Valley Stream to reassess commercial properties

Valley Stream officials have announced a plan to reassess all commercial properties in the village, in hopes they can put a stop to more than $1 million a year in tax refunds.

When a commercial property owner files for an assessment reduction, it can often take years for the case to be settled. However, the new assessment is retroactive to when the challenge was first filed, meaning the village has to pay back what it over-collected in taxes from that owner during those years.

John Mastromarino, Valley Stream’s treasurer, said the village usually waits for the county to settle its case with the property owner, then the village negotiates a new assessment and a refund. Nassau County’s assessment determines what a property owner pays in taxes to the county, town, school district and other special districts. Valley Stream’s assessment is separate and used only to determine village taxes. However, property owners typically challenge village and county assessments together.

According to Mastromarino, about 90 percent of the money the village repays in a year goes to commercial property owners. Last year, the village paid nearly $2 million in refunds including some big ticket items such as $424,000 to Vornado Realty for some land at the east end of the Green Acres Mall property. And Long Island American Water recently won an $820,000 refund, which dates back 12 years and will be paid over the next three budget cycles.

“If something has to be reduced,” Mastromarino said, “or if there’s a potential reduction, we don’t want to wait.”

The village recently hired a professional assessment firm, Michael Haberman Associates, to review all the commercial assessments in Valley Stream. The firm will receive an hourly fee of $125, up to $40,000 for the year.

Mastromarino said the firm’s associates will determine what properties are over-assessed. He said the reductions would be phased in over time, because the loss of tax revenue has to be made up by other property owners, including homeowners.

But Mastromarino said the impact on homeowners could be minimal. Right now, the village budgets $950,000 a year to pay back refunds. If the assessments are more accurate and there are fewer challenges, Mastromarino said the village won’t need that money in the budget every year, and could reduce what it collects in taxes.

The village’s current bond rating is very high, Mastromarino said, but falls just short of Triple-A, the highest possible rating. He said that the village’s financial advisors have told officials that the high amount of property tax refunds is all that stands in the way of the increased rating.

A Triple-A bond rating, Mastromarino said, would be mean lower interest rates when the village borrows money to fix roads, buy a new fire truck or other capital improvements.

Better rates could save the village $100,000 a year in interest payments, which could be used to pay for other projects, Mayor Ed Fare noted. “It’s like a credit card,” he said. “If you can get 19 percent down to 4 percent, you can borrow more.”

Fare said getting the commercial assessments fixed is key to improving the village’s financial health, which he said is strong already. “That’s a cornerstone, getting the assessments right,” he said.

Mastromarino said the re-assessment of commercial properties could take several years, and the firm will likely begin with the highest valued properties in the village. Residential properties will not be re-assessed.