Bungalow colony agrees to some taxes

Grocery store agreement renegotiated

By FRITZ MAYER

MONTICELLO, NY — The owners of a Monticello bungalow colony have come to an agreement with three local boards that includes paying property tax on a grocery store that might otherwise have been tax exempt. This comes as a result of a renegotiation of a deal arranged between the Ichud Foundation and the Town of Thompson, Monticello Central School District and Sullivan County.

County treasurer Ira Cohen said the new agreement, which has been signed by Judge Robert Sackett, is important for taxpayers because it will mean more revenue. More importantly, it clarifies the law that applies in this case.

Here is the background: An initial deal, which was worked out in 2005, provided that Ichud would make a payment in lieu of taxes to the three taxing authorities on the bungalow colony it owns on Route 42. In return, the property was perpetually deemed to be tax exempt. The deal also allowed that a grocery store the group planned to build would also be tax exempt.

Cohen, who was not involved in negotiating that agreement, objected to it and sought to collect real estate taxes from the organization. In February, Ichud went to court and Sackett ordered Cohen to release tax liens on the property for 2005 and 2006, which would have essentially left the tax-free status in place.

In June, Cohen argued before Sackett that the town had erroneously bargained away its right to assess the property, because under state law, property-tax exemptions must be applied for every year. Further, Cohen argued on a technicality that Ichud had not filed papers to cover both years, so they should pay the taxes for 2006.

The judge ordered the two sides to go back to the bargaining table and reach an agreement. In the meantime, Ichud bought more property next to the bungalow colony and opened a grocery store.

The taxing municipalities, Ichud and Cohen ultimately reached an agreement that the tax-free status would have to be applied for each year, that Ichud would pay property taxes for 2006 and that the grocery story is taxable property.

The rest of the property will remain tax-free as long as the Thompson assessment grants that status each year.