Prime properties across Nassau County, including 144 acres in Plainview owned by Islanders owner Charles Wang, would receive tax refunds of up to about $4 million if the county legislature approves a plan to borrow $102 million to settle thousands of commercial and residential property tax assessment challenges.
Wang would get the largest total refund -- $3.8 million. The owners of The Source mall and Fortunoff in Westbury, the former Roosevelt Raceway property and a warehouse space on the original Grumman site in Bethpage all would get refunds near or above $1 million, records show.
Some of the refunds have been accumulating for more than 10 years; others, including Wang's properties, cover multiple tax years.
The list of top recipients includes seven country clubs and golf courses each with refunds of $300,000 or more, three assisted living facilities and the Lord & Taylor building on Miracle Mile in Manhasset.
Wang's refunds follow Nassau's agreement to settle challenges on his Plainview property, his Oyster Bay Cove estate and three other pieces of land in Oyster Bay for $3.8 million, according to county records. The county attorney first requested $6,843,500, but subsequently reduced it, saying the county overestimated the school taxes.
Commercial assessments are based on income generated by the property. The national recession reduced profits and increased vacancies, lawyers say. Unlike residential protests, complicated commercial tax challenges often take years to resolve, which compounds the amount of refunds owed.
"I think you can take the general economic climate and apply it to our tax roll," said County Attorney John Ciampoli. "Part of the assessment process with regard to commercial properties is based upon the income statement, which . . . takes a hit in the head when you have a major store like the Fortunoff store sitting vacant."
Attorney Allan Hyman, who represents The Source mall and Fortunoff, said, "There were enormous issues and problems with tenants and there are a lot of vacancies."
Owners of the Home Depot property on the grounds of the former Roosevelt Raceway are owed a $1.15 million refund, records show. Owners' attorney Jason Penighetti also cited vacancies, including Home Depot's closed Expo site.
"That shopping center is hurting," Penighetti said.
Nassau County Executive Edward Mangano had asked the legislature to borrow $102 million: $70 million for commercial refunds, $20 million for residential, plus borrowing costs.
Revised list of refunds
After Democrats noted that the legislature only approves settlements of $100,000 or more, Ciampoli submitted a revised list of refunds. Some of the amounts differ from the refunds first requested for the same properties. Some refunds were dropped, including the $1.04 million for part of the former Grumman property in Bethpage.
In all, the administration is asking the legislature to approve $9.2 million less in settlements for properties owed $100,000 or more.
"That should make any legislator uncomfortable, when backup shows settlements considerably less than the amount we were initially told," said Legis. David Denenberg (D-Merrick), who wants more information.
"Some of the refunds that were in the first list were estimated," Ciampoli said. "When we get a better figure, we adjust it. In each case, where there's an adjustment, there may be a separate, individual reason. What we're trying to do . . . is get better and more precise information."
Generally, the property owner's attorney provides the county with a refund estimate, including interest from the date taxes were first overpaid, said private tax attorney Donald Leistman. The county then rechecks and refines the number.
Ciampoli said tax lawyers had yet to provide some information requested by lawmakers, such as names of property principals. Those parcels were dropped from the revised list, he said.
Minority Democrats complain that they still cannot make an informed decision. They also are refusing to approve any borrowing until Republicans agree to a "fair" plan to redraw legislative district lines. Last year, Democrats blocked a Republican-reapportionment plan that they felt was partisan.
The county, meanwhile, has made an initial request to borrow $38 million. "The amendments . . . are out there so the package can be broken up into chunks," Ciampoli said. "That means there will have to be other bonding ordinances to be submitted and voted on."
Tax attorneys, who are paid a percentage of the refund, say they want their clients paid.
"The people who really get hurt in these cases are the tenants," Hyman said. "It's costly to the tenants, it's costly to the owners, it's costly to the residents and taxpayers of Nassau County."
Attorney Laureen Harris, head of the tax-challenge bar in Nassau, has asked a Supreme Court judge in a test case to begin the process of turning court-ordered settlements into monetary judgments against Nassau. That would allow attorneys to place liens on county bank accounts or seize county property. Arguments in the case are scheduled for Thursday.
"I suppose the county is going to need to have a judicial gun put to its head to authorize some kind of payment," said Leistman. "Otherwise, the claimants are going to be seizing police cars."
Wang site top of refund list
The commercial property owed the largest tax refund -- nearly $3 million -- is the Plainview land that Wang owns.
Five years ago, Wang planned to develop a multiuse project there, but withdrew his application in the face of community opposition. In 2010, Wang handed over the right to develop the property to Jericho builder Michael Dubb, with the Beechwood Organization. The deal was not an outright sale, so Wang remained the owner. Dubb has said he hopes to build hundreds of housing units and some office, retail and restaurants on the site.
Ciampoli said "just about all" of the $3 million reduction in the Plainview refund was due to overestimating the school taxes.
"The county is never in danger of paying out more than it should because when the treasurer issues the check; each lot is analyzed," he said.
Ciampoli said he does not recall when the Wang refunds were negotiated. "At no time was anyone here looking, following or tracking a tax [challenge] in the name of Wang," he said. "That's irrelevant. We look at the property."
Ciampoli said the settlement had "no connection" to last summer's referendum in which voters turned down a plan to borrow as much as $450 million to rebuild the aging Coliseum where the Islanders play.
Ciampoli and his chief deputy, Lisa LoCurto, said county attorneys sometimes don't know the property owner when they negotiate settlements.
"The owner is not what is determinative in deciding whether the case has merit," LoCurto said. "What is more important is the substantive assessment, whether it's correct, whether it can be supported."
Islanders senior vice president Michael Picker, who oversees Wang's real estate holdings, did not return calls. A spokeswoman for Wang's law firm, Farrell Fritz, would not comment on specific clients or cases.
Attorney Jon Santemma, representing the Hempstead Club and five other golf clubs, said, "There is nothing political about these golf clubs. They all have outings. It's all economics."
He said the golf business has been hurt in the recession, with the number of rounds down nationwide. He said courts have found that golf courses must be assessed on how they are used, not on their value if developed.
Garden City tax attorney Richard G. Fromewick cited higher tax rates and the economy as two key reasons for the extensive refunds.
"If you bought a strip of stores and now you have 40 percent vacancies, you can get a tremendous reduction on your real estate taxes," Fromewick said. "If the economics of the property don't sustain those [assessment] numbers, that's part of the increase in refunds."
Includes Plainview land, Oyster Bay Cove home and >Oyster Bay commercial properties.
GSM LI Llc, Hicksville
Former airplane manufacturing facility converted to warehouse and office space, now half empty with a contaminated site.
Breeze-Eastern Corp., Glenwood Landing
A former industrial building with contamination on its site. The tax challenge dates to 1995.
Marcus Avenue Acquisition, New Hyde Park
Low-rise office building.
Home Depot, Westbury
The Source mall, Westbury
Washington-Clinton LLC — Hempstead Village
Rent-stabilized apartment building in Hempstead Village.
Hempstead Country Club, Hempstead