The City of Boston agreed to stop inflating the assessed value, and taxes, for commercial properties that file abatements, according to a watchdog group that slammed the practice as retaliatory and unlawful and later filed suit against the city.
Mike Firestone, the city’s corporation counsel, sent an email to Frank Bailey, president of the Pioneer New England Legal Foundation, on Dec. 4 that was obtained by the Herald and stated the city’s assessing department would no longer be using the “discussed practice.”
“We appreciate that you need to get back to your board tonight,” Firestone wrote in the email. “We are at work on a formal response to your proposal, but at a high level, you can share that the city remains open to discussion of some resolution.
“As previously discussed, although we believe that assessed values in FY24 and FY25 constituted fair cash value, we have informed you that the assessing department will not use the discussed practice moving forward, including for the valuations we submitted to the (state Department of Revenue) for FY26,” he wrote.
Firestone, the city’s chief of policy and strategic planning at the time, said the city was “open to further discussing the properties you identity, recognizing that many of them have pending ATB appeals, which provides a forum for resolution.”
Pioneer Institute senior fellow Charles Chieppo told the Herald that the city was referring to the practice of adding additional value to properties that had appealed city assessments with the state Appellate Tax Board.
“The exchange came during unsuccessful settlement negotiations before the lawsuit was filed,” Chieppo told the Herald last Friday.
Pioneer had flagged the alleged overassessment scheme for months before filing suit against the city on Dec. 17 in Suffolk Superior Court.
Chieppo declined to comment further on the matter on behalf of Pioneer, “because the suit is still pending and we hope to have further discussions with the city.”
Pioneer contends that the alleged practice is retaliatory and unlawful, and has filed a class-action suit on behalf of an impacted commercial property owner.
The lawsuit is seeking restitution, for the city to repay the plaintiff commercial taxpayer, along with others who may join the filing, the amount they were overcharged in property taxes, due to the city’s alleged overvaluation.
Despite reportedly agreeing privately to stop the alleged overassessment practice as part of settlement negotiations, the city has publicly dismissed Pioneer’s allegations as “baseless and full of misinformation,” per a prior statement from Mayor Michelle Wu’s office.
Wu’s office acknowledged Firestone’s email to Bailey, but would not confirm Pioneer’s description of the “discussed practice” or explain why the city would agree to stop an assessment practice after previously dismissing allegations of wrongdoing.
“The city assesses 180,000 properties annually, and less than one out of every 200 end up in dispute,” a city spokesperson said Monday in a statement. “The city wrote to discuss concerns expressed by Pioneer about the commercial assessment of their plaintiff’s property.
“Ultimately, Pioneer chose to sue and the city will defend Boston taxpayers and our authority to fairly tax our largest commercial properties,” Wu’s office added.
Bailey, Pioneer’s president and a retired judge of the U.S. Bankruptcy Court in Massachusetts, said in a press briefing last month that Pioneer estimates as many as 200 commercial properties have been overtaxed by the city practice.
If the suit is successful, those properties could be owed restitution at a time when the city’s finances are hampered by declining commercial property values tied to vacant office space that one City Hall watchdog has projected may lead to a $1-2 billion budget shortfall over the next five years.
Bailey said the lawsuit was filed “only after serious consideration and after literally months of efforts to engage the city and the Department of Revenue to ensure basic questions about the transparency and fairness of the Boston commercial real estate tax system” and that it “is operating in compliance with the law.”
He said the alleged overassessment practice went on for fiscal years 2024 and 2025.
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