September 1, 2018

The Update Desk: Vending Machine Tax Break

A couple of weeks ago, in this Meanwhile, Back in Albany post, we learned about a really cool tax break - known as a 485-a - that developers can get when they put commercial space in their residential buildings.

In the case of the Three Vending Machines, it was a local project, Copper Beech Commons, built by a local developer who has made a difference with several of his properties over the years. But in this case, having the vending machines garnered the project some $3 million in property tax savings, and I think cost him a little bit of respect.

Now, clearly the NY Legislature didn't intend for this to happen -- as the prior post noted, we're burdened with a number of at least OK ideas put into law, only to have them identified as ripe for the picking by smart lawyers (or campaign donors, as the case may be).

For Copper Beech Commons, however, it seems the leaves have fallen, or something. In an article last week on Syracuse.com, Tim Knauss followed up on his original story and let us know that  Syracuse city assessors have been out inspecting properties claiming the 485-a tax break "where commercial operations were not readily evident from the street."

A small office at the property has been cleaned up, with new doors added, to try and entice a small business to lease the space and preserve the tax break. Why? Well, as city assessment commissioner David Clifford noted,
Vending machines are not a commercial use, especially when they're owned and operated by the building owner. As far as I'm concerned, that's just like having a washing machine in the basement.
The assessors last warned the developer that the vending machines did not count for the exemption four or five years ago, so there should have been no surprise that there could be problems once the last (and only) tenant of the space moved out in 2015.

I hope the developer finds a tenant, or refunds us all of the tax money he got illegitimately for all those years. More importantly, I hope we can count on city officials to consistently be good stewards of our tax dollars, and that our legislators can find a way to correct these 'good ideas gone bad' laws while they're sitting around waiting for their leaders to come up with next year's budget.