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Home My WebLink About11 - Full Expanded EAF - 2024-12-03 - Attachment M - Real Estate Property Tax Project Report ATTACHMENT M REAL ESTATE PROPERTY TAX PROJECT REPORT, PREPARED BY CRONIN & CRONIN, PLLC CRONIN & CRONIN LAW FIRM, PLLC REAL ESTATE PROPERTY TAX PROJECTION REPORT FIELD HOME 2300 Catherine Street Cortlandt Manor Prepared: May 2022 Tax Years: 2021/22 Prepared For: Toll Brothers 50- A River Street Sleepy Hollow, NY 10591 Prepared By: Cronin & Cronin Law Firm, PLLC 200 Old Country Road, Suite 470 Mineola, New York 11501 C C & CRONIN & CRONIN LAW FIRM, PLLC BRAD W. CRONIN 200 OLD COUNTRY ROAD ∙ SUITE 470 TEL:516 -747 -2220 SEAN M. CRONIN * MINEOLA, NY 11501-4263 FAX: 516 -747-2240 CARA P. CRONIN † WWW.CRONINTAXLAW.COM RAYMOND J. FUREY ◊ INFO@CRONINTAXLAW.COM * Member NY and CT Bars † Member NY and NJ Bars ◊ Member NY and FL Bars May 17th, 2022 50-A River Street Sleepy Hollow, NY 10591 Re: OUR FILE # 100-1534 Project: Field Home 2302 Catherine Street, Cortlandt Manor, NY 10567 TOWN OF YORKTOWN PARCEL ID: 35.12-1-2 and 35.08-1-45 Dear Kevney, As per your request, the following is a projection of the real estate taxes and a comparison to the actual taxes for the above-noted property. The Town of Yorktown is required under the Real Property Tax Law to assess all properties based upon their physical condition on May 1 of each tax year with a valuation date of July 1 of the previous year. Accordingly, for purposes of this projection, we are estimating the value of the subject property as if it were fully constructed as of taxable status date. All estimates are based on current New York State law and the facts as provided to our office. The real estate tax projection does not take into account any exemptions that the property may receive. If the physical plans change, the applicable law may also change and the estimate of real estate taxes will no longer be valid. The courts have consistently ruled that the income approach is the preferred method for valuing commercial property in New York State. This is consistent with the mandates of Real Property Tax Law Section 581 which mandates this analysis for condominiums in this jurisdiction. Accordingly, we have performed an analysis based on upon hypothetical projected rentals as well as surrounding market data and have estimated the market value of the property. We have enclosed charts illustrating the current taxes as well as the projected revenue relying upon our projected taxes that will be generated to the various taxing entities. Should you require anything further, please do not hesitate to contact me. Very truly yours, Sean M. Cronin SEAN M. CRONIN C C & 3 Table of Contents Section 1 – Property & Assessment Information .......................................................................................... 4-6 Purpose, Use, and Scope of Report ........................................................................................................................... 4 Property Description ................................................................................................................................................. 4 Critical Study Dates .................................................................................................................................................. 4 Tax Cycle, Fiscal Periods & Payment Dates ............................................................................................................ 5 Reassessment Program ............................................................................................................................................. 5 Condominium Assessments ...................................................................................................................................... 6 Section 2 – Assumptions & Disclaimer .......................................................................................................... 7-8 Assumptions ............................................................................................................................................................. 7 Disclaimer ................................................................................................................................................................. 7 Section 3 – Assessment Analysis, Tax Rate Increase & Comparable Properties ..................................... 9-10 Assessment Analysis ................................................................................................................................................. 9 Tax Rate Increase...................................................................................................................................................... 9 Comparable Properties ............................................................................................................................................ 10 Section 4 – Property Description & Tax Projection ...................................................................................... 11 Property 1: Property Address.................................................................................................................................. 11 Property Description ........................................................................................................................................... 11 Tax Projection .................................................................................................................................................... 11 Section 5 – Income Approach Analysis: Exhibit 1 ......................................................................................... 12 4 SECTION 1 Property & Assessment Information Purpose, Use, and Scope of Report The purpose of this report is to provide the client with basic property tax information as well as projection of taxes for the properties described below. Property Description Property Address: 2302 Catherine Street Assessing Jurisdiction: Town of Yorktown General Description: 118 Age-Restricted, 3-bedroom Master-Down Townhome Condominium Units. Each will be between 2,316-2,465 square feet. Parcel Numbers: 35.12-1-2 and 35.08-1-45 Year Projected to be Built: 2023 Number of Units: 118 Land Area: approximately 50.51 acres Critical Study Dates: Study Prepared: May 2022 Tax Year under Analysis: 2023/24 (utilizing current tax rates) 5 Tax Cycle, Fiscal Periods & Payment Dates Tax Year: Town: Yorktown Fiscal Period: January 1st, 2023 through December 31st, 2023 Assessment Valuation Date: July 1st Assessment Equalization Rate: 1.93 (2022) Appeal Deadline: Application: June 21st, 2022 (4th Tuesday in June) Petition: 30 days after the assessment roll is finalized (Usually in September) Tax Bill/Notices: Town: April 1st School: September 1st Number of Tax Bill Installments: Town: One School: Two Tax Bills Due: Town: Payable by April 30th without penalty School: 1st Half, Payable by September 30th without penalty 2nd Half, Payable by January 31st without penalty Reassessment Program The Town of Yorktown does not engage in annual revaluations, and has not performed a town-wide revaluation of all the parcels in over fifty years. A subject sale at a price above the current assessment would not result in an increased assessment since both the New York Supreme Court and the U.S. Supreme Court have ruled that reassessing a property based upon a sale under these circumstances is selective reassessment in violation of the “Equal Protection Clause” of their respective Constitutions. The jurisdiction is able to increase your assessment based upon new construction, a physical change to the property, a change in zoning, or other similar change in use or condition. 6 Condominium Assessments New York Real Property Tax Law (“RPTL”) §581 and New York Real Property Law (“RPL”) §339- y establishes rules regarding the governing of assessment of residential cooperative, condominiums and rental properties. The provisions of RPTL §581 provide a method for valuing property which significantly reduces the assessed value of condominiums and cooperatives. In 1985, the Real Property Tax Law was amended to read: “The provisions of paragraph (a) of this subdivision shall not apply to such real property classified within: (i) on and after January first, nineteen hundred eighty-six, class one of section one thousand eight hundred two of this chapter; or (ii) on and after January first, nineteen hundred eighty-four, the homestead class of an approved assessing unit which has adopted the provisions of section one thousand nine hundred three of this chapter, or the homestead class of the portion outside an approved assessing unit of an eligible split school district which has adopted the provisions of section nineteen hundred three-a of this chapter…” While the primary reliance is on the income approach to value, many of the variables related to the project have been reviewed. We have estimated the assessment for the property taking into consideration not only the income approach, but also the construction costs, selling prices and assessments of similar units as well as our experience with the Town and the Assessor. 7 SECTION 2 Assumptions & Disclaimer Assumptions The underlying assumptions relied upon to project the future real estate taxes for the above-noted property include, but are not limited to: 1. That the legal descriptions, parcel numbers, and financial information supplied by the client are accurate; 2. That the building square footage, including the breakdown of office and storage space, provided to our office by the client is accurate; 3. A market study of comparable rentals in the vicinity performed by our office; 4. It should be noted that the anticipated tax rate for each tax year will increase by approximately 2% to 5% for Town, County, School and Special District taxes. This takes into consideration the 2% tax cap. The tax cap can be overridden by local governments, exempts pension costs and applies only to municipal budgets, not to the tax rate; 5. That the property has 118 Age Restricted, 3-Bedroom Townhome Units; Disclaimer The foregoing represents our best opinion based upon the facts and figures given to us. Our opinion is not meant to be a legal representation and/or warranty. It represents our best estimate of what an assessment should be and not what an Assessor may arbitrarily choose to place on the subject property, which, of course, is subject to a tax certiorari proceeding. 8 Additional Assumptions for New Building: The underlying assumptions relied upon to project the future real estate taxes for the above-noted property include, but are not limited to: 1. That each Condo Unit will be on its own tax lot; 2. That the existing Nursing Home Facility will be demolished. A new community will be built consisting of 118 Townhome Units; 3. A market study of comparable rentals in the vicinity performed by our office; 4. The projection is estimating the project “as if” complete; 5. That the laws governing the assessing of Real Property as they currently exist in New York State will be in effect when the construction is completed. Additional Assumptions for Condo: The underlying assumptions relied upon to project the future real estate taxes for the above-noted property include, but are not limited to: 1. That the condominium will be Age Restricted and consist of 118 units; 2. That all 118 units will include 3-Bedrooms, with the Master Bedroom on the First Floor; 3. That the lot will ultimately be re-apportioned into 118 lots that will share a common area. The Town of Yorktown will assign a separate tax lot designation to the common area but there will be no taxes due for this tax lot due the condominium structure; 4. That the average sale price of each unit will be $862,995; 9. That the 2022/23 assessment ratio used in our analyses is subject to change annually, potentially resulting in a change of the full market value for these properties next year; 10. That this letter is being sent to you with the express understanding that our firm assumes no liability for the projections presented herein; 9 SECTION 3 Assessment Analysis & Tax Rate Increase Assessment Analysis In general, the courts in New York have held that for income producing property, the Income Capitalization Approach is the most trusted method of valuation. We therefore look to market, as well as the actual income and expenses, at a location and value the property by applying those figures in an Income Capitalization analysis. The Income Capitalization analysis is the foundation of the majority of our negotiations with the respective taxing jurisdictions for tax certiorari purposes. While the Income Capitalization Approach is the trusted method of valuation, the courts have held that if there is a recent, arm’s length, subject sale of the property that cannot be explained away as abnormal, the sale price is the best indication of value. The courts have put the most weight on the sale price as an indication of the market and held that the subject sale supersedes the Income Capitalization Approach in these circumstances. New York Courts have also found that there is often a business component that can inflate a sale price making the sale not reflective of the market for assessment purposed to some degree. So while a subject sale can be critical in our negotiations, there are many factors we will review to determine if the sale is reflective of the market or rather a more complicated business that should not dictate the real estate value. Since the Town of Yorktown does not engage in annual revaluations and has no plans in the foreseeable future to perform a revaluation, absent a physical change to the property or in zoning, the assessment should remain stable and unchanged after it is established. The increase in your taxes over time would, therefore, be a result of a tax rate increase as indicated on the projections in this report. Our assessment analysis is based upon the review of comparable properties in the area, the current market rent, the history of the practices and assessments for the subject property, as well as the rent provided to us in your Potential Acquisition report. According to our analysis, the current assessment for the properties appears to be “in line” with the market values. Unless there is significant physical change to the condition of the properties, the existing assessments will be carried forward for the subsequent years. ** Please see Exhibits 1 in Section 5 of the report for our Income Approach Analysis. Tax Rate Increase We analyzed the historical tax rate increase in the Town of Yorktown over the past five years. The anticipated tax rate for the 2022/23 and subsequent tax years could increase by approximately 2% to 5% for Town, County, School and Special District taxes. Tax Cap: There is a 2% tax cap in New York State. The tax cap can be overridden by local governments, exempts pension costs, and applies only to municipal budgets- not to the tax rate. 10 Comparable Properties The following three properties are located in the same area as the subject properties and were used in our Assessment Analysis: Comp 1: Property Address: Glassbury Court: 2265 Dalton Drive Tax Map # 35.12-1-1.27-54 Property Type: Condo Assessment: 7,100 Full Market Value: $334,905 SF: 2,265 Value per SF: $148 Taxes 21/22: $8,074 Taxes per SF: $3.56 Comp 2: Property Address: Glassbury Court: 1806 Summerhill Ct Tax Map # 35.12-1-1.19-37 Property Type: Condo Assessment: 6,800 Full Market Value: $320,754 SF: 2,265 Value per SF: $142 Taxes 21/22: $7,733 Taxes per SF: $3.41 11 SECTION 4 Property Description & Tax Projection PROPERTY ADDRESS PROPERTY DESCRIPTION C&C File # 100-1534 Property Address: 2300 Catherine Street, Cortlandt Manor Assessing Jurisdiction : Town of Yorktown Tax Map #: 35.12-1-2 and 35.08-1-45 Property Type: Condominiums Year Built: 2023 Occupancy: 118 Units Building Square Footage Land Acreage: 50.51 Current Assessment 21/22: 74;250 Equalization Rate 22/23: 1.93 Current Full Market Value 21/22: 3,502,357 Current Taxes 21/22: $721.80 *This property receives tax exemptions as a Nursing Home Current Tax Rate 21/22: 1,440.422 TAX PROJECTION Projected Tax Burden as Fully Constructed: Year Total Projected Assessed Value Combined Tax Rate Est Taxes Est Taxes Per Unit 2023 895,939 1,440.422 $1,290,529.83 $10,936.69 Portion Total Projected Assessed Value Current Tax Rate Est Taxes Est Per Unit Town/County 895,939 439.267740 $393,557.10 $3,335.23 School 895,939 1,001.154 $896,972.73 $7.601.46 Total 895,939 1,440.422 $1,290,529.83 $10,936.69 12 SECTION 5 INCOME APPROACH ANALYSIS EXHIBIT 1 FILE # 100-1534 LAND ACRES 50.51 LAND SQ.FT. 2,200,215.6 TAX MAP # 35.12-1-2 35.08-1-45 ADDRESS 2302 CATHERINE ST 2021/22 VALUATION DATE July 1st TENANT/TYPE Condos Units 118 Rental Rate $4,500 Gross $6,372,000 TOTAL UNTIS 118 POTENTIAL GROSS INCOME $6,372,000 VACANCY 5% EFFECTIVE GROSS 6,053,400 EXPENSES 25% NET OPERATING INCOME 4,540,050 CURRENT TAXES 184,806 TOTAL CAP RATE INCLUDING TAX FACTOR 9.78 FULL VALUE 46,421,718 EQUALIZATION RATE 0.0193 NEW AV 895,939 VALUE PER UNIT 393,404