One of the largest property tax payers in Riverhead Town has won a long-fought lawsuit challenging its assessed valuation.
Traditional Links, owner of the Friar’s Head Golf Club in Baiting Hollow, has had the assessed valuation of its 349-acre site slashed by more than 60 percent in decision in State Supreme Court.
“The town will owe a refund of $3 million for the years in question, plus interest,” said attorney Jay Herman, of Herman, Katz and Cangemi LLP, which represented Traditional Links in the tax certiorari proceeding.
The lawsuit covered six tax years — 2009/10 through 2014/15 — but the court’s decision will affect the property valuation for every year thereafter.
“The town will also owe a refund for the years since,” Herman said in an interview Friday.
In a 25-page decision, State Supreme Court Judge John Leo ruled that the town “improperly valued” the Sound-front golf course based on hypothetical future residential development.
Friar’s Head Golf Club is a private membership golf club featuring an 18-hole world class golf course, with amenities including a clubhouse, three guest cabins and an FAA-approved helicopter landing pad.
The site is zoned residential, with a two-acre minimum lot size. At issue was the valuation of 45 acres of “excess land” that could potentially be subdivided and developed with homes.
The town incorrectly valued the site based on the “alleged residential development potential” of “excess land” that’s not currently used as part of the golf course.
“The excess land adds value to the property, but not 39 percent to 40 percent to the value as [the town] would have the court add due to a hypothetical subdivision…” the judge ruled.
“It cannot be said that the [town’s] appraisal constitutes any more than wishful thinking as to a subdivision,” the court said.
“The court finds as a matter of law that the valuation of the property or any part thereof under a potential use that is inconsistent with the existing one is contrary to the statutory and fundamental principles of assessment valuation,” Leo wrote.
This was the second trial of these tax certiorari proceedings. A previous trial before a judge who retired before the decision was entered was “invalidated” by the court and the matters were set for re-trial before Leo. The trial took place on eight days in February, March and April of 2018.
The total tax due on the property in the current tax year, based on the valuation invalidated by the court, is $810,595. That includes $485,783 in school tax and $200,673 in town tax — plus special district and other property taxes.
Assessor Laverne Tennenberg, chairperson of the board of assessors, did not respond to emails asking about the impact of the court’s decision on the golf course’s property tax bill or the amount of any refund due for previously paid taxes.
“The town will be appealing the decision,” Tennenberg wrote in an email Friday.
Town attorney Robert Kozakiewicz, who represented the board of assessors the trial, did not respond to a request for comment.
Supervisor Laura Jens-Smith also did not return a call seeking comment.
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