WORCESTER - The state Appellate Tax Board has determined that the city owes the former owner of the Osgood Bradley Building on Grafton Street roughly $71,200 in tax abatements because the property was overvalued from 2012 to 2015.

The tax abatements are $18,654 for fiscal 2012, $16,557 for fiscal 2013, $17,594 for fiscal 2014 and $18,425 for fiscal 2015.

The owner of the property during that period, Bradford P. Wyatt, trustee of 18 Grafton Street Nominee Trust, paid $357,382 in real estate taxes to the city for those years.

The property, now known as The Edge at Union Station, is an eight-story, 169,304-square-foot former industrial manufacturing building at 8-18 Grafton St. that was constructed in 1914. It is located just off Washington Square, next to Union Station.

It was recently converted to college student housing.

Before the property was converted to housing, the city had assessed its value at $2.95 million in fiscal 2012 and 2013 and $2.88 million in fiscal 2014 and 2015.

But during that time the building was only partially occupied, with the third and fifth floors totally unoccupied, and no more than 50 percent of the space was occupied on some of the other floors.

In each year, the property owner filed abatement applications with the city assessor, and in each instance they were denied. Petitions were subsequently filed with the state Appellate Tax Board appealing those decisions of the assessor.

During his testimony before the state board, Mr. Wyatt discussed his "near futile efforts" to find tenants to lease space or buyers to purchase the building.

He said part of the problem was that the building had many outdated and outmoded features, and there was very limited space for parking on the site or nearby.

In addition, the building had significant costs associated with abating asbestos, PCBs, lead and other hazardous substances in and on the property.

Mr. Wyatt also presented the board with income and expense statements showing an unprofitable operation, with significant costs and expenses.

He sold the property to a developer for $3.15 million in May 2015, but said that was about 1½ years after the last relevant valuation and assessment date for his appeals.

Mr. Wyatt said the sale had been contingent on, among other things, the purchaser/developer obtaining certain financing approvals, historic tax credits and a special permit for the city so the building could be used for housing.

In his testimony, he said the original purchase and sale agreement ended up being amended 14 times and he was not paid any money until a month before the closing.

"Based on all the evidence and reasonable inferences drawn therefrom, the board ultimately found that the appellant successfully provide that the subject property was overvalued for fiscal years 2012 through 2015," the Appellate Tax Board decision stated.

In particular, the board found that the May 2015 sale of the property was not particularly germane to determining its fair cash values for 2011 through 2014. That was because the sale was consummated almost 1½ years beyond the last relevant valuation and assessment date for the fiscal years covered in the appeals.

The board further found that the purchase and sale contract had many challenging contingencies, and the fact that it had to be amended 14 times suggested continual problems and uncertainties fulfilling the terms and conditions of the sale.

"All these factors led the board to conclude that the sale and conversion of the property had been highly speculative right up until the closing finally took place, and certainly as of the relevant valuation and assessment dates at issue in these appeals," the board stated in its findings.

"Accordingly, the board gave the sale virtually no weight in its determination of the property’s highest and best use and fair cash values for the fiscal years at issue," it added.

The Appellate Tax Board also found that the highest and best use of the property for the fiscal years at issue was its then uses (business and manufacturing) because it felt the conversion of the property to student apartments was "simply too speculative" at that time.

"The board found and ruled that the capitalization of net income was the best method for determining the fair cash value of the subject property for the fiscal years at issue," the opinion stated.

City spokesman Michael Vigneux said the city has 20 days from the publication of the state board's finding of facts, or until Dec. 18, to appeal the decision.