UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

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THE CITY OF NEW YORK,

Plaintiff,

-against-
COMPLAINT
THE FEDERAL REPUBLIC OF NIGERIA, “JOHN DOE
#1” through “JOHN DOE #20”, the names of the last 20
Index No. ___________
defendants being unknown to plaintiff, the persons or
parties intended to be persons or corporations, if any,
having or claiming an interest or lien upon the property
described in the complaint,

Defendants.

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Plaintiff the City of New York (“the City”), by its attorney, Michael A. Cardozo,

Corporation Counsel of the City of New York, alleges as follows for its Complaint:

1. This action is brought pursuant to Title 11 of the Administrative Code of the

City of New York for a declaration of the validity of real property tax liens held by the City on

828 Second Avenue, Nigeria House, New York, NY, 10017, a parcel also known on the Tax

Map of the City of New York as Manhattan Block 1337, Lot 1 (“the Property”), and for a

judgment in an amount of up to $16,000,000 in real property taxes, charges, and interest due and

owing to the City on the Property as of January 8, 2010, plus interest thereupon up to the date of

judgment, or such other and greater amount as may be proven at trial.

2. The Property is owned by the Federal Republic of Nigeria (“Nigeria”), and is

used in part for exempt purposes, including as offices for the Nigerian Consulate and the

Nigerian Mission to the United Nations.

 3. However, at least since July 1, 2002, and on information and belief for some

years prior to that date, portions of the Property have also been occupied by third parties or been

vacant, and all or part of one floor has been used as a residence for persons other than the head of

mission or the consul general. These portions of the Property constitute non-exempt uses that are

subject to property taxation.

4. As of January 8, 2010, the total outstanding balance billed by the City for real

estate taxes, other charges, and interest incurred since July 1, 2002 was $4,168,031.97. If the

same portions of the Property that were taxable as of July 1, 2002 were taxable from the time

construction was completed in March 1993, the total outstanding balance for real estate taxes,

other charges, and interest would be in excess of $16 million.

JURISDICTION AND VENUE

5. This is an action against a foreign state. Pursuant to 28 U.S.C. § 1330, the

federal courts have jurisdiction without regard to amount in controversy for any nonjury civil

action against a foreign state for which that foreign state is not immune under the Foreign

Sovereign Immunities Act. 28 U.S.C. §§ 1130, 1602-1611. Two exceptions to immunity apply

here: the commercial activity exception, 28 U.S.C. § 1605(a)(2), and the immovable property

exception, 28 U.S.C. § 1605(a)(4). Therefore, this Court has jurisdiction over this action.

6. Pursuant to 28 U.S.C. § 1391(f)(1), a civil action against a foreign state may

be brought in any judicial district in which “a substantial part of property that is the subject of the

action is situated.” Therefore, this Court is the proper venue for this action.

PARTIES

7. Plaintiff City is a municipal corporation duly organized and existing under the

laws of the State of New York.

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 8. Defendant Nigeria is a sovereign foreign state that is the owner of the

Property.

9. Defendants John Doe #1 through John Doe #20 are named as party-defendants

to represent persons or corporations and other lienors, if any, who may have or claim to have an

interest in or lien against the Property. Plaintiff will submit the true names and interest of John

Doe #1 through John Doe #20 as and when plaintiff learns of their true names and interest.

10. Each of the defendants named in this action claims to have or may have some

right, title, interest or lien in or to the Property or some part thereof, which right, title, interest or

lien, if any, is subject and subordinate to the City’s property tax liens.

FACTS

11. Nigeria acquired the Property on September 18, 1981. The site originally

consisted of four separate tax lots, which were acquired by two different corporate entities

wholly owned by Nigeria. Title to the site was transferred in two separate deeds from the two

corporate entities to Nigeria on July 27, 1982. The two deeds were recorded on August 2, 1982,

in reel 632, pages 1829–1831. The four tax lots were merged into one in December 1988.

12. Because of the need to vacate tenants at the site, disputes with the contractor,

and other reasons, construction of the building that now occupies the Property was not

substantially completed until March 1993.

13. The Property, known as “Nigeria House,” is at 828 Second Avenue, New

York, NY 10017, and is Manhattan Block 1337, Lot 1 on the City Tax Map. It is improved with

a 22-story office building containing a gross building area of 90,569 square feet.

14. In 1996, the City received payment from Nigeria for real property taxes

levied on the Property for January 1, 1982 until June 30, 1984. From July 1, 1984 until June 30,

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2002, the Property was effectively granted a full real property tax exemption by the City. That

exemption was based on Nigeria’s 1993 representation that the entire Property was being used as

offices of the Nigerian Consulate and the Nigerian Mission to the United Nations.

15. By letter dated January 9, 2002, the New York City Department of Finance

(“Finance”) informed Nigeria that it needed to confirm the basis of Nigeria’s tax exemption. The

parcel was restored to full taxable status for the tax year commencing July 1, 2002 pending the

completion of Finance’s review of the Property.

16. On information and belief, a portion of the Property had been used as a

Nigeria Airways office for some years prior to 2002. In addition, on June 30, 2002, when the

exemption was withdrawn, those portions of the Property that were then occupied by third

parties, including Nigeria Airways, had been so occupied for some time prior to that date. The

City does not now know the precise extent and duration of non-exempt uses of the Property.

17. In response to the January 9, 2002 letter and discussions pertaining thereto,

Nigeria provided a breakdown of the use of space on each floor of the building located on the

Property. It appeared from the breakdown that the following spaces were being used for non-

exempt purposes: Nigeria Airways occupied space on the first floor; spaces on the second, third,

fifth, and sixth floors were being rented to the United Nations; on the fourth floor, two entities

named the House of Travel and Prime Protection occupied space, and other space on that floor

was vacant; and on the twentieth floor, there was a residential unit that was not, on information

and belief, occupied by the head of the Nigerian Mission or by the consul general.

18. By letter dated May 29, 2002, Finance informed Nigeria that Nigeria House

was eligible for an exemption for the portion of the Property used for mission or consular offices,

but that each of the spaces listed in the previous paragraph was not exempt.

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 19. By letter dated October 21, 2002 from its counsel, Alter Mantel, LLP, to

Finance, Nigeria disputed the conclusions that “(1) the vacant space on the 4th floor of the

building and (2) residential unit on the 20th floor are not entitled to tax exemption.” However,

Nigeria did not dispute that the other spaces that the City sought to tax were taxable. Nigeria

included with this letter a check in the amount of $93,031.94 in payment of the taxes that Nigeria

owed on these concededly taxable portions of the Property for the period July 1, 2002 through

December 31, 2002, withholding only $19,658.82, which was the amount Nigeria estimated to be

owed for the vacant space on the fourth floor and the residential unit on the twentieth floor.

20. By letter dated November 18, 2002, Finance explained to Nigeria’s counsel

that the residential space on the twentieth floor was taxable, because under Real Property Tax

Law § 418(1), property tax exemption is limited to offices and quarters of the head of mission

and to offices of the staff, and the residential unit was not being used for these purposes.

Moreover, regarding the vacant space on the fourth floor, Finance explained that Nigeria had not

proven that it was used exclusively for exempt purposes. Finance invited Nigeria in the letter to

provide it with a detailed analysis of the present and contemplated uses of the fourth and

twentieth floors, stating that if these materials caused a change of its conclusion, then Finance

would reconsider its decision. Nigeria never provided Finance with this information.

21. Nigeria has not paid any property taxes on the Property since the above-

referenced payment in 2002. In 2006, a representative of Nigeria contacted Finance and inquired

about the real property tax liability of Nigeria, and by letter dated January 27, 2006, Finance

provided an updated balance to Nigeria of real property taxes owed on the Property from 2002

forward.

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 22. Nigeria met with the New York City Commission for the United Nations,

Consular Corps, and Protocol on June 26, 2007 and March 18, 2008 to discuss the property taxes

and other charges owed to the City by Nigeria for the Property. At these meetings, Nigeria

confirmed that a portion of the property was not being used for mission or consular purposes, or

as the residence of the head of mission or consul general.

23. Mission representatives also stated that some of the space now leased to the

United Nations has been vacant over the years, and that Nigeria would provide a history of the

use of the commercial space, detailing when it has been vacant, as vacant commercial space may

be eligible for a lower tax rate. Nigeria has not to date provided the City with this information.

24. In a letter dated July 29, 2009, the New York City Law Department wrote to

Nigeria again informing it of the amount owed the City in real property taxes and other charges

and explaining that unless the debt was paid promptly and in full, the City would commence

litigation. Other contacts ensued, but to date Nigeria has not paid any of the outstanding taxes,

charges and interest.

25. Taxes, other charges and interest due and owing to the City from July 1,

2002 to the present date, January 8, 2010, are as follows:

Property Taxes – 7/01/2002 – 1/08/2010 Principal – $2,058,335.67

Interest – $2,107,294.16

Elevator Charges – 2/21/2006 Principal – $65.00

Interest – $57.60

Illuminated Signs – 7/01/00 – 7/1/09 Principle – $1091.67

Interest – $1187.87

Total Principal: $2,059, 492.34

Total Interest: $2,108,539.63.
_____________________________
Total owed: $4,168,031.97

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 26. In addition, on information and belief, portions of the Property were non-

exempt and taxable at some times during the period between March 1993 and July 1, 2002.

27. Whereas in 2002, Nigeria represented that fifteen floors of the 22 floors were

dedicated to exempt uses, a recent article in the Nigerian newspaper The Guardian states that

only ten floors – less than half the Property – are currently being used by the mission and the

consulate. Nigeria House in U.S. in Deplorable State, THE GUARDIAN, Nov. 23, 2009

(http://www.ngrguardiannews.com/homes_property/article12/indexn3_html?pdate=231109&ptitl

e=Nigeria%20House%20in%20U.S.%20in%20deplorable%20state&cpdate=261109).

28. The precise amount of taxable space and duration of the taxable status of

such space is not presently known. However, if the same portions of the Property that have been

taxable since July 1, 2002 were taxable from the time the new building was completed in March

1993 until the present, the total amount of tax, charges, and interest owed would be in excess of

$16,000,000.

29. No other action or proceeding has been commenced or is now pending at law

or otherwise to foreclose the tax lien or to recover the debt owed by Nigeria.

30. In the event that the City possesses any other liens against the Property,

either by way of judgment, or otherwise, the City requests that such other lien(s) shall not be

merged in the City’s cause of action set forth in this complaint, but that the City be permitted to

enforce said other lien(s) and/or seek determination of priority thereof in any other independent

action(s), proceeding(s), including without limitation, any surplus money proceedings.

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 CAUSE OF ACTION

31. The City requests that the Court impose a judgment pursuant to New York

City Administrative Code §§ 11-354 and 11-338 on Nigeria declaring the validity of the tax liens

in the amount outstanding on the Property.

32. The City requests that the Court issue a Judgment directing Nigeria to pay

the plaintiff the amount of real property taxes, other charges and interest cited above, subject to

the following:

a. Any state of facts that an inspection of the exempt and/or non-exempt

use of the Property would disclose;

b. Any state of facts that an accurate survey of the Property would show;

c. Any taxes, assessments, emergency repair liens, water and sewer rents

and other charges that hereinafter become liens against the Property;

and

d. Prior liens of record not set forth in this Verified Complaint, if any.

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 WHEREFORE, the City requests that this Court enter a judgment:

1. declaring the validity of the outstanding tax liens pursuant to N.Y.C. Admin.

Code § 11-338 and § 11-354;

2. directing that the defendant Nigeria pay the amount of property taxes, interest

and other charges due as set forth above or in such greater amount as may be proven at trial,

together with such other amounts as would accrue up to the time of such payment; and

3. granting such other and further relief as the Court may deem just and proper.

Dated: New York, New York

January 8, 2009.

MICHAEL A. CARDOZO
Corporation Counsel of the
City of New York
100 Church Street, Room
New York, New York 10007
(212) 788-1007

________________________________
By: John R. Low-Beer, JL3755
Assistant Corporation Counsel