From Village Hall: CNC Deliberations and Homestead Act

Mattie Silberfein, an 11 year-old student at Greenacres was Mayor for the day on Tuesday February 9 and she was invited to open the meeting of the Village Board with a roll call and pledge of allegiance. Her parents purchased that honor at a fundraiser for Greenacres and she was clearly up for the job. She was poised and well spoken as she took the Mayor's chair and the spotlight in Rutherford Hall.

Mayor Jon Mark then went from young to old, wishing his 92 year-old mother Ruth Friendly a happy birthday, saying, that he has the job of Mayor today because his parents chose to move to Scarsdale in the summer of 1951.

It was a very busy night for the board, who held a meeting on the proposed library renovation prior to the 8 pm meeting, and scheduled a public hearing on adoption of the Homestead Tax Option at a meeting of the Town Board, immediately following the 8 pm session.

Before Trustees turned to discuss Homestead, many spoke in support of the proposed library renovation and expansion. Watch them speak here.

In a surprise appearance before the board, Trustee Deb Pekarek's husband John Leslie addressed the group about the Citizen's Nominating Committee's failure to re-nominate his wife Deb for a second term as Village Trustee. He praised her outstanding service, saying "she does her homework, is honest and upfront, asks questions that others are asking, encourages open discussion, and is sensitive to others." He continued, "Based on her performance it was a no brainer that she should have another term as trustee."

However Leslie said "The non partisan system is broken. It appears that the non-partisan system has become the partisan system. The committee grew into a political minefield. Volunteerism has taken a big hit."

Discussing the new board he noted that their credentials are impressive but questioned whether only those with an Ivy League degree can serve. He said, "Are we becoming even more elitist?" He also noted that no one from Greenaces would be on the new board and that there would be only one woman. He observed that there will be three lawyers, commenting, "In my experience too many lawyers impede progress." About the two new nominees he said, "One of them should wait another year to serve. What the CNC has done is wrong on many levels. We need to do something now."

The Mayor then commented, "There should be no doubt what a fine trustee Deb has been."

Howie Nadel, who chaired the Citizens Nominating Commitee deliberations responded to Leslie's comments and defended the committee. He reminded the trustees that they were all selected by the CNC. He said, "The committee is not a gang, they are not prejudiced, they are not territorial. They did not view this as a political event or a football game. They looked at facts, they processed them, they researched and researched again. They came up with what I believe is the best slate. I think it's a shame that their voluntary service is denigrated. It is very upsetting to lose. Don't turn them into a gang. They viewed their positions and responsibilities seriously and they deserve an apology."

Homestead Act:

After the Village Board meeting, the Town Board convened to discuss the Homestead Tax Option. As the Village proceeds through its second Village-wide revaluation in just two years, it feels like Groundhog Day. Though the Village and School Boards considered and rejected the adoption of the Homestead Act in 2014, they are now revisiting this issue again, as a part of the second village-wide tax revaluation. The question is whether the 42 owners of residential condominium units at Christie Place should be taxed based on their potential rental income or as single family homes.

Village Assessor Nanette Albanese estimates that if Homestead is not passed and these units continue to be assessed based on their potential rental income, in 2017 residents will pay an average of $14,464 in real estate taxes per unit, for condos valued at $737,000 t0 $1.9 million. If Homestead were adopted the average real estate tax for a unit at Christie Place is estimated to rise by $13,409 to $27,873 or almost double. On the other hand, if the Village does not adopt Homestead, and does not collect the additional $563,185 from Christie Place homeowners, the burden will be shared among Scarsdale's 5,698 homeowners at a cost of approximately $99 per household.

Residents of Christie Place, the Scarsdale Forum and the Scarsdale League of Women Voters all had positions on Homestead two years ago – and those opinions are being re-stated again this year.

The Scarsdale Forum has issued a report urging the both the school and the village boards to adopt homestead, while the League of Women Voters does not support adoption. The Tuesday night hearing drew a crowd, and you can listen to all the statements on the Scarsdale Cable Channel here.

Here are some sound bites from some of the speakers:

Deb Morel, President of the League of Women Voters of Scarsdale read the league's statement. Here is an excerpt from the statement explaining their viewpoint:

"It bears pointing out that the taxes of the One Christie Place residents were already almost doubled after the 2014 revaluation, using the legally prescribed income approach. It also should be mentioned that the original public/private partnership between the developer and the Village continues to provide much needed short-term and long-term parking, a police station and public restrooms at the One Christie Place site. If the Homestead Tax Option is not adopted, the Town estimates that the tax burden on the remaining approximately 5,700 single-family homeowners would be, on average, about $99.00 per property. This is even lower than the $150 average tax increase per single-family home estimated in 2014. The League believes that the harm to the One Christie Place residential condo owners from adoption of the Homestead Tax Option would not be justified by the potential benefits to single- family homeowners at this time.

In addition, the League reiterates its long-standing position of advocating for an increased supply of housing that provides residential alternatives for long-term Scarsdalians and we believe that adoption of the Homestead Tax Option under the present circumstances would counteract that aim."

The report from the Scarsdale Forum can be read in its entirety on the Forum website – however here is the conclusion of the document,

"The bottom line is that the reason Scarsdale is undergoing the costly and complex process of revaluation – for the second time just two years -- is to try to ensure the most equitable distribution of the property tax burden based on the fair market value of the properties. Is it fair to the rest of Scarsdale taxpayers for them to have to continue to subsidize to the tune of $563,185 per year the property taxes of the residents of these high-end, luxury condominium units?"

"...These condominiums are benefitting from a loophole in the Real Property Tax Law that allows certain condominiums to be assessed under an unrealistic income valuation approach, instead of the comparable sales method which provides a much more accurate measure of true current market value. When one is reaping a very substantial benefit from such a tax law loophole, one cannot seriously complain when that loophole is closed, especially when the mechanism to close that loophole – the Homestead Tax Option – has been the law of the State of New York for thirty-five years."

Laura Miller, a lifelong Scarsdale resident whose mother lives in the Christie Place Condominiums spoke against the adoption of Homestead, bringing up the benefits to Scarsdale Village that are built into the project. She said,

"Christie Place must allow the Village to utilize portions of the building for retail purposes, commuter parking and public amenities such as a public safety facility and two restrooms. Ginsburg Development Corporation was required to construct a parking facility with up to 224 spaces for Village use. The cost of this construction was about $300,000 per unit in the building, which was passed along to the buyers in their purchase prices.

The Village now owns these parking spaces at no cost to it. The Village charges approximately $1500 per spot per year for these spaces so they are earning approximately $336,000 per year plus the money from the 80 metered spots in the Christie Place municipal lot. I believe the owners of Christie Place still carry a note of over $2 million dollars from the construction of the garage facility. I believe the homeowners at Christie Place STILL pay the annual interest on that note. Single-family homeowners are not subsidizing the Village in this way so again, those homeowners should not be taxed in the same manner as the Christie Place units, just because they may be over 55."

The residential owners at Christie Place also pay a share of the public garage maintenance and cleaning costs from which the Village benefits.

Bob Berg said Christie Place homeowners have a "gaping property tax loophole,"
And ... "that after Christie Place was built in 2008, until the 2015 tax year, the owners of the Christie Place condos were able to pay only 1/3 of the property tax that owners of the same value single family houses must pay."

He called the situation "fundamentally unfair ...indefensible and unprincipled. " In his view it "discriminate(s) grossly in favor of a small class of residents -- some of whom are exceptionally wealthy and all of whom live in luxury, high-end condos -- without any income or asset screening test – just because you felt sorry for them because they might not have known when they bought their apartments that their Blue Light Special might not last forever."

He said that the 2014 revaluation slammed "legions of 55 year old plus residents who live in single family homes – many of whom have seen a doubling of their property taxes."

He suggested that "Residents who feel badly for the Christie Place residents are free to contribute to a "Save the Christie Place Residents Property Tax Subsidy Fund."

Richard Garwin age 88 lives in Christie Place with his wife who is 87 years old. He called the adoption of Homestead a "misuse of the law," and also pointed out all the benefits the Village enjoys from the public-private partnership. Read his statement in opposition to Homestead here. 

Sean Cohen of Chesterfield Road agreed with Miller. He said, "The Village gets $400,000 a year from that garage. The village has an income stream. No one in a house in Scarsdale provides an income stream. There is a restrictive covenant that only permits sales to seniors. These should be taxed like co-ops."

Howie Nadel, President of the Scarsdale Forum said, " The Executive Committee of the Scarsdale Forum favors the board adopting the Homestead Act. It's not about Christie Place. There will be additional units coming into Scarsdale. How will they be treated? More units are coming; I would hate to see this group make a 20-year mistake."

William Seltzer, an attorney representing the Christie Place Board of Managers reminded trustees that none of the underlying facts have changed since 2014.
He reviewed the rules and restrictions that govern sales agreements and the terms of the agreement between Ginsburg Development and the Village including the garage, the police station and public parking. He said that residents are now paying $166,000 per year for the debt on the garage which the attorney called a "$15 million garage." He read a letter from Mayor Peter Strauss who signed the original deal with Ginsburg objecting to the adoption of Homestead, calling it "unfair."

Michael Levine of 54 Walworth, who has studied the Village tax structure said, "I came to this meeting without an opinion on this issue, but I now believe the board should not adopt Homestead. The fairness is between coops and condos, not between condos and single-family homes. The parking revenue from Christie Place practically compensates for the difference. The Village has reduced costs in service for a multi-dwelling building. We need to conclude that things are fine as they are."

The Mayor read a statement from Carol Silverman, the Chair of the Advisory Council on Senior Citizens who reported that members agree that Christie Place residents be assessed at fair market value. Other seniors were hit hard by the revaluation. In their view, Christie Place homeowners are subsidized and Homestead should be passed.

At the end of the meeting the Board agreed to vote on the matter at their February 23rd meeting.