A Sixth Avenue office tower in which Donald Trump owns a non-controlling stake received the largest assessment break last year, a city report disclosed.
The building at 1290 Sixth Ave. won an assessment reduction of $92.3 million in 2015. But this still turned into a net plus of about $45 million in assessed value for the building.
That’s because the NYC Department of Finance had first proposed a $137.5 million increase before it was partially slashed by the city’s Tax Commission, which acts as an independent review body.
The building also contributed $33.7 million to the city’s coffers in 2015-2016 and will pay more than $36.2 million this fiscal year, despite showing the building also received another cut in its “actual” assessment of $69.2 million for 2016-2017.
The majority stake is controlled by Vornado Realty Trust, which has been redeveloping and re-tenanting the property, thus affecting its cash flow.
Trump obtained the stake when his Chinese partners sold Riverside South and reinvested the proceeds in that Vornado Realty Trust building along with another in San Francisco.
That building wasn’t the only one to get a huge tax break because of declines in income, rising expenses and differences of opinion on appropriate cap rates.
At least 16 Manhattan office towers had assessment cuts in 2015-2016 totaling $20 million or more from their initial values as determined by the Department of Finance.
Outside of Manhattan, the Tax Commission granted Queens Center a $26.1 million cut on one parcel and $11.9 million on another.
The Tax Commission can negotiate up to two years of assessment reductions. The formal court system is now rarely used because of the longtime periods involved and the need to pay for audited financials, expert witnesses and other evidence.
In fact, according to the 2015 Tax Commission report, for the 65 petitions decided by the courts, a mere $123,000 in assessment reductions were granted, making the Tax Commission the most expedient and reliable for reviews.
The March 2016 report showed the MetLife building at 200 Park Ave. had the second-largest cut last year at $56.44 million.
Other buildings in the Rockefeller Center and Sixth Avenue corridor also saw large cuts as occupancy shifted and improvements were made.
These included 1221 Sixth, which had a $16 million cut in 2014 and a $24 million cut in 2015; 1230 Sixth, which was granted a $27 million cut in 2014 and $16 million cut in 2015; and 1260 Sixth, the Radio City Music Hall, which had a $29 million cut in 2014 and $36 million cut in 2015.
These reductions are made on the “actual” assessed value and in a rising market cannot be used to calculate the taxes paid, which are based on the so-called billable or transition assessment, which is phased in over a number of years.
In 2015, the Tax Commission received 52,767 applications, covering 196,303 tax lots, with a total assessed value of $190.7 trillion. Hearings were held on 27,541 of those applications.
In total, the Tax Commission made accepted offers in 2015 on $5.04 billion in assessed values. This totaled $4.18 billion of 2015 assessments and another $97.5 million for 2014. In 2014, $5.9 billion in assessment cuts were previously granted.
The 2015 figures translate into a tax savings of $575 million for all property owners, including single-family homes.
Tax Commission hearings were recently completed for the 2016-2017 tax year that reflects bills that started on July 1, 2016.
Pure Growth is growing and will move and nearly double its space from its current offices at 575 Madison Ave. to 13,185 square feet on the eighth floor of 680 Fifth Ave. at West 54th Street, which is also known as the Buchmann Building.
Sources say the new high-quality prebuilt space with perimeter offices includes a small landscaped outdoor terrace where employees can use its Pure Sun Defense sunscreen products and nosh on Pure Growth Organic’s healthy snacks.
Pure Growth was founded by Chris Clarke, who sold his last company, SapientNitro, to Publicis for $3.7 billion. Clarke has created several divisions.
His Pure Sun Defense was cofounded in 2015 by cancer survivor and actor Hugh Jackman and launched in partnership with Marvel, Disney and Universal Studios.
Its hypo-allergenic sunscreens feature licensed characters on the packages for kids.
The company is currently situated in 8,850 square feet on the 24th floor at 575 Madison, which is for rent through Robert Rosenberg at EVO Real Estate.
Nicholas Gilman, Caxton Kaback and Gordon Ogden of Byrnam Wood represented Pure Growth. A JLL team of Frank Doyle, Clark Finney and Kevin West represented the ownership. The asking rent was in the mid-$70s per square foot.
The parties declined comment or couldn’t be reached.
