The Daily Dirt: How to navigate a political third rail

For years, the government’s approach to property tax reform was: Let’s plan to make a plan.

So, when I saw a new state bill to create a commission to draft recommendations for reforming New York’s property tax system, my first reaction was: Here we go again!

Assembly member Edward Braunstein’s bill, however, includes deadlines: The mayor must present a plan for reforming the city’s property tax system by Aug. 31 using recommendations directly from a report released in December 2021, at the very end of Mayor Bill de Blasio’s tenure.

After receiving this plan, a temporary, 13-member state commission will write a report and draft legislation to give the legislature and governor before the end of this year.

That is all, of course, if the bill moves forward.

The measure was inspired by the Court of Appeals’ revival of Tax Equity Now New York’s lawsuit against the city. In March, the court blessed TENNY’s argument that the city’s tax system is “unfair, inequitable and has a discriminatory disparate impact on certain protected classes,” and kicked the case back to state Supreme Court.

The city and state could obviate the need for the lawsuit by passing reforms. Both argued in the case that it should be up to them to address the property tax system, not the courts.

“The Department of Finance can fix the system on their own and the courts don’t have to do it. That’s what [the city] has wanted to do all along. They said this is something that the government should fix, not the judiciary,” said Benjamin Williams, a tax attorney with Rosenberg & Estis. “But they weren’t doing it.”

“They were just unwilling to do it because it’s a political third rail,” he added.

The question now seems to be: Will city officials get ahead of a potential lower court ruling in TENNY’s favor, or wait for the court to mandate action?

Correction: Friday’s Daily Dirt newsletter reported incorrectly that WeWork’s unsecured creditors were in favor of former CEO Adam Neumann’s offer to buy the firm. The newsletter correctly reported that they urged WeWork leadership to consider Neumann’s offer. On Monday they announced support for WeWork’s reorganization plan.

What we’re thinking about: When will the city revive its tax lien sale? Send a note to kathryn@therealdeal.com. 

A thing we’ve learned: Mayor Eric Adams’ executive budget includes $4 million and 36 new staffers to enforce Local Law 97, Crain’s reports. Those staff members will join 22 people at the Department of Buildings who are already focused on the decarbonization law. 

Elsewhere in New York…

— More than 150 people are suing city agencies alleging they were sexually abused by staff at juvenile jails, Gothamist reports. Some of the claims date back as far as the 1970s, permitted under the passage of a 2022 city law that extended the statute of limitations and created a two-year window for older allegations involving gender-motivated acts of violence to be filed.

— Columbia University is threatening to expel students who took over Hamilton Hall Tuesday morning and refused to leave unless the school agreed to divest from Israel, disclose all financial holdings and grant amnesty to student protesters, Politico New York reports.

— Nearly three years after eliminating late fees, the city’s libraries have seen a spike in library card applications and materials borrowed, the City reports. “We’ve found that fines didn’t incentivize returns, but were keeping out the people who most needed our free services, programming and access to knowledge,” officials said in a statement.

Closing Time

Residential: The priciest residential sale on Tuesday was $28.9 million for a 7,000-square-foot townhouse at 135 West 11th Street in the West Village. 

Commercial:  The largest commercial sale of the day was $13.8 million at 2537-2541 Richmond Terrace in Elm Park, Staten Island.  

New to the Market: The highest price for a residential property hitting the market was $20 million for a 4,500-square-foot condominium at 277 Fifth Avenue in NoMad. Nikki Field and Mara Flash Blum of Sotheby’s International Realty have the listing. — Matthew Elo