Syracuse University lawyers argued in a New York appeals court that its student center should be fully exempt from paying taxes to the city. Schine Student Center is pictured. Credit: Maddi Jane Brown | Central Current

Syracuse University’s student center will remain tax exempt, capping off a five-year battle between the City of Syracuse’s Department of Assessment and Syracuse University. 

Judges at the Rochester Fourth Appellate Division on Friday afternoon reversed a lower court decision that sided with the city’s tax assessment of SU’s Schine Student Center, the university’s main student center. The decision comes as the city prepares to renegotiate its service agreement with SU, and as Le Moyne College purchases more land near its campus.

The ruling may also require the city to pay back any taxes it has collected from the student center.

SU spokesperson Sarah Scalese said the university appreciated the court’s ruling, and did not answer written questions from Central Current.

“We appreciate today’s ruling,” Scalese said in an email.

Judges at the Rochester Fourth Appellate Division on April 10 heard arguments from Zachary Schauf, a Barclay Damon attorney representing SU in the matter. The city chose not to present an oral argument, preferring to use its previous arguments. Friday’s ruling found in favor of the university and reversed Judge Gerald Neri’s previous decision in favor of the city.

The parties have been at odds since 2021, when the city’s Department of Assessment determined that SU’s renovations of the student center incorporated revenue-driving public businesses that are not exempt from city taxes. 

After the university upgraded the Schine Center to include chain restaurants, the city’s assessor cited those eateries and the center’s bookstore as taxable entities. The eateries included Dunkin’, Panda Express and CoreLife.

The university insisted that the center is not aimed at generating profits, and serves solely as a hub to provide students with everything they may need, from food options, to a communal meeting space, to books and supplies. 

The university objected, but the city’s Board of Assessment Review stood by the city assessor’s determinations.

SU in 2022 sued the city after the city revoked 9% of the Schine Center’s tax-exempt status. Judge Gerald Neri in 2025 ruled in the city’s favor, prompting SU to appeal the decision in the higher court.

In oral arguments on April 10, Shauf, the Barclay Damon attorney representing the university, argued that Onondaga Supreme Court Judge Gerald Neri should not have cited a legal section of the state’s real property tax law that would allow the assessment board to dismiss the university’s grievance if the university had willfully neglected or refused to answer the city’s questions. 

But Shauf argued the university hadn’t sidestepped any inquiries from the city.

“So it should never have gotten there,” said presiding Judge Gerald Whalen.

“That’s right,” Shauf said. 

The city opted not to advance an oral argument.

During a budget hearing before the common council’s Finance, Taxation and Assessment committee, Councilor Corey Williams questioned why the city didn’t send a lawyer to represent itself in a lawsuit it has fought for for years.

City Corporation Counsel Susan Katzoff provided a rationale that cited a short-staffed office: She had fired the attorney who was assigned to the case.

Explaining the city’s legal strategy, Katzoff implied there was no nuance worth clarifying in the case that wasn’t already spoken for in the city’s legal documents.

“We will go if we feel there is a nuanced issue that really doesn’t come across well in the papers, and you feel like you need to explain it, or if it is a unique issue that has never been tried about it, if there is something unique about it, we will make the investment and travel to Rochester,” Katzoff said. “Otherwise, we are taking this position that we will rest on our papers.”

When Katzoff told the councilors her office was down one attorney, she was referring to Trevor McDaniel, who had been fired nine days prior.

McDaniel since 2023 represented the city in the Schine Center lawsuit. It remains unclear if the city had planned to send McDaniel to advance oral arguments before he was fired, or if the city had always planned to eschew a chance to advocate its case in person before the judges of the appellate division. 

Central Current asked the city whether, prior to McDaniel’s firing, the city intended to send McDaniel to advance oral arguments. The city’s response did not directly address whether the city was planning on McDaniel advancing oral arguments prior to his termination.

“Unless ordered by the court, the City views oral argument as optional and dependent upon staffing and bandwidth,” City spokesperson Sol Muñoz wrote in an email to Central Current. Muñoz said that the city is “disappointed” with the ruling, and said the city is still reviewing and analyzing the decision.

Central Current reviewed the email Katzoff sent to McDaniel to notify him of his firing, in which the city’s chief lawyer told McDaniel it was apparent his judgement “did not serve the City or this office.”

Katzoff outlined in the email three things she wanted to make clear to McDaniel before notifying him that he had 39 minutes to gather his personal belongings and vacate the office.

Katzoff’s first point of clarification implied McDaniel at some point told her to take on the assessment case.

“Telling me to handle a case in your place is nothing short of insubordination,” Katzoff wrote.

The second declares that McDaniel undermined Katzoff’s authority by challenging her legal authority before the Board of Assessment Review in a separate legal matter with the university.

“Third, and most importantly, when a decision is made by this office, this office supports that decision with one voice,” Katzoff wrote, “unless that decision is illegal or unethical.”

SU’s win will likely roil city residents, especially those living on the city’s Eastside, who are frequently critical of assessment and court decisions in favor of universities not paying taxes on some properties. 

Andy Leahy, who monitors such taxation developments, decried the decision Friday afternoon in a written message to Central Current. Leahy wrote that the court’s decision creates loopholes for colleges and other nonprofits large enough to “drive Monster Trucks straight on through.”

“Are state and local governments going to be forced to cease and desist from collecting sales taxes on Dunkin, foam fingers, hoodies, Coors, nachos, and soft pretzels — just so long as the retail happens to be insulated within a tax-exempt and so-called academic structure?” Leahy said.

On Friday, Williams bemoaned the court’s decision and expressed optimism that the city’s fight to tax a portion of SU’s Schine Center is not over.

“We are disappointed about the decision and I hope that we exhaust every opportunity to appeal the decision,” Williams said on Friday.

Read the full text of the email Katzoff issued to McDaniel to notify him of his termination:

Trevor:

Allow me to make a few things clear. First, you do not have the authority to tell me to handle something. As Corporation Counsel, I have the authority to assign jobs and tasks to the attorneys within my office. I assigned the BAR to you. If you are unable to complete a task I have assigned to you it is your obligation, with my permission, to find a suitable attorney replacement. Telling me to handle a task in your place is nothing short of insubordination.

Second, I welcome all of the attorneys in my office to challenge my legal analysis in private, as you have done on many occasions. But to do so in front of a client as you did this week is inappropriate and undermines not only my authority, but this office as a whole. Third, and most importantly, when a decision is made by this office, this office supports that decision with one voice, unless such decision is illegal or unethical. Neither were the case in the present matter, yet you did not present this to the BAR in a manner creating one voice.

While you may not like it, I was appointed Corporation Counsel because of my years of experience in economic development, the trust I have built with my clients, my relationships with community members, and my ability to identify and solve problems in a way that is beneficial to the City first and foremost, but to the public we serve as well. When you hold this title you can make the decisions about how best to serve the City.

I appreciate it is unpleasant when people go around you to get to me – but that is the nature of my position and will undoubtedly happen again. I will not apologize for it nor should I have to explain it.

It is apparent to me that your judgment does not serve the City or this office. As such, please be advised that you are terminated effectively immediately.

Please leave your badge, computer fob and any other city issued items with Nancy.

Please feel free to contact HR relative to any benefits and insurance at (315) 448.8780.

If you need to remove items from your office, I would ask that you do so by no later than 9:30 a.m. You will need to vacate the office at or before 9:30 a.m. If you are unable to collect your items by that time, we will make arrangements to have your office packed and a time for you to retrieve your belongings. Please do not remove any files or other City materials from the office.

Corporation Counsel

City Hall Room 300

233 East Washington Street

Syracuse, New York 13202

Phone: (315) 448 – 8400

Susan R. Katzoff

Skatzoff@syr.gov

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Patrick McCarthy is a staff reporter at Central Current covering government and politics. A graduate of Syracuse University’s Maxwell and Newhouse Schools, McCarthy was born and raised in Syracuse and...