December 17th, 2012

Mr. David FrankelCommissioner, NYC Dept. of Finance 1 Centre St. 5th Floor. New York, NY 10007

Dear Commissioner Frankel:

Please express my thanks to Samara Karasyk, Reasa Semper and Eric Munson for their presentation on the property tax assessment process given on Thursday, December 6th. Their presentation was helpful and informative for the many members of my constituency in attendance.

The purpose of the presentation was to review the property tax assessment process for some of my concerned constituents living along the 2nd Avenue subway construction corridor. We held this meeting because co-op/condo board representatives and individuals living along 2nd Avenue approached my office with great concern that their property tax assessments reflected a substantial increase in the values of their respective homes in spite of dropping rentals prices and sales prices, thus a presumed drop in property value.

As I am sure you are aware, the 2nd Avenue corridor between 96th and 63rd Streets has been the center of tremendous disruption throughout the construction process of the subway. Newspaper reports have compared this area to living in a war zone with constant explosions and nonstop construction problems. If you have not visited this area, I invite you to take a tour with me. Residents enduring this process have seen a reduction in quality of life and, I believe, a reduction in the value of their homes. Once the subway is completed and running, they should see increased values in these properties, but not now.

It became apparent through your staff’s presentation that the assessment process is unable to take into account the environmental impacts from the construction process that have driven down rental costs and home values alike. In certain instances ‘comparable’ properties were selected by seemingly disconnected criteria such as average apartment size and the presence of fireplaces in individual units rather than relevant location. The old real estate cliché – location, location, location – seems to be most appropriate given the common value-driving force at play in this vicinity.

I understand that the Dept. of Finance must adhere to the tax assessment process as it is currently mandated. In light of this reality, I am asking that the Dept. of Finance provide my office with answers to the below list of follow up questions. In the event you are unable to answer any of the below listed questions, please indicate where my office will likely be able to get the best possible answers.

Some of the buildings that have approached my office were compared to a single other building, possibly from an entirely different area of Manhattan, and with no comparable construction nightmares. Why is there no minimum number of comparables for each building being assessed? Does state law identify a requisite number of comparables to be used?

In the mandated process: What role does location play in defining appropriate comparables? Does the role of location merit higher priority than building amenities? In your response, please include the legal parameters by which the Dept. of Finance must adhere when identifying appropriate comparables.

Why, in the appeal process, is the Dept. of Finance not present to defend its assessment? People seemed very frustrated that they were prepared to argue “their side” but could not have questions asked of the Dept.

Can buildings sharing a common dilemma appeal their assessments collectively

without taking legal action? If so, is there any existing precedent for doing so?

Can assessors perform site visits when evaluating a building and factor in environmental conditions? How can these visits be requested or executed?

If no precedent exists and the mandated process does not allow for environmental impacts, please identify where in the law appropriate changes could be made to remedy this issue. In your response, please also include suggested corrective language which would help achieve appropriate alterations to existing law.

In researching potential solutions to this issue, I discovered a special zoning designation given to portions of the 2nd Avenue Subway corridor in relation to the 2nd Avenue Subway construction.

Found in the attached 2011 Zoning Resolution under Article IX: Special Purpose Districts, Section F of the General Purposes portion of the resolution, the City Planning Commission identifies the following: “(f) to promote the most desirable use of land in the area and thus to conserve the value of land and buildings, and thereby protect the City's tax revenues”. Portions of 2nd Ave. have been designated as Special Transit Land use District in this document.

Considering that this document has identified isolated zones as “2nd Ave. transit areas” and factored into the process the valuation of land in the future, it would

seem appropriate to apply the same considerations when assessing the current value of affected properties within this zone. Having already been designated as a “Special Purpose District”, please identify if this designation could factor into the different approach to the assessment process going forward.

I would like to thank you in advance for your time and attention on this matter. Should you have any questions prior to responding to this letter, please contact Patrick Madigan in my office (212) 490-9535. Thank you again and I look forward to your response.

Sincerely,

Liz KruegerState Senator