In Matter of Lackawanna Community Dev. Corp. v. Krakowski , the Lackawanna Tax Assessor sought to rescind a real-property tax exemption given to Lackawanna Community Development Corporation (LCDC), a not-for-profit corporation.
LCDC purchased the property back in 1981 and leased it to Now-Tech Industries, Inc., a for-profit corporation. (Now-Tech later assigned the lease to PCB Now-Tech, Inc., another for-profit corporation.)
In 2006, Lackawanna's Tax Assessor concluded that the property was no longer being used for an exempt purpose.
While the Erie County Supreme thought the property remained tax free, the Appellate Division, Fourth Department, didn't think the exemption applied given the manufacturing use and, on appeal, the New York State Court of Appeals agreed.
Our state's highest court was of the view the Legislature hadn't intended to create a blanket tax exemption and that the premises' "actual or physical use" was the controlling consideration.
Since the property wasn't being used in furtherance of the LCDC's direct "purpose of spurring economic development," any forbearance was forfeited.
Land of the lost?
To view a copy of the Court of Appeals's decision, use this link: Matter of Lackawanna Community Dev. Corp. v. Krakowski