Pyramid Mall Takes Back $20 Million from Taxpayers

BY MICHAEL RICONDA

New City – In a unanimous vote at a joint session on the evening of July 23, representatives of the Town of Clarkstown and the Clarkstown Central School District approved an agreement with Eklecco Newco LLP (associated with Pyramid Management, LLC), which owns the Palisades Center Mall, to settle pending tax certiorari matters.

The agreement will require an approximately $20 million settlement to be paid out of school district, town and county coffers. In addition, the mall will agree to pay $21 million in taxes each year through 2016, down from $28 million, pursuant to an assessed value demanded by the agreement, in addition to an annual $150,000 to the Town of Clarkstown for seven years as a partial reimbursement for police services. The mall is highly profitable, earning a profit of $38.9 million in 2008.

A statement was issued by the joint committee lauding the agreement as mutually beneficial, because it grant the mall a portion of its settlement while deflecting the possibility of a larger, more unwieldy settlement that could cripple local finances. “The mall had been seeking a reduction in its assessment of approximately 60 percent,” The statement read. “If it was successful in all claims, the refund could have exceeded $40 million plus statutory interest of approximately $1.4 million.”

Clarkstown is expected to share the burden of the settlement with its special districts and the county itself. The school district willy pay approximately $13 million, the town will pay $5 million, the county and special districts will pay $2 million. Clarkstown will bond the refund and repay its debt over time with the hope that various economic development initiatives will help to mitigate the effects on taxpayers. Meanwhile, Clarkstown School District is expected to pay back its $2 million debt directly out of its tax certiorari reserve.

Joint session, July 23
Joint session, July 23

Each payment has a set timetable, with the school district required to pay its share of the refund within 30 days of court approval of the settlement, while the town and other taxing districts have 90 days for their shares. If all payments are made on time, no statutory interest will be levied on top of the current payments.

The dispute stems from refunds Eklecco demanded from the 2009/10, through 2013/2014 fiscal years. The mall’s assessed value in the 2016/17 budget will remain in effect for three years thereafter, the agreement states. Before reaching the settlement, the parties passed through phases of negotiations, mediation and a two week trial before the Honorable Margaret Garvey, who will also evaluate and approve the settlement.

The town has not to public knowledge confronted the town assessor over the apparent overassessed value or hold its tax assessor to account. Supervisor Alex Gromack said he hoped new rate-able projects including an O&R substation and the Shops at Nanuet would offset the debt incurred by the town due to the settlement.

In response to the news of the $20 million settlement, many taxpayers in Clarkstown noted they were sold in the 1990s that taxes would be ameliorated by the Palisades Center Mall project, yet taxes have only gone up since its creation.