Rudin Wins Back $350K in Real Estate Taxes From City: Judge

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The city owes Rudin Management Company $350,000 plus interest in real estate taxes collected for a public park Rudin donated to the city, a court has ruled.

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The Supreme Court of the State of New York judge said in his Jan. 16 decision, made public last Wednesday, that the developer should not have been held responsible for paying taxes on a public park for the 18 months after the city had taken over its operation even though the city had not officially received the deed for it.

Rudin’s attorney, Joel Marcus of law firm Marcus & Pollack, said the judge supported his argument “that the handover and dedication of the park had the same legal significance as a deed conveyance as far as exemption was concerned. Notwithstanding that legal argument, even if taxable, it was of zero value because of the easement agreement in favor of the city; so that no tax should have been collected during the period of the Rudin ownership and the two tax years appealed.”

The issue dates back to April 2011 when Rudin and  joint venture partner Global Holdings bought the Hudson Square submarket site where St. Vincent’s Hospital had been (it closed in 2010) out of bankruptcy for $260 million, according to court documents and The Wall Street Journal. That included one site on which North Shore-LIJ would erect a medical facility, one where Rudin would build  The Greenwich Lane residential condominium at 155 West 11th Street and one for a triangular-public park, St. Vincent’s Triangle.

In March of the following year, the New York City Planning Commission gave Rudin the green light for the project so long as the company “convey[ed] an easement to the city for perpetuity for use of the park as open public space…surrender[ed] all future development rights for the park space” and “convey[ed] title to the park to the city parks department upon substantial completion of the park,” among other conditions, court documents indicate. It was later determined that St. Vincent’s Triangle, across from the former St. Vincent’s Hospital main campus at 7-15 Seventh Avenue would include an AIDS memorial sculpture.

Rudin built the park and handed it over to the city gratis on Aug. 21 2015 (with the city and Rudin issuing a joint press release about the park’s opening), but the city did not take the deed until Feb. 15, 2017, when the sculpture—for which the city paid $3.6 million—was done. During that 18-month period the city “was in full control of the park…and it was open for public use, but the city refused to take formal title by accepting a deed from” Rudin, court records indicate, because the sculpture wasn’t completed.

The city maintained that so long as the property was technically in the name of the developer it was fully taxable, but Rudin’s attorney argued that the property was restricted to park use in perpetuity and had “no potential for private sale or income production” because the title was committed to the city, so the “value should be assessed at zero,” according to the recent court filing.

A Greenwich Lane spokeswoman responded to a request for comment on the case with the following statement: “We are proud to have built and donated this beautiful community park to the City of New York, which includes the land that the NYC AIDS Memorial sits on. The park, which opened to the public in 2015, is a gathering place for all New Yorkers to enjoy.”

New York City Law Department, the attorney for the city, didn’t immediately respond to a request for comment.