It took a gym to increase the assessment at Southgate Plaza, one judge to lower it, and an appellate court to raise it.
West Seneca said its review of the plaza in 2016 showed it demolished 32,000 square feet of retail space and built a new 32,000-square-foot LA Fitness gym, so the town increased the assessed value. The owners, Southgate Associates, late last year won a court-ordered reduction in the assessment for the 2016-17 tax year in the midst of a larger case to lower the assessment.
West Seneca won its appeal of that decision by State Supreme Court Justice Henry Nowak Jr. when the Appellate Division, Fourth Judicial Department, last week unanimously reversed the order in favor of Southgate Associates' claim that the reassessment was unconstitutionally selective.
About $41,000 in town, school and Erie County taxes was at stake in this part of the court case, but the plaza is seeking an even larger reduction in the overall case that could result in a shifting of $275,000 to $300,000 in taxes each year from Southgate to other property taxpayers.
Overall, Southgate wants to chop its assessment from about $22 million fair market value to about $14 million, said Peter Weinmann, the attorney for the plaza.
The issue on the gym space had been whether the town acted constitutionally in increasing the assessment because a new gym had been added to the plaza in place of retail space.
The owners petition "featured only bald assertions that the reassessment was unconstitutionally selective," and "thus failed to submit competent evidence establishing that the challenged reassessment was unconstitutionally selective," the Appellate Division decision said.
The decision was hailed by the town, and deemed a minor setback by plaza owners.
"This is just a temporary setback," Weinmann said.
He said the plaza may appeal the ruling to the state Court of Appeals because of the constitutional issue and because the Fourth Department ruled differently than other Appellate Division departments on similar issues.
The town spent about $86,000 on the appeal, said Town Attorney John Fenz. But town officials believe it was money well spent.
"It was an important move for the town to protect not only our town but other towns," Supervisor Sheila Meegan said at Monday's Town Board meeting.
"Southgate added approximately $2 million in fair market value," Fenz told residents at the same meeting. "That $2 million in value would have been assigned to you, the other taxpayers."
The property at 3977 Seneca St., at Union Road, had been assessed at $8,411,510, but the town raised it to $8,905,500 specifically because the owners replaced retail space with a gym, according to court documents that cited an “impact notice” from the town.
In West Seneca, properties are assessed at about 40 percent of fair market value. So that resulted in an increase in fair market value to $22.26 million, from $20.03 million, based on the town’s equalization rates at the time.