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Long IslandSuffolk

Lindenhurst officials call off closing for Sandy properties in dispute over $185G in tax liens

Village officials said they didn't know about tax arrears on all 39 properties in NY Rising enhanced buyout program and want "a clean slate" before proceeding with the deal.

This vacant lot at 877 S. Bay St.

This vacant lot at 877 S. Bay St. in Lindenhurst had a house on it before superstorm Sandy. The village has called off the closing on 39 Sandy-damaged properties it had agreed to buy after tax liens were discovered on them. Photo Credit: David L. Pokress

A deal for Lindenhurst Village to take over from the state more than three dozen superstorm Sandy-damaged properties came to a sudden halt earlier this month when the village discovered tax liens on the properties.

Village officials were preparing to close on the properties on July 6, and that morning did a last-minute tax lien search that showed back taxes owed on the first two out of 39 properties, village attorney Gerard Glass said. The village immediately called off the closing, he said.

“We were under the impression we were going to take over these properties all current in their taxes,” Glass said. “The state said usually municipalities take them the way they are. We said, we’re not going to.”

Mayor Mike Lavorata said village officials would later find that back taxes were owed on all 39 properties, ranging from about $600 to $18,000 on each property and totaling about $185,000.

The storm-damaged properties were purchased by the state for about $18 million as part of NY Rising’s Enhanced Buyout program. The initiative was designed to return flood-prone properties to a natural state as buffer zones, with the houses demolished and no development allowed. The village agreed to take over the properties three years ago.

Governor’s Office of Storm Recovery spokeswoman Catie Marshall said the state performed a title search  before purchasing the properties to resolve any liens, as required under the program’s rules, and none was found. State agencies are exempt from paying property taxes, she added.

The agency and the village are working on “resolving all outstanding issues to move the sale forward and achieve a smooth transfer of title,” she wrote in an email.

The agency maintains that the money owed is for village taxes and that the village placed the liens. Village Administrator-Clerk Doug Madlon said the liens come from town and county taxes. “They may not understand the different levels of taxes,” he said of the agency.

Glass said the village will not pay “one dollar” of the back taxes.

“We need a clean slate from the day we close,” he said. “There’s no other way the village can accommodate this program.”

Marshall has said that the village was expected to take over all of the properties per their agreement, although since the program is voluntary, she said, it could walk away from any of the lots. Village officials pushed back on several of the more heavily damaged properties, contending that bulkhead repairs would be cost-prohibitive. Attempts to get the state to pay for bulkheading were mixed, with the state agreeing to some but not others, Glass said. At the time of the closing, two of the original properties — one on Bayview Avenue West  and another on Atlantic Street — had been rejected by the village.

“I didn’t want to spend money on bulkheading for these properties, so why would I pay someone else’s tax bill?” said Lavorata. “It’s not fair to the residents.”

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