GUILDERLAND — The city of Watervliet is one of 103 property owners suing the town of Guilderland in Albany County Supreme Court in a certiorari proceeding in response to the recent townwide property revaluation.
Watervliet is suing over an 850-percent increase in the value of its holdings — a reservoir, dam, and related piping — according to Jeremy Smith, the city’s general manager.

The assessment of Watervliet’s 688-acre reservoir holding rose from about $2.6 million last year to about $17.7 million in 2019. Smith says that, if the new assessment stands, each taxpayer in the city of Watervliet will need to pay 25 percent more in water bills. 

In its petition, the city says that its properties should be valued at no more than $2,409,000. 

Assessor Karen Van Wagenen confirmed that the city is asking for an assessment lower than last year’s. 

Smith said that the 2019 assessment is almost seven times that of last year’s. He called this increase “heinous” and said it was arbitrary, since Guilderland did not ask for any information about the property until after the town came up with the new figure. 

Smith asked Guilderland at the time, he told The Enterprise this week, how the new figure had been decided, and was only then asked for detailed information about the property. 

The city’s petition says that the new assessment was “established without any supporting data” and was “attributed entirely to a highest and best valuation of the land that was committed to the existing use of a dam and reservoir facility.” 

Smith told The Enterprise that he believes the town assessed the land as if it were developable. “And this is obviously not developable land,” he said. 

 Through The Enterprise, Van Wagenen responded that the town’s outside consultants, Andrew and Laurence Farbstein of Industrial & Utility Valuation, would have taken the lead on assessing the reservoir, and would have based it on regional data. “They’re very familiar with how to do reservoirs and hydroelectric,” she said of the Farbsteins.

Watervliet had not been able to provide the information requested within the narrow 10-day timeframe allotted, Smith said, and so the assessment became final. The city did provide that information as part of its grievance, but that was denied, he said. 

Van Wagenen said that Watervliet would have received its new assessment at the beginning of March and would have had that month to provide additional information, “like anyone else.” The only time Watervliet would have been given a 10-day deadline, she said, would be by the board of assessment review, which needs to have materials back in order to complete its process.

Laurence Farbstein said that data mailers would have been sent out to the city of Watervliet, like other property owners, in October or at least by November of 2018, so the city would have had months to supply the town with information. 

“We asked for the data for both the reservoir and, as you know, there’s a hydroelectric plant that generates a million megawatts on the site, so we had asked for the information, which they ignored,” Farbstein said.

The Enterprise asked Smith about the data mailer. He responded, “I am not looking to argue with Mr. Farbstein’s opinions or the Assessor’s opinions. No real information was used in the calculation. The Town has since been provided information. Facts are, the assessment was raised 700 percent (7 times the historical value) without any reasoning. Since being provided the data there has been no change or update.” 

Utility valuation is one of his specialties, Farbstein said, adding that the municipalities he has represented include the town of Olive against the city of New York with the Ashokan Reservoir, “which is a little bit larger than this one — it generates 350 million gallons a day and sends it to the city of New York.” He also represented the town of Kent against the city of New York, with respect to the Boyd’s Dam reservoir, and on the flip side has represented the city of Peekskill in regard to the Wiccopee Reservoir, he said, adding that he has negotiated settlements or testified on all of those. 

Closer to home, he has worked on revaluations for Albany multiple times, Schenectady once, East Greenbush multiple times, Colonie, and Coeymans, he said. 

Farbstein said, “I have found historically that the reason people don’t respond to data mailers is because in their mind the information would not be helpful to their situation.” 

He added, “You can’t not give us the information and then argue, ‘Because I didn’t give you the information, you don’t have the right number.’” 

Farbstein said he asked questions that were standard in the industry for describing reservoirs. “I wasn’t asking for rocket-science calculations.” 

The only information he had specific to the Watervliet Reservoir, Farbstein said, was an environmental-impact survey the city had filled out for a different purpose. He has valued hydroelectric plants as well as conventional power plants, he said. “So I had to give my best guess,” he said, “because they wouldn’t give us any information.”

So, based on his experience, “You have a reasonable idea in terms of the grubbing and clearing, in terms of the weirs, in terms of the gates, in terms of other parts — the cyclonic cement, spillways, all the things that go into a reservoir.

Farbstein was prepared to make an adjustment once the town received information, which never came. “I might be too high, but I also might be too low … If they thought our number was so high that it was outrageous, why wouldn’t they have provided the information and had it adjusted downward?” 

He has no idea, he said, what the city might have submitted to the board of assessment review, “because it’s an independent body.” By the time that process was underway, he said, his time consulting on the revaluation was over.

Smith told The Enterprise that, before the grievance process, he had asked to come in and have a discussion with the town, but was told, he recalled, “There was a process and that they were not willing to discuss.” 

Van Wagenen said she was never contacted by the city of Watervliet. “He may have requested meetings with the town board or the supervisor, but they're not supposed to be involved with the assessment process. If he reached out to other aspects of the town, they would have refused.” 

She added, “He could have come in for an informal [review], just like anyone else. He would have sat down with the Farbsteins, more than likely. He can’t go outside the system.” 

Smith confirmed, through The Enterprise, that he had contacted the town supervisor.

A court date has not been scheduled, Smith said.

Other certiorari proceedings 

One-hundred-and-three property owners are suing Guilderland, Van Wagenen said; combined those 103 properties have a total new assessed value of almost $570 million. 

Guilderland, which had not done a town-wide revaluation since 2005, has 12,803  properties with a total assessed value of $4.8 billion. In the revaluation, properties overall increased 40 percent from $3.4 billion town-wide.

Several multifamily projects intended for elderly residents, or originally intended for elderly residents, have filed certiorari proceedings. 

— Summit at Mill Hill: The 2019 assessment of this 92-unit senior independent-living apartment building, on Route 155 at Mill Hill Court, is $1,909,400. The petition asks for this to be reduced by half, to $954,700. 

The 2019 assessment is, Van Wagenen said, a partial assessment, since the complex — currently under construction — was “only about 15 percent done as of March 1.” 

The certiorari petition says that the new assessment is “overvalued and unequally assessed”; 

— Omni Senior Living: This independent senior-living complex of 96 units on Carman Road, built years ago, is seeking a reduction of more than $8 million. Its current assessment is $8,497,200, and it is asking for a new assessed value of $350,000. 

The petition written by attorney Paul Goldman states that, by law, because 20 percent of the units are income-restricted, the “net operating income” of the facility needs to be calculated in a different manner, which does not include federal, state, or municipal income tax credits, subsidized mortgage financing, or project grants, “where such subsidies are used to offset the project development cost in order to provide for lower initial rents as determined by regulations promulgated by the division of housing and community renewal; and

— Mill Hollow Two: Mill Hollow Two, located just off Route 20 near the town hall, was originally an age-restricted multiple residence project, but received approval from the town in 2016 of its request to lift the age restriction when developer Buck Construction said the restriction was making it impossible to get financing for the project.  

This property’s current assessment is $15,169,000; the petition seeks an assessment of $9,252,000, or a reduction of almost $6 million; and

— Northeastern Industrial Park: Another commercial property with a current assessment much greater than its requested assessment is 550BSA III, LLC; its holdings include most of the Northeastern Industrial Park. Van Wagenen said. The current assessment of its three parcels totals $16,900,800, and it is asking for that to be reduced to $9.5 million, which would be a reduction of more than $7 million. 

Grievances 

In the recent townwide revaluation in Guilderland, a total of 892 grievances were filed with the town, and their total assessments were lowered by $22,558,565, or about $23 million, according to Van Wagenen. 

The tipping point that determined whether a property owner’s taxes would rise or not was 39 percent, the assessor said. If an assessment rose more than 39 percent, the amount of taxes due on the property would also rise. 

According to Van Wagnen, a total of 682 homeowners filed grievances with the town. Of those, 229, or 34 percent, were successful in seeing their assessments lowered. The average amount that homeowners’ assessments went down was $36,694. 

The percentage of successful grievances was similar, if all grievances were taken into account. Thirty-five percent of the total property owners who filed grievances, or 315, got reductions, Van Wagenen said. 

Commercial property owners were less successful in their grievances than homeowners. There were 96 commercial property owners who filed grievances, and just 16 percent were successful. 

Landowners, on the other hand, had a higher success rate than any other category. A total of ninety landowners filed, and 63 of them, or 70 percent, saw their assessments lowered. 

Four of the nine farms that filed grievances had their assessments reduced. 

The town’s largest taxpayer, Crossgates Mall, saw the total assessed value of all of its holdings, including the mall, the hotel, the land around the mall, and all the empty homes the company has bought on several residential streets near the mall, is $330,841,500, or about $331 million. This figure is up $63,250,900 from last year, Van Wagenen said. 

Crossgates did not file a grievance about the new assessment. 

The $331 million in Crossgates holdings includes the amount of the $15,655,000 assessment of Macy’s, Van Wagenen said. Macy’s has filed a certiorari proceeding about its assessment.