STAMFORD – The owner of The Lofts at Yale & Towne, the signature Harbor Point building that is cracking and sinking into the ground, is in court seeking a cut in its $1.1 million property tax bill.
The structure “is so damaged as to require complete demolition and total reconstruction,” according to the appeal filed in State Superior Court in Stamford by the owner, Gaia Real Estate of New York, doing business as Lofts Owner LLC.
It is the result of “dropping groundwater levels and settlement of underlying fill soil,” according to the court document. “Along with the cost of demolition, 100 percent of rental income has been lost, all of which is a major calamity” for the owners of the 200 Henry St. building, it states.
The 225-unit building has been “completely vacated of tenants for safety reasons,” it states. Damage includes “numerous cracks … in floor slabs, beams, columns, windows and walls.”
The last of the tenants moved out in April.
Because of all of that, the city’s valuation of the building now “is excessive,” according to the court document.
The tax department last year assessed the total value of the five structures that comprise The Lofts at $40.4 million, with a fair market value of $57.7 million.
But the value now is “seriously reduced,” the document states.
It does not specify a revised value or an amount for the tax reduction the owner is seeking.
City records show taxes on the building all paid up until last year, when the owner paid half the amount due.
According to the court filing, the owner sought a hearing before the Stamford Board of Assessment Appeals but was refused.
“We don’t hear tax appeals for commercial buildings worth more than $1 million,” board Chairman George Sessa said Monday. “They have to go to the courts.”
State law says tax appeal boards may elect not to conduct a hearing for any commercial property with an assessed value greater than $1 million. Property owners instead may appeal to the Superior Court in their judicial district, according to the law.
Elliott Pollack of Pullman & Comley, the attorney representing the owner, did not return requests for comment Monday.
City Legal Affairs Director Doug Dalena, Tax Assessor Greg Stackpole and Lauren Meyer, special assistant to Mayor Caroline Simmons, also did not return requests for comment.
The court document states that The Lofts at Yale & Towne is sinking because of “special and unique circumstances” not caused by the owner that have arisen since Oct. 1, 2017.
That was about a year after Gaia Real Estate bought The Lofts from Building & Landing Technology, the developer of the multi-billion-dollar Harbor Point project.
BLT built the Lofts in 2010, converting it from the century-old Yale & Towne lock factory, which has a foundation made of wooden pilings.
Gaia has since discovered that the pilings are victims of dewatering. The little-known phenomenon that happens when the water table beneath a building drops, exposing the pilings to air, which allows bacteria and bugs to grow and consume the wood.
Gaia engineers originally thought they could save the building, but later determined that it would not survive a renovation. An architect for Gaia called it a disaster.
It’s particularly true because the company’s insurance carrier will not cover any damage caused by dewatering, a Gaia executive told the Stamford Historic Preservation Advisory Commission in April.
Gaia planners are now before the commission seeking historic preservation bonuses that will allow the company to build more apartments in the new structure. Gaia has to boost revenue to cover the cost of lost rental income, demolition and reconstruction, planners say.
According to the court filing, the Stamford Building Department issued a preliminary demolition permit, but more permits are required. The company also is awaiting zoning approvals before it can knock down and rebuild, the document says.
The Lofts owner filed the court appeal after the Board of Assessment Appeals declined the hearing in the spring. The latest action in the case occurred this month, when Lofts attorney Pollack objected to a request from Stamford Assistant Corporation Counsel Barbara Coughlan, who wanted “copies of any and all internal or publicized/distributed memoranda, letters, correspondence, e-mail, notes, files, reports or documents concerning or relating to the value of the property” over several years.
The documentation is “voluminous,” Pollack said in his objection, and “wholly irrelevant” to the owner’s claims, which are about the condition of the building as of October, when its value was last assessed.
If Stamford officials reduce taxes on The Lofts, it won’t be the first time it’s happened because of dewatering.
In 1976 the city replaced aging drainage pipes to stop flooding in a residential neighborhood downtown. But the city used bigger pipes and set them deeper in the ground, which drained away so much water that cavities formed in the soil, and buildings on the surface sank.
A garage belonging to Theodore and Julie Breunich was so damaged that the city stopped charging them taxes on it, according to a Stamford Advocate story stored in the Ferguson Library’s Historical Archive.
The fiasco affected 15 homes, which the city bought outright or paid owners to repair.
The Lofts dewatering case does not involve a city action, other than a possible tax cut. According to the court appeal, the owner seeks reduction of the assessments “to their true and actual values;” reduction in taxes; a refund of the overpayment of taxes and interest on that amount.