The subject of this RPTL Article 7 tax review proceeding is a 396 unit, garden-style, residential apartment complex located on the former Roosevelt Raceway property [*2](the subject property). Twenty (20%) percent of the units are "affordable" and the complex is part of an 80/20 housing program. Construction of the complex occurred

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between 2003 and 2006. The subject property is identified on the Land Tax Maps of Nassau County as Section 44, Block 78, Lots 67-71, and is more commonly known as 1299 Corporate Drive, Westbury, New York. The property is located within the Uniondale School District (H-2) and is classified by Nassau County within Class II. RPTL Article 18. The tentative 2008/09 assessment roll assessed the subject property at $607,181.00 which equalizes to a full market value of $68,248.020.00.

On or before March 1, 2007, Archstone filed an initial correction application (grievance) with the Administrative Review Commission (ARC) for a change of the tax assessment on the subject property. Petitioner claimed the subject property had a value of $1,517.955.00. The correction application (grievance) filed by Archstone was dismissed by ARC without a determination on the merits.

On or about April 2, 2008 Archstone filed a petition for 2008/09 pursuant to RPTL Article 7.

The respondents ("County") brought the within Article 78 proceeding to dismiss Archstone Communities Trust (Archstone's) 2008/09 RPTL Article 7 tax review proceeding based on the determination by the Assessment Review Commission (ARC) that pursuant to RPTL § 523-b the petitioner's failure to respond to the information requests made by ARC regarding the correction application was willful and substantially frustrated the ARC's ability to make a proper determination on the merits (ARC letter dated March 31, 2008 to petitioner's attorney).

The initial application filed with ARC on or around March 1, 2007 made no mention concerning the water intrusion problems or potential mold growth at the complex.

ARC asserts it first learned about the condition in an article published in Newsday on November 27, 2007. The article reported that Archstone must evict all of its residents due to pervasive water intrusion problems at the apartment complex. Apparently it was disconcerting for ARC to learn about the mold condition for the first time from the Newsday article. ARC contacted Archstone for information on the mold condition since the correction application for 2008/09 did not include any information regarding mold [*3]problems at the subject property. On February 29, 2008, petitioner filed an Amended and/or Supplemental ARC application for 08/09 wherein petitioner stated "the twenty (20) residential buildings have suffered water intrusion damage to the exterior cladding

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systems, as well as to ancillary portions thereto. This has required residents to vacate the buildings and also requires substantial repair and remediation to these buildings, that will, inter alia, cost many millions of dollars over the next year to year and a half."

At a March 27, 2008 conference the attorneys for the petitioner advised ARC about numerous pending lawsuits. ARC wanted documentation to substantiate the application to reduce the assessment. Petitioner was unable to provide actual costs to remediate the problem. As soon as the property was completely evacuated the petitioner claimed it would be able to determine the full extent of the problem.

The representatives for ARC who attended the March 27, 2008 meeting expressed their concern of having learned about the mold condition for the first time in the Newsday article on November 27, 2007. ARC did not accept Archstone's good faith position that it would not and/or could not know of the extent of the damage to the complex at the time of the March 27, 2008 hearing or at any time prior thereto until the subject premises were completely vacated. Petitioner asserted there were no actual costs available. Archstone could only provide ARC with estimates. The petitioner proposed providing information subject to a confidentiality agreement. The idea of a confidentiality agreement was rejected by ARC. ARC asserts that "[d]espite the inch thick of exhibits proffered along with a litany of irrelevant anecdotes,' petitioner has failed to submit a single document establishing that its property suffered water intrusion damage and mold infestation on the taxable status date of January 2, 2007." Further, at ¶ 8 respondents' attorney states "[p]etitioners were not willing to waive their claim of water intrusion and mold infestation." At the time of the ARC hearing on March 27, 2008, the extraordinary problems with the building were evident with the many lawsuits pending in this Court. Archstone was involved in litigation relating to problems with the property's initial design, construction, construction supervision and quality of the materials utilized in building the complex. ARC's attorney contends that, at the very least, petitioner's attorney could have made available to ARC copies of all the pleadings submitted in connection with the pending lawsuits. The court pleadings were all a matter of public record and available to ARC. More importantly, even if ARC had reviewed all the pleadings filed in connection with the lawsuits they would only contain estimates of the alleged damage sustained. Justice Warshawsky , one of the Judges of this court, described the litigation [*4]involving the subject property as a "behemoth action." In Archstone v Tocci Building Corporation of New Jersey, Index No. 1018/2008, Justice Warshawsky indicated the complexity of the litigation (order signed June 3, 2008, entered in the Office of the County Clerk on June 6, 2008).

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This motion by plaintiff for an order pursuant to

CPLR § 602 and Lien Law § 44 consolidating or

joining for trial the above captioned action with

an action pending under Index Number 6064/07

between DaVinci Construction of Nassau and

Archstone-Smith Communities, and an action

pending under Index Number 5292/07 between

FJR Construction Inc. and Archstone Smith

Communities is granted to the extent the actions

are joined for discovery and it is So Ordered.

The above captioned action involves the liability

for defective construction and or design of a multi

unit residential project. It is uncontested that water

enters between the facade of the buildings and the

core and causes damage. The defendants in this

lawsuit are the general contractor, Tocci, the architect,

Perkins Eastman, the stone facade manufacturer,

Eldorado Stone, and the issuer of the Performance

Bond, Liberty Mutual. Defendant Tocci has brought

third party claims against 23 subcontractors. Thus, it

can be seen that the near universe of trades involved

in the construction of the project are included in this

action where liability for the defects is to be determined.

The two actions sought to be joined for discovery were

brought to foreclosure on mechanics liens. They have

been bonded. However, under the circumstances they

are not simply mechanic's lien foreclosure as fault is an

issue for an as yet unascertained overall construction

failure. The quality of the material and the quality of the

labor used by the subcontractors is in issue as it is [*5]

investigated whether any of the subcontractors are liable

to plaintiff for remediating the construction.

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Although the prejudice to the lienor subs in being

joined in this behemoth action cannot be denied,

it is balanced by the difficulty of adjudicating

liability in this action without all parties being

present. (emphasis added).

Each action shall proceed under its own index

number.

Discovery will be undertaken in the manner to be

set forth in Preliminary Conference Order that will

issue after a Preliminary Conference to be held on

June 5, 2008.

Class actions were also initiated against Archstone by various tenants. It was not reasonable to expect Archstone to defend the allegations it made in the pleadings in the aforesaid "behemoth action," before ARC when making the within application for the correction of assessment for taxation.

For income producing real property, when an application is submitted by an applicant for correction of assessment for taxation, all income received or accrued and all expenses paid or incurred in the real estate operation of the property, shall be submitted and filed as prescribed by the rules of the Commission. RPTL § 423-b(d). By letter dated August 24, 2007 in regard to the 2007/08 assessment, petitioner's attorney provided ARC with copies of the 2006 Financial Statement and 2006 Rent Roll. By letter dated February 21, 2008, petitioner's attorneys provided ARC with copies of a detailed rent roll as of January 1, 2008; the financial statement for 2007; written support for $1,500,000 in tenant relocation costs; and over $2,000,000 in rent differential costs. Moreover, petitioners provided ARC with an estimate of 14 months to do repairs after all the tenants vacated the complex. By March 2008, the petitioner had conveyed to ARC the assessment being protested and why it was wrong, thereby complying with the statutory scheme contemplated by Article 7 of the RPTL. (See MTR Sterling v Assessors, 66 NY2d 122, [*6]126).

RPTL § 523-b(8) provides that the final determination of ARC on "applications for the correction of an assessment already heard shall be rendered not later than the tenth day of March in the year following the year in which the tentative assessment roll is

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published, or such later date as may be permitted by the board of assessors, in order that the final assessment roll may be prepared for publication on the first business day in April; provided, however, that the commission may continue to take testimony and render determinations on applications subsequent to March tenth." RPTL § 523-b(10) provides that each applicant of a Class 2, Class 3 or Class 4 property shall receive a notice as to the final determination of ARC or a statement that ARC has not yet made a determination as to the final assessed valuation which shall be made as soon as the petitioner's application is reviewed or heard. By establishing an arbitrary time and date of the essence clause for Archstone to comply, ARC was unreasonably precluding Archstone from ever demonstrating its meritorious challenge to the assessment. Public policy favors the determination of controversies on their merits. (See Joo Tae Kim v 158 Plaza Corp., 35 AD3d 542; Scarlett v McCarthy, 2 AD3d 623). Based on the evidence before this Court and the time frames mentioned in RPTL § 523-b(8) and (10), ARC's setting of a 2:00 PM deadline on March 27, 2008 for Archstone to provide copies of studies and reports regarding the mold condition was a draconian rush to judgment, rather than an efficacious, user-friendly determination by an agency charged with the goal of correcting real estate tax assessments in a timely fashion.

Real Property Law §523-b precludes a party from seeking an adjustment in real estate tax assessments if the failure to disclose the requested information is willful. Respondents have failed to demonstrate that the noncompliance was willful or occasioned by a desire to frustrate the administrative review. The petitioner's objections to the demands from ARC and the request for a temporary delay in responding, in light of the pending "behemoth litigation," and the time needed to remove all the tenants so that the full extent of the mold condition could be ascertained were reasonable and did not rise to the level of willful noncompliance intended to frustrate administrative review. (See Matter of Fifth Avenue Office Ct. Co. v City of Mt. Vernon, 89 NY2d 735; Matter of

Curtis Palmer Hydroelectric Company v Town of Corinth, 306 AD2d 794; Chester Mall Partners v Village of Chester, 239 AD2d 414).

Archstone does not oppose the respondent's request for a reasonable adjournment of the appraisal exchange date. This is consistent with the petitioner's position throughout [*7]these proceedings that the later the exchange date, the greater likelihood the costs incurred by Archstone will be ascertained.

The motion to dismiss the Article 7 proceeding is denied.

This decision is the order of the Court.

DatedMarch 17, 2009J.S.C.