The Green Acres Mall in Valley Stream.

The Green Acres Mall in Valley Stream. Credit: Danielle Finkelstein

Two Valley Stream school districts are to return to court Friday for oral arguments in a lawsuit brought by one district after the other withheld tax money over a dispute about the Green Acres Mall tax breaks.

The court appearance follows one last week during which a judge ruled that the funds must be placed in a custodial account and cannot be moved without his permission, lawyers for both districts said.

In May, Valley Stream School District 24 refused to hand over to the Valley Stream Central High School District what it originally said was $2 million of its tax levy — the difference if payments-in-lieu-of-taxes, or PILOTs, were counted as tax revenue in the districts’ funding formula.

District 24 is one of three Valley Stream elementary districts that sends its students to the Central High School District and pays a portion of its tax levy to the high school district.

The dispute is over PILOTs granted to Macerich, the California-based owner of the Green Acres Mall in Valley Stream, by the Hempstead Town Industrial Development Agency. The mall and an adjacent shopping center, the Green Acres Commons, are not on the county’s tax rolls because of their PILOTs, and District 24 wants all properties that receive such tax breaks to be treated as if they remain on the tax rolls.

The withheld money is actually more than $1.4 million, not $2 million, which officials realized when the judge ordered a review of the total funds. About a million dollars in tax revenue is still due from Nassau County and expected in the first week of August, according to District 24’s lawyer, Michael Raniere. It will be moved from District 24’s account at a Capital One branch in Valley Stream to a Flushing Bank branch in Uniondale by Thursday, he said.

The high school district has sued District 24 to recoup the money, and in addition has asked Nassau Supreme Court Justice Jack Libert to force three members of the high school’s board of education who also sit on District 24’s board to recuse themselves from participating in discussions and votes about the lawsuit.

The board members have voluntarily recused themselves and Libert will not take action unless they change their minds, high school district attorney John Gross said.

On Friday, the judge will hear oral arguments and is expected to keep the money in the custodial account as he determines whether District 24 had the right to withhold part of its tax levy, Gross said.

The IDA and Macerich return to court Thursday in a separate lawsuit challenging the revocation of the tax breaks.

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