In early spring, the City of Rye sent the County of Westchester and Standard Amusements LLC, the new operator of Playland Amusement Park, which long benefitted from tax-exempt status as a public recreational facility, a tax bill for $3.3 million. The City’s contention was that as the park was now owned by a private, for-profit company it could no longer be tax-exempt.
The County and Standard subsequently filed suit against the City. In late summer, the City filed an assessment challenge. On September 29, State Supreme Court Justice Anne Minihan ruled that the tax exemption be restored as the park is still open to the public and the County continues to have some control over its operation.
Longtime resident and former City Councilmember Julie Killian wrote the City Council of her concern on how the City will make up the $3.3 million, which is excerpted here.
• “Have you put appropriate measures in place to protect the City and taxpayers from the negative financial implications?
• Did the Council vote to change the assessment and add Playland to the tax rolls?
• Did the Council discuss what would happen if the County sued and Rye lost?
• Did your lawyers advise you about the implications and the huge potential downside? If not, they should be fired.
• Did you reserve for the Rye City or Rye Schools’ portion of the $3.3 million tax bill? Did you ask the School District to reserve? If you are not adequately reserved, where are you going to come up with the $3.3 million?
I hope you were informed, during discussions on this issue, that, by law, Rye City is on the hook for the County and School portions of the taxes if Playland and the County do not pay.
Taxes were calculated at a higher assessment. So, what happens when the School District bills us for $2.2 million?
I am concerned that adequate provisions were not put in place to protect our City’s finances and our taxpayers. I hope I am wrong, that you are all fully aware of the risks and have adequately reserved for the possibility that the suit is lost and the taxes are not paid.”