The following numbered papers read on this Article 78 proceeding brought by petitioner 64-11 QB Owner LLC, (QB Owner), seeking a declaratory judgment to reversing the determination by the respondent Commissioner of Finance of the City of New York, Preston Niblack, which sustained a finding by the New York City Department of Finance, (DOF) that a tax classification of the subject vacant property located outside Manhattan, as Tax Class 4 for fiscal years (FY), 2020-2022, and correcting such tax class designation to Tax Class 1. Papers Numbered Notice of Petition and Petition — Exhibits EF 1-20 Answer and Answering Affidavits — Exhibits EF 23-39 Reply Affidavits EF 41-47 Upon the foregoing papers it is ordered that the petition is determined as follows: In this Article 78 proceeding for declaratory judgment and other relief, the petitioner QB Owner, seeks to reverse the administrative decision of DOF, upheld on appeal by the Commissioner of Finance, which determined that the tax classification of Tax Class 4, assigned to the subject vacant property was correct. At issue, is whether the Commissioner’s final determination, that the designation of the subject property as a Tax Class 4, Building Class V1, for such a property outside Manhattan, rather than as Tax Class 1, Building Class V0, was arbitrary or capricious or in violation of law. Real Property Tax Law (RPTL) §1802 (1) (d) (i), states that property is classified as tax class one (TC 1), if zoned residential, and falls within the following restriction: “(d) all vacant land located within a special assessing unit which is a city (i) other than such land in the borough of Manhattan…” In opposition, the respondent’s primary argument is that the CPLR Article 78 procedure filed by the petitioner was not the legally proper method to challenge such classification. Respondent takes the position that RPTL Article 7 is the exclusive remedy for such a review. Respondent’s counsel further argued that despite the Notices of Property Value indicating the property was “vacant”, that the property was, instead, a parking lot. In support of its petition, petitioner submitted, among other things, a copy of the pleadings, a copy of the Notices of Property Value Tax Years 2019-2020, 2020-2021, and 2021-2022, copies of certain photographs of the property, a copy of DOF’s “Clerical Error Rule” promulgated by the Commissioner of Finance effective date July 16, 2016, a copy of Petitioner’s request to DOF to correct the clerical error, and a copy of DOF’s Final Administrative Decision. In opposition, the respondent submitted, inter alia, a copy of its Answer, and copies of certain photographs or google earth images of the subject property. In reply, QB Owner submitted, among other things, a copy of DOF’s Notice of Property Value for fiscal year 2023-2024 (not being contested.) The subject property is designated as 64-11 Queens Boulevard, County of Queens, Block: 1341 Lot:77, (hereinafter referred to as the “property”.) It is not disputed that on December 6, 2021 the petitioner submitted a request to DOF seeking the change of tax classification for the property, from the erroneous designation as tax class 4 to the proper and lawful tax class 1, for the 2019-2022 tax periods. This request was made in accordance with NYC Administrative Code §11-206, and the “Clerical Error Rule”, promulgated by DOF and enacted as 19 RCNY 53 et seq. NYC Administrative Code (Admin Code), §11-206, provides the Commissioner with the discretion to correct, “any assessment or tax which is erroneous due to a clerical error or to an error of description contained in the several books of annual record of assessed valuations or in the assessments-rolls.” In order to implement its statutory authority, DOF promulgated its “Clerical Error Rule”, 19 RCNY 53 et seq., which includes within its rules, a few examples of correctable scenarios. After a review of these rules and examples, the court finds that correcting an erroneously designated tax class is within the DOF’s authority provided by Admin Code §11-206. Included within these rules is a time limitation within which claims must be filed. 19 RCNY §53-01 (3) states, “The Department of Finance will only correct eligible errors that occurred within six years of the date of submission of an application.” Faced with the appropriately filed request to correct the alleged clerical error, or error in description of the subject property, the Commissioner finally responded, on September 2, 2022, as follows, in its pertinent part: “We have determined that the issue in your application is not due to a clerical error or an error in description, and therefore no action has been taken.” In its Article 78 petition, the petitioner states that, after purchasing the subject property in 2017, that, in 2019 the existing structure consisting of a hotel, was demolished, rendering the property “vacant property.” It is not disputed that the property is located within a residentially zoned district (R7X), with a commercial overlay, (C2-3). The respondent does not deny that the Notices of Property Value, for tax years 2019-2020, 2020-2021, and 2021-2022, designate the property as Tax Class 4, but under the portion of the statement entitled, “Please Review: Your Property Details”, the building class is listed as “Vl (Vacant land),” on all three notices. Clearly, the subject property was found by the appraisers of DOF to be vacant land, and indisputably is outside of Manhattan. With regard to respondent’s assertion that an Article 78 proceeding is an improper procedural vehicle for the petitioner to seek redress, generally, challenges to tax assessments made by the Department of Finance are made in a tax certiorari proceeding pursuant to RPTL article 7. (See RPTL §706; Kahal Bnei Emunim & Talmud Torah Bnei Simon Israel v. Town of Fallsburg, 78 NY2d 194 [1991].) However, contrary to the respondent’s posture, it is not the exclusive remedy for a taxpayer seeking relief. RPTL §700 provides that, “a proceeding to review an assessment of real property shall be brought as provided in this article unless otherwise provided by law.” (See Better World Real Estate Group v. New York City Dept. Of Finance, 122 AD3d 27 [2d Dept 2014].) Admin Code §11-206 provides another method limited to clerical errors or errors in description, for the Commissioner of Finance to exercise its discretion to correct these errors on behalf of aggrieved taxpayers. The rules adopted by DOF with regard to this procedure is discordant to the statutory framework of RPTL Article 7 tax certiorari proceedings, in that, RPTL Article 7 tax certiorari proceedings have a very limited time frame within which a taxpayer can seek relief. DOF’s own rules, (19 RCNY 53 et seq), provide for a six year look back period within which the Commissioner may act to make a correction. DOF’s position, that only the RPTL Article 7 tax certiorari proceedings could be utilized as the exclusive remedy, renders any challenge to its exercise of discretion, under Admin Code §11-206, made after the time limits for RPTL Article 7 are passed, impossible. Even DOF does not allege that these §11-206 corrections can not be made beyond the time limits of RPTL Article 7. Having been asked to exercise its discretion, and deciding to deny the request to make the necessary correction to abide by its own past practices and legal precedent, renders the Commissioner of Finance and DOF subject to scrutiny in an Article 78 proceeding, without which, the Commissioner lacks any accountability for the powers given pursuant to Administrative Code §11-206. (See Better World, 122 AD3d 27.) The Appellate Division, Second Department’s ruling in Better World, 122 AD3d 27 [2d Dept 2014], is, at this time, the uncontroverted binding authority that an Article 78 proceeding may be brought to seek relief from the Commissioner’s arbitrary and capricious exercise of authority, in failing to correct the kind of error alleged in this matter. It is noted that the provision under consideration, Real Property Tax Law (RPTL) §1802 (1) (d) (i), refers to properties outside Manhattan. Other than Bronx County, (First Department), all other counties within the City of New York are within the Second Department. The court is aware of no pending appeal on this issue. Within the Second Department are numerous other cases of coordinate jurisdiction holding the same or similar, (See eg., 9313 Rockaway Beach, LLC v. Niblack, 79 Misc3d 1211(A), [Sup Ct, Queens Cty, J. Catapano-Fox 2023]; Richmond SI Owner LLC v. Soliman, 75 Misc 3d 1211 (A), [Sup Ct, Richmond Cty, J. Ozzi 2023; Seetharam Adimoolam, et al., v. Niblack, et al., [Sup Ct, Richmond Cty J. Marrazzo 2022]; 1543 E NY Ave LLC v. Soliman, et al., [Sup Ct, Kings Cty J. Rothenberg, 2022]; Jomaniam LLC v. Niblack, et al., [Sup Ct, Richmond Cty J. Porzio 2022]; MLK LY LLC v. The Commissioner of Finance of the City of New York, et al., 2022 NY Slip Op. 33386(U), [Sup Ct, King Cty J. Rothenberg 2022].) In an Article 78 proceeding involving a decision made by an administrative agency without a hearing, the scope of the court’s review is limited to a determination as to whether the agency used improper procedure, error in law, or was an arbitrary and capricious decision. (See Kripalani v. State Div. Of Housing & Community Renewal, 126 AD3d 904 [2d Dept 2015.) An action is arbitrary and capricious when it is taken without sound basis in reason or regard to the facts. (See Matter of Pell v. Board of Educ. of Union Free School Dist. No.1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222 [1974].) Here, it is undisputed that the primary zoning for the property, located outside of Manhattan, is listed as residential, “R7X”, with Commercial Overlay, “C2-3″. The Notices of Property Valuation, which are official records kept by the DOF, were mailed to the property owner/taxpayer to advise of the tax status of their property in each given taxable period. Each stated that the property was “vacant” land. This conclusion is a result of the work that DOF’s appraisers do each year to ascertain the accurate descriptions and classifications of properties in the City of New York for tax purposes. The petitioner’s assertions that it demolished the hotel on the property is evidenced by these notices, in that, in addition to stating the property was “vacant”, they demonstrated changes in the comparative market values from pre-demolition 2018-2019, ($3,473,000) to ($2,000,000) for the post-demolition 2019-2020 period, or a reduction in value of $1,473,000. The actual assessed value was reduced from $1,562,850 to $900,000, a reduction of $662,850. Further evidence in support are the pictures, which demonstrate that during the challenged 2019-2020, 2020-2021, 2021-2022 tax periods, the property was, in fact, vacant. Succinctly stated, DOF’s own findings of fact demonstrate that the subject property, as a result of some typographical error, or error in description, was erroneously designated as Tax Class 4, instead of Tax Class 1 as required by RPTL §1802 (1) (d) (i). The assertions of respondent’s counsel, that the property was otherwise, are unsupported by the evidence, and are directly contradictory to the DOF’s own findings, and published official public records proclaiming the status of the property as “vacant”, within the contested tax periods. It is noted that the picture submitted by the respondent in 2022, of what might be described as a parked “big yellow taxi”, does, in fact, demonstrate, in the immortal words of Joni Mitchell, that “they paved paradise and put up a parking lot”, but not during the taxable periods in question. RPTL §1802 (1) (d) (i) is clear, that property designated as “vacant” land, located outside of Manhattan is to be classified as Tax Class 1. Whatever was intended for the property’s use in the future, the status existing as of the taxable status date, is the basis for the tax classification. (See 194 Main, Inc., v. Bd. of Assessors 91 AD3d 876 [2d Dept 2012].) In light of the foregoing, denying petitioner’s request to correct the erroneous tax class designation from tax class 4 to tax class 1, pursuant to Admin Code 11-206 and its own rules under 19 RCNY 53 et seq., was arbitrary and capricious. (See Better World, 122 AD3d 27 [2d Dept 2014]; see also, 9313 Rockaway Beach, LLC v. Niblack, 79 Misc3d 1211(A), [Sup Ct, Queens Cty, J. Catapano-Fox 2023]; Richmond SI Owner LLC v. Soliman, 75 Misc 3d 1211 (A), [Sup Ct, Richmond Cty, J. Ozzi 2023; Seetharam Adimoolam, et al., v. Niblack, et al., [Sup Ct, Richmond Cty J. Marrazzo 2022]; 1543 E NY Ave LLC v. Soliman, et al., [Sup Ct, Kings Cty J. Rothenberg, 2022]; Jomaniam LLC v. Niblack, et al., [Sup Ct, Richmond Cty J. Porzio 2022]; MLK LY LLC v. The Commissioner of Finance of the City of New York, et al., 2022 NY Slip Op. 33386(U), [Sup Ct, King Cty J. Rothenberg 2022].) Therefore, it is ordered that the Article 78 petition is granted. It is further ordered that the DOF’s final determination dated September 2, 2022 is vacated, and it is further ordered that the designated Tax Class for the subject property shall be corrected from Tax Class 4 to Tax Class 1 for all contested taxable periods. The matter is remanded to the Department of Finance for recalculation of the taxes levied on the property for the tax periods of 2019-2020, 2020-2021, and 2021-2022. Dated: September 21, 2023
