Washington, January 03: One of the weirdest developments in the aftermath of the World Trade Center attack is being played out in an astounding tax court battle.
More than eight years after the Sept. 11 terror attacks, New York City authorities are demanding that developer Larry Silverstein fork over almost $35m in commercial rent taxes on the Twin Towers and two other buildings that no longer exist.
The city’s reasoning is that Silverstein continued to pay rent to the Port Authority after the towers fell.
That, city officials claim, subjects his transactions to the 3.9 percent commercial rent tax through 2005, when the state legislature ended the tax for all properties below Canal Street.
On May 27, 2007, the city’s finance department sent Silverstein a bill for $34,866,549 – including penalties and interest – on his four trade center buildings.
City officials asserted that “the airspace that had been surrounded by the buildings still existed” and, since Silverstein had the right to rebuild, he had to pay up.
Silverstein pointed out that the government seized control of the entire site in 2001, so he could hardly rebuild.
Judge Marlene Schwartz agreed in a Dec. 9 decision, and chided the city for its “error.”
“We are disappointed with the ruling and are considering all legal options,” said Rita Dumain, chief of the city’s tax and bankruptcy litigation division.
—Agencies