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Nov 12, 2019

Bronxville homeowners, scions of wealth, can thank outdated assessments for tax breaks

In southern Westchester County perches the well-appointed village of Bronxville, a square mile in size, in a county that pays among the highest property taxes in America.

Here, titans of Wall Street, partners of white-shoe Manhattan law firms, physicians who lead departments at New York’s most prominent hospitals and Roger Goodell, commissioner of the National Football League, lay their heads each night.

And here in Bronxville, the state of New York’s broken property tax system, with aid from the town of Eastchester, has bestowed huge property taxbreaks on some of the nation’s wealthiest citizens.

A Tax Watch investigation into the Bronxville and Eastchester assessment rolls found that as much as $300 million in real property listed on Bronxville assessment rolls is not taxed by Westchester County, the Eastchester Fire District or the town of Eastchester.

That’s because Eastchester’s outdated rolls undervalue scores of Bronxville homes.

While owners of these properties pay taxes based on updated values to Bronxville’s village government and schools, where per-student spending is about $30,000 a year, they leave as much as $1.7 million on the table for Eastchester, its fire district and the county. The village is located in the town of Eastchester.

Their tax breaks were discovered in a Tax Watch investigation that explored inequities:

There are 88 Bronxville homes with Eastchester assessments at least $1 million lower than their Bronxville values.

There are 259 Bronxville homes — about 20 percent of the village’s residential parcels — with Eastchester assessments at least$537,000 lower than their Bronxville values, for a total of $270 million in untaxed property for county, town and fire district purposes.

Among the top under-assessed Bronxville homes, 74 were on four of the most desirable streets: Park Avenue, 23; TanglewyldeRoad, 20; Summit Avenue, 18; and Prescott Avenue, 13.

There was also a smattering for Bronxville mansions whose Eastchester assessments exceeded those in Bronxville, including the Hemlock Road estate of NFL Commissioner Goodell. His home, which was valued for $6.7 million by Eastchester but $5.5 million by Bronxville.

“It’s inequitable, and it’s unfair,” said Paul Feiner, town supervisor of Greenburgh, which revalued its property in 2016 after 60 years. “There are people in Eastchester who are paying more than they should, and those who are paying less than they should. It’s not fair for anybody.”

Eastchester isn’t alone, as Westchester is second to Suffolk County in having the state’s most outdated assessments.

Only seven of 25 Westchester municipalities have conducted a reassessment since 1987, with eight last doing so at least 50 years ago, including new Rochelle 1936; White Plains and Cortlandt, 1953; and Yonkers, 1954.

 

Five of six Rockland towns last conducted a revaluation in the 1980s, with Haverstraw’s reval in 2006 the most recent. Meanwhile, in Putnam, five of six towns did a revaluation in 2018 or 2019, with Philipstown last doing one in 1996. In Dutchess, 15 of 20 municipalities revalued in 2018 or 2019.

The wealthiest of the wealthy

Bronxville’s 6,400 residents live in one of the nation’s most affluent communities. Ranked eighth in Bloomberg’s 2018 report on “America’s 100Richest Places,” the village boasts an average household income of $335,000.

Among the tax-break winners is Glenn Greenberg, the founder and managing director of Brave Warrior Advisors, an investment advisory firm.

Greenberg’s father, Hank Greenberg, was a member of the Detroit Tigers whose name is ensconced in the Baseball Hall of Fame. Back in 1941, when he turned in his Tigers uniform for that of the U.S. Army, the town of Eastchester last conducted a revaluation of its real estate — a practice y municipal financial experts say should be undertaken every few years to ensure property-tax fairness.

That 78-year gap has provided the younger Greenberg, who in 2018 paid $173,000 in property taxes on his 21 Ridge Road a break that didn’t include an estimated $19,000 from his property tax bill, based on current tax rates.

To find the heart of Bronxville’s tax haven, take a walk up Prescott Avenue’s narrow cobblestone lane to Lawrence Park, where I strolled in the1990s when I owned a Tuckahoe home near the Bronxville line.  

At 26 Prescott, Timothy Collins, the founder and CEO of the private equity firm, Ripplewood Holdings, owns the Owl House, which features a sculpted raptor peering from an eave. Collins’ restored mansion pays village and school taxes based on a value of $8.6 million. But his tax bill for county, town, and fire taxes is based on a value of only $3.8 million.

His savings? An estimated $29,000 a year for someone who paid $165,000 in property taxes in 2018.

The estates of Lawrence Park were built in the late 19th- and early-20th century by real estate developer William Van Duzer Lawrence. His vision fora suburban community and arts colony within walking distance of the commuter railroad created what has become one of Westchester’s premier neighborhoods

Next door, John and Christine Fitzgibbons, at 2 Wellington Circle, reside in a storied home with a lacrosse net on the front lawn. Sided with native fieldstone, the home has eight bedrooms, six fireplaces, 18-inch thick walls, and a formal dining room shaped like a boat’s prow, according the 1992 book, “Lawrence Park: Bronxville’s Turn-of-the-Century Art Colony.”

It’s taxable value for Bronxville schools and village taxes was $6.2 million in 2018. Eastchester’s assessment, however, was just $1.9 million, leaving$4.3 million untaxed for town, county, and fire district taxes.

Fitzgibbons, an entrepreneur, philanthropist and member of the Council on Foreign Relations, made his fortune in Russian oil. He paid $117,000in in property taxes in 2018. His bill could have been $26,000 higher if the updated Bronxville value was used, based on current tax rates.

Together, Fitzgibbons and Collins have $9 million in real estate that’s taxed for Bronxville village and schools but not taxed for WestchesterCounty, its Bronx Valley sewer district, the Eastchester Fire District or the town of Eastchester.

Attempts to contact Fitzgibbons and Connors were unsuccessful.

$1.6 million tax yield unrealized

If taxed at today’s rate, that Bronxville’s untaxed real estate would yield an estimated $1.6 million in property taxes.

The taxes that Bronxville property owners aren’t charged are paid by the rest of Westchester’s taxpayers when it comes to county taxes. Eastchester taxpayers pick up Bronxville’s slack for fire service. And homeowners in Mount Vernon, Yonkers, Greenburgh and White Plains, including some in Westchester’s poorest neighborhoods, pay some of Bronxville’s share of county sewer taxes.

Greenberg bought his seven-bedroom estate at 21 Ridge Road for $8.5 million in 2015. The house was touted as “the jewel in Bronxville’s crown —a historic Italian Renaissance-style estate, built in 1911, and representing an era of great style and opulence.”

Greenberg’s home includes a wine cellar, protected by a bank vault door, which keeps up to 1,800 bottles of wine “in temperature-controlled comfort.”

Greenbergsaves close to $20,000 in property taxes because the outdated Eastchester assessment leaves $3.2 million of his house’s value untaxed for county, town and fire services.

Citing the 2017 federal tax bill that capped the deductibility of state and local taxes to $10,000, Greenberg doubts his home would fetch $8.5 million in today.

“I doubt I would get close to what I paid,” he said.

 

Colavita’s balancing act

Eastchester Town Supervsior Anthony Colavita acknowledges inequity in the system. But he has no intention to bring tax fairness to his town of32,000 residents.

“It’s unfair, but the problem is, to make it fair, we have to revalue the entire town,” he said. “That becomes a balancing act. And right now, I don’t think we are doing it.”

That balancing act would require that Eastchester abandon its nearly 80-old practice that benefits his constituents in Eastchester and Bronxville.

By keeping the town’s values lower with its World War II assessments, Eastchester taxpayers will continue to pay a smaller proportion of county taxes. As a bonus, Bronxville mansion owners are spared paying their fair share of town and fire taxes.

“The greater value would impact the county apportionment,” said Colavita, running for eighth term in November. “We would get a bigger part of the countywide pie. And Bronxville would have an increase in fire and county taxes.”

Eastchester Town Board member Glenn Bellitto, whose Bronxville assessment is $356,000 more than his Eastchester value, voted when he was on the Bronxville Village Board to update village rolls in the 2000s.

Bringing equity within Bronxville was a good idea 12 years ago, Bellitto said. Bringing tax equity to Eastchester and Westchester isn’t a 2019priority, added Bellitto.

“We did an internal equity thing,” Bellitto recalled.

Bronxville homeowner Betsy Harding, who led the 2007 revaluation campaign, said it’s time for Eastchester to do what the village did 12 years ago.

“I talk to people in other states, like Connecticut, and they are astounded,” Harding said. “It should be like fixing the roads, It’s something that government does.”

Michael Denning, the Eastchester Democrat challenging Colavita in November, agrees. “It’s the fairest way — going to full value,” he said.

Why assessments differ so much

Recent Westchester revaluations in Scarsdale and Greenburgh found that high-end homes overall had been under-assessed for decades. Bronxville’s assessment system provides a window into how property-rich homeowners get tax breaks without revaluation.

Bronxville since 2007 has kept its assessment rolls at 100 percent of value, considered the gold standard for assessments, with values updated annually to reflect current market conditions.

Eastchester’s assessment values, based on the town’s 1941 revaluation, are at 1.1 percent of market value. A property’s fair market value in Eastchester is found by applying what’s called the equalization rate — an imperfect state formula based on selected recent sales and appraisals.

Interviews with Eastchester Assessor Todd Huttunen and Bronxville Assessor Gerry Iagallo reveal how the disparities occur.

Iagallo relies on what’s happening in the Bronxville real estate market, so if there’s a sale, and the price reflects an arms-length transaction, he adopts that value for next year’s assessment roll. Recent sales also provide data for annual across-the-board value shifts in Bronxvilleneighborhoods.

“We believe that the assessment roll should reflect values that are as close to humanly possible to the actual current fair market value,” he said.

In Eastchester, Huttunen relies on the equalization rate. State law prohibits him from raising an Eastchester assessment if a house is sold at a price higher than the assessment unless he conducts a townwide revaluation.

He can only raise assessments to add the value of improvements after a homeowner files for a building permit, which Huttunen said happened with Goodell’s home.

Still, he warns that even Bronxville’s rolls aren’t perfect.

“Bronxville may be at 100%, but that doesn’t mean their values are all reasonable,” he said. “People who live in 100% valuation communities can, and do, file grievances too.”

Both Iagallo and Huttunen must certify each year that their assessment rolls are “fair and equitable.”

I asked Huttenen how the Bronxville and Eastchester rolls could both be “fair and equitable” when the difference was so large. “That’s a good question,” he said.

Follow Tax Watch columnist David McKay Wilson on Facebook and Twitter @davidmckay415.

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