The New York herald., 1921-07-10
.$1,5OO,OOO TAX CUT
ON EQUITABLE SITE
Justice Lehman Cites Advan-
tages to Du Pont Syndicate
in Buying Land.
1T PAID OUT NO CASH
Borrowed From Seller at 4.40
Per Cent. $40, 100000 to
Erect Building.

In decision yesterday reducing by
S1.50o.oo the S25,00o.0 900 assessed valu-
alton Of the Equitable Building for 1915
taxes Supreme Court Justice Lehman
recites extraordinary Incidental sdvan-
tages" obtained by the T. Coleman du
Pont syndicate that bought the site from
the Equitable Life Assurance Society
and erected the great once building In
1sl4-1sls. These advantages" have
moro than passing interest Ia view Of
recent investigations Of the way insur-
ance companies invest their MEMBER
money
Briefly, the Justices opinion sets forth
that the du Pont syndicate. known -
the Equitable Once Building Corpora
ton, not only paid no cash when II
bought the property but was loaned
$50, 500, 900 at q rate OF interest OF $50
per cent when the low normal rate
for mortgages In which the company
per cent.
Buyer Paid NO Cash.
His opinion says: "rt 10 urged that
the valuation placed upon the property
by the Tax Commissioners 10 supported
by the fact that the property wac actu-
silly purchased by the relAtor In 1919 for
the sum Of $1s,5oo.0oo. II in fact such
q sum had actually been paid for the
property, then It would furnish most
cogent evidence to support the assAss-
ment. It appears, however. that al
though the nominal price OF the prop
erty was ixed at that sum. yet the
purchaser not only paid no cash but
received an agreement that the seller
would lend the builder upon the land
and the building to be erected the sum
of $40, 500. 900, repayable only by amor
tization running over period OF Sixty
years.
"The mortgage given In accordance
with this agreement does not recite any
rate of interest and the payments OF
money for interest and amortisauon are
comn1ingled. But 1t is not disputed that
the interest return from such payments.
II the principal is calculated at $l3.bOo..
900. would amount to less than 4h per
cent.
"It is evident that under these circunn-
stances It cannot be said that the nomf-
mai price Of $13,500,0 900 fixed the value
Of the property as determined oy the
seller had received $iS.500,000 in cash
| II could have used 1t to better advantage
| than by loaning this sum. together with
an additional amount OF 100000 at q
rate OF interest Of 4.40 per cent when
| the low normal rate was about 5 per
| cent, and the buyer could well AFFORD
to pay a nominal cum beyond the actual
value Of the property when i receives
such extraordinary incidental advan-
tages. have carefully examined the
terms. and In my opinion the relAtor
under this agreement actually paid sew.
eral million dollars less than the nonni-
nal price"
| Assessment Reduced.
Justice Lehman therefore consented 70
the plea Of the office building corpora
tica to reduce The city appraisal Of the
land value. No objection was made To
the $4,000, 900 valuation placed by the
Tax Board on the building. The dsci-
sion was the outcome OF 4 twenty-six
day trial before Justice Lehman in the
spring OF 1920. The attorneys for the
du pont syndicate expect that the
81, 500 900 reduction will become prece-
| dent In actions that have been started to
| reduce the valuations for 1919 and 1920
taxes
At the time the life assurance associa-
ton decided to sell the block after the
fire in 1912 that destroyed the old EQui-
table Building an announcement was
made Of loan OF $19.5o0,000 to the pur-
chasers. $1.o00.ooo less than the sum
mentioned by Justice Lehman. It was
described then as a sort Of a building
loan" to bear 6 per cent. interest while
| construction was in progress and A little
over 4 per cent thereafter. The length