The Real Deal New York

City hands Google millions by slashing taxes on Chelsea HQ

City mysteriously lowered the assessed value of 111 Eighth Avenue, which the tech giant owns
January 17, 2014 02:20PM

Tech giant Google scored more than $21 million in real estate tax savings during the past two years, thanks to an unusual intervention on the part of City Finance Department.

The company’s 111 Eighth Avenue New York City headquarters, a former Port Authority building across from the Chelsea market, was appraised at $816 million in early 2012, three veteran Finance Department assessors told the New York Daily News. But on February 24, 2012, the Finance Department slashed the estimate to $628 million — a 23 percent drop — according to the department’s computer log, obtained by the Daily News.

But the strangest thing about the drop, the unnamed assessors told the News, was that the agency lowered the appraisal without any formal objection to the initial amount from Google.

“The agency almost never reverses an appraisal before an owner objects,” one assessor, who asked not to be identified, told the News.

The cut in assessed value saved Google about $21 million in property taxes, the News said.

Department spokesman Owen stone said that the agency was only correcting “a mistake” in adjusting the original appraisal amount, and Taconic Management’s Peter Febo, the building manager, concurred, according to the News’ report.

But then in November of 2012, an earlier building appraisal valuing the property at $1.2 billion was overruled and cut to $827 billion — a dispute that agency computer logs show. One of the lower assessments was based on a supervisor’s listing of a “comparable” building that was a private, three-story brownstone six blocks away from the Google headquarters.

Google paid $1.8 billion for the building in late 2010. At the time, it was the largest commercial real estate purchase by a tenant in U.S. history. [NYDN] Julie Strickland