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In Atria Assocs., we held that, as to all 19 plaintiffs, including CTA, the retroactive tax assessments referable to the period preceding the "rent commencement date" were "null and void" (Atria Assocs. v. County of Nassau, supra, at 851).
Summary of this case from Coliseum Towers v. NassauOpinion
March 30, 1992
Appeal from the Supreme Court, Nassau County (McGinity, J.).
Ordered that the order and judgment in Action No. 4 is modified, on the law, by deleting the provision thereof which granted that branch of the motion of the plaintiffs DiFazio Electric, Inc., Concept 400 Realty Co., and Computer Associates International, Inc., which was for summary judgment declaring that they are not liable for that portion of the property taxes assessed against the land on which the leased property is located, and substituting therefor a provision denying that branch of their motion; as so modified the order and judgment in Action No. 4 is affirmed insofar as appealed from, without costs or disbursements, and the matter is remitted to the Supreme Court, Nassau County for a hearing on the issue of whether the plaintiffs are liable under the subject leases for that portion of the property taxes assessed against the land on which the leased property is located; and it is further,
Ordered that the order and judgment in Action No. 12 is modified, on the law, by deleting (1) the provision thereof which granted that branch of the motion of the plaintiffs Reckson Associates and HMCC Associates which was for summary judgment declaring that they are not liable for that portion of the property taxes assessed against the land on which the leased property is located, and substituting therefor a provision denying that branch of their motion, and (2) the provision thereof which denied that branch of the motion of the plaintiffs Reckson Associates and HMCC Associates which was for summary judgment declaring January 28, 1989, to be the "rent commencement date" of the parcel C lease and substituting therefor a provision granting that branch of their motion; as so modified the order and judgment in Action No. 12 is affirmed insofar as appealed and cross-appealed from, without costs or disbursements, and the matter is remitted to the Supreme Court, Nassau County for (1) entry of an appropriate amended judgment, inter alia, declaring January 28, 1989 to be the "rent commencement date" of the parcel C lease, and (2) a hearing on the issue of whether the plaintiffs are liable under the subject leases for that portion of the property taxes assessed against the land on which the leased property is located; and it is further,
Ordered that the orders and judgments in the remaining actions are affirmed insofar as appealed from, with one bill of costs payable to the respondents appearing separately and filing separate briefs.
Between 1979 and 1986 the County of Nassau executed 22 substantially similar leases with the plaintiffs, requiring them to develop portions of a County-owned property known as Mitchel Field for commercial uses. The leases provided, inter alia, that the County would take no steps to place the demised premises on the tax rolls until a "rent commencement date", defined generally as 18 months after the necessary zoning variances for the agreed-upon use had been obtained. After the rent commencement date, the lessees would be responsible for all taxes "which * * * may * * * be charged, levied, * * * become due and payable, or liens upon or for or with respect to the Building, appurtenances or equipment".
The plaintiffs duly paid those taxes levied after the rent commencement date as provided in their respective leases. However, on August 27, 1988, the County took steps to collect taxes for the period between the execution of the leases and the applicable rent commencement dates. The plaintiffs brought these actions, inter alia, to declare the retroactive assessments null and void.
Only the State Legislature is empowered to grant exemptions from property taxation (see, RPTL 300; People ex rel. Buffalo Fort Erie Pub. Bridge Auth. v Davis, 277 N.Y. 292). The County, therefore, had no authority to refrain from taxing this County property held for a private use (see, RPTL 406; Matter of Oak Is. Beach Assn. v Mascari, 47 Misc.2d 21, affd 25 A.D.2d 497, affd 18 N.Y.2d 861).
Moreover, the County cannot be estopped from its statutory duty to enroll and assess property, and estoppel cannot be utilized to enforce a municipal contract that violates express statutory provisions (see, Granada Bldgs. v City of Kingston, 58 N.Y.2d 705; see also, Matter of Yachthaven Rest., 103 B.R. 68, 77-78). The County could not agree to refrain from enrolling and taxing non-exempt property.
However, the impropriety of the attempt to grant this tax exemption does not impose any duty to pay property taxes upon the plaintiffs. As a general rule, liability for property tax rests with the owner, not the tenant (see, Black v General Wiper Supply Co., 305 N.Y. 386, 392). Without specific agreement the tax liability for municipal property not held for public use lies with the municipality itself (see, Wilson Co. v City of New York, 73 N.Y.S.2d 206, 209, affd 276 App. Div. 755; Matter of Oak Is. Beach Assn. v Mascari, 47 Misc.2d 21, affd 25 A.D.2d 497, affd 18 N.Y.2d 861, supra).
The plaintiffs' obligation to pay property tax arises solely from the leases, and does not depend on whether the property was properly enrolled and assessed. Under the clear terms of the leases, the plaintiffs assumed tax liability as of the rent commencement date. Nothing in the leases provided for any liability on the plaintiffs' part before that date. Severance of the illegal tax exemptions and enforcement of the remainder of the lease is the proper remedy, as it maintains the substance of the contracts between the parties (see, Artache v Goldin, 133 A.D.2d 596, 599; Stephan v Shulman, 130 A.D.2d 484; Wilson Co. v City of New York, supra). Accordingly, the orders and judgments appealed from are affirmed insofar as they held the retroactive assessments null and void.
In addition, we note that RPTL 553 supersedes Nassau County Administrative Code § 6.24, and had retroactive assessments been permitted, they would have been limited to the year immediately preceding the current tax year (cf., Western N.Y. Pa. Ry. Co. v City of Buffalo, 176 Misc. 350, affd 264 App. Div. 832, affd 290 N.Y. 702).
The plaintiffs DiFazio Electric, Inc., Concept 400 Realty Co., Computer Associates International, Inc., Reckson Associates, and HMCC Associates also obtained summary judgment declaring that they were liable only for that portion of the property tax assessed against the buildings and appurtenances leased by them, and not the land. We find, however, that the language of the relevant section of the lease is so confusing that it renders impossible any determination of the intention of the parties. Since "the intent must be determined by * * * evidence [and] inferences outside the written words of the instrument * * * a question of fact [is] presented" (Mallad Constr. Corp. v County Fed. Sav. Loan Assn., 32 N.Y.2d 285, 291), and summary judgment was improperly granted. The orders and judgments appealed from are modified accordingly and the matters are remitted to the Supreme Court, Nassau County for a hearing on this issue.
The plaintiffs Rodolitz Organization, Rodolitz Associates, and Seaman-Mitchel Associates also raise this issue on appeal, but failed to raise it in their pleadings, and no portions of the orders and judgments they appeal from refer to this question. With respect to these plaintiffs this issue is not properly before this court.
Finally, the unrefuted evidence submitted by the plaintiffs Reckson Associates and HMCC Associates reveals that there was a formal acknowledgment by the Board of Supervisors of the Town of Hempstead that although it was properly apprised of the need for a variance based on building height as well as the need for a change in zoning classification, it failed through inadvertence to grant the variance until July 28, 1987. Since the term commencement date under the lease was defined as the date the property was zoned in terms no less restrictive than those approved by the County Planning Commission, and as the Planning Commission approval allowed a building slightly lower than that finally permitted but higher than that allowed by the earlier, incomplete rezoning, July 28, 1987, was the term commencement date, and the rent commencement date was January 28, 1989, eighteen months after the amendment was granted. Accordingly, summary judgment on this issue is granted in favor of these plaintiffs. Balletta, J.P., Miller, O'Brien and Ritter, JJ., concur.