Apartment Corporation, Redlich
spoke about real estate taxes and
the “tremendous inequity in how
these taxes are applied” to co-ops.
As the law currently stands, co-ops
are considered Class 2 properties,
rental, not ownership properties,
in the eyes of the law and are taxed
accordingly. As such, the assessments
are not calculated on market
value, but an arbitrary number
based on what they think the rental
value of the apartment should be.
Then a capricious rate of return is
applied to determine an underlying
value for each apartment. By that
procedure, the assessed value of
North Shore Towers homes has
risen 25% over the past two years,
translating to a nearly $5 million
real estate tax increase in the next
four, according to Redlich.
Understandably, there’s a lot
going on politically to help co-ops.
Redlich acknowledged the Co-op
Council, in which Bob Ricken
was involved when he was Board
President. In November, Ricken,
Redlich, Carmiciano and Board
Member Stanley Goldsmith met
with the Council, three of its
presidents and Assemblyman Ed
Braunstein to discuss what could
be done. And the night prior to this
Open Meeting, the Board and PAC
Committee met with New York
State Senator Tony Avella, who
has introduced several bills, one
of which would reclassify co-ops
into their own tax category. The
past four years, this latter bill has
been passed by the State Senate,
but not been taken up by the
Assembly, which must also vote
before it can be signed into law. It
seems the Speaker of the Assembly
is working with Mayor de Blasio to
stymie the bill, because the Mayor
doesn’t want the revenue stream
for his projects affected.
According to Redlich, without
positive change in the real estate
tax assessment in the immediate
future, there will be increases in
NST Maintenance fees for the next
four years. “There is simply no way
to avoid it. This is something, as
far as North Shore Towers is concerned,
beyond our control.”
Thus, Maintenance fees will
increase 2.5% for 2018. Redlich
noted, “Had we not taken profits,
surpluses from prior years and
escrowed that money into 2018
and 2019 to satisfy the $1 million
dollar principal payments on our
mortgage, this increase next year
would have been 5%. So thank
God for forward looking.”
With that spirit in mind, Redlich
is prepared to advise the Board to
continue the practice of escrowing
surpluses—if the co-op is fortunate
enough to have one next year—to
cover the 2020 principle payments
on the mortgage. “I know we’re
going to be up against it the next
four years, and anything I can do
to help lessen that maintenance
increase, I think is going to be a
priority.”
This Draconian real estate tax
assessment accounts for 46% of
NST’s total expenditures, most of
the nearly 900,000 increase in the
budget for 2018. Redlich stressed
he and Comptroller Serikstad “fly
blind” when formulating the budget
for the second half of a given
year, as the assessed values of
properties, as well as the tax rate,
runs July 1 to June 30 every year,
so they can only predicate their
findings on the numbers reported
as of June 30, 2017. Given the
exorbitantly high increase of the
past two years, both men are predicting
a “friendlier” assessment in
the future. But if assessed values
do not abate, “it’s going to rock
the boat again.”
During his presentation, Board Treasurer Steve Redlich
called upon all residents to write New York Assembly
Speaker Carl Heastie (speaker@nyassembly.gov) and urge
him to present Bill A7475 to the Assembly, going so far as to
offer the following emailing info and sample letter:
Graph shows the dramatic rise in assessments from 2016 into 2018
January 2018 ¢ NORTH SHORE TOWERS COURIER 13
