GREENWICH — The Hyatt Regency in Old Greenwich has reached a settlement with the town over a tax dispute which will result in a smaller tax bill for the hotel and a roughly $685,000 credit as a reimbursement.
Lawyers representing the Hyatt Regency argued that the property was overvalued by the town assessor and the town agreed, according to court documents.
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The settlement stipulates that the value of the property will be decreased in tax calculations for the 2021 to 2025 Grand Lists, which means the hotel will get a credit reflecting the tax “overpayment” made by the hotel.
The hotel's tax credit will add up to roughly $685,000, based on an estimate by Greenwich Time, which considered the change in valuations and mill rate from Grand List years 2021 to 2025. The mill rate, which is used to calculate property taxes, changes each year as the Board of Estimate and Taxation sets the town budget.
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The hotel, which has 374 rooms on a 14-acre site, is the largest in Greenwich. The owners recently completed a nearly $40 million renovation.
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Owen Weaver, an attorney at Marino, Zabel & Schellenberg who represented the town in the suit, said the changed valuations are reflective of the renovations. He said the town's valuation in the settlement is also considerably more than the sale price paid when the property changed hands in 2022.
"The settlement was reached after lengthy negotiations with the plaintiff," he wrote in a statement. "(The settlement) was based on multiple factors, including the fact that the property had been under construction and sold in an arm’s length transaction a year after the revaluation for $37,498,348. The settlement resulted in a revised valuation much higher than this sales price and reflects the impact of the ongoing construction at the property."
Representatives for the Hyatt Regency did not respond to a request for comment.
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All town properties were assessed in 2021. That process pegged the value of the hotel parcel at 1800 E. Putnam Ave. at $79,012,100. Taxes are calculated off the assessed value of a property, which is 70 percent of the total, so the hotel was originally given an assessed value of $55,308,470.
Hyatt’s attorneys argued that the $79 million total valuation was “grossly excessive, disproportionate and unlawful,” which led to tax payments which were “manifestly excessive.” The hotel owed the town more than $600,000 each year since 2021, based on the 2021 assessment and the changing mill rate.
Property taxes are the town’s largest source of revenue, but most of the tax base comes from residential buildings, not commercial ones like the hotel.
The Hyatt’s $79 million valuation was supposed to be used to calculate tax payment through 2025, when the town assessor does its next reassessment, but the hotel challenged the figure.
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The owners first appealed the assessment at the town’s Board of Assessment Appeals in February 2022, which denied the hotel’s appeal.
The hotel then escalated its appeal to court and filed a lawsuit in April 2022 in state Superior Court in Stamford. The property was sold to new owners in October 2022, who continued the suit. Two cases, brought by old owners Greenwich Hotel LLC and new owners HRG Hotel Owner LLC, were consolidated into one and transferred to state Superior Court in New Britain in 2023.
The settlement between the hotel and the town was submitted to the court on Dec. 4 and accepted on Dec. 5, closing the matter.
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The settlement bumps the original $79 million assessment down to three different values over five years.
The smallest adjustment, for the 2024 and 2025 Grand Lists, drops the full value of the hotel from $79 million to $74 million, a roughly 6 percent decrease in value.
In the 2023 Grand List the hotel’s total value, under the settlement, dropped from $79 million to $58 million, a 26 percent reduction.
The largest change, resulting in the largest tax reduction, came in the 2021 and 2022 Grand Lists, which saw the hotel’s value drop from $79 million to $52 million, a 34 percent cut. This $52 million figure, Weaver noted, is still considerably higher than the $37 million sale price from 2022.
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The change in valuation is all about the buildings, not the value of the land, according to court documents.
The value of the land will stay the same on the town records after the settlement — a full value of $10.3 million — but the value of the buildings went down in the settlement. The building values did, however, grow over time, getting closer to the original town valuation but never reaching it.
No money will change hands under the settlement, meaning neither party will pay costs or interests to the other, but the hotel will get a credit against its future tax payments.
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Dec 22, 2024
Reporter
Andy Blye is a reporter with the Greenwich Time. He joined Hearst Connecticut Media Group in 2023. Andy grew up in California and started his journalism career in Arizona before moving to Connecticut. Outside of work he enjoys basketball, photography and video games.