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Oral arguments set in Northport-East Northport’s LIPA tax case

LIPA is trying to reduce taxes on its Northport plant — and three others around the Island — through court challenges.

John Gross leads a community forum at Northport

John Gross leads a community forum at Northport High School on Tuesday. Credit: Yeong-Ung Yang

Oral arguments are to begin next week in the Northport-East Northport school district lawsuit challenging LIPA’s attempt to reduce the tax assessment on its Northport plant, an attorney for the school district said.

Attorney John Gross said at a community forum Tuesday night that Suffolk County Supreme Court Justice Elizabeth Emerson would hear oral arguments in the district’s third-party beneficiary breach of contract lawsuit on May 9 in Riverhead.

LIPA is trying to reduce taxes it pays on the Northport plant — and three others around the Island — through court challenges and has asked for up to a 90 percent reduction in the plant’s assessed value.

If LIPA gets the 90 percent assessment reduction, the annual taxes the Northport school district collects from LIPA would be cut drastically. LIPA now pays the town of Huntington and the school district about $82.5 million in taxes, of which $53 million goes to the district and makes up 38 percent of its annual tax levy. Under the 90 percent assessment reduction, the property taxes of homeowners in the school district are projected to potentially nearly double.

The district is fighting LIPA’s efforts to reduce the plant taxes, citing a 1997 agreement by LIPA and then Gov. George Pataki not to challenge the taxes as the basis for its breach of contract lawsuit.

“If they’re not paying us taxes, then what is the point of having this plant?” Northport resident Michael Marcantonio asked at the school district meeting held at Northport High School.

The Huntington Town Board at its Tuesday meeting unanimously approved hiring a second law firm to help in its lawsuit against LIPA and the assessment of the Northport Power plant.

Town officials selected Albany-based E. Stewart Jones Hacker Murphy LLP to assist previously retained Poughkeepsie-based Lewis and Greer PC in representing the town in the case.

Huntington sued LIPA and National Grid seeking to end the tax challenge. The town has cited a 1998 letter by LIPA’s then-chief Richard Kessel agreeing to never challenge taxes on the power plants. LIPA has questioned whether the letter is enforceable.

Town documents said it was “necessary” to hire outside counsel to assist Lewis and Greer because “the nature of this litigation is complex and specialized and the number of law firms with experience in trying tax grievances of power plants is limited.” Town documents go on to say E. Stewart Jones Hacker Murphy has “extensive” experience in that type of issue.

E. Stewart Jones Hacker Murphy will be paid an hourly rate of $285 for all attorney time, while paralegals will be paid $135 an hour, according to town documents.

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