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LIPA tax challenge against Huntington gets court date

A State Supreme Court justice has set a trial date for the largest in a series of property tax challenges by LIPA against the Town of Huntington, a move experts said could hasten settlement talks.

In an order dated May 17, Justice Elizabeth Hazlitt Emerson set the trial in the Huntington case for May 2, 2018.

Emerson also ordered parties in the case to “continue settlement discussions in an effort to fully resolve this matter.”

Huntington has filed suit against LIPA and National Grid seeking to end the tax challenge. The town has cited a 1998 letter by then LIPA chief Richard Kessel agreeing never to challenge taxes on the power plants. LIPA has challenged whether the letter is enforceable.

LIPA pays taxes of $76 million a year for the Northport power plant, the largest on Long Island and in the National Grid fleet.

Tax challenges against plants in Port Jefferson, Island Park and Glenwood Landing also are pending.

In all, the utility pays $189 million annually for taxes on the plants.

In the case of Port Jefferson, LIPA has sought to reduce its taxes by two-thirds over an eight-year period. The Village of Port Jefferson and the Port Jefferson School District have made an undisclosed counter offer.

Stuart P. Besen, an attorney for Huntington Town in the contract action, called the judge’s order “significant,” suggesting it could speed settlement talks.

“Anytime in any type of case that you get to the point where you’re going to trial, a lot of time negotiations heat up,” Besen said, noting the judge’s action sets a schedule for depositions in the contract suit.

The order also sets a schedule for payments of more than $600,000 from LIPA to Huntington Town for engineering and appraisal costs if LIPA and National Grid are prevented from pursuing the tax challenges.

John Gross, an attorney for school districts involved in the case, was unavailable for comment, and LIPA declined to comment. Huntington Town spokesman A.J. Carter declined to comment.

Setting a trial date came months after a business coalition asked a top state court judge to move the tax cases along.

The judge’s order “finally moves a long-running rhetorical debate over rate payer fairness into the reality of the courtroom,” said Kyle Strober, executive director of the Association for a Better Long Island, a developer’s group that supports the tax challenges.

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