MONTGOMERY COUNTY — The Montgomery County Legislature voted unanimously on Tuesday night to waive interest and penalties on taxes levied against 22 properties owned by the Greater Mohawk Valley Land Bank — effectively settling a months long tax dispute with the entity for $48,685.
The legislature conducted a special meeting and public hearing on waiving the interest and penalties before the legislature’s regular committee meetings.
Two people spoke during the public hearing: Margaret Kennedy, who said she was now the chairwoman of the Greater Mohawk Valley Land Bank’s board of directors, and County Treasurer Shawn Bowerman.
“I would prefer that legislators vote in favor of the measure, speaking for the land bank, we would appreciate that show of support,” she said.
Bowerman argued for the opposite position.
“I just want to be on record that I’m opposed to this local law,” he said. “I don’t think it’s fair to the rest of the taxpayers of the county that struggle to pay their taxes and interest. I think it sets a bad precedent going forward because the land bank is going to expect this treatment every time they get a property going forward.”
The resolution to waive the interest and penalties on the properties did not include exact figures on what the county had previously claimed was owed in back taxes for the properties, but stated the financial impact of the loss for the county was “$20K plus additional penalties to the county.”
In the fall of 2020, the county had originally sought $141,000 in taxes, penalties and fees for 25 properties the land bank had acquired from 2018 to 2019.
Greater Mohawk Valley Land Bank Executive Director Tolga Morawski said the gap between the county’s original bill of $141,000 and the $48,685 amount the land bank ultimately agreed to pay for 23 of the 25 parcels is largely due to an additional year’s worth of property taxes being incorrectly levied against the properties despite the land bank’s tax exempt status. He said the issue is complicated by a state regulatory change that occurred shortly after the land bank acquired the properties, which gives land banks “instant exemption” from property taxes after taking ownership of a property. Previously, land banks were treated like other nonprofits, which required they pay some property taxes on a prorated basis until the “Taxable Status Date” of March 1, when assessors would change the status of the parcels to tax exempt.
Although several legislators argued during the meeting that the Greater Mohawk Valley Land Bank was responsible for the dispute for having not properly grieved its tax exempt status, Morawski said the land bank was ignored when it tried to notify local property assessors in Montgomery County and Bowerman about the tax exempt status. State law does not require land banks to notify local assessors about the tax exempt status change.
“They are wrong, and the onus isn’t on me,” Morawski said. “Land banks are not required to notify anybody. The assessors job is to, you know, make themselves aware of this information, but I still, as a courtesy, notify them, and they still refuse to accept that we were exempt because they don’t want to lose the money.”
Morawski said the land bank was on strong legal ground to reject the higher bill, and could have walked away from the properties, allowing the county to foreclose on them again, had Montgomery County not agreed to waive the “re-levied tax bill” county taxpayers had been stuck with because the county made the local government’s whole for the unpaid property taxes incorrectly levied on the properties after the land bank’s tax exempt status should have been in effect.
“I ‘cced’ Shawn [Bowerman] on every one of those letters, saying any tax charged to these properties will not be valid,” Morawski said. “What did Shawn do? Shawn literally accepted the bill, the re-levied taxes from these villages and towns and schools, and wherever and said, ‘OK, I’ll make you whole for this bill…’ and so then he reimburses them for bills that are not valid and that puts him in the position that he needs to get money to backfill that error, you know?”
Chairman of the Legislature Michael Pepe, who represents District 7, confirmed Tuesday night that County Attorney Meghan Manion had determined the property taxes applied to the parcels after the land bank acquired them should not have been levied against them, and the county has been forced to absorb the cost of paying those unpaid incorrectly levied taxes to the local governments where the assessors had not changed the tax exempt status for the landbank properties. Pepe said he wasn’t sure what the amount of the re-levied tax bill was.
During the meeting he confirmed the land bank had given the county a check for $48,685, but that did not cover the money owed for three properties in Fultonville: 3 Ann St., 11 Ann St. and 63 Center St.
Pepe introduced an amendment to waive interest and penalties on the three properties until July 30, contingent on the land bank paying back the principal taxes owed for the properties. The amendment was approved unanimously.
Morawski said the land bank has already paid $100,000 to demolish the structures on the three properties and several of the properties include liens that were never properly cleared from the titles of the properties by the county’s foreclosure process. For that reason he said his board of directors will likely allow Montgomery County to take the properties back through foreclosure.
“They can have them, the land bank’s already done its job,” Morawski said of the demolition work. “If we tried to keep them we’d end up owing like another $37,000, for three vacant lots we could never sell for that price.”
Pepe acknowledged that some of the Montgomery County properties among the 25 involved in the tax dispute had failed to obtain adequate bids through the county’s normal foreclosure auctions process, which at the time had made them good candidates for using the land bank’s access to state and federal funds to rehabilitate them, but said members of the legislature are growing frustrated with the amount of time it takes for the Greater Mohawk Land Bank to turn around properties, and likely won’t be interested in allowing the land bank to acquire any more anytime soon, although the land bank can acquire properties at auction like any other bidder.
“We need results, and I think we’re going to draw a line in the same direction here until some of the properties start turning around, we will not be turning properties over to them, but that will not preclude them from bidding on them themselves,” he said.
Morawski said it’s his intention to continue to work with Montgomery County with respect to an $800,000 federal U.S. Environmental Protection Agency brownfield remediation grant it recently received.
“We want to pivot and work with the county,” he said.
Pepe said he’s doubtful legislators will work with the land bank going forward.
“Given the tenor of our whole legislature’s feeling and mood about how this all unfolded over the past few years, I don’t know that we would be champing at the bit to get involved with them on brownfield restoration,” he said.