For at least a year or two, one of the most financially successful hotels in the biggest market in the world, Manhattan, enjoys an enviable property tax holiday that was not extended to any of its competitors, courtesy of New York City Finance. “I never made a mistake in my life”, Rudyard Kipling wrote, “at least, never one that I couldn’t explain away afterwards.” It would be hard for the City to explain charging a mere $400,000 in taxes for a 669-room hotel that was sold in 2011 for some $270 million, tallying to just about $2 per square foot, as compared with the $15 per square foot average among New York City hotels last year. My city residents (read, voters) don’t receive that kind of a break.
According to Owen Stone, Finance Department spokesman, the low assessment was an “oversight“. He added,“typically, when construction is completed, we add the value from the physical improvements.”
By comparison, the upscale W Hotel on Lexington Avenue paid $22 per square foot in real estate taxes, some 10 times what Yotel was billed.
Although a City assessor inspected the site and indicated that the hotel was completed, the Finance Department classified the hotel as under construction, leading to an assessment that did not reflect true condition. Apparently, the mistake persisted and is reflected again on this year’s assessment roll, though the City has stated that it is correcting the issue on next year’s roll.
So maybe New York City is more affordable than we thought – if you’re the lucky one.