Developer of Central Falls condos averts tax sale

A prominent real estate developer averted a tax sale on a condominium building in the financially troubled city by paying off his bill with just hours to spare Thursday.

But an attorney for developer Louis Yip said his client paid $254,000 to settle his tax bill only as a gesture of good faith and will continue efforts to get Central Falls to honor an earlier tax agreement under which he believes he owes only $70,000.

Yip made the payment just before the tax sale was scheduled to begin Thursday morning. He hadn’t paid taxes in 2010 or the first quarter of 2011 on 28 condominium units and an undeveloped parcel of land.

Yip believes he owes the cash-strapped city only $70,000 because of a tax deal he inked with its leaders in 2008, before the state assumed control of its finances, said his attorney, William J. Lynch.

“He’s not seeking any kind of special deal,” Lynch told The Associated Press. “He’s relying on an existing tax agreement that was agreed to by the City Council and the mayor.”

Central Falls is now under the control of a state-appointed receiver, Robert Flanders.

Flanders filed for bankruptcy on behalf of the city on Aug. 1 and is trying to close a $5.6 million budget deficit in the current fiscal year. The city of 19,000 residents also faces an $80 million unfunded pension liability. The city’s budget for the most recent fiscal year was $16.8 million.

Flanders has argued that Yip’s tax deal only goes into effect once a buyer purchases a condo unit. He said he’ll meet with Yip or any other developers to discuss possible incentives for economic development. But he said he wouldn’t strike a deal that solely benefits Yip.

“I don’t want this to be a special deal with Mr. Yip,” Flanders said. “I’d like us to have a program that could be taken advantage of by any number of developers. He (Yip) has paid his bill for what he owed in the past, and I would hope the focus of our discussions would be on the future.”

Yip’s company, Tai O Group, owns an old mill building that was developed into condos and apartments. Eleven of the units have been sold.

Lynch said his client has invested more than $5 million in the project and wants to invest another $15 million.

“I don’t think there’s any potential development that would benefit Central Falls like this development,” Lynch said. “All he’s looking for is to be treated fairly.”

Article source: http://www2.turnto10.com/news/2011/aug/17/5/developer-central-falls-condos-facing-tax-sale-ar-691384/

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