Each year, hundreds of Connecticut home and business owners challenge their property tax bills. While most cases are resolved during hearings at the municipal level, some move into the court system. But seldom do such cases spark much public interest.
There are exceptions. A Branford case now in New Haven Superior Court is making headlines because of the property involved—once envisioned as an Islamic school—and the parties, which include the founders of Wallingford-based Edible Arrangements International, one of the most successful Islamic-owned companies in the U.S.
For now, the dispute over whether the property enjoys a tax-exempt status is turning on civil procedure issues of standing and default judgment rather than religious rights. The latest twist is a request by Branford to move the case to the state Judicial Branch’s Tax Session in New Britain, a docket for complex tax cases. More than 600 cases were put on the New Britain tax docket in 2013.
“This tax appeal raises numerous complex legal and factual issues,” Carolyn Kone, the attorney for Branford, wrote in her motion to move the case.
In 2010, brothers Tariq and Kamran Farid, through their Farid Foundation, bought the former Pine Brook/Wightwood Elementary School on Stony Creek Road, with a plan to convert it into Shoreline Islamic Academy. But instead, the Edible Arrangements’ founders opened an Islamic school in nearby Guilford, and transferred ownership of the Branford property to another company.
Branford then began levying taxes on the property, and the brothers objected. Complicating matters is the fact that the Branford building is unusable after being damaged by two floods. It is up for sale once again.
Branford tax assessors say the building has a total market value of $1.82 million and an assessed value of $1.27 million. Branford’s Board of Assessment Appeals declined to hear the Farids’ appeals under a provision that allows disputes involving properties worth more than $1 million to go straight to state court.
To lawyers for the would-be school, the argument is simple. The building was envisioned as a religious educational institution and Branford officials granted it tax-exempt status when the Farid Foundation bought it. Simply because the building was transferred to another company, Stony Creek LLC, it’s tax status doesn’t change, the school’s lawyers argued, because Stony Creek is 100 percent owned by the nonprofit foundation and the property was never used for other purposes.
“Because applicant Stony Creek LLC holds the subject property in trust for applicant Shoreline Islamic Academy Inc. and because the subject property is used exclusively for educational, charitable and religious purposes, the subject property is entitled to a tax exemption,” the school argued in court documents. The school’s counsel, Jennifer Rignoli, of Parrett, Porto, Parese & Colwell in Hamden, did not respond to a request for comment.
But Branford rejected the school’s argument. It says when the Farids quit-claimed—or transferred—the school property to a limited liability corporation in July 2012, the tax exemption went away.
At the beginning of June, Branford moved to dismiss the case, arguing that the court lacks subject-matter jurisdiction. None of the plaintiffs has standing to bring the appeals, argued Kone, of Brenner, Saltzman & Wallman in New Haven.
In court papers, Kone stated that the Farids lack standing as individuals because they did not own the property on the dates that the property’s tax valuation was being established. Stony Creek does not have standing to challenge the tax issue while holding the property in trust for Shoreline Islamic Academy because it did not bring the case as a trustee.
Moreover, the academy lacks standing to prosecute the appeal because it is a tenant of the property but its lease has not been filed in the town’s land records, Branford’s counsel said in court papers. Connecticut law confers standing only on plaintiffs whose leases have been recorded and who are bound under the terms of their lease to pay real property taxes, the town said.•