The Council and Galvan

As predicted, a resolution was introduced at last night's Common Council meeting authorizing a settlement with the Galvan Initiatives Foundation and Galvan Civic I in an Article 7 proceeding against the City. After asking for an introduction of the resolution, Council president Tom DePietro explained that Galvan's request for tax exempt status for 614-620 Columbia Street (the former Community Theater building) and 612 Columbia Street (the house just west of the theater building) had been denied by the city assessor because the application had been submitted late. As a consequence, Galvan sued the City because late submission is not grounds for denying tax exemption. 

DePietro went on to say of the action the Council was being asked to take, "It seems complex, but it's not. . . . This has nothing to do with whether you or I like or dislike the Galvan Foundation. It's a legal matter that is really kind of out of our hands." Crystal Peck, counsel to the Council, then explained that the properties were both owned by a nonprofit and to be used for nonprofit purposes, and hence were eligible to be exempt from property taxes. She told the Council that three different city attorneys--Victoria Polidoro, Andy Howard, and Cheryl Roberts--had looked at this and made the determination that the properties should be granted tax exemption. The Council, however, was not ready to pass the resolution.

Councilmember Margaret Morris (First Ward) wanted more information about the rationale for taking the properties off the tax rolls. She was particularly concerned about the future use of the house at 612 Columbia Street. Galvan has presented a site plan to the Planning Board that separates the house from its backyard. The backyard will be the location of mechanicals and dumpsters for the theater, but the intended use of the house has not been clarified.

Councilmember Dominic Merante (Fifth Ward) questioned why Galvan had paid no taxes on the property prior to applying for a nonprofit exemption. He too expressed concern about the use of 612 Columbia Street. Merante moved to table the resolution. The motion was seconded by Morris.

Councilmember Mohammed Rony (Second Ward) reminded the Council that the Galvan Foundation "has a tendency of sitting on properties. They purchase it, and they take it off the tax rolls saying that they're going to put it into a nonprofit use, and then they sit on it for five or ten years."

When the Council voted on tabling the resolution, nine councilmembers voted aye, Ryan Wallace (Third Ward) abstained, without explaining why, and DePietro voted no.

Wallace then urged that the Council have a special meeting to take up the issue again, suggesting that if the Council didn't act soon, it could put Galvan's $900,000 Empire State Development Grant in jeopardy. It was decided, however, not to have a special meeting but to take up the issue at the Council's November meeting, when the lawyers would be present to explain further their rationale.

Before the Council moved on, former Fourth Ward alderman John Rosenthal spoke, reminding the current Council of the "litigious nature of the Galvan organizations." He told the Council, "They threatened to sue me, in my capacity as a public official, for asking questions regarding due diligence about their operations." Rosenthal continued: "Given that . . . we're dealing with a billion dollar, essentially, property owner who has a nonprofit set up essentially so he doesn't have to leverage any of his money toward the real cost of these developments. It's one thing if we're talking about public housing. It's another thing if we're talking about a community theater, whatever that is, and there are some legitimate questions here." Rosenthal asserted, "Given that Eric Galloway and his entities repeatedly grieved, through the assessor's office, a fair taxation for the properties he owns in his for-profit capacity, I think it is just outrageous that, yet again, this organization that's supposed to be trying to help the city is trying to sue us."

After Rosenthal spoke, DePietro, who earlier described Galvan as "a developer who owns a significant part of the city and whose intentions are not always clear," cautioned: "As a Council, we have to be very careful about how we deal with the many entities that go under the name of Galvan. It's a legal stew of confusion for us." To which Rosenthal interjected, "By design."

The videorecording of the meeting can be found here. The discussion of the settlement begins at about 29:49.

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