Finance department does NOT raise taxes to generate income
By Linda Collins
Brooklyn Daily Eagle
BROOKLYN HEIGHTS — Much of the criticism directed at the city’s Department of Finance (DOF) regarding property taxes is undeserved, according to David Frankel, DOF commissioner.
Frankel was speaking at the Brooklyn Real Estate Roundtable quarterly luncheon Tuesday at the Brooklyn Historical Society.
Interviewed by Michael Kaye of Douglaston Development, co-chair of the Roundtable Steering Committee, Frankel said, “We are constantly asked if we increase taxes just to generate more income for the city. We don’t do this. Not in any way. It’s property values that create the income for the city.”
There are perceived inequities, however, in every property tax category.
For example, Class I (one-to-three-family homes) provides 49-50 percent of the tax revenue; Class II (condos and co-ops) provides only 15 percent of the revenue.
A legitimate criticism of the department, however, is that property taxes have fluctuated too much. The goals now are to have more sophisticated controls and take the assessor out of the process, he said.
“It has been suggested that we take all residential properties (one-to-three-family, condos and co-ops) and throw them together, then redistribute the tax burden. What do you think we should do?” he asked attendees in the room. “The value of one-to-three-family homes would go up from one-and-a-half to three or four times what they were.
“Could I get this passed?” he asked, getting a laugh.
Frankel also emphasized that his department collects all taxes, not just real estate taxes, including collecting city debt (there is $6-7 million in uncollected city debt currently). And it collects and adjudicates all parking tickets.
Currently, there is $3.5 million in parking ticket revenue to adjudicate and collect — owed by some 700,000 people, he said.
Frankel, who followed an announcement by Brooklyn District Attorney Hines that murders were down in the borough, quipped that he was glad to speak after the D.A., that anything he had to say would be better than any discussion of murders.
Additional speakers at Tuesday’s luncheon included Dan Hartman, a principal of Ares Management, and Michael Matrisciani, a principal of Matri Holdings LLC.
Interviewed at the dual podiums by David Kramer of the Roundtable Steering Committee, Hartman, whose firm is primarily a lender, said he has nine projects in Brooklyn, favoring neighborhoods like Clinton Hill. He spoke in detail about a development at 163 Washington Ave. in Clinton Hill.
It was a joint venture with an equity partner that “just came to us” and its success turned out to be a big surprise.
“We were in it for the short-term,” he said. “We’re at stabilization now and looking at another term.”
“Today we’re filling in the gap between construction loans,” he added.
He also said his firm, a national company, is now looking at several Park Slope deals.
“And we’re more rental-oriented right now,” he noted.
Matrisciani said his firm, developers of the 12-story mixed-use building at 500 Fourth Ave. at 12th Street, is also looking at more Park Slope development.
Interviewed by Steering Committee member John Horowitz, Matrisciani said his family had always wanted to be landowners and began acquiring property along Fourth Avenue until “we realized we had 188,000 square feet.”
The firm then found a developer to partner with and an architect, Robert Scarano; but then the firm took over the job.
“We launched in June 2010 and today we are completely sold out,” he said of the building, which he called a destination building. “We wanted to give people a Park Avenue building in Park Slope.”
With future projects, Matrisciani will most likely be looking at rentals. About finding financing for them, he said, “There is money out there — with the right project, of course.”
Asked about Fourth Avenue’s future, he said that in five-to-10 years the owners of all the tire and rim shops and other landlords will see the value of their properties.
“It will be just a few years and those properties will be available for sale and development,” he said.
Matrisciani was also asked about the parking issue in Park Slope.
He replied “We have parking and, yes, it is full. But not just from people in our building. We have people from the neighborhood.”
Future roundtable events
The remaining 2012 quarterly luncheons will take place on Tuesdays, Aug. 7 and Nov. 13, at the Brooklyn Historical Society.