TOWN OF NEWBURGH – The Town of Newburgh agreed Monday to refund 2018 Orange Lake Fire and lighting district taxes on two Watchtower Bible and Tract Society of New York-owned properties to settle a dispute in which the organization challenged four years worth of special-district taxes.

Watchtower will receive about $31,000 in fire and lighting district refunds for this year on two hotel properties it bought on Route 17K and Route 300 to house volunteers working on the Jehovah’s Witnesses world headquarters in Warwick.

The organization, whose two hotels have a combined assessed value of $7.8 million, had challenged special-district levies for 2015 through 2018. Water district taxes are exempt from the settlement.

“I’m just very glad that we were able to negotiate one year instead of all four,” Councilman Scott Manley said after the town council approved the settlement.

In a petition filed in Orange County Court in August, Watchtower claimed that the town “either unintentionally as a mistake or intentionally and without lawful authority” miscoded the former Hilton on Crossroads Court and the former Hampton Inn on Route 300.

With a combined market value of nearly $23 million, the hotel properties were not assessed town, county and school taxes for those years.

But the town levied special-district charges for the Orange Lake Fire District and lighting and water districts.

“Petitioner would not be required to pay the resulting unjust charges if its exemption from taxes had been justly, correctly, and lawfully granted and administered,” Watchtower’s attorneys wrote in the organization’s petition in county court.

Watchtower bought the two hotel properties in 2014 as it built its 1.6-million-square-foot headquarters on Kings Drive in Warwick.

Market value for the Route 300 hotel property is $7,378,500 and for the Crossroads Court hotel $15,435,300, according to county property records.

The organization applied for exemption under a section of state real property tax law covering property used “exclusively for religious, charitable, hospital, educational, or moral or mental improvement of men, women or children purposes.”

Instead, the town gave the organization an exemption under a different section of state law covering property owned by a religious organization but used for residential purposes. That exemption still required the payment of special-district taxes.

Although Watchtower’s headquarters in Warwick is complete, the two hotel properties are still being used, the organization said in its court filing.

Volunteers “supporting” the headquarters and Watchtower facilities in the towns of Fishkill, Patterson and Shawangunk used the Hampton, according to court documents. The former Hilton houses volunteers visiting the area for retreats, according to Watchtower.

lsparks@th-record.com