97 A.D.2d 843 | N.Y. App. Div. | 1983
In a proceeding pursuant to CPLR article 78 to review a determination of the respondent Tax Commission, dated July 28, 1982, which denied petitioner’s application for exemption from real property taxes (the application having been made on the ground that the petitioner is a charitable organization under the provisions of the Real Property Tax Law), petitioner appeals from a judgment of the Supreme Court, Queens County (Durante, J.), dated July 29, 1982, which dismissed the
“Financing Expenses
“Interest - First Mortgage 436,027.78
“198,213.56 634,241.34”.
Respondents’ answer in this article 78 proceeding asserts: “petitioner is conducted to secure to its mortgagees a distribution of any profits petitioner might realize from the operation of the property, tax-free, by treating earned profits as a deductible mortgage expense on petitioner’s books.” The transcript of the hearing held on June 25,1980, before the Tax Commission, reveals that the rates petitioner then charged the residents for room and board were $436 to $550 per month; the variance between those figures depended not on economic need but whether there was single occupancy or double occupancy and the size of the room; a person relatively well off would be admitted but would not be required to pay more, the rates being “standard”; 85 to 90% of the residents receive S.S.I. benefits. With respect to that 85 to 90% the transcript states: “me. postel: [counsel for petitioner]: * * * As far as S.S.I. goes, they give a certain amount. If it is the bare minimum, then it is completely covered. If it is not, then there must be other monies coming from the individuals, me. block [counsel to Tax Commission]: If a person comes to you and his S.S.I. payments are less than your rate scale for a room, would he be allowed — me. postel: In
“1979/80 A.V. Land: $205,000 Total: $1,675,000
“1980/81 A.V. $205,000 $1,675,000
“Based upon the information submitted by the applicant and contained in its exemption file, the applicant has failed to clearly show that it is organized or conducted exclusively for exempt purposes, nor is the subject property used for exempt purposes, pursuant to RPTL Sec. 421 (1) (a) Lawrence-Smith School, Inc. v Tax Commission, 166 Mise. 856 (Sup. Ct., 1938), affd. 255 App. Div. 762 (1st Dept., 1938), affd. 280 N.Y. 805 (1939).” Petitioner then instituted the subject article 78 proceeding. In its original decision Special Term directed a remand to respondents “for further proceedings to fully develop the record * * * and to make proper findings”. On reargument, however, it dismissed the petition distinguishing the two cases on which petitioner placed principal reliance, namely: Matter of Belle Harbor Home of Sages v Tishelman (100 Mise 2d 911, affd 81 AD2d 886) and Matter of Jeantet Residence for Seniors v Commissioner of Fin. (105 Mise 2d 1080, affd 86 AD2d 671). Petitioner now argues on appeal that Jeantet (supra) (which also involved a vast discrepancy between the apparent fair market value and the sales price of the facility, and large mortgages) “is directly on point and controlling herein”. At bar, Special Term stated, in part: “However, in Belle Harbor, supra, it was assumed that the operator of the residential-care facility was legitimate charity. It was not until Marino P. Jeantet Residence for Seniors, Inc. v The Commissioner of Finance (105 Mise 2d 1080, affd NYU Feb. 3,1982, p 13, col 6), that the City attempted to deny a real property tax exemption to an allegedly charitable corporation on the ground that the mortgages it gave in purchasing the premises exceeded the fair market value of the property. In Jeantet, supra, the City argued that the petitioner had assumed $3,000,000 in mortgage obligations in purchasing a financially defunct home for the aged whicb was worth one-third of the price paid by the petitioner. The court rejected the City’s argument. ‘The court finds that the fact that Jeantet pays interest and principal to mortgagees of the subject Premises who may profit from this