Town Settles Islamic School Tax Case

File PhotoTariq and Kamran Farid, owners of Edible Arrangements International, have reached a settlement with the town regarding the back taxes the town says they owe on their now abandoned Islamic Academy school property.

The school, ordered closed by the town earlier this year because it was deemed structurally unsafe for human use, lies vacant. It is located at the site of the former Pine Brook/Wightwood Elementary School at 56 Stony Creek Road and is currently for sale.

The settlement was reached last Friday in New Britain Superior Court, pending approval by Board of Selectmen (BOS). This morning the three-member BOS, meeting in First Selectman Jamie Cosgrove’s office at Town Hall, voted unanimously to accept the settlement. On Friday Superior Court Judge George Levine took a pre-trial session scheduled for today off the court calendar.  He said it would only be rescheduled “if the Board of Selectmen rejects the settlement.”

The tax assessor maintains the school lost their tax-exempt status when the brothers and their foundation quit-claimed the Branford school property on July 24, 2012, to SKF Stony Creek, LLC, a company they own, with the same address in Wallingford as the corporate headquarters of Edible Arrangements. The town’s position was that SKF Stony Creek has no tax exemption status.

After a 25 minute meeting in executive session, Cosgrove said a stipulated judgment will be entered by the court “in favor of the town on claims relating to tax exemptions from the years 2011 to 2012 to 2013.” He said the Farids will pay back taxes for those years “in an assessed value to be entered by the court in total amount of 55,000.” Click here to read an earlier story.

Town Attorney Bill Aniskovich, who outlined the settlement for the BOS in executive session, told the Eagle afterwards that the properties remained taxable for the contested years and in that sense the town won their part of the case. “They did not get tax-exempt status for those years,” he said in an interview.

However, a check of public records shows the town’s settlement agreement of $55,000 for the three years is not what the Farids actually owed the town on the 56 Stony Creek Road property. 

According to tax records, the taxes for 2011, 2012 and 2013 on the school property came to a total of $118,102 and possibly more in interest and liens for those years.

The discrepancy arises out of the fact that the settlement includes an adjusted valuation of the property based on both the price the Farid brothers paid for the property and a “comparable sales” appraisal submitted as part of the tax appeal. This reduced the assessed value of the property and the total amount due in taxes, those familiar with the details said.

The Farids have made it clear over the course of the case that they believed they were entitled to tax-exempt status. Although the school never opened, the building held religious services from time to time.

Asked if their non-profit status has been restored as part of this settlement, Aniskovich said in an interview that the Farids have now “filed an application that will be acted on by the assessor.” He added that there was “no agreement as part of the appeal as it relates to 2014 other than they will file an application and it will be acted on by the assessor.” He added: “If they want to do a school there, they have to file an application and do a school.”

History of School

The brothers purchased the former Pine Brook school in 2010.

The town’s tax collector, Joanne Cleary, submitted an affidavit during the course of the court proceedings saying that her records indicate that neither of the brothers nor the Farid Foundation “ever made any payments for taxes owing for 56 Stony Creek Road.”

The town has valued the 2.76-acre school property at $1.8 million and assessed the property at $1.2 million. 

Barbara Neal, the town’s tax assessor, determined that the Farid brothers had to pay taxes on the property because it was not tax-exempt after July 24, 2012 when the quit claim was filed. Branford began levying taxes on the property after that date. The brothers appealed. It is this tax case that landed in court.

Although the Farids did not open an Islamic Academy in Branford, they did open one in Guilford.  The Guilford school received non-profit status in 2011.

The school has now fallen into disrepair and is up for sale.  In recent years, the school was damaged in two separate broken sprinkler system incidents, one in 2010 and another in February, 2011. Earlier this year, on January 31, 2014, the town declared the building structurally unsafe for human use.

The brothers’ attorney, Jennifer Rignoli of the law firm of Parrett, Porto, Parese & Colwell in Hamden, sought comparative non-profit tax information after Neal denied them tax-exemption status after July 24, 2012. The request was extensive. She wanted to know about every property in Branford that received a full or partial tax exemption over the past five years.

Carolyn Kone, one of the town’s attorneys handling the case, said the plaintiffs (three groups in all, including SKF Stony Creek, LLC, Shoreline Islamic Academy, Inc. and Tariq Farid & Kamran Farid, Trustees of the Farid Foundation) had served “extensive interrogatories (25), many of which have numerous sub-parts (including one that has 10 sub-parts) and requests for production (13) along with 14 instructions.”

Gathering the data for these requests is a costly and time-consuming undertaking, Kone said.  If a settlement occurs, “the requests will not be required, thereby saving the municipal defendant time and resources that would otherwise be expended responding to plaintiffs’ discovery requests.”

She noted that if the tax case were resolved, there would be no need for the extensive information requests that would be costly and time-consuming for the town. 

And so it was.

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posted by: Jonnyb on November 24, 2014  3:57pm

Sounds like the Branford taxpayers got beat up on this deal…

Did the board see any real data on what it would cost to comply with Jennifer Rignoli’s request? Why settle after all of this?

posted by: Branford Guy on November 24, 2014  7:54pm

Actually the Branford taxpayers are getting a great deal in the settlement.  What the article fails to mention is that the buyers of this school paid only $620,000 for it in 2010 (its fair market value, after it had been on the market for a long time), and that the tax assessment of over $1,200,000 and assessment appraisal of $1,800,000 were absurd. Those higher assessments had never been appealed when owned by the non-profit, because they didn’t care, because they didn’t pay taxes.  So if the property had been assessed more accurately, its 70% valuation would have been something like $435,000, and the annual taxes would have been closer to $11,000 per year. So we are getting $55,000 when we probably only deserve $33,000.  What do you think the property is worth?

posted by: Jonnyb on November 25, 2014  8:18am

That’s an interesting point, but based on what I’ve read on here, the assessed value of the property was never in dispute and I’m not sure it is relevant. The tax assessment is the tax assessment, if they didn’t agree with it they should have appealed, regardless of tax status. When the town notified the brothers of the change, was there a legal or regulatory reason why they couldn’t appeal the assessment at the same time they fought to keep their tax-exempt status?

To your question of what I think the property is worth, I don’t really know. I would say that it’s 2.7 acres in a nice section of Branford, so I’d guess more than 620k, at least before the sprinklers flooded the building. It looks like Press/Cuozzo is the realtor selling the property but it’s not listed on their website. They have another listing on the same street, a residential home listed for 439k that sits on less than an acre…

Without knowing specific details on the case, it seems to me that the town was due over 100k and ended up with about half.

posted by: Branford Guy on November 25, 2014  8:57am

Yes, obviously they should have appealed. I am guessing that the valuation appeal got wrapped up into the appeal of the loss of tax exempt status, after July of 2012. In Branford, in most cases, where the assessed value exceeds $500,000, the town’s Board of Assessment Appeals will decline an appeal so that your only recourse is the Superior Court, where this apparently ended up.  The property is currently listed on the MLS for sale for $650,000.  It will be interesting to see what new value is placed on it as a result of the settlement, and by vision appraisal in this revaluation year.  I would still take the settlement money and run.  Branford hasn’t earned a dollar of tax revenue on this property since the early 1970’s before it became Wightwood School.