Fighting City Hall has turned out to be a rather expensive proposition for the owners of some struggling downtown Boston office buildings.
City
Hall has slapped developers and other real estate types with anywhere
from a few hundred to hundreds of thousands of dollars in financial
penalties after they appealed tax assessments on often half-empty
buildings.
Now a top
Boston elected official has launched his own investigation to get to the
bottom of the mysterious tax bill increases that some building owners
have been hit with.
City
Councilor Ed Flynn has filed a 17F order requiring the Wu
administration to cough up information on the controversial and
seemingly newfound practice of penalizing property owners who appeal
their tax assessments.
“There
have been a series of reports in the media expressing concerns about
assessing practices in the City of Boston, specifically as it relates to
the assessment of office towers,” Flynn notes in his order.
The
label “ATB dispute” was affixed to the city tax records of the
properties in question. Short for the state’s Appellate Tax Board, the
ultimate authority on tax appeals, according to Daniel Swift, a top
Boston tax whose sleuthing on behalf of his clients uncovered the
charges.
City officials then hiked the tax assessments on the buildings in question, triggering higher tax bills.
Swift
contends the penalties were hidden, noting he only spotted them when
examining paper tax documents for various buildings that had been filed
at City Hall.
In a
recent interview, Swift called the penalties “shocking,” saying he had
never seen anything like it in all his years of work representing city
building owners.
For
his part, Flynn is seeking a list of all buildings that city officials
have affixed the costly “ATB dispute” label to the rules regarding the
use of the penalties by city officials, and what records are kept on
them.
Flynn, to
substantiate his Request for Information from the city, mentions
Boston’s history in the 1970s of over-assessing and hence overtaxing
office and commercial buildings, which led to a $140 million court
judgment.
In today’s dollars, that would amount to $620 million, Flynn noted.
The
Boston Policy Institute (BPI) has warned that the city could face the
loss of anywhere from $1.4 billion in tax revenue in the best case
scenario to more than $2 billion in the worst over the next few years,
amid the collapse of office tower values following the shift to remote
work.
“This current dispute over
assessment practices has a real back-to-the-future flavor that should be
familiar and frightening for anyone who knows Boston’s history,” Greg
Maynard, executive director of BPI, noted.
Scott van Voorhis is a longtime Boston reporter specializing in real estate and is the publisher of Contrarian Boston.