NYA Suit Against Town Results In A 70 Percent Property Tax Break

By John Voket

After previously verifying that legally, Newtown Youth Academy was liable for 100 percent of its local real estate and personal property taxes, Assessor Chris Kelsey told The Newtown Bee that a settlement between the town and the Fairfield Hills-based recreation center will instead provide NYA with a 70 percent local tax reduction for at least the next three years.

According to the assessor, the town had been engaged in protracted civil action initiated after NYA, which has also qualified for federal tax-exempt status, balked at paying 100 percent of its assessed local property taxes and refused to accept a subsequent 42 percent exemption offer.

A settlement, which was recently approved by the Legislative Council, was signed by all parties involved. And, Mr Kelsey said, the legal action against the town was withdrawn “with prejudice,” putting the issue to rest through the end of 2013.

The assessor said NYA’s representatives, including its President Peter D’Amico, initially expected that qualifying for federal tax-exempt status automatically entitled the organization to a local property tax exemption. And that they failed to file the necessary application for exemption for the 2008 tax year.

“They just assumed they were exempt,” Mr Kelsey said, adding that the organization is also exempt from Connecticut state taxes. Following a meeting with NYA over the 2009 application, the local Board of Assessment Appeals offered a final 42 percent exemption, Mr Kelsey said, but that was rejected and the civil action soon followed.

As part of the final negotiated agreement with the town, NYA agreed to pay the local tax bill on its full assessment for 2008, totaling $136,000 plus $13,000 in interest.

He said the final settlement, which was authorized by the council on September 15, will change the real estate assessment to a flat $5 million, generating taxation at the negotiated 30 percent rate.

“It may appear somewhat confusing because that $5 million assessment will last until the end of 2012, when the next townwide revaluation is expected to be completed,” Mr Kelsey said. “But the 70 percent exemption will remain in effect until the end of the 2013 assessment cycle, which runs from October to September.”

The assessor said at that time, NYA will be responsible for filing a new request for local tax exemption. He added that the 30 percent assessment in 2013 will be based on the market value adjustment on the NYA’s cavernous building at that time.

Mr Kelsey said he will also follow suit on NYA’s personal property taxes, as “an olive branch” gesture, assessing the organization at 30 percent for applicable property inside the physical structure.

Since NYA settled on the 30 percent assessment retroactive to 2009, the agency negotiated to pay one-third of its outstanding property tax bill each year, in addition to its current tax liability in 2010, 2011 and 2012. The added retroactive payment totals $36,000, and will be paid over the three $12,000 annual installments.