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    The Lawletter Blog

    TAX: Assessed Value Dispute—Robert De Niro's Hudson Valley Compound

    Posted by James P. Witt on Wed, Mar 4, 2015 @ 10:03 AM

    The Lawletter Vol 39 No 12

    Jim Witt, Senior Attorney, National Legal Research Group

         A real property tax assessment dispute involving a large parcel of land in Ulster County, New York, 75 miles north of Manhattan in the Hudson Valley, has recently been settled. The case is of interest for two reasons: (1) It brings into focus the issue of assessed value as based on the uniqueness of the property versus assessed value based on comparable properties in the area; and (2) the property is owned by a Trust on behalf of the actor Robert De Niro and his family.

         The property, well over 50 acres, is located in the town of Gardiner, New York, and has frontage on the Wallkill River (a tributary of the Hudson). The property was acquired in 1997 for $1.5 million, when its main structure was an 18th-century farmhouse, supplemented later by barns. Under De Niro's ownership, the house was renovated to include six bedrooms and seven bathrooms; one barn was converted into a 14,000-square-foot recreation center, containing a game room, gym, basketball court, swimming pool, boxing ring, and small film studio. Another barn was converted into a workshop and another into an office. Also there were $1 million in landscaping expenses to block any view of the property from the road.

         In 2010, De Niro, via the Trust that owns the compound, challenged the Town's $6 million assessment of the property on the basis that the median price for a home in Ulster County was $330,000, with only six properties selling for over $2 million. The Trust's appraiser put a $4 million value on the property. The Town argued that the property was unique and could be marketed to wealthy buyers; its appraiser testified at the trial that the $6 million assessment undervalued the property and that its true worth was $8.98 million. Justice Mary Work of the New York Supreme Court for Ulster County sided with the Town, ruling that the privacy and self-sufficiency of the property meant that the market for it was not limited to Ulster County but extended to a one-hundred mile radius of Manhattan.

         The Town made an offer of settlement at somewhat less than $6 million (the tax bill on the $6 million assessment was $170,000, but the New Paltz School District would be entitled to $124,000 of that). If De Niro prevailed, the Trust would save $57,000 per year.

         The Trust first refused the settlement and was ready to appeal; then the Trust agreed to let the original assessment stand and volunteered to cover the Town's legal expenses. This about-face was reportedly prompted by the loss of support coming from the townspeople, who had initially cheered De Niro on in his right to sue over taxes. But when word got out that the Town stood to lose more in legal fees on the appeal than it would gain from a win, the taxpayers footing the bill began to turn on De Niro, accusing him of using his money to bully the Town.

         At some point during the dispute, a writer for a New Jersey legal publication drove up to the gate of the De Niro compound, announced himself on the intercom as a reporter covering the case, and requested an interview with Mr. De Niro. A male voice came through the speaker: "Are you talkin' to me?"

    Topics: tax law, assessment value, property tax

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