Rotterdam’s deal to reduce the assessment of Hannaford Plaza by $3.7 million will result in the Schenectady City School District making a sizeable payout, even though the district played no part in reaching the settlement.
The deal to retroactively lower the value of the sprawling 20-acre shopping center on Altamont Avenue from its assessment of $18 million in 2009 down to $14.2 million in 2013 was approved by members of the Rotterdam Town Board. The settlement was reached, however, without any input from the city school district, the taxing entity that will bear the brunt of the repayment owed to Altamont Avenue Associates, a limited liability corporation and the property’s owner of record.
The property near Rotterdam’s border with the city is almost wholly within the boundaries of the city school district’s tax maps. A much smaller portion of the property falls in the Mohanasen Central School District, which signed off on the agreement.
“Where’s [the city school district’s] comments?” asked Robert Godlewski, the lone board member who voted against the settlement. “Where’s their input into the process?”
Superintendent Laurence Spring said the city school district will owe the company roughly $283,000 to settle the five years covered in the agreement. He acknowledged he was unaware of the lawsuit, which was filed three years before he was hired by the district.
Spring said it’s not unusual for municipalities to bypass the district when discussing settlements, especially in the case of smaller assessment reductions. But he said the issue of having settlements thrust upon the district was significant enough that a new process was recently implemented so that the school’s business office closely watches for assessment challenges and then determines whether they’re large enough to warrant legal action.
“We’ve developed a procedure internally to determine whether we’re going to assert our own legal challenge,” he said.
Like all properties in the town, the plaza was reassessed as part of Rotterdam’s revaluation in 2007. The assessment has remained at $18 million since 2009, when the company launched its legal action against the town.
As part of its argument, the law firm representing Altamont Avenue Associates focused on comparable sales of properties and the amount of income generated by the plaza. David Rowley, the lawyer who represented the company, said part of the case focused on the vacancies in the plaza.
“That’s been a significant part of the problem,” he said, “There’s been a vacancy issue over there that has been ongoing.”
About three years ago, the plaza was dotted with vacancies — something its property management company blamed on the economy. The main shopping center features around 365,000 square feet of space, along with an additional 13,000 square feet of space in separate buildings.
Today, the plaza is about 85 percent filled, according to Nigro Companies, which manages the property. Steve Powers, Nigro’s vice president, said none of the vacancies are large.
“They’re all smaller retail spaces,” he said.
Yet Rotterdam’s own appraisal of the property showed that it was overvalued, said Rowley. And the lower appraisal ultimately helped the two sides reach a settlement agreement.
Assessor John Macejka Jr. declined to discuss the settlement until it is approved by the state Supreme Court justice presiding over the case. In a memo to the Town Board last month, he acknowledged “the reduction in assessed value is warranted.”
Spring said the district will be able to cover the repayment without difficulty, but that it’s money that could be better spent elsewhere. He said a lack of state aid for the district is inflating taxes, which is in turn leading companies to seek lower property values.
“This is one of the symptoms of the cycle we’re in,” he said.