A parcel in the town of Philadelphia is going to receive a reduced tax bill next year and a large refund for prior years after an apartment complex owner challenged the assessment and a lower figure was negotiated.
After a year of negotiations, the Town Council at a special meeting Monday dropped the assessment for the 150-unit Friends Settlement apartment complex, 300 Quaker Ave., from $15.5 million to $8.5 million. The $8.5 million assessment will be retroactive to 2008, and the town will be required to refund the difference in property taxes it collected over that span, when the full value was still in place.
The decision was sparked in 2008 when complex owner United Group of Companies Inc. of Troy which has seven apartment complexes in the north country, including Friends Settlement challenged the towns property assessment. The company made that move after the Army stopped providing subsidized leases for complexes owned by United and other developers that participated in the Section 801 Housing Program. The program was discontinued because occupancy rates among military families at the 13 participating complexes had declined significantly.
Supervisor Cheryl K. Horton, whom the council appointed last summer to lead negotiations with the developer, said the revised assessment for the apartments is comparable to other complexes in the towns of LeRay and Watertown.
Apartments at Friends Settlement were previously assessed at about $100,000 each, she said, but will now be about $56,000 with the reduction. That figure was determined by a professional appraisal of the property conducted last year and by comparing values of complexes in the towns of LeRay and Watertown. Duplex apartments Woodcliff East and Woodcliff West, located off Route 11 about 10 miles south of Philadelphia, are also assessed at about $56,000 each, she said.
Mrs. Horton said the town will pay back property taxes it owes from 2008 to 2012 with the pot of money it received from the developer during a settlement for the property when the Army discontinued its program in 2008 about $135,000. That will cover most of the amount owed, but the town is also expected to pay about $10,000 out of its coffers. Mrs. Horton did not specify the amount owed when asked Monday.
I believe the assessment for the property was too high to begin with, and its former value wasnt substantiated by the appraisal we conducted, she said. The assessment was cut quite a bit, but its now at a fair amount that is similar to other apartments. We didnt see how we could do any better.
She added the negotiated amount was higher than the $4.15 million assessment the developer first sought for the property.
Mrs. Horton said she hasnt determined how much the towns total assessed property will decrease. The lowered amount will drop the annual sales tax revenue Jefferson County distributes to municipalities that is allocated based on total assessment values. The change will also affect Indian River Central School Districts property tax rate and the sales tax revenue the village of Philadelphia receives.
Board member Ronald E. Spicer said he thought the assessment should have been higher but said the town couldnt afford to prolong the negotiation process.
Residents have said that if we dropped the rate for the apartments, it wouldnt be fair because their rates have gone up, he said. But the bottom line is we couldnt afford to keep this dragging out, which could have dropped the assessment value even lower.