.html?res=9C0DE3D9163FF936A25755C0A961958260&sec=&spon=&pagewanted=2

Posted by: robn | January 6, 2008 3:26 PM

joe,

The other uses on the anastasio's property are neither "incidental" nor "occasional". They are intentional and constant. The language you found reinforces the notion that the land for non-rail uses should be prorated and taxed.

Posted by: Joe | January 6, 2008 5:45 PM

Thanks CedarHillResident. I hadn't looked too closely at the details, just the way the CT courts apply the law. Looking back at the old Circle of Life DEP decision, it refers to the leased properties as one large 280 acre property owned by CSX, that spans New Haven and North Haven, and the vast majority of which is still operated by CSX (ironically, the whole thing is referred to as the "Cedar Hill Rail Yard").

Anyway, my hunch is that the worry is a court would still consider all associated, leased parcels (maybe even with the 99 year lease--thanks for that link!) to be part of the main RR property, and thus exempt. The logic would be that (1) the vast majority of the 280 acres is RR (according to vision appraisal, the 3 Anastasio-leased properties total about 50 acres or so), (2) all title is still held by CSX, and (3) the Court's don't require "exclusivity," then the whole of the CSX properties, taken together, would be considered RR, so any associated properties would be as well. I guess it would matter how much attention a court would pay to historic divisions on a property (ie: if the 3 parcels had existed independent of the main parcel in the past, etc). Anyway, as I said in the above post, it's at best a close call, and since the caselaw is pretty straightforward against assessing the properties, I think the city probably still made the right legal call.

This all said, Andy Ross's point is perhaps the most interesting: is the state law exempting RR's still worthwhile? I don't know enough about the history or intent, but it seems that times have changed and it'd be worth at least reconsidering. But again, this is a state level issue, not a city level issue. I guess you could also take this case up to the CT S. Ct. to challenge the old interpretation... but I find it hard to believe the court would overturn such an old precedent that is still referenced as the sole authority on a longstanding state law.