State’s Top Court: Low-Cost Parking Is Not a Tax-Free Charity

The owner of five Queens cut-rate parking facilities will have to pay property taxes, the state’s top court has ruled. The New York State Court of Appeals upheld the city’s decision to take back a tax exemption it had previously granted the politically-connected non-profit that operates 2,000 parking spaces in downtown Jamaica.

Photo: Google Street View
The politically connected non-profit operator of discount parking garages in Jamaica will have to pay property taxes, the state’s top court ruled. Photo: Google Street View

Over the course of a decade starting in 1996, Jamaica First Parking LLC, a subsidiary of the Greater Jamaica Development Corporation (GJDC), purchased parking garages and lots in downtown Jamaica from the city. The GJDC board, which includes former Congressman Rev. Floyd Flake, is well connected to much of the political establishment in southeast Queens.

In 2007, the city’s Finance Department said Jamaica First’s parking garages would be exempt from property taxes because they serve a “charitable” purpose under the law. Daily News columnist Juan Gonzalez smelled something fishy in late 2010, and the city reversed its property tax exemption just months later.

GJDC then sued the city for taking back the property tax giveaway. The case ultimately went to the Court of Appeals, the state’s highest court, which on July 1 ruled 5-2 that the non-profit will have to pay property taxes for its public parking lots [PDF].

While the court didn’t question the wisdom of below-market parking garage construction as an economic development strategy, it was clear that the court didn’t buy the argument that operating public parking is related to non-profit charitable work.

“We disagree with petitioners’ assertion that the parking facilities are charitable in and of themselves because they fulfill the primary purpose of economic development,” wrote Judge Eugene Pigott for the majority. “While these goals may be laudable, they are not charitable.”

“We’re waiting for the lawyers to review the decision so we can figure out how to move ahead,” GJDC spokesman Bob Liff told the Press of Southeast Queens. “If this means they have to pay property tax, it is our job to figure out how much that is.”

GJDC now owes at least $2.7 million in back taxes, a de Blasio administration spokesperson told the paper.

  • Joe R.

    This is a great ruling but we should really question how someone operating a garage should have been able to obtain a charitable exemption in the first place.

    On the petitioner’s assertion that garages “fulfill the primary purpose of economic development”, maybe that’s true in the exurbs, but this is downtown Jamaica we’re talking about. The place is a transit mecca. You need a garage there, and the traffic it generates, like a hole in the head. Maybe if this was 100% bike parking the developer would be right but you wouldn’t need such a huge facility which blights the surrounding area for that.

  • ahwr

    Bike parking to support economic development isn’t charitable. Neither would operating buses or vans to get people to the area.

  • Joe R.

    Nor would I think it should be given charitable status. I’m just saying a better case can be made that bike parking in a place like Jamaica might at least remotely support economic development. It’s pretty hard to make the same case for car parking given that adding congestion in an already congested area has a negative economic impact.

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