Initially, the application brought in the proceeding entitled Matter of Steel Los III/Goya Foods, Inc. v Board of Assessors and The Assessment Review Commission of the County of Nassau, Index no. 403186/02, (Action #1), had been reassigned to this Part from that of Hon. Frank S. Rossetti.

By Stipulation and agreement by the attorneys for the parties hereto, these actions are joined for all purposes. (CPLR 602).

The motion, by Bethpage Union Free School District, in Action #1, brought on by order to show cause, for an order a) permitting the Bethpage Union Free School District by its Board of Education to intervene in this proceeding as a necessary party, and b) vacating the Order and Judgment of this Court dated November 5, 2003 and entered by the Clerk of the Court on November 10, 2003 and scheduling the matter for a hearing on the propriety of the relief provided for therein; and a motion, by plaintiffs, in Action #2, brought on by order to show cause, for an order pending a final determination of this matter, a) enjoining defendants from reducing Goya's 2004/05 school tax PILOT payments to the District by applying credits against such payments; b) directing Goya to make all school tax PILOT payments in full, when due, without taking into consideration any credits for prior year overpayments; and c) enjoining the County defendants from entering into any tax certiorari settlements which provide for the granting of funds in the form of credit against future tax PILOT payments, instead of cash refunds by the County, where the refund is the result of a reduction in the assessed valuation of property, together [*2]with such further relief as to this Court seems just and proper; and a motion, by plaintiffs, in Action #2, brought on by order to show cause, for an order pending a final determination of this matter, a) enjoining defendants from reducing Goya's 2004/05 school tax PILOT payments to the District by applying credits against such payments; b) directing the Nassau County defendants to remit to the District the full amount of Goya's 2004/2005 school tax PILOT obligation without any reduction in that amount for the credit granted Goya by the County and c) enjoining the County defendants from entering into any tax certiorari settlements which provide for the granting of refunds in the form of credits against future tax PILOT payments, instead of cash refunds by the County, where the refund is the result of a reduction in the assessed valuation of property, together with such further relief as to this Court seems just and proper, are all determined as hereinafter set forth.

A factual background is necessary to a comprehensive determination of the applications before this Court, and that begins with the ownership of properties in Bethpage by the Grumman Corporation, later the Northrup Grumman Corporation. Northrup Grumman, in the 1990's, commenced downsizing, and laying off most of its work force on Long Island. The parcel of land that is the basis of this action is a 16 acre parcel that was acquired by the Nassau County Industrial Development Agency (hereinafter "IDA"); and that parcel, statutorily, became tax-exempt pursuant to General Municipal Law Article 18-A. That parcel was purchased by Goya, financed through the IDA, and transferred back to the IDA.

A public hearing was held on July 2, 1997, at the Town Hall of the Town of Oyster Bay. A notice was published in the Newsday of June 22, 1997, which stated, in pertinent part, as follows:

"GOYA FOODS, INC., a corporation organized

and existing under the laws of the State of

Delaware (the "Company"), has requested that

the issuer (IDA) provide financial assistance in

connection with a project through the issuance by

the issuer of its taxable industrial development

revenue bonds in an aggregate amount not to

exceed $9,500,000 (the "Bonds"). The Project

will consist of the acquisition, construction and [*3]

equipping of a warehousing and distribution

facility consisting of the acquisition of a 16 acre

parcel of land within the Grumman site located

on South Oyster Bay Road, Bethpage, New

York, the construction of an approximately

150,000 square foot building (for future

expansion to 250,000 square feet) and related

facilities thereon, and the acquisition and

installation of machinery and equipment in

connection therewith, all for use in the packaging,

warehousing and distribution of food products

(the "Project"). The Project will be operated by

the Company [illegible].

In connection with the Project, the Company will

receive financial assistance from the issuer in the

form of the following tax-exemptions: (i) real

property tax abatement determined pursuant to

§485(b) of the New York State Real Property Tax

Law with respect to the improvements to be

financed by the issuer; (ii) an amount not to exceed

$95,000 consisting of exemption from the mortgage

recording tax; and (iii) an amount not to exceed

STEEL LOS III/GOYA FOODS, INC.Index no. 403186/02

BETHPAGE UFSD, et alIndex no. 000468/05

$501,500 consisting of sales tax exemptions".

* * *

"The issuer will at the above-stated time and place

hear all persons with views in favor of or opposed

to the issuance of the Bonds, the providing of a

straight-lease structure or the location or nature of

the Project. Interested parties may present their

views both orally and in writing with respect to the

Project.

DATED: June 22, 1997 [*4]

NASSAU COUNTY INDUSTRIAL

DEVELOPMENT AGENCY". [Emphasis Supplied].

The immediate result of that hearing is not contained in this record. However, on June 1, 1998, the IDA and Goya Foods, Inc. (hereinafter "Goya") entered into an agreement in which Goya, inter alia: agreed to make payments in lieu of taxes (hereinafter "PILOT"); was

permitted to challenge, pursuant to RPTL Article 7, the tax assessment upon which the

PILOT payments were based; was entitled to receive a credit against future PILOT payments.

Specifically, paragraph 5 of the agreement provides, in pertinent part:

"As long as this Agreement is in effect, the

Agency and the Obligor agree that the Obligor

shall be deemed to be the owner of the Facility

and of any Additional Facilities for purposes

of instituting, and the Obligor shall have the

right to institute, judicial review of an assessment

of the real estate with respect to the Facility and

the Additional Facilities pursuant to the

provisions of Article 7 of the Real Property Tax

Law or any other applicable law, as the same may

be amended from time to time. Notwithstanding

the foregoing, in the event that the assessment

of the real estate with respect to the Facility and

the Additional Facilities is reduced as a result of

any such judicial review so that the Obligor would

be entitled to receive a refund or refunds of taxes

paid to the Treasurer, if the Obligor were the owner

of the Facility and the Additional Facilities, the

Obligor shall not be entitled to receive a refund or

refunds of the payments-in-lieu-of-taxes and

assessments paid pursuant to this Agreement. In

that event, the Obligor shall be entitled to receive

a credit against future payments-in-lieu-of-taxes

[*5]and assessments to be paid to the Treasurer

pursuant to this Agreement in the amount of the

refund or refunds of taxes paid to the Treasurer

that the Obligor would be entitled to receive if

the Obligor were the owner of the Facility and the

Additional Facilities". [Emphasis supplied]

Paragraph 18 provides:

"Except as may otherwise be agreed by the affected

taxing jurisdictions, the payments under this

Agreement shall be allocated among such jurisdictions

in proportion to the amount of real property taxes and

other taxes which would have been received by such

jurisdictions had the Facility not been tax-exempt by

reason of the Agency's ownership thereof". [Emphasis supplied]

Subsequently, Goya commenced proceedings, pursuant to RPTL Article 7, which challenged the tax assessment by the County (upon which Goya's PILOT payments were based) for the years 1999 through 2002. Those proceedings were instituted in 2000, 2002 and 2003, were consolidated and a stipulation of settlement was entered into by the County and Goya, resulting in an order and judgment of this Court (AJSC Rossetti) dated November 5, 2003. The November 5, 2003 judgment provided, inter alia, ". . .that, in the event PILOT payments as originally assessed have already been made, the Receiver of Taxes for the Town of Oyster Bay, the Nassau County Industrial Development Agency and the County Treasurer of Nassau County, be and he hereby is authorized and directed to credit the amount of State, County, Town, and District and School PILOT payments that may have been paid on account of said original assessments in excess of the amount of PILOT payments based upon the reduced assessments as herein ordered and determined. . .paid by the Petitioner [Goya] against the cycle of PILOT payments next following the granting of this Judgment. . .". [Emphasis supplied]. That cycle commenced in the 2004-2005 tax year, and the District received notice of this impact in September 2004, subsequent to the presentation of, and voting upon, the District budget for the 2004-2005 school year.

Previously, under a procedure that had, prior to this agreement, been changed, the County paid the refund under the PILOT program directly to the petitioner who had won the

[*6]

tax grievance or tax certiorari proceeding. Herein, the parties, i.e., the County and Goya, agreed to the reduction of the PILOT payments to be credited towards all future "tax" obligations.

The original PILOT payments for the initial years, 1999 through 2003, ranged from

$550,000 to $650,000 per annum for the 16 acre parcel and the 161,000 square foot warehouse facility.

The net result of that successful tax certiorari proceeding was a deduction of the PILOT payments already made by Goya to the County for distribution (in part) to the District and settlement before the late Judge Rossetti, that credited that cumulative amount in one tax year. The credit of $454,628.20 was to be applied against the $504,154.19 PILOT payment for 2004/2005, and the District was advised of this arrangement in September, 2004. The budget for 2004/2005 was developed and adopted in May 2004, with the expectation that said sum was to be collected and was allocated as part of its budget.

The plaintiffs argue that, initially, they, or the District, were never put on notice of this proceeding or arrangement, and that arrangement effectively makes the District a beneficiary in what was a third party beneficiary contract. It also argues that the PILOT agreement providing for a credit, violated the Nassau County Administrative Code, §6-26.0(b)(3)(c). That portion of the Code provides that, in a tax certiorari proceeding, any error of assessment by the County ". . .shall be a county charge". The District asserts that the intent and spirit of the Code, to retain the responsibility for tax refunds in the County, has been violated, and the County and Goya has attempted, by this agreement and settlement, to shift, to other taxing districts, the responsibility for the County's assessment errors. The District further asserts that the County decision to provide Goya with tax credits under their arrangement is in direct conflict with the County's representation of the District's interest and as such, the District should have been specifically notified of this entire process and procedure because the

County, by this credit arrangement, was protecting its own treasury.

Relative to the application of injunctive relief, the District contends that it is the law and public policy to hold the school districts harmless in tax certiorari matters and there is no statutory basis for the County to be able to contract away that obligation. As to the requirement of balancing the equities, the District avers that with no input into the transaction and as a third party beneficiary of the contract between Goya and the County, [*7]which had already set the tax rate for the 2004/2005 school year, the District had no means to protect itself from the plan for Goya to use a credit against the District's tax expectation. Counsel further avers that irreparable harm will be suffered by the District because, although the budget is large, all the moneys are allocated with a very close tolerance, so that the loss of this amount of income has a great impact on non-mandated programs and upon the students and community.

The County avers, through its attorney, that the District's complaint is one of

disappointed expectation and that is not a claim that it can recover on. It asserts that, in the

final analysis, the PILOT program results in a distribution of more revenue to the District over a longer time period, so that it is a benefit. Counsel further asserts that the District's complaint is actually a liability in the form of a tax refund. He further avers that the PILOT agreement has made the District a third-party beneficiary but ". . .not of a generalized, all-encompassing right to revenue, but the third-party beneficiary to the amount and kind of payments or taxes due under this agreement, which specifically says it is a credit against future payments in lieu of taxes where there's been a successful proceeding" (Oral argument transcript, March 17, 2005 Ormsten, p.44, lines 18-23). He argues that the District's

interests were represented by the County in that the County has an equally-strong interest in the preservation of its tax base. Counsel also argues that the District was provided with notice of the entire mechanism when notice was promulgated of the hearing about the PILOT program for Goya, and the District could have had input at that point; and that notice, for that hearing, made the District chargeable with knowing that there were provisions for credits rather than a straight payment.

The counsel for Goya asserts that the statutory format for the PILOT program is well-settled, and sets up a formula for payments for the property that is based upon the tax assessment for the property and provides Goya the opportunity to challenge that assessment in the future. He further asserts that the Administrative Code of Nassau County does not provide for notice to the District in a tax certiorari proceeding and the District was provided notice of the original hearing which led to an agreement that was entered into more than six years ago, arranging for the District to receive contractual payments pursuant to the PILOT agreement. The attorney for Goya stresses that the payments are not taxes and the PILOT program is statutorily appropriate. He avers that the District has no standing to object to the agreement because it was not a party to that [*8]agreement, and also because the District, after Goya has reached the agreement with the County, is receiving more money than it received prior to Goya moving onto the site. He points out that the Administrative Code, on the issue of notice and taxes, does not apply herein because the PILOT payments are not taxes. He further avers that the District's lack of awareness of the tax certiorari proceeding is only due to the District's failure to ". . .find the answer" (Oral argument transcript March 17, 2005,

Terrana, p.69, line 17). Counsel for Goya argues that the District was given a copy of the agreement and that puts the District on notice of the tax certiorari proceeding and ultimate

settlement. Counsel further argues that Goya is the aggrieved party herein and it is the County which should be the party to make the District whole. Counsel for Goya also contends that, by reason of the fact that Goya is entitled to the benefit of its bargain, i.e., that it was induced to move its operation to Nassau, was overassessed and then prosecuted a tax certiorari proceeding, that the District cannot prevail in the context of a preliminary injunction against Goya. Counsel also points out that the District is seeking the reimbursement of $484,000 out of a total budget of more than $55 million, which computes to be a minuscule percentage, and that cannot be irreparable injury, defeating the District's request for a preliminary injunction.

In reply, the District's attorney repeats the arguments previously made, and notes that,

after a search, there is no proof that the District ever received a copy of the June 1, 1998 agreement. He further argues the merits of the District's application for preliminary injunctive relief. He distinguishes the case law relied upon by his opposing counsel and argues that Justice McCabe's decision in Matter of Pall Corporation v Board of Assessors, does not have a determinative effect on the instant case. He points out that the PILOT agreement does not determinatively state that a credit is to be given to Goya, only that a credit is an option. Also, he argues that the agreement does not specify that the credit was to be taken against the school tax, nor that the credit was to be taken in any one specific year; and that the Code's hold harmless provision was not changed or modified. Therefore, he avers that the contract provision regarding credits should be construed to apply those credits

only to those owed to the County, and not reduce the PILOT payments to the District. He

disputes the County's contention that the District knew or should have known of the possibility of the issuance of credits against future school tax PILOT payments, because of the notice of the public hearing does not give any notice of the matters at issue herein, [*9]i.e., challenging of Goya's PILOT payments, a credit against those payments as opposed to a refund, or that the hold harmless policy would be avoided. Counsel also repeats his arguments regarding the District meeting the procedural requirements for injunctive relief.

Pursuant to a tax certiorari proceeding, brought by Goya, to challenge and ". . .review the assessment made by the Respondent, the Board of Assessors of Nassau County, for the purpose of taxation upon a certain parcel of real property . . .for the tax year January 1,

1999. . .for the tax years January 1, 2000 through and including January 1, 2002. . ." (Judgment November 5, 2003, AJSC Rossetti), it was

"ORDERED, ADJUDGED AND DECREED, that,

in the event PILOT payments as originally assessed

have already been made, the Receiver of Taxes for

the Town of Oyster Bay, the Nassau County

Industrial Development Agency and the County

Treasurer of Nassau County, be and he hereby is

authorized and directed to credit the amount of State,

County, Town and District and School PILOT

payments that may have been paid on account of

said original assessments in excess of the amount of

PILOT payments based upon the reduced assessments

as herein ordered and determined, (together with

interest as hereinafter provided from the date of

payment thereof to the date of entry of this judgment

and further interest from the date of the application

pursuant to RPTL §726 until the date of the credit),

upon proof that said PILOT payments were paid by

the Petitioner or by the agent or person acting on

behalf of the Petitioner against the cycle of PILOT

payments next following the granting of this Judgment

and service of a copy of the Judgment upon [*10]

Respondents".

Pursuant to that determination the County, by its Treasurer, in a letter dated September 13, 2004, to Goya,

"Revised your 2003-2004 School Tax Levy according

to the COURT ORDER AND JUDGMENT,

CALENDAR #02T0942, Cons. Index #02-403186.

The total overpayment of taxes and interest in the

amount of $454,628.20 will be applied to the 2004-

2005 School (PILOT) billing".

and promulgated a tax bill reflecting that revision.

The Court notes that, as asserted by the defendant County, the District received the public notice of the hearing, dated June 22, 1997, scheduled for July 2, 1997. The Court also notes that the stated purpose of the hearing was to ". . .hear all persons with views in favor of or opposed to the issuance of the Bonds; the providing of a straight lease structure or the location or nature of the Project". (Newsday June 22, 1997, Legal Notice 8195). The County's assertion, that the notice of that hearing also charges the District with knowledge of the agreement of June 1, 1998, is highly speculative. There is no mention in the original notice regarding any of the issues which are central to these applications; the advertised central purpose for that July 2, 1997 hearing was for the capitalizing bonds, the lease and the location and nature of the project, and there is no mention of any challenge to any assessments, nor any mention that there was any contemplation of a tax credit that would directly impact a school budget.

On the issue of notice, to the District of the tax certiorari proceeding, it is clearly stated in RPTL §708(3) that a school district is not entitled to notice of that proceeding. This is, in the ordinary Article 7 proceeding, not in dispute. The precise language and clear intent of §6-26.0 (b)(3)(c) is that the County, when there is an error in assessment, will bear the burden of repayment of that overassessment.

"(c) Notwithstanding any provisions of this

chapter, or any other general or special law

to the contrary, any deficiency existing or

hereafter arising from a decrease in an

assessment or tax under subdivisions one,

four and seven of section 6-24.0, or sections

[*11]

6-12.0 or 5-72.0 of the code, or by reason of

exemptions or reductions of assessments shall

be a county charge". (emphasis supplied)

The Code, §6-17.3, also provides, in pertinent part: "Notwithstanding the provisions of any other general or special law to the contrary it shall not be necessary to deliver a copy of said petition [in a tax certiorari proceeding] or notice to the clerk of any school district".

There is no dispute herein that the proceeding which Goya brought, and which terminated in the Judgment of November 5, 2003, was a tax certiorari proceeding brought to review and correct the error in assessment that the County made with respect to the subject property. That proceeding does not require any notice to the District (RPTL §708(3)).

The decision of the Appellate Division, Second Department, in Matter of 1 Toms Point Lane Corp. v Board of Assessors (239 AD2d 503, 658 NYS2d 348, 1997) is instructive in that it suggests that Code §6-26.0 (b)(3)(c) mandates a County charge for an overassessment for school districts without any notice, but a Village, which is not

enumerated in that Code section, is not entitled to the same tax refund that a school district

obtains, and that is the reason for that petitioner affording the Village notice of the tax certiorari proceeding. That reason is based upon the statutory responsibility of the County to indemnify the school District for the County's errors in assessments.

The Court notes, and all the parties herein concede, that the PILOT payments, and all the agreements, have all the accouterments of taxes, but that the parties to the contract and the General Municipal Law have re-labeled those payments. The County argues that the District is not entitled to any notice because the proceeding, which resulted n the November 5, 2003 judgment, was a tax certiorari proceeding. However, both Goya and the County repeatedly stress that the PILOT payments are not taxes. They also contend that the District, in essence, has no right to complain because, if the IDA had not transacted with Goya, that parcel of land (formerly Northrop Grumman) would lie fallow and generate little, if any, tax revenue to the District and the County.

The defendants contend that, notwithstanding their lack of responsibility to notify the District of the proceeding and process leading to the June 1, 1998 agreement and the [*12]tax certiorari proceeding, the public notice of the July 2, 1997 hearing is sufficient to require the District to make some affirmative investigation that would have led to an awareness of the pending impact to the District's 2004-2005 budget prior to the September 2004 notice that the District did receive. This Court perceives a fundamental flaw in the defendants' respective assertions. That flaw is that, it is illogical and wholly speculative to impute any responsibility to the District that it should have had any knowledge of the June 1, 1998 agreement and a

cascading effect of some illusory knowledge of the impact to its budget, from the content of the June 22, 1997 notice.

Moreover, while Goya alleges that the District was given a copy of the June 1, 1998 agreement, at some point prior to that date, this record is devoid of any proof of such service and, in fact, the District denies any service of that document, except in connection with this litigation as an exhibit to the opposing papers. Further, given that the practice of the defendant County in tax certiorari proceedings was (and is) to issue refunds in accordance with the mandate of §6-26.0(b)(3)(c) directly to the petitioner, the District was undisputedly without any prior notice of the possibility of the credit of $484,628.20 (gleaned from prior years' overassessment) in the single year herein complained of. This action, of the unilateral deduction, and the proof adduced herein, constitutes an unconstitutional exercise of the police power in that it is a taking in violation of the Fifth and Fourteenth Amendments of the United States Constitution.

Attention must now be drawn to the interaction of the June 1, 1998 agreement and its ultimate impact upon the November 3, 2003 judgment, as well as that modification of the usual practice and procedure in tax certiorari judgments, in general. There is no issue as to the constitutionality or propriety of the PILOT program, which envisions increased commercial and industrial development on vacant or fallow properties within an assessing unit such as Nassau County (GML§ 858(15), and historically, until the implementation of

agreements (such as that in issue herein) which replaced "tax refunds" with "tax credits", provided for a seamless adaptation of the tax certiorari system of refunds.

In the agreement in issue herein (June 1, 1998), the County and Goya fashioned a procedure to re-pay certain real estate tax overassessments by shifting that burden to the District, so that the County would not suffer a drain on its own treasury to the extent of $454,628.20. This is in contravention to the clear statutory mandate and intent of Code [*13]§6-26.0(b)(3)(c) that the County be charged with the consequences of its own error in assessment, i.e., that the District be held harmless.

In sum, then, the defendants' actions herein led to the paradoxical conclusion that, although the District was not entitled to any notice of the tax certiorari proceeding and the District had no input in the June 1, 1998 PILOT agreement because it was not a party thereto, the District had to pay the bill for the County's overassessment.

The sequence of facts, as related herein, renders a stark contrast to the situation which Justice McCabe discussed in Matter of Pall Corporation v The Board of Assessors, et al, Index no. 400350/01, when he denied intervention to the Port Washington School District. In that action, Justice McCabe noted that the motion was made ". . .because the School District may suffer an adverse financial impact. . ." (emphasis supplied). Herein, the District has already suffered the loss of the Goya PILOT payment that was due in November 2004. In Vantage Petroleum v Board of Assessment Review (91 AD2d 1037, 458 NYS2d 632, 2nd Dept., 1983), the Appellate Division found that, since the Lindenhurst School District had no direct financial interest in the outcome of the tax certiorari proceeding because the school districts were not liable for school tax refunds, then intervention was not warranted.



"Pursuant to the amendment [of the Suffolk County Tax Act], a school district in Suffolk

County is no longer liable for refunds of the school portion of the property tax that is owed a petitioner as a result of tax certiorari proceedings pursuant to Article 7 of the Real Property Tax Law" (supra, p.634). That court found support in Matter of Sperry Rand v Board of Assessors of County of Nassau (aff'd 77 AD2d 822, 429 NYS2d 1023), noting that

"The Sperry Rand court was confronted with

a statute which also *1039 relieved the school

district of **635 liability for tax refunds in tax

certiorari cases (Nassau County Administrative

Code, §6-26.0[b][3][c], see L.1948, ch. 851, §2).

In addition, section 6-17.3 of said code

specifically provided that in any proceeding to

review an assessment, it was not necessary to

deliver a copy of the petition or notice to the [*14]

clerk of any school district, notwithstanding the

provisions of any other general or special law to

the contrary.

In denying the motion to intervene in Sperry Rand,

Special Term held that the legitimate interest that

school districts have in their tax base when

preparing budgets was not a ground for intervention

in a proceeding to review a tax assessment pursuant

to article 7 of the Real Property Tax Law and that

the "right to be forewarned of impending changes

in valuation affecting its tax base [existed] only when

the school district [was itself] entitled to notice of

the tax review proceeding" (Real Property Tax Law,

§ 708), because the requirement for notice is based

on the school district's liability for the payment of

refunds". [emphasis supplied]

The rationale for denying intervention in tax certiorari proceedings to school districts is squarely based upon the lack of a school district's liability for payment of refunds.

Regarding refunds versus credits, this Court perceives that as a distinction without a

difference. The District herein has suffered a direct immediate impact of the loss of $484,628.20 in funding. Logically and equitably, where a school district is to be made to pay for a refund of taxes, or, in the case at bar, responsible for a credit against a taxpayer's payment to it, a school district is entitled to intervention.

The injunctive relief sought by the District is directed at: the reversal of the reduction of Goya's 2004/2005 school tax PILOT payments to the District by the application of credits;



the County from entering into any tax certiorari settlements integrating credits as a manner of payment of PILOT payments instead of case refunds; and at the County to remit to the District the full amount of the Goya 2004/2005 school tax PILOT obligation without any reduction by the credit implemented in the November 5, 2003 judgment. [*15]

The Court's recital of the facts pertinent herein and the presentation of the relevant statutory and case law is balanced, as it must be, with the inherent principles of equity. That exercise of equity jurisdiction, as mandated by the nature of the application to interpret the transaction between Goya and the County as a third party beneficiary contract, recognizes that such agreement does qualify as a third party beneficiary contract. (see, Binghamton Masonic Temple Inc. v City of Binghamton, 213 AD2d 742, 623 NYS2d 357, 3rd Dept., 1995). There was a clear intent in the June 1, 1998 agreement to confer a tax impact upon the District and such impact was certainly not an incidental one; in fact, by operation and the intent of the General Municipal Law, Article 18-A, the entire intent of the PILOT program and the IDA was to increase the tax benefit to the taxing authorities and units. Put another way, the County must fulfil its legal duty to indemnify the District pursuant to the Code, and the contract

between Goya and the County cannot vitiate or obviate that legal obligation to the District without the District's permission or consent, requiring its input and intervention.

The defendants are using the legal fiction that the PILOT payments are not taxes, but they are, in effect, lease payments for the parcel of land that Goya is occupying and utilizing. However, were this a true lease, only the County would be the landlord and would receive the lease payment, but, herein, the PILOT payments funneled to the District create a third party beneficiary contract which, in turn, creates a responsibility to the District that the County must fulfill. Alternatively, the County's legal liability established by the Administrative Code must be carried out.

It is not the intent of this Court to void the PILOT agreement of June 1, 1998, or to declare the creation of the IDA as unconstitutional. It is the intention of this Court to correct an inherently unfair and inequitable policy decision, made by the County, to protect in own exchequer at the expense of the District, and done so in a manner that the District did not discover it until it was too late for the District to protect itself and its students and constituents.

Ironically, while the defendants herein complain of the untimeliness of this application, such delay would not have occurred if those defendants had given proper, formal notification of the requisite steps that led to the judgment of November 3, 2003.

Viewed in the factual context as outlined hereinabove, this Court determines that the District has proven the three requirements for a preliminary injunction.

"To prevail on a motion for a

preliminary injunction, a movant

[*16]

must establish the likelihood of

success on the merits, irreparable

injury in the absence of an

injunction, and a balance of equities

in its favor (see Aetna Ins. Co. v

Capasso, 75 NY2d 860; Somers

Stained Glass Corp. v Somers

Designs, 277 AD2d 442). Further,

the movant must demonstrate a clear

right to relief which is plain from the

undisputed facts (see Blueberries

Gourmet v Aris Realty Corp., 255

AD2d 348, 350, citing Family Affair

Haircutters v Detling, 110 AD2d

745, 747)".

(JDOC Construction, LLC v Balabanow, 306 AD2d 318, 760 NYS2d 678, 2nd Dept., 2003).

That relief is applicable only to that part of the District's application which seeks an order of this Court that the Nassau County defendants remit to the District the full amount of Goya's 2004/2005 school tax PILOT obligation without any reduction in that amount for the credit granted to Goya by the County.

This Court does not perceive Goya's actions herein to be deserving of depriving it of its bargain with the IDA and the County defendants herein; nor are those actions deserving of injunctive relief. This Court will not grant the District's request for injunctive relief against the County defendants from entering into any tax certiorari settlements which provide for the granting of refunds in the form of credits against future tax PILOT payments, instead of cash refunds by the County, where the refund is the result of a reduction in the assessed valuation of property, as such relief is overbroad and such request is, in essence, the ultimate relief

requested in the complaint and obtainable only upon a request pursuant to CPLR 3212.

With respect to the application in Action #1, for intervention and vacatur, that application is granted in its entirety and a hearing is directed to be held on May 25, 2005 at 10 a.m., before the undersigned for the purpose of restructuring and reforming that portion of the November 5, 2003 judgment that provides for the implementation of [*17]credits, in place of tax refunds by the County.

To summarize, the application in Action #1 is granted in its entirety; the application by the District in the first order to show cause is granted as to the request denominated (a) and denied as to (b) and (c); the application by the District in the second order to show cause is granted as to the requests denominated (a) and (b), and denied as to (c).

The making of this motion has triggered assignment pursuant to Part 202 of the Uniform Rules for New York State Trial Court. The Preliminary Conference mandated by Section 202.12 shall be held on the first floor of the courthouse, Room 186 in the DCM Part on the 23rd day of June 2005 at 9:30 A.M.

This constitutes the decision and order of this Court.

Dated J.S.C.