Press Release: Board of Trustees Statement Regarding The Landing Litigation

PRESS RELEASE:  BOARD OF TRUSTEES STATEMENT REGARDING THE LANDING LITIGATION

During the February 8, 2022 Village of Dobbs Ferry Board of Trustees Meeting, the Board considered two resolutions regarding the settlement of property tax litigation initially brought in 2018 by The Landing on the Water in Dobbs Ferry against the Village of Dobbs Ferry, the Dobbs Ferry Union Free School District, the Town of Greenburgh and the County of Westchester involving a significant reduction in assessment value for certain properties at the Landing. The Mayor and Trustees would like to provide some context for those Dobbs Ferry citizens and taxpayers who may be affected by the settlement of this litigation.

The 1964 New York State Condominium Act was adopted with the goal of providing a path to home ownership to people who had been renting apartments and who were, predominately, lower income people. Unfortunately, one unintended consequence of this Act was that it created a loophole by which a number of more affluent taxpayers also converted their communities to condos and significantly lowered their property taxes.

In an effort to ward off the ramifications of a conversion, the Town of Greenburgh, which is the assessing unit for Dobbs Ferry properties, passed a local law closing the loophole. For reasons still unclear, the law became caught up in a technical delay at the New York State Secretary of State. The Board of Education passed a similar law in 2019, but neither of the laws were filed in sufficient time to avoid the litigation the Village of Dobbs Ferry is now a party to.

In 2018, The Landing filed paperwork to convert single family residences to condominiums for assessments, which resulted in a significant tax savings for the unit holders. This action commenced the litigation that was the subject of this settlement. At this moment, both local laws filed by the Village and the Board of Education are now in full effect and the loophole is now closed, but neither of those laws could be used to dismiss this pending litigation outright.

The Village Board of Trustees takes very seriously its responsibility to protect Village taxpayers. Of every tax dollar collected in Dobbs Ferry, about 67% goes to the school district, 20% to the Village, and 13% to the Town and County. The Village Board has been working with the Board of Education and the Town jointly in defending this litigation for over three years.

The Village's defense in this litigation hinged on novel arguments with no precedent.  Considering this, and the appeals process which could have prolonged the litigation for several more years, there was a concern that potential refunds and accrued interest would continue to build, as would the attorney fees surrounding the Village’s defense. In assessing the risks in going forward with litigating this case, the Board authorized this settlement, which will provide no tax refunds to The Landing for 2018 and 2019, saving a total combined $2.6 million plus interest that might have been risked if the litigation had continued and ultimately been lost. The Board of Trustees as a body has chosen to focus on that savings.  Based upon the advice of legal counsel, pressure from the Court to settle, the desire to settle by the School Board and the Town, the attendant risks of litigation, and the possibility of an ultimate adverse judgment that could lead to a significantly worse outcome, the Board decided to authorize this settlement to provide the least negative effect on many taxpayers in our community. 

Property taxes are based upon the tax levy and the assessment of each property, with variables that contribute to the tax levy and property assessments every year.  Although the exact impact for each taxpayer cannot be known, the effect of this settlement may result increased property taxes throughout the remainder of the Village. 

This was a difficult decision for the Board of Trustees as evidenced by the 5-2 vote authorizing this settlement. The Board's primary concern throughout, and unanimously, was to do all that it could legally do to protect the taxpayers. Recognizing this settlement will continue to impact Village taxpayers, the Board commits to continue to do what it can to mitigate those impacts.