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Some of New York's wealthiest landlords have failed to pay property taxes, aggravating the city's money woes. Taxes due and paid July 1 fell $225 million short of what was owed by property owners, including such tycoons as sports team owner John McMullen, developer Arthur Cohen and Penthouse publisher Bob Guccione, according to city officials.
Because of the city's tumbling real estate market, delinquency rates are soaring in every borough, averaging 50 percent above the previous fiscal year. At this time last year, the amount of unpaid property taxes due July 1 totalled $166 million.
Owners of big buildings dominate a list of 50 top tax delinquents prepared last week by the city at New York Newsday's request, ranging from venerable Wall Street skyscrapers to the restyled Puck Building on Houston and Lafayette Streets.
"Very troubling," Finance Commissioner Carol O'Cleireacain wrote in an Oct. 31 memo to the mayor, who is reducing property tax expectations by $42 million over the next two years and boosting reserves to cope with the increasing shortfall.
If collected, the millions owed just for the first half of this year would have wiped out almost 60 percent of this fiscal year's city budget deficit.
Budget reserves fell short in the past fiscal year when delinquencies shot past the 2.6 percent put aside in the contingency fund, O'Cleireacain wrote in an earlier memo. The delinquency rate has shot up to 2.74 percent for fiscal year 1990.
Alarmed by the rash in delinquencies, O'Cleireacain has directed her top aides to begin placing "We missed your check" calls to landlords as an early warning. Now, as added incentive, she is considering slapping a new penalty on tardy landlords, though legally only their property - not them - are held responsible.
Penalties were boosted earlier this year when the 19 percent now charged on late payments was shifted from simple interest to compound.
With the empires of many big developers tumbling, delinquencies continue to climb despite stiffer penalties and stepped-up enforcement, leading officials to reason that cash-starved developers are using the...