Comptroller’s report: Edgewater tax assessor inappropriately reduced assessed values of condos

TRENTON – The state Comptroller said this morning that a tax assessor for Edgewater inappropriately reduced the assessed value of more than a hundred condominiums owned by the same wealthy developer.

As a result, in a report issued by the Comptroller, the office calls for “property tax assessments to be “based on numbers, not favoritism.”

The Comptroller found that the assessor, Arthur Carlson, “reduced the assessed value of more than a hundred condominiums owned by the same wealthy developer, operating without documentation to grant reductions that more than tripled the tax reductions provided to owners of identical units in the same complex.”

The Comptroller’s office found that the assessed values of the developer-owned units later were raised back to market value after the developer sold the units.

In total, the Edgewater tax assessor granted assessment reductions that handed the developer an estimated $472,000 in disproportionate and inappropriate tax savings, the report found.

“If you’ve ever suspected that not all property tax payers are treated equally, here’s your evidence,” Comptroller Matthew Boxer said in a release. “The Edgewater tax assessor, operating contrary to standards set by state law, handed improper tax reductions to a wealthy developer that were denied to other residents. In the end, the taxpayers of Edgewater and Bergen County were left to pick up the tab.”

In interviews with OSC investigators, according to the Comptroller’s office, Carlson said he granted the assessment reductions that were denied to other owners because the real estate market had weakened and because he believed the developer faced bankruptcy. The developer that received the reduction is a wholly owned subsidiary of a multibillion-dollar corporation headquartered in Bahrain, the Comptroller reported.

“Even if the corporation was in danger of going bankrupt, which it was not, the financial well-being of a property owner is not a legal basis for a tax assessment reduction,” OSC Investigations Division Director John Hoffman said in a release. “If an ordinary property owner tried to get their assessment reduced because they lost their job, it wouldn’t happen. This corporation should not have been shown special treatment.”

The tax assessment reductions were granted on two separate occasions, in 2008 and 2009. In the first case the assessed value of 50 condo units was reduced by 20 percent, and in the second case, the assessed value of 49 of those 50 units was reduced an additional 45 percent, according to the Comptroller.

In 2009, 31 private condominium owners at the same complex appealed their property assessment. Not one received an assessment reduction of even half the 45 percent reduction granted to the developer, the Comptroller reported. One of the 31 owners owned a unit that had received a 20 percent reduction the year before when it was still developer-owned, yet his appeal yielded a reduction of only 15 percent.

The OSC report recommends that tax assessors file an annual report listing all municipal tax assessments that have been adjusted by 20 percent or more in the past year along with a written justification for each adjustment. Another recommendation suggests the state Division of Taxation develop a methodology to identify properties owned by a single entity that appear under-assessed relative to other, similarly situated properties.

Edgewater officials could not be reached immediately for comment.

According to published reports, Carlson resigned in July after council members in this Bergen County town decided not to tenure a part-time worker. Comptroller’s report: Edgewater tax assessor inappropriately reduced assessed values of condos