Commercial property owners react to Mangano tax plan

A unique new round of deal making between

A unique new round of deal making between Nassau County Executive Edward Mangano and Assembly Deputy Speaker Earlene Hooper (D-Hempstead) surfaced in the frenzied final hours of the Albany legislative session. Photo Credit: Newsday / J. Conrad Williams Jr.

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Commercial property owners Thursday expressed mixed reactions to a Nassau County plan to overhaul the commercial property tax grievance system, with some saying it could drive up taxes and others calling it a starting point in addressing the county's flawed assessment system.

Nassau County Executive Edward Mangano, who is attempting to get state approval for the overhaul, says the proposal will bring "tax relief to all property owners" by creating a system that will stabilize assessment rates.

The plan, which is under consideration by the State Legislature, would require commercial property owners who contest their assessments to place up to 10 percent of the assessed value of their property in an escrow account. Money from the escrow account would be used to pay commercial property tax refunds, ending the county's practice of borrowing $80 million a year to fund them, Mangano said.

Ron Marchand, president of Hicks Holding Corp., a Westbury real estate holding company, said he was "extremely upset" about the proposal.

"It's like I'm going to be penalized for grieving my taxes, because their assessment system is not handled correctly," Marchand said. "If they're overtaxing me, I shouldn't have to pay a penalty to grieve."

But Desmond Ryan, executive director of the Association for a Better Long Island, a business development group, called the proposal a "a good starting point."

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Ryan noted that the plan's impact wouldn't be felt until the 2016-17 tax roll, giving the county time to make necessary changes in consultation with business groups and school districts.

"We've got to find a constructive solution to this problem," Ryan said of the tax refund issue.

In an interview Thursday, Mangano said the escrow fund would apply primarily to property owners who have not settled their grievance claim within the county's 15 month deadline. Under the current system, many cases drag on for years.

"The goal is, bring your evidence in the 15-month period," Mangano said in an interview. "That's what you're supposed to do under the law. Then you'll be adjusted."

Nassau County Legis. Howard Kopel (R-Lawrence), who helped the administration craft the new tax plan, said school districts and other taxing entities will receive 100 percent of the taxes they request from commercial property owners. To "compensate" for the money being held in escrow, all commercial properties would see a tax rate increase, Kopel said.

Mangano said that even if tax rates for commercial properties "adjusted," owners will still see reduced tax bills because their overall assessments will have gone down -- presuming a school district or municipality hasn't increased its tax levy.

Gary Beltrani, who owns child care centers on Long Island, including two in Nassau, said he is opposed to the plan because of the escrow requirement. He said the county's flawed property tax system is a reason he would not consider opening another location in Nassau.

"Eventually you get to the point, on the risk/reward scale, of it not even being worth it anymore," Beltrani said of opening a new business.

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He said taxes on his Massapequa center are nearly $90,000 more per year than in Melville, where he just opened a new location.

"I see why people are leaving Long Island, I really do," Beltrani said.

Gary Joel Schacker, president of the Commercial Industrial Broker Society of Long Island, which represents local commercial real estate agents, expressed concern that the plan would prompt tax increases.

"Anything that bumps property taxes up for owners is going to be disturbing ... that cost is going to be passed along to the tenant," Schacker said of the county's assessment proposal.

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