New York resident Alex Zbinovsky snatched up a cavernous former factory in Wilkes-Barre in 2013 because he thought the structure had potential and the purchase price was only $500.

The 43,000-square-foot brick property at 447 New Grove St. was available cheap in Luzerne County’s repository, a pool of scraps that did not sell in two back-tax auctions.

Although he had spoken of big plans for the site, Zbinovsky said this week he can’t proceed until the county significantly reduces the tax assessment. His attorney, William Vinsko, points to a state law that he says required the county to automatically lower the value to the repository purchase price.

The law says the purchase price of a repository property “shall be deemed to be the fair market value of the property for tax assessment purposes.” That reduced value can’t change until the property is sold, improved or revalued as part of a new countywide reassessment, it says.

But Zbinovsky’s factory is still assessed at $225,000.

This lowering of assessments is a contentious issue discussed at recent county meetings. It has significant ramifications in this instance because the county has amassed approximately 1,000 repository properties and has been trying to unload them.

A fresh example: county council approved the sale of 26 repository properties at $500 each earlier this month.

The county’s future real estate tax receipts from these properties would shrink from $6,064 to $78 if the current assessed values totaling $1.01 million are lowered to the combined purchase price of $13,000, analysis shows.

County officials have been requiring repository buyers to file assessment appeals to qualify for the reduction, and they established $1,000 as the lowest permissible assessment based on a glitch in the system that prevents values below that dollar amount.

Councilman Stephen A. Urban verified the protocol when he and his colleagues were about to approve the latest batch of repository sales, asking if the buyers must pay on the higher current values until 2019. The deadline to challenge assessments for 2018 was Aug. 1, he said.

Chief County Solicitor Romilda Crocamo and county Manager C. David Pedri both confirmed the county lowers values only if appeals are filed, saying this requirement is within the county’s authority.

But citizen Brian Shiner questioned the county’s interpretation at a subsequent meeting of council’s real estate committee. He said the law seems clear about the requirement to reduce assessments as an incentive to prevent properties from lingering in the repository pool with no taxes paid.

‘Trying to settle’

The county is semi-liable for repository properties until they’re sold, prompting a push to get them into the hands of new owners. Past reports indicate the county has more repository properties than other similarly sized counties statewide.

Vinsko has disputed the legality of forcing repository buyers to pay for an appeal and await a decision that in his opinion is not a choice based on the legal requirement to reduce the value.

Some repository buyers have raised the possibility of a class-action suit over the issue, Vinsko said, adding that he has no plans to handle such an action.

In the Zbinovsky matter, the county assessment appeals board had issued a ruling in April 2013 keeping the assessment at $673,100. The board reduced the value to $225,000 in September 2014 but declined a further reduction Aug. 7, records show.

The clock is ticking because the factory is listed in the Sept. 28 back-tax auction due to $40,298 in unpaid taxes owed from 2013 through 2016 by his company, Future Horizons PA Ltd., which is the owner of record.

The company had argued the assessment did not comply with law governing repository properties in a 2014 court challenge. The Wilkes-Barre Area School District disagreed with that stance and maintained the assessment may even be too low compared to the market value of similarly situated properties.

No final ruling on the matter was recorded on the court docket.

Vinsko said this week he is preparing an updated action.

“We’re in the process of trying to settle and negotiate this with the county,” Zbinovsky said.

He has previously talked about exploring residential and commercial options for the site, which was occupied by several companies in the past, including Rex Laboratories in the 1970s. The building has been boarded up and secured with locks at the gates but is in “total disrepair,” he noted.

At the time of his purchase, Zbinovsky promised to reach out to neighbors to discuss plans. Residents had objected in 2006 when Volunteers of America proposed demolishing the factory to build an independent living facility for young adults.

Plans for the development of this former factory on New Grove Street in Wilkes-Barre have stalled due to a tax assessment issue, the property owner says.
https://www.mydallaspost.com/wp-content/uploads/2017/09/web1_factory-1.jpeg.optimal.jpegPlans for the development of this former factory on New Grove Street in Wilkes-Barre have stalled due to a tax assessment issue, the property owner says. Times Leader staff photo

By Jennifer Learn-Andes

jandes@timesleader.com

Repository Properties

The list of land and structures available for purchase is posted at www.luzernecountytaxclaim.com.

Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.