On Jan. 16, New York City Finance Department announced that it has reevaluated the amount of taxes the city has lost as a result of the recently discovered property assessment scam and readjusted the market value of the city's buildings to make up for lost revenues.

According to the announcement, the market value of commercial buildings involved in the scandal will go up by 23%, while the market value of residential buildings will increase by 20% to 23%. This development comes on the heels of the overall 18% property tax increase for the city, which has been approved last December.

"Last year, after we learned about the corruption scandal, the Finance Department reviewed the values of all 562 properties named in the indictment. For the fiscal year 2004 tentative roll, we have been able to recapture some of the value that has been missed in previous years on these properties," said Department Commissioner Martha E. Stark.

The tax assessment scam has been uncovered last year when it became known that Albert Schussler, a tax consultant to some of the city's most affluent landlords and a former tax assessor, has been bribing former colleagues to reduce the taxes on his clients' buildings. Schussler died a few weeks ago before he Went on trial to face the charges.

At least 15 of the city's tax assessors have been dismissed for improper conduct and are now awaiting sentencing on federal fraud, bribery, and racketeering charges. But, while none of the landlords involved have been indicted, they will have to repay the city millions of dollars it lost in tax revenues over the past 35 years.

According to the Finance Department report, the buildings that have been undervalued include 1 United Nations Plaza, 9 W. 57th St., and 420 Lexington Ave., as well as 559 other residential, commercial, and industrial properties.

The Real Estate Board of New York, which in the past has denied the landlords' knowledge about the bribery scam, indicated that it will go along with the city's ruling.

"As far as REBNY is concerned, we don't know whether the (current) figure is valid at all, we thought the matter was still under investigation," said Warren Wechsler, a spokesman for the Real Estate Board. "Individual owners may choose to challenge that assessment or not through the usual channels, but the industry is ready to pay its fair share."

The revenues from property tax assessment make up 20% of the city's annual budget.

COPYRIGHT 2003 Hagedorn Publication
COPYRIGHT 2003 Gale Group

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