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Thursday, July 3, 2014

Nashua faces lawsuit over property taxes on Spit Brook Road office building

NASHUA – A real estate holding firm affiliated with Citizens Bank is asking a superior court judge for a tax abatement on property on Spit Brook Road that it argues was overvalued by more than $3.5 million.

Servco Inc., which has a registered address on State Street in Boston, filed a lawsuit against the city in Hillsborough County Superior Court South last year over property taxes that it paid on a parcel at 61 Spit Brook Road. ...

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NASHUA – A real estate holding firm affiliated with Citizens Bank is asking a superior court judge for a tax abatement on property on Spit Brook Road that it argues was overvalued by more than $3.5 million.

Servco Inc., which has a registered address on State Street in Boston, filed a lawsuit against the city in Hillsborough County Superior Court South last year over property taxes that it paid on a parcel at 61 Spit Brook Road.

The 2.4-acre property houses a five-story office building called Executive Tower, which is home to companies including AT&T, technology company Xilinx and IntelliSoft Group Inc., which creates software to process medical credentials.

Assessing records indicate that Servco controlled the property for a period in 2012 before selling it to a property management group at the beginning of last year.

The city assessed the property at $6.3 million in 2012, charging Servco nearly $135,000 in property taxes, but Servco asserts that the fair-market value of the property was no more than $2.6 million at the time, according to court records.

The company filed for a tax abatement, but the city refused to grant any abatement “sufficient to rectify the disproportionately high assessment,” according to the lawsuit, filed Aug. 30. The company is asking a judge to abate any portion of the property taxes levied by the city that are found to be “illegal, excessive, disproportionate or unjust,” along with interest and other costs.

The city, represented by Nashua Assistant Corporation Counsel Celia K. Leonard, contests allegations that Servco is entitled to an abatement. The parties have agreed to enter mediation ahead of a three-day trial, which is tentatively scheduled to begin in November.

Attorney Timothy Kerrigan, of Kerrigan Law in Nashua, who is representing Servco, said attempts at mediation or other forms of alternative dispute resolution are standard in any civil proceeding.

“All civil actions fall under the alternative dispute resolution rule, which requires the parties to choose some method of alternative dispute resolution, and in this instance we chose mediation,” he said.

Built in 1986, the office building at the site is located a short distance from Exit 1 off the F.E. Everett Turnpike. It offers more than 59,000 square feet of finished area, with more than 200 parking spaces on the grounds.

Property information generated from the city’s records in September indicates that the land is now valued at about $2 million and the building at about $4 million, with extra features on the grounds contributing an additional $477,200 to the overall assessment.

Combined, that puts the assessed value of the property at more than $6 million. However, it didn’t fetch that price on the open market last year.

City records indicate that Servco sold the property to Farley White Nashua LLC on Jan. 31, 2013, for about $2.6 million.

On average, properties in Nashua were assessed close to 10 percent higher than their actual market value when Servco owned the land and building on Spit Brook Road two years ago, according to court records.

Using that figure as a guide, Servco argues that the city’s assessment should have been no higher than about $2.9 million. Servco believes the city’s $6.3 million assessment was “disproportionately high” and that the figure was about 240 percent of the property’s “lawful and true value.”

Nashua Corporation Counsel Stephen Bennett declined to comment on the lawsuit but said in general, the city is always willing to listen to taxpayers and often tries to reach agreement with property owners over assessing disputes.

“If we get credible information from a taxpayer which impacts an assessment, I’m very confident that our assessing department sees it and looks it,” he said.

Representatives from Citizens Bank and Farley White Interests were unable to offer comment before The Telegraph’s print deadline.

Earlier this year, the city paid the owners of the nearby castle-style Radisson Hotel nearly $1 million after a long-running legal challenge over property taxes

In February, the city paid the hotel’s owners $958,753 after the state Supreme Court agreed with a Superior Court decision that Nashua taxed the hotel at almost double its value for four years.

Jim Haddadin can be reached at 594-6589 or jhaddadin@nashua
telegraph.com. Also, follow Haddadin on Twitter (@Telegraph_JimH).