NY: Judge: Mineola Should Not Have Taxed MTA

A judge has ruled that the Village of Mineola should not have taxed the Metropolitan Transportation Authority when it owned the former KeySpan building.

The decision, dated Feb. 14, strikes a blow to the village, which had in 2012 placed a nearly $490,000 lien on the now-demolished property.

The transit agency argued that the state's public authorities law exempts it from property taxes; but village officials said the property at 250 Old Country Rd. was not used for operational purposes and should not be exempt.

Nassau County Supreme Court Judge Karen V. Murphy wrote in her five-page decision the MTA deserved a "judgment annulling and setting aside the disputed assessments as erroneous and void in light of the plainly applicable" public authorities law, which exempts public agencies from property taxes.

Mineola Mayor Scott Strauss, in an email, criticized the public authorities law. "We fully appreciate the need to exempt property used for transportation purposes. But not a single square foot of the building in question was used for those purposes. The MTA was simply a landlord for lawyers and other office uses," Strauss wrote. "If it turns out that exemption of property not related to transportation is the law, then it's a bad law."

Village Attorney John Spellman said he did not know whether the village would appeal.

The ruling, MTA spokesman Salvatore Arena said, "states clearly that the village's tax assessment is in violation of the MTA's tax exemption and is without legal merit."

The MTA had argued, according to court papers, that the agency is "wholly exempt from taxation even if some or all of that property is leased by the MTA to others." MTA officials said in court papers that though the agency "had considered using some of the office space for its own employees, it did not."

The use, MTA officials said, was confined to "several tenants [who] continued occupying some of the office space under existing leases for some time, but it is now vacated (save for three telecommunications antenna leases)."

The decision indicated that in 2012, the MTA discovered that a tax lien of $482,853.93 had arisen from unpaid village assessments. The agency placed $740,806.68 in escrow, village attorney John Spellman said.

The site was sold last year to a developer, and the building has been demolished. An $85 million development for rental apartments is planned.


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