NEW YORK (January 22, 2007) — McDermott Will & Emery client, Rye City School District, won a case of first impression related to real estates taxes in New York State Court. The case addressed the issue of whether a continuing care retirement community (CCRC) is exempt from real estate taxes. McDermott represented the Rye City School District as well as the interests of the other Rye City municipal respondents.
The genesis of the case occurred in 1891 when Miriam A. Osborn, a wealthy New Yorker, bequeathed money and property for the creation of a Memorial Home for indigent women. The Memorial Home opened in 1907 and its activities were overseen by John W. Sterling.
In the early 1990s, because of alleged financial reasons, the Memorial Home (now known as The Osborn) was converted into a state of the art CCRC providing an array of living accommodations and services to senior citizens who can afford to pay its entrance and monthly fees. As a consequence, the Rye City Assessor determined that the conversion resulted in a fundamental change in use of The Osborn’s property and revoked The Osborn’s real estate tax exemption. As a result, The Osborn filed seven petitions for the tax years 1997 through 2003 that challenged the legality of the Rye City Assessor’s decision.
Justice Thomas A. Dickerson of the Supreme Court, Westchester County, issued a landmark decision upholding the Rye City Assessor’s decision. As determined by Justice Dickerson, as a result of The Osborn’s conversion to a CCRC, the provision of charity was no longer the principal or primary purpose of The Osborn. In the final phase of the case, yet to be decided, the judge will address the valuation of The Osborn property, and as a result the annual property taxes due to the city and the school district.
The McDermott New York trial team was led by partners Robert A. Weiner and Lisa A. Linsky.
McDermott's Trial Department is well-known for providing clients with a unique blend of trial skills and substantive experience which can be effectively used in the many areas of law and business where disputes arise.