Unbuilt condominium apartments in buildings whose plans have been approved by the state attorney general may still be taxed, according to an article by Josh Barbanel in today's edition of The Wall Street Journal about the woes of Morgan Lofts at 11 East 36th street, Lee Gardens at 24 Lorimer Street in Williamsburg, Brooklyn, and Gateway II on Frederick Douglas Boulevard and 114th Street in Harlem.
The article said that two penthouse apartments beneath the tall arches atop Morgan Lofts were never built but are billed $30,000 each yearly in property taxes "plus thousands of dollars more in common charges."
"There are among a number of phantom condominiums in at least three projects in Manhattan and Brooklyn caught up in the maze of city and state rules for condominium development. The Morgan Lofts penthouses were included in plans filed with the state attorney general, but not built. Year in and year out, they are still charged property taxes by the city, and asked to pay common charges as if they actually existed. 'This is like living in never-never land,' said Joe Bobker, a real estate develop and consultant to his two sons who are the developers of Morgan Lofts. City records show the two condominiums, now little more than a windswept rooftop, owe a total of $212,302.22 in city property taxes."
"Owen Stone, a spokesman for the Department of Finance, which levies taxes, said the department as aware the phantom condominiums are sometimes charged taxes. 'It's not unheard of, but rare,' he said," the article said.
Gaetano & Associates, the sponsor of Gateway II, was billed for taxes on a six-story tower it planned to build atop a row of existing five-story buildings," the article said, adding that "the tower was delayed for years during the downturn because of financing issues after the failure of its lender, Washington Mutual Bank. It is now nearing completion" and the sponsor sued the law firm that prepared the plan to recover common charge payment but lost in a jury trial earlier this month.
Lee Gardens, a low-rise condominium that dates to 1998, is only two stories with never-built condominium units on the third and fourth floors. Taxes accumulated ever since on the units, and liens on the phantom units were sold in 2004 and 2009 to investors.
A solution according to Mr. Stone would be for the sponsors to submit revised plan eliminating the units, but that would mean that other condo owners would have to pay higher common charges.
The article said that two penthouse apartments beneath the tall arches atop Morgan Lofts were never built but are billed $30,000 each yearly in property taxes "plus thousands of dollars more in common charges."
"There are among a number of phantom condominiums in at least three projects in Manhattan and Brooklyn caught up in the maze of city and state rules for condominium development. The Morgan Lofts penthouses were included in plans filed with the state attorney general, but not built. Year in and year out, they are still charged property taxes by the city, and asked to pay common charges as if they actually existed. 'This is like living in never-never land,' said Joe Bobker, a real estate develop and consultant to his two sons who are the developers of Morgan Lofts. City records show the two condominiums, now little more than a windswept rooftop, owe a total of $212,302.22 in city property taxes."
"Owen Stone, a spokesman for the Department of Finance, which levies taxes, said the department as aware the phantom condominiums are sometimes charged taxes. 'It's not unheard of, but rare,' he said," the article said.
Gaetano & Associates, the sponsor of Gateway II, was billed for taxes on a six-story tower it planned to build atop a row of existing five-story buildings," the article said, adding that "the tower was delayed for years during the downturn because of financing issues after the failure of its lender, Washington Mutual Bank. It is now nearing completion" and the sponsor sued the law firm that prepared the plan to recover common charge payment but lost in a jury trial earlier this month.
Lee Gardens, a low-rise condominium that dates to 1998, is only two stories with never-built condominium units on the third and fourth floors. Taxes accumulated ever since on the units, and liens on the phantom units were sold in 2004 and 2009 to investors.
A solution according to Mr. Stone would be for the sponsors to submit revised plan eliminating the units, but that would mean that other condo owners would have to pay higher common charges.
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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