Opinion
May 18, 1967
Final order appealed from entered March 25, 1965, unanimously reversed, on the law and the facts, and assessments reinstated and confirmed, with $50 costs and disbursements to appellant. Petitioner failed to establish by substantial evidence that the assessments were excessive. These were consolidated proceedings to review the real estate tax assessments for the years 1957-1958 through 1963-1964. There were several earlier trials and appeals relating to the property, but this was the first involving the completed office building known as the "Socony-Mobil Building." The improvement is a 42-story stainless steel front air-conditioned building. It occupies the entire City block from Lexington Avenue to Third Avenue between 41st and 42nd Street, having frontages on four streets and direct access to subways and communter railroads through underground passage-ways. The tenancy is of AAA character, consisting mainly of internationally known corporations occupying relatively large amounts of space on long term leases. The surrounding area has been almost completely rebuilt in the postwar period, redevelopment having been sparked anew by the removal of the unsightly Third Avenue "El" in 1956. (See Matter of Teachers Ins. Annuity Assn. of America v. Tax Comm. of City of N.Y., 27 A.D.2d 833.) The ground lease rentals paid during the periods under review as well as the sales submitted by both experts support the land assessments. The leasehold mortgage to finance the building as well as the actual cost of the construction establish the propriety of the building valuation. Actual net income was equivalent to a return of 9.4% on the final total assessment. Petitioner's vacancy allowance of 5%, considering the character of the tenancies and the terms of the leases, was excessive; its exclusion of service income in estimating gross income was unwarranted and its hypothetical allowance for "tenant changes" of $564,750 annually is without basis in the record ( Matter of Knickerbocker Vil. v. Boyland, 16 A.D.2d 223, 226, affd. 12 N.Y.2d 1044; Matter of Seagram Sons v. Tax Comm., 18 A.D.2d 109, 111-112, affd. 14 N.Y.2d 314). The above facts dictate a like conclusion to that reached in Matter of Teachers Ins. Annuity Assn. of America v. Tax Comm. of City of N.Y. ( supra) — where the property involved was a new office building in the immediate area of the subject property and the tax years reviewed were included in the period under review herein — that any reduction in the assessments is not warranted. Settle order on notice.
Concur — Stevens, J.P., Steuer, Tilzer, Rabin and Bastow, JJ.