Cooper Union and the Chrysler Building
The art deco Chrysler Building in New York is one of the city's most famous sights. It is officially designated a landmark, being an outstanding example of an architectural style that flowered briefly between the two world wars. But beyond that, it is a landmark also in the less formal sense of the word. It is a very large office building even for New York. It is the city's third highest structure, surpassed only by the Empire State Building and the World Trade Center. It is particularly beautiful at night when the light from its unusual tower shines over the city. In all, it is one of the most luminous spectacles on the Manhattan skyline.
But while in many ways the building is very conspicuous, there is also a hidden side, a side most New Yorkers do not know, and something that the press (to judge by coverage in the New York Times) has assiduously not told them. What is hidden is that the building pays no property taxes and that the money that would ordinarily be due for such taxes is used to support a private college, Cooper Union. This institution, an elite and venerable private college of art and architecture on Manhattan's lower east side, has so far been able to escape taxation of the Chrysler Building even though it is the general rule in New York that real estate taxes are due on commercial property regardless of who owns it.
The resulting loss to the City
currently runs to about eight million dollars a year (1). Over a ten year
period, the loss amounts to about one hundred million dollars, figuring only
modest annual tax increases. The total loss could be somewhat higher or lower,
depending on future
fluctuations in the tax, but in any case it is not a trivial amount in a city that is chronically short of cash. The Chrysler Building was completed in 1930. The history of its tax status, as we shall see, goes back to Cooper Union's charter of 1859, the document that forms the basis for the continuing claim of tax exemption. The Chrysler Building has always been used for wholly commercial purposes. The ground on which the building stands, but not the building itself, is owned by Cooper Union. The building's owner pays Cooper Union what he would otherwise have to pay the City, so the property represents an endowment for the college. This anomalous arrangement has been upheld by arcane judgments of New York State courts, and, so far at least, attempts at overriding the courts in the Legislature have been successfully parried.
How legislative action was avoided, in the guise of doing what was not done, is one of the most intriguing chapters of the story that is to follow.
The Chrysler Building subsidy to
Cooper Union amounts to just over $8000 per year per student. Cooper uses this
income to allow all regular students, poor or rich, to attend tuition free. In
this it is alone among the institutions of higher learning in the city.
Some of Cooper Union's unique features may be illustrated by contrasting it with the publicly supported City College of New York (CCNY), about seven miles north of Cooper. Once CCNY students, too, enjoyed free tuition, but this has not been true for many years now.
Cooper Union is far less rich
than the more famous private universities in the city, but it is a very good
place to study for those who are talented enough to be accepted. The most
recent information shows that of 2,339 applicants only 304 were accepted.
Eighty percent of Cooper students were in the top ten percent of their high
school class. In contrast, CCNY had an acceptance rate of 73%, and only eight
percent of its students, one tenth the Cooper rate, were in the top ten percent
in high school. Since there is a positive correlation between scholastic
standing and socio-economic standing, it is a good guess that CCNY students, on
average, are more needy of economic aid that their Cooper colleagues. (2)
Another indication of relative need is the striking difference in the racial composition of the two student bodies. Cooper Union, unlike CCNY, has an exceptionally low proportion of Black and Hispanic students. In a city that is about twenty-nine percent African American (3), only eight
percent of Cooper Union's students are Black. And while New York is about twenty-four percent Hispanic, Hispanics at Cooper represent only nine percent of the student body. On the other hand, fully 27% of Cooper's students are Asian American in a city whose population is only about seven percent Asian. CCNY is 39% African American, 26% Hispanic, and 16% Asian American.
There is no suggestion, of course, that Cooper Union practices racial or ethnic discrimination. But it is well known that there is a correlation between race and economic status. As a result, it would seem that the tuition assistance from tax payers that is given to Cooper students but denied to CCNY students is more needed, on average, by the latter than by the former.
In addition to its regular degree
programs, there is also a Cooper Union "Forum" that offers courses
and lectures to the public. But these programs are not free; participants pay
about $13 for each evening's session. And the institution's library, which
Peter Cooper had ordained
to be free to the community, is now closed to the public. So it cannot be said that the City's taxpayer, unless he is a matriculated Cooper student, gets a direct benefit from Cooper's tax exemption.
Peter Cooper (1791-1883), the founder of Cooper Union, was a self-educated industrialist, philanthropist, alderman, and, in 1876, presidential candidate on the Greenback ticket. Both he and his descendants were generous supporters of culture and education. The Cooper and Hewitt families (Abram Hewitt was Peter Cooper's son-in-law) became associated in a number of cultural endeavors that have survived to this day.
Cooper Union dates from 1859 when
the state's legislature passed "An Act to Enable Peter Cooper to Found a
Scientific Institution in the City of New York," i.e. the charter of
Cooper Union. (4) The law was first passed on February 17, was amended on March
21, and amended once more on April 13, all in the same year. The institution
was to give courses "free to all who shall attend the same" ( p. 7),
and was also to provide, among other amenities, a "free reading room"
(p. 8). Since the institution eventually became dependent on disputed tax
may well be said that this charter was an early example of an unfunded mandate.It is Section 11 of the charter that is most relevant to our story:
The premises and property mentioned in said deed, and which shall at any time belong to or be held in trust by the corporation hereby created, or the trustees thereof, including all endowments made to it, shall not, nor shall any part thereof, be subject to taxation while the same shall be appropriated to the uses, intents and purposes hereby and in the said deed
provided for. (P. 15).
At first blush, this language may
suggest that the now settled doctrine, viz. that property used for commercial
purpose is not eligible for tax exemption, should also apply to Cooper Union.
But as we shall see, the courts have held otherwise, first in the Wells case of
finally in the key Sexton case of 1936 (6).
Legislation passed some 35 years after the original Cooper Union charter, a tax amendment in 1893 and then the General Tax Law of 1896, tightened the requirement that non-profit organizations refrain from commercial involvement if they wish to retain their tax exemption. The latter law also prohibited any further special tax-exemption statutes, such as the Cooper Union Charter of 1859. Moreover, this 1896 law has generally been held to repeal all such special charters.(7) The Wells and Sexton cases, exempting Cooper Union from these requirements, are highly technical and certainly defy a layman's common-sense understanding of the law.
It was in 1902, nineteen years
after Peter Cooper's death, that Cooper Union acquired the property on 42nd
Street that eventually became the site of the Chrysler Building. It was a
complicated financial maneuver, involving contributions by Andrew Carnegie and
the Cooper and Hewitt families. (8) The City placed this property on the tax
rolls in 1903. Cooper Union promptly took the matter through the state courts
and succeeded in having the assessment lifted in the 1905 case known as Cooper
Union v. Wells.
In 1931, after the completion of the Chrysler Building, the City once more assessed the property which was by now of considerable value. Cooper Union had recently entered into a contract with the owners of the Chrysler Building under which the former retained title to the land, of which it now became the lessor, and the latter acquired title to the building but became lessee with regard to the land. The whole property was assumed in this contract to remain exempt from real estate taxes. The lessor, Cooper Union, would receive compensation to consist of two parts, both variable: a) an amount proportionate to the current market value of the property, and b) an amount equal to the real estate tax that would be due if the property were on the tax rolls. It was a convoluted arrangement that gave rise to the appearance, at least, of a tax dodge.
Cooper Union again resisted the City's assessment of the Chrysler Building. The trial court upheld the City, but, on appeal, the higher courts held for Cooper Union. The Appellate Division in this Sexton case (Sexton was the president of the City's Board of Taxes and Assessments) considered various issues, including the fact that the property was not used exclusively for carrying out the educational purposes of Cooper Union, as would be required by the Tax Law of 1896 to sustain the exemption. But the court finally held that the 1896 law, in this particular case and for technical reasons, did not override the prior (1859) Charter. Among other factors, the court noted that when Edward Cooper and Sarah Hewitt conveyed the 42nd Street property to Cooper Union in 1902, this was done for purposes of endowing Cooper Union; and the original Charter, when exempting Cooper Union from taxation, had contained the phrase "including all endowments made to it."
In any event, the Sexton court observed, the case had been rendered res adjudicata, or a settled matter, by the judgement in Wells some thirty-one years earlier. There is a legal maxim that holds res judicata facit ex albo nigrum; ex nigro, album; ex curvo, rectum; ex recto, curvum, 'The solemn judgment of a court makes black out of white, white out of black, straight out of crooked, and crooked out of straight.' Once a particular matter is settled by a competent court, no later court will upset the settlement even if a new generation of lawyers and judges were to find the settlement illogical or unjust.
This is how matters stood for many years. But in the late nineteen sixties the matter was reopened, more publicly than ever before or after, during the administration of Mayor John V. Lindsay. Lindsay was one of New York's very few Republican mayors, but there is no indication that this circumstance was relevant to the case at hand.
When the courts interpret a law
to give an undesired result, the remedy of course is to try to change the law.
This was done, or rather feigned, in the state legislature in 1969.
As we shall see, a law was introduced to amend Cooper Union's charter with respect to tax exemption, but the bill was worded so that it had no effect whatever. It was stated at the time that there would be a difficulty under the federal constitution, following the Dartmouth College case, if the new law were to apply to the Chrysler Building. We shall look first at the legislative history of the charter amendment of 1969 and then discuss the legal interpretations of Dartmouth as they relate to our case.
The public record and the press reports surrounding the 1969 legislation is murky, and those among the principals who are still alive have been unavailable to me for interviewing. The newspaper record, as far as the New York Times is concerned, begins on December 30, 1968, when Fiovarante G. Perrotta, the mayor's finance administrator, is cited as desiring a change in the law:
Mr. Perrotta said the city's legislative program for improving its fiscal situation would include several planks...
One would be aimed at improving property tax collections by cutting the $16-billion total of tax-exempt property.
'The tax-exempts range from the 23d War Temperance Society of the Bronx ... to the Chrysler Building, which escapes an annual tax of $1.5-million on land and building because the land is owned by Cooper Union,' the
He said the city would attack the 1859 law under which Cooper Union gets the tax exemption. Presumably part of the $1.5-million goes to the engineering and art college for its free tuition program. The city has twice litigated the exemption, carrying the case to the State Court of Appeals, to no avail.
This seems to indicate that the Lindsay administration, through its finance spokesman Perrotta, had firm intentions to change the law so that the Chrysler building could be taxed.
A month after this original announcement, on January 31, 1969, a New York Times editorial understood the meaning of the pending legislation in just this way:
A ... bill -- this in the State Legislature -- would limit the tax exemption on property owned by Cooper Union. That distinguished institution plays a useful educational role, but it should not be exempt from paying taxed on the Chrysler Building, a purely commercial property assessed at $19.8 million, which it owns.
And after another month, there is a final item on this matter in the New York Times of February 25, 1969:
The Assembly's Committee on New York City Affairs today approved a bill that would rescind the tax-exempt status of the Chrysler Building, which stands on land owned by Cooper Union.
The New York Times went no further in reporting on this legislation, either in 1969 or any time thereafter. But what it did report was exactly the opposite of what happened.
On January 28 of 1969, Chairman (now Judge) Edward J. Amann of the Assembly's Committee on New York City Affairs introduced a bill to amend Cooper Union's charter by appending the following wording to Section 11, the tax exemption section of that charter:
provided, however, that all property acquired and all improvements made on or after the effective date of this act shall be exempt from taxation only to the extent provided by law for property used for educational purposes. (9)
So the bill, which the public had
been told would place the Chrysler Building on the tax rolls, contained a
grandfather clause to exempt the Chrysler Building from its provision. (Before
the bill became law, the words "effective date of this act" were
changed to read "July first, nineteen hundred sixty-nine." ) What
then was the total effect of the bill? None at all. In a memorandum to Governor
Nelson A. Rockefeller urging the Governor's signature, Attorney General
Lefkowitz assures him that "We are advised that Cooper Union does not
contemplate acquiring any other profit making real estate, but if it did, then,
of course, this bill would apply thereto." (10)
Why a bill with nil effect was introduced, voted upon, and signed by the Governor has never been publicly disclosed. We do, however, have a letter from Cooper Union's attorney, Carroll L. Wainwright, Jr.(11), and another from Daniel Maggin (12) , chairman of the Cooper Union Trustees, both of whom endorsed the bill. The latter wrote:
In view of the fact that no change in ... policy is contemplated, and recognizing that it is in the best interests of the City of New York to have this policy reflected on the public record, the Trustees of Cooper Union agree to the amendment of the contract between Peter Cooper, Cooper Union and the State of New York which New York City has requested.
While the bill jacket of this legislation -- i.e. the file of memoranda and correspondence surrounding the legislation -- documents ample contacts between public officials and Cooper Union, there is no record at all of any contact with anyone who may have been opposed to the continuing tax exemption.
There is, however, a memorandum to Governor Rockefeller from Walter Kicinski of the Division of the Budget, one of the State agencies consulted prior to the Governor's signature, which sounds a discordant note:
It is possible, however, that the City is being too modest, and should attempt to eliminate exemptions already [emph. in original] granted for property obviously not being used "exclusively" for a noncommercial purpose. The case involving the Chrysler Building is particularly aggravating in that Cooper Union reportedly received a $1 million annual payment from the Chrysler Building's tenants as a "tax equivalency" charge, despite the fact that it pays no taxes on the building. (13)
As for Edward J. Amann, the Assemblyman (now a Judge of the New York Supreme Court) who introduced the bill as chairman of the Committee on New York City Affairs, his comments twenty-five years later show no apparent recollection of the contradiction between the bill's purpose and its effects:
As the [City's Memorandum] states, in a sense, Cooper Union was double dipping, in that a good portion of the building was occupied by commercial tenants.I believe the enclosed Memorandum clearly set forth the purpose and need for legislation. At this late date, I have no personal recollection of what transpired in 1969 concerning the entire matter, except that I introduced the bill at the request of the Mayor of the City of New York. (14)
The Memorandum mentioned by Judge Amann appears as part of the printed record as a submission from Anthony P. Savarese, the Legislative Representative of the City of New York in Albany. To anyone knowledgeable about the matter, this memorandum is self-contradictory and misleading:
Because a question may exist under the Dartmouth College case as to whether the present grant of exemption can be withdrawn by the State over the wishes of the grantee, the amendment is prospective in its operation and applies only to property acquired and improvements made on or after July 1, 1970 [This is a clerical error -- the bill's wording is 'July 1, 1969' -- WC], the effective date of the law.
The achievements of the graduates of this distinguished free tuition institution have contributed to the City's economic, social and political development. However, New York City should not be compelled to subsidize the education of Cooper Union students, a large number of whom are not residents of the City, to any greater degree than it subsidizes the education of students at other institutions. (15)
The first of these paragraphs asserts that it is not constitutionally possible to do what the second paragraph says is the aim of the legislation.
The first of the paragraphs that
I have just cited, expressing the thought that the Dartmouth case may
prohibit taxation of the Chrysler Building, appears verbatim also in a letter
sent by Mayor Lindsay to Governor Rockefeller which urges the Governor to sign
the bill into law. (16) The Mayor attributes the paragraph to a memorandum from
his Finance Administrator, Fiovarante Perrotta, the very man who, according to
the New York Times, had urged legislation to tax the Chrysler Building.
So we have an unexplained discrepancy between what Perrotta said in public -- that he wants the Chrysler Building taxed -- and what he wrote in his private memorandum to the Mayor -- that he thinks this cannot be done constitutionally because of the Dartmouth case. We also have a letter that Perrotta wrote to Daniel Maggin, Chairman of the Cooper Trustees, about six weeks before the Mayor's letter to the Governor. (17) Perrotta replies here to a minor editorial point raised by Maggin -- the addition of a single word in the pending bill. But Perrotta's assurance, "The City of New York is taking appropriate steps to amend this bill in the manner set forth in your letter and previously agreed to by me," may signal that some more far-reaching oral negotiations had taken place between Cooper Union and the City. Mr. Perrotta, who is now an attorney in private practice in New York City, has told me in a brief telephone conversation that he no longer remembers any details of the case.
The letter from Attorney General Lefkowitz to the Governor (18) , supporting the pending bill, is also puzzling. On the one hand the AG explicitly finds that "Cooper Union does not come within the doctrine of the Trustees of Dartmouth College vs. Woodward," i.e. the Dartmouth case. But on the other hand he says, rather vaguely and in any case without specifying whatever legal reasons he may have had, that "there would seem to be a doubt as to the power of the legislature to retroactively change" the tax exemption contained in the original Cooper charter.
But it is Dartmouth that is invoked on the record by the public officials. What is this case and what relevance does it have to the taxation of the Chrysler Building ?
The issue goes back to one of the earliest US Supreme Court cases. It was in 1819, with John Marshall as Chief Justice, that the Court ruled in favor of one set of trustees as against another at Dartmouth College in New Hampshire. (19) The old trustees served under the original charter of the college, granted in 1769 by King George III. The state altered the charter in 1816, reorganized the college governance, and installed a new group of trustees. The old trustees sued on the ground that King George's charter constituted a contract which, under Section 10 of the first article of the Constitution, no State may violate: "No State shall ... pass any ... Law impairing the Obligation of Contracts ... "
The state courts sustained the
new trustees, but, on appeal to the US Supreme Court, the old royal charter was
held to constitute an inviolable contract within the meaning of the
Constitution. Marshall wrote the opinion for the majority, mentioning in particular
the special nature of
"eleemosynary corporations, those which are created for the promotion of religion, of charity, or of education." The new charter ordained by the State, he wrote, "may be for the advantage of this college in particular, and may be for the advantage of literature in general; but it is not
according to the will of the donors, and is subversive of that contract on the faith of which their property was given.... The judgement of the state court, must, therefore, be reversed."
On the face of it, the case of
Cooper Union, and the Chrysler Building, would seem analogous to that of
Dartmouth College. In both cases there was an old charter conferring certain
privileges that the institutions regarded as inviolable contract and not
subject to change without the
consent of the institution; in both cases, there were claims by others that attacked these privileges.
The history of Dartmouth
in American constitutional history is complex. Succeeding Supreme Court
decisions have considerably narrowed its import. But whatever the legal
complexity of Dartmouth in general, it is quite clear to the lawyers who
have examined the issue that Dartmouth has no application to Cooper Union.
These lawyers know this for a variety of reasons, among them that the State's
highest court, the Court of Appeals, has very persuasively rejected the
applicability of Dartmouth in another case involving Cooper Union, the Gass
case of 1907.
In the early years of the century and many years before the Chrysler Building was conceived, Cooper Union engaged in some routine transaction and was charged a recording tax when it sought to record an endowment mortgage. Basing itself on its 1848 charter and the Dartmouth doctrine of contract inviolability, Cooper claimed exemption from this recording fee as it did for all other taxes, and accordingly sued Paul Gass, the Register of the County of New York. The lower court agreed with Cooper Union, but the Court of Appeals held that Cooper's charter was in fact superseded by the Tax Law of 1906, which specifically held that "no person ... shall be exempt ... by reason of any provision in any private act or charter which is subject to amendment or repeal by the Legislature." Consequently, Cooper was held liable for the tax.
The most interesting aspect of the Gass decision was the reasoning of the Appeals Court that specifically disposed of any claims that Cooper might have under Dartmouth:
... the State Constitution in force at the time of the incorporation (NY Constitution of 1846, article 8, paragraph 1) provided that all general laws and special acts authorizing the formation of corporations 'may be altered from times to time or repealed,' and the founder when he executed the deed and the incorporators when they accepted the charter must be presumed to have known that this was the fundamental law of the state. (20)
In other words, Cooper could not claim that its 1848 charter was inviolable under Dartmouth because the New York State constitution that was in force specifically provided that any special charters could be altered or revoked by the Legislature. Of course, this decision does not affect the current tax exemption of the Chrysler Building, which is res judicata -- judicially settled -- by the Wells and Sexton cases. What Gass does, however, is make it clear that the State Legislature has the power to override Wells and Sexton and to place Chrysler on the tax rolls.
In view of Gass, it is
difficult to believe that the Dartmouth College case could have been a
very serious factor -- except as a rationalization -- in the minds of the
public officials, most of whom were lawyers, and who, in any case, had access
to the most expert legal advice. The unpublished memorandum from Finance
Administrator Perrotta and the published memorandum by the Legislative
Representative of New York City (see above, III) both say that "a question
may exist" (my emphasis) under Dartmouth, but give no legal
analysis or discussion. Neither mention Gass, let alone try to argue
that Gass does not apply. The submission by the Attorney General, though
raising unspecified constitutional doubts about taxing the Chrysler Building,
acknowledges that Dartmouth does not apply.
Within the Executive Department of the State government in Albany, there is a Division of Equalization and Assessment which is charged by State law with the "general supervision of the function of assessing throughout the state." The lawyers of this Division have twice considered the constitutional question of whether the State Legislature has the power to lift the tax exemption of the Chrysler Building. As a result, we have two thoroughly documented legal opinions. The first is dated August 5, 1980, with the lawyer preparing it concluding as follows:
After review of the Cooper Union file and research into the Constitutional questions involved, it is my conclusion that the State of New York can constitutionally modify the real property tax exemption granted to Cooper Union in its corporate charter by removing real property held for commercial purposes, specifically the Chrysler Building, from the scope of the tax exemption. (21)
The second study is dated December 13,1994, reaching a similar conclusion:
It ... appears that the Legislature could constitutionally repeal the exemption from real property taxation for property of Cooper Union on which is located the Chrysler Building, but, to date, the Legislature has refrained from doing so. Thus, the Chrysler Building remains exempt from real property taxation. (22)
Cooper Union, being one of the smaller
institutions of higher learning in the city, is not frequently mentioned in the
metropolitan newspapers. The tax status of its major source of income -- the
Chrysler Building -- has not been mentioned in the New York Times for several
However, a major article on the school did appear in Education Life, a section of the Sunday New York Times, in November of 1994. (23)
The article is lavishly illustrated and emphasizes the budgetary problems of the school. It features a bar graph to show that sixty percent of its income derives from the Chrysler Building. But nowhere in the article is it mentioned that most of the money from that source is due to the building's tax exemption; the reader of the article is never told that there is such an exemption. Perhaps the omission was an inadvertence.
But the treatment of another topic in this article would seem to border on misrepresentation. "What makes Cooper Union's standards all the more remarkable is its diversity. One-quarter of the students are Asian and 17 percent black or Hispanic." The suggestion here -- that Cooper is particularly open to Black and Hispanic students -- is the very opposite of the truth. As we saw earlier, the proportion of Blacks and Hispanics is strikingly low, given the racial composition of New York city. This is not to say that there is any evidence whatever of a racial or ethnic bias at Cooper Union. But the particular admission policies of the college do not favor Black or Hispanic applicants, and it is surely not truthful to suggest otherwise.
If Cooper Union has benefited from an uncommon benevolence at the hands of the press, its treatment in the scholarly and popular literature has been no less indulgent. The articles and the Ph.D. thesis that I have consulted, on the subject of Peter Cooper, Cooper Union, and the Chrysler Building -- I have seen many but not all such sources -- are invariable quiet on the peculiar tax status of the Chrysler Building.
Even before the very explicit tax legislation of the 1890's, it was public policy in New York State to tax property owned by non-profits when used for commercial purposes.(24) Until the Chrysler Building was completed in 1930, the exemption granted to the 42nd Street property of Cooper Union formed but a minor exception to this policy and would scarcely warrant attention. But ever since its erection, the Chrysler Building has stood as a glaring monument, not only to public munificence for private endeavor, but as a monument, also, to the willingness of public officials to flaunt public policy.
The most puzzling behavior, of course, is that of the public officials, both city and state, during the administration of Mayor Lindsay. They said that they wanted to tax the Chrysler Building and they allowed the newspapers to announce that this is what they were doing. But in the fine print of the legislation, and, as we have seen, away from public view and without informing the public, they inserted a grandfather clause which rendered the law nugatory. The rationalization they used -- the Dartmouth case -- has no legal justification and must have been known to have no justification.
What can be learned from this story ?
It is surely not news to students of history that public officials occasionally do things opposite to what they say they do. Or that they do things in the privacy of private conversation and inter-office memoranda, away from public view. Or that the press can be less than completely revelatory about every aspect of the public business. None of these things are new. Not new, but nevertheless curious, and interesting to observe in detail.
More interesting, though, is that
the foibles of the politicians here, neither in the past nor the present, seem
to have involved crass self interest, corruption, or obvious bad faith. It
seems rather that the extraordinary indulgence toward Cooper Union -- and here
we can only speculate -- came from a desire to do good. The opinion seems to
have been, as expressed privately by one Cooper Union official, that the
college is a most precious little jewel that would be destroyed if its major
source of income were taxed. "There is surely no better way," he
the city to spend a measly eight million a year."
In the period since 1945, public officials have acted with more complaisance toward non-profit groups than in previous periods. The courts, too, have been more lenient than before when faced with demands by some of these groups for expansion of their tax exemptions. (25) When Mayor Edward Koch appointed Frederick A. O. Schwarz to chair a task force in 1982 to advise the city government on how to deal with those groups that fall between those clearly eligible for tax exemption and those clearly not, the group came back to recommend generosity:
The Task Force has thus concluded that the path of 'good sense' calls for this City to return to its traditional enlightened generosity in construing and applying the real property tax exemption for non-profit organizations. Not all of them do or should qualify. But we believe that the non-profit cultural, social service, legal rights and other policy oriented groups whose status has recently become controversial do qualify under the law as most recently interpreted and should qualify as a matter of good sense for the City. (26)
This report specifically excluded the case of the Chrysler Building from its concerns. It calls it an "anomaly." (27) But the overall sentiment of the report, a sentiment of good will to those seen as performing good works, may be indicative of the state of mind of those who have so jealously guarded the special privileges of Cooper Union.
There is of course another side.
As it is said that hypocrisy is the homage that vice pays to virtue, some of
the people who have been instrumental in guarding the exemption are on record,
as we have seen, saying that "New York City should not be compelled to
subsidize the education
of Cooper Union students." The New York Times has editorialized to the same effect, even as its news columns fudged the issue. Some day, perhaps, the difficult financial position of the city may move public officials, under pressure from the public or not, to decide that the extraordinary generosity toward Cooper Union is simply too expensive. But all this lies in a future that we cannot fathom now.
(1) Final Assessment Roll for the
City of New York, January 5, 1994.
(2) The data on Cooper Union and CCNY, in this paragraph and the next, come from Compuserve, Peterson's Guides, January 12, 1995.
(3) Figures concerning the racial composition of New York city from Statistical Abstract of the United States, 1991, p. 35.
(4) Charter, Trust Deed, and By-Laws of the Cooper Union for the Advancement of Science and Art: With the Letter of Peter Cooper, Accompanying the Trust Deed. New York: Wm. C. Bryant & Co., 1859. Page references are to this edition. See also Phyllis D. Krasnick. 1985. Peter Cooper and the Cooper Union for the Advancement of Science and Art. Ph.D. Dissertation, New York University. P. 119 and passim.
(5) Cooper Union v. Wells, 180 NY 537 (1905)
(6) People ex re. Cooper Union v.
Sexton, 273 NY 462 (1936).
(7) Robert L. Beebe and Stephen J. Harrison. 1981. "A Law in Search of a Policy: A History of New York's Real Property Tax Exemption for Nonprofit Organizations," Fordham Urban Law Journal, vol. IX, pp. 533-590.
(8) Krasnick, op.cit., pp. 191-2
(9) In bill jacket, Chapter 257, Laws of 1969, State of New York.
(10) Attorney General Louis J. Lefkowitz to Governor Rockefeller, April 7, 1969, p. 3. In bill jacket.
(11) Carroll L. Wainright, Jr. to Robert R. Douglass, Counsel to the Governor, April 8, 1969. In bill jacket.
(12) Daniel Maggin to Fiovarante G. Perrotta, March 3, 1969, p. 3. In bill jacket.
(13) Kicinski to Rockefeller, 3/28/69. In bill jacket.
(14) Amann to present author, July 25, 1994
(15) Laws of New York, 1969, pp. 2403-4.
(16) Lindsay to Rockefeller, April 14, 1969. In bill jacket.
(17) Perrotta to Maggin, March 3, 1969. In bill jacket.
(18) Lefkowitz to Rockefeller, op.cit., p. 3.
(19) Dartmouth College v. Woodward, 17 US 518 (1819)
(20) People ex rel. Cooper Union v. Gass, 190 NY 323 (1907).
(21) Stephen J. Harrison to James Della Porta, Memorandum, Division of Equalization and Assessment, August 5, 1980.
(22) Erik R. Wescott to Joseph K. Gerberg, Memorandum, Division of Equalization and Assessment, December 13, 1994
(23) Peter Passell, "The High Price of Free Excellence," Education Life insert to New York Times, November 6, 1994, pp. 18-19.
(24) Beebe and Harrison, op. cit., pp. 536-542
(25) Beebe and Harrison, op. cit., pp. 554-572
(26) Report of City Task Force on the Exemption of Non-Profit Organizations from Real Property Tax. Frederick A. O. Schwarz, Jr., Chairman. October 4, 1982. Page 4.
(27) Ibid., p. 9
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