MANHATTAN — Chinatown property owners overcharged for a new neighborhood business improvement district will be refunded $300,000 in tax credits, BID officials and the Department of Finance confirmed Monday.
Some property owners and residents said last month that fees collected by the Department of Finance for the newly formed Chinatown BID dated back to 2011 and argued that they shouldn't have been taxed so much since the BID just launched in January.
In response, the Asian American Legal Defense and Education Fund (AALDEF), the Property Tax Payers' Association and property owners threatened legal action unless a refund was secured for fees charged before the BID was even in place.
"It is unfortunate we had to threaten a lawsuit for this to happen," said Jan Lee, a staunch BID opponent who was charged $2,200 in BID fees for the two properties he manages on Mott Street. Lee worked with AALDEF on advocating for the return of fees.
A spokeswoman for the Department of Finance said the billing has been adjusted and those who paid the extra fee will receive a tax credit for what they overpaid.
The BID said it began charging fees to members for coordinating jobs like trash cleanup, street decorations and other amenities for a period starting Oct. 1, 2011, and ending in June 2012. The fees are charged based on property values for each building, with amounts ranging from $200 to $5,000 per year.
The BID, however, wasn't officially approved by the Comptroller's office until late January — almost four months after the City Council and Mayor Michael Bloomberg signed it into law, according to records.
Wellington Chen, the executive director of the Chinatown Partnership that created the BID, said the improvement district began providing services from the moment it became law last year.
Lee and Chen confirmed the combined credit amount of about $300,000.
Lee said the Department of Finance will send out letters in English and Chinese explaining its error and making clear which dates the BID fees would be charged.
"They will not penalize property owners who didn't pay the tax and give a refund to those who have already paid it," Lee said.
Chen called the issue a "technicality," dismissing AALDEF's characterization of the BID fees as being "illegal."
"This is an accounting issue," Chen said. "It does not warrant wasting time and energy."
He added: "It has taken us 30 years to form this BID, so what is another few months?"