In the eyes of city assessors, the so-called market value of Goldman Sachs’ headquarters in Battery Park City has dropped by $176 million, or 26.7 percent, to $511.7 million — the sharpest reduction of any Manhattan office building this year. (See chart above.)
The market value is one of the numbers the city Department of Finance uses to calculate an owner’s annual property tax bill. It is generally only a fraction of what the building would sell for on the open market.
Yet, unlike other Lower Manhattan properties that suffered damage from Hurricane Sandy, Goldman’s 200 West Street did not face a reduction due to an inherent loss in value to the building. The 2 million-square-foot, 43-story tower built four years ago notoriously remained like a fortress during the storm.
Instead, the city slashed the value for the upcoming fiscal year because it compared 200 West to similar buildings in Lower Manhattan — rather than in Midtown, as it has done in the past — to assess the value. Typically, Lower Manhattan office properties are not worth as much as their peers in Midtown.
A spokesperson for the Department of Finance was not immediately available to explain the reason for the change. A spokesperson for Goldman did not immediately return a call seeking comment.
Other Lower Manhattan office towers also saw steep cuts, according to a review by The Real Deal of the department’s final tax rolls, published late last month.
Among them were 32 Old Slip, owned by Boston-based private equity firm Beacon Capital Partners, and three towers belonging to Toronto-based Brookfield Office Properties: 1 Liberty Plaza, 4 Brookfield Place and 1 New York Plaza.
TRD reviewed tax records for Manhattan office buildings larger than 350,000 square feet south of Chambers Street, and ranked 10 buildings with the greatest dollar reductions in market value for the upcoming tax year, which runs from July 1, 2013 to June 30, 2014.
Goldman’s headquarters and Brookfield’s 4 Brookfield Place are on Battery Park City Authority land, meaning the companies do not pay property taxes to the city. Instead, they make payments in lieu of taxes, known as PILOTS, to the authority. The payments are based on the city’s valuations.
The cut in 200 West’s market value will lower Goldman’s payments, assuming tax rates remain the same, Matthew Monahan, a spokesperson for the Battery Park City Authority, said. It was not immediately clear what the annual impact would be on the payments.
“Reductions in the city’s Department of Finance assessed value of properties within Battery Park City generally would lower PILOT revenues if the tax rates remain constant,” Monahan said.
Beacon’s 36-story 32 Old Slip saw its market value slide by $65.7 million, or 21.6 percent. The next highest decline was Brookfield’s 1 Liberty Plaza, falling $63.8 million, or 9.7 percent, and its 4 Brookfield Place, declining by $39.6 million, or 9.3 percent.
The next group of properties was impacted by Hurricane Sandy. The city chopped the value of the German investment fund RREEF’s 17 State Street by $21.1 million, or 14.2 percent; Brookfield’s 1 New York Plaza by $20.8 million or 4.4 percent; and the commercial condominium building managed and partially owned by Time Equities at 125 Maiden Lane by $20.3 million, or 28.6 percent.
The last three properties were 180 Water Street, owned by Melohn Properties, which saw a $13.5 million decline in value, amounting to 14.4 percent; Jack Resnick & Sons’ 199 Water Street, which was cut by $10.3 million, or 4.7 percent; and Savanna Partners’ 80 Broad Street, which lost $8.1 million in market value in the city’s eyes, or 13.2 percent.
Brookfield and a spokesperson for Resnick declined to comment. The other landlords did not immediately respond to a request for comment.