Church Street South Taxes Cut 20%

Markeshia Ricks photoOwners of the former Church Street South apartment complex won a 20 percent tax cut after a judge agreed that the city assessor had overvalued the crumbling property.

On July 2, the Superior Court judge, Jon C. Blue, ordered the city to reduce its 2016 and 2017 valuations of the half-dozen properties that comprise the former 30-building, 301-unit federally subsidized apartment complex across from Union Station.

The complex’s owners, Northland Investment Corp., filed a tax appeal lawsuit against the city through its holding company Church Street New Haven LLC on June 21, 2017.

As a result of the lawsuit, Northland will receive $83,237 back from the city in “overpaid” taxes for 2016 and 2017. Northland will also pay 20 percent less in taxes this year than it would have paid based on the properties’ 2016 valuations.

Their taxes could further drop going forward after Northland finishes demolishing the vacant property and before it builds a new, prospective 900 to 1,000-unit mixed-income, mixed-use complex on the site. The city and Northland areseeking funding to begin that project.

Lawyer Michael D. Reiner, representing Northland on behalf of the Farmington, Conn. firm Greene Law, P.C., argued in the initial complaint filed with the New Haven Superior Court that the city has overvalued each of the complex’s six properties during the citywide revaluation in 2016.

Reiner described the city’s assessments of each property as “not that percentage of its true and actual value on the Assessment Date but ... grossly excessive, disproportionate and unlawful.”

The city assesses each taxable property in New Haven at 70 percent of its full market value. So, for example, if the city assessor determined a property’s full market value to be $100,000, then that property would be taxed at the assessed value of $70,000.

The tax rate, in turn, corresponds to the mill rate set by the alders and the mayor in each fiscal year’s budget. One mill corresponds to one dollar in taxes for every $1,000 of assessed value.

In 2016, the city’s assessor issuing the following full market valuations to the six properties that comprise the former Church Street South apartment complex:

1 Tower Lane = $596,200
86 South Orange St. = $3,118,500
91 Columbus Ave. = $1,198,500
94 Columbus Ave. = $2,148,000
89 Union Ave. = $1,292,000
169 Union Ave. = $1,386,400

The city and Northland cut a deal on revaluations for each of the properties before the case could make it to trial.

Per a June 18, 2018 motion for judgment signed by both Northland and the city, which Judge Blue agreed to in a final order on July 2, Northland received a 10.27 percent cut on each property’s valuation for Oct. 1, 2016. Northland then received another 11.44 percent cut on top of the new 2016 valuations for each property’s valuation for Oct. 1, 2017.

The new and current full-market valuations for each of the properties, as of Oct. 2017, are:

1 Tower Lane = $473,772
86 South Orange St. = $2,478,125
91 Columbus Ave. = $952,391
94 Columbus Ave. = $1,706,914
89 Union Ave. = $1,026,691
169 Union Ave. = $1,101,707

Click here to read the full judgment.

Thanks to the order, the properties’ cumulative values, and corresponding taxes, are 20.53 percent less than they were after the original 2016 assessment by the city.

“Any overpayment by the Plaintiff shall be a credit in the next tax payment,” reads the judgment.

That means that, in addition to paying 20 percent less going forward than what it was paying in 2016, Northland will get back from the city a total of $83,237 that it already paid for these properties in 2016 and 2017.

The judgment also notes that the valuations of Northland’s relevant properties may further decrease in the coming years, as the company has just recently begun to demolish Church Street South’s former residences.

“The parties acknowledge that it is the intention of the Plaintiff to demolish the structures on the Property,” the judgment reads. “At such time as the structures on the Property are demolished, removed and graded … the value of the Property will be adjusted by the assessor…”

Previous coverage of Church Street South:
The Tear-Down Begins
Finally Empty, Church Street South Ready To Disappear
Northland’s Insurer Sues To Stop Paying
Who Broke Church Street South?
Amid Destruction, Last Tenant Holds On
Survey: 48% Of Complex’s Kids Had Asthma
Families Relocated After Ceiling Collapses
Housing Disaster Spawns 4 Lawsuits
20 Last Families Urged To Move Out
Church St. South Refugees Fight Back
Church St. South Transfers 82 Section 8 Units
Tenants Seek A Ticket Back Home
City Teams With Northland To Rebuild
Church Street South Tenants’ Tickets Have Arrived
Church Street South Demolition Begins
This Time, Harp Gets HUD Face Time
Nightmare In 74B
Surprise! Now HUD Flunks Church St. South
Church St. South Tenants Get A Choice
Home-For-Xmas? Not Happening
Now It’s Christmas, Not Thanksgiving
Pols Enlist In Church Street South Fight
Raze? Preserve? Or Renew?
Church Street South Has A Suitor
Northland Faces Class-Action Lawsuit On Church Street South
First Attempt To Help Tenants Shuts Down
Few Details For Left-Behind Tenants
HUD: Help’s Here. Details To Follow
Mixed Signals For Church Street South Families
Church St. South Families Displaced A 2nd Time — For Yale Family Weekend
Church Street South Getting Cleared Out
200 Apartments Identified For Church Street South Families
Northland Asks Housing Authority For Help
Welcome Home
Shoddy Repairs Raise Alarm — & Northland Offer
Northland Gets Default Order — & A New Offer
HUD, Pike Step In
Northland Ordered To Fix Another 17 Roofs
Church Street South Evacuees Crammed In Hotel
Church Street South Endgame: Raze, Rebuild
Harp Blasts Northland, HUD
Flooding Plagues Once-Condemned Apartment
Church Street South Hit With 30 New Orders
Complaints Mount Against Church Street South
City Cracks Down On Church Street South, Again
Complex Flunks Fed Inspection, Rakes In Fed $$
Welcome Home — To Frozen Pipes
City Spotted Deadly Dangers; Feds Gave OK
No One Called 911 | “Hero” Didn’t Hesitate
“New” Church Street South Goes Nowhere Fast
Church Street South Tenants Organize

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Comments

posted by: 1644 on July 18, 2018  9:40pm

Wait till the lead painted building owners start asking for realistic appraisals based on the cost of abatement.

posted by: Noteworthy on July 18, 2018  9:41pm

and the financial pressure increases due to stupidity

posted by: Kevin McCarthy on July 18, 2018  9:55pm

One small clarification. The article says that the taxes could drop further after Northland finishes demolishing the buildings. In fact, CGS § 12-64a requires the city to take the buildings off the tax rolls once they are demolished and the rubble is removed. (The provision does not affect the taxes on the land.) As the story notes, the order references this provision.

Yet another budget headache.

posted by: BevHills730 on July 18, 2018  10:59pm

Northland Investment Corp is the worst.

posted by: Noteworthy on July 19, 2018  6:12am

It’s Northland’s fault the city taxed it too much? lol. Shame on Northland for seeking to pay its fair share vs. overpay.

posted by: Kevin McCarthy on July 19, 2018  6:58am

1644, maybe but probably not to any significant degree. As you probably know, apartment buildings are typically valued on a net income basis rather than comparable sales or cost of original construction. The mere presence of lead paint or the potential for an abatement order does not affect net income. The owners of buildings that incur substantial costs as a result of complying with an order have a good case for an assessment reduction. But the number of units affected by such orders is a tiny fraction of the tens of thousands of rental units in town. And the city’s ability to substantially expand its enforcement efforts is very limited. Hopefully, landlords will do a better job of routine maintenance in light of the coverage of the hazardous buildings. But I doubt many will incur the costs of remediation on their own.

posted by: Kevin McCarthy on July 19, 2018  8:18am

I carry no brief for Northland, which has been a bad landlord. But the law (CGS § 12-64) requires, with limited exceptions that don’t apply here, that property be assessed at its fair market value. A property’s condition affects its value. The city erred, and has acknowledged its error, in assessing this property. The law provides perverse incentives. But it has been on the books for decades, if not centuries. I suspect it will not changed soon.

posted by: Egocrata on July 19, 2018  9:27am

And this is, kids, why we need to move towards land value taxation. That piece of real estate is one of the most valuable parcels in Connecticut. As a vacant lot is taxed peanuts, giving zero incentive to Northland to get a project in place quickly. Tax the land, not the buildings. Land is scarce, buildings are cheap.

posted by: concerned_neighbor on July 19, 2018  9:56am

Valuation and tax paid are two different things. This article does not provide the factual basis for the conclusion that the taxpayer paid 20% less _tax_. In fact, the article does not examine how much tax was paid other than to say approximately $83,000 of tax that was paid in the past will be credited going forward.

This sentence is not factually supported by the reference: “Thanks to the order, the properties’ cumulative values, and corresponding taxes, are 20.53 percent less than they were after the original 2016 assessment by the city.” The Order addresses valuation only.

Because tax rates change - that is the amount per assessed value (which you do explain in the article) - you cannot conclude that Northland will see a 20% reduction in tax paid. While the valuation and corresponding assessment may decrease, the City may increase the mill rate so that there is no net change in tax paid.

Please correct the article or go get the evidence about the tax paid to support your assertions.

posted by: BevHills730 on July 19, 2018  10:32am

Noteworthy,

Northland has overseen a housing complex that has done lifelong damage to many of our youth.  Now the list of people and organizations you defend includes pedophiles, rapists, and slumlords.

posted by: Kevin McCarthy on July 19, 2018  1:56pm

Egocrata, years ago, the legislature authorized New London to conduct a land value taxation pilot. I have no idea whether it was implemented and if so how it worked out.

More generally, the fact that the idea has been around well over a century and has been implemented in a very small number of jurisdictions suggests that it is not a panacea. Pittsburgh stopped using this approach in 2001 and nonetheless seems to be doing well relative other Rust Belt cities.

concerned_neighbor, you are correct going forward. But the order also dealt with Northland’s past tax liability. The article is correct with regard to the 2016 and 2017 tax years.

posted by: 1644 on July 22, 2018  1:07pm

Egocrata:  The land is valued and taxed at its fair market value as land.  PA 490 provides some exceptions to this practice, and advocates of historic preservation, such as me, would argue for more.  Regardless, Northland would have cleared this land long ago and built a high-value development that would be generating a lot of tax revenue for New Haven had Colon and others not blocked it.  Northland never wanted to operate CSS, it wanted to clear the land to build something market-rate, precisely because the “highest and best use” of the parcel is as transit oriented, mixed use development.  New Haven’s effort to preserve subsidized housing is the reason this parcel is not generating a lot of income for the city.