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HomeMy WebLinkAbout2021_12_13 BOER MINUTES DocuSign Envelope ID:639C5139-26DA-4AC3-8274-8C6D5BE5A52A MINUTES Board of Equalization and Review Date: December 13, 2021 Board Members Present: Hunter Beattie, Chair Leon Meyers, Regular Barbara Levine, Regular Staff Members Present: Nancy Freeman, Tax Administrator Anne Marie Tosco, Orange County Attorney Steven"Chad"Phillips, Deputy Tax Assessor Roger Gunn, Real Property Appraisal Manager Kelly Wells, Chief Appraiser Cyle Anderson,Appraiser Chris Mashburn, Appraiser with CCA Vrinlli Flores, Administrative Assistant SCHEDULE: 9873698276 Paliouras Enterprises LLC APPEARING 9873694294 Paliouras Enterprises LLC APPEARING 0801155134 Orange County Healthcare Properties Inc. NOT APPEARING 9799692931 Tri City Investments LLC APPEARING 9788281298 Etta H.Wilson APPEARING 9799038088.013 J K B Commercial LLC APPEARING 9874066658 James Ray Hall NOT APPEARING 9788268572.001 Chapel Hill Foundation Real Estate Holdings Inc. NOT APPEARING 9787143928 AKS Real Estate Holdings LLC NOT APPEARING 9798654944 Sanjay G. Asrani APPEARING 9788150842 NP Loden 505 Franklin LLC NOT APPEARING Chair Hunter Beattie called the meeting to order at 1:00 PM. PALIOURAS ENTERPRISSES LLC PIN 9873698276 John Cocklereece appeared before the Board on behalf of Paliouras Enterprises to appeal the valuation of 23.02 acres identified as Lot 3 Paliouras Enterprises LLC PB 118/44,Hillsborough. The current assessed value of this property is $3,746,000. A list of evidence follows: APPELLANT COUNTY 9873698276 Appeal 9873698276 County DocuSign Envelope ID:639C5139-26DA-4AC3-8274-8C6D5BE5A52A The appellant is requesting that the Board lower the valuation citing the fact that the subject property has easements,topographical issues, environmental issues like ground water contamination, and town and state requirements all of which will hinder development9873698276the property. The appellant stated that the subject property will be developed in the future for commercial uses of various sizes. However, the subject's 23 acres will need environmental cleanup that will affect the timeframe of development and should affect the parcel's assessed value. Due to the environmental contamination and other issues,the appellant's opinion of value for the property is $2.69 per square foot. Cyle Anderson represented the County and stated that the parcel has been split into four separate parcels since January 1,2021 with one parcel known as PIN 9873698536 containing 5.99 acres selling in March of 2021 for$1,850,000 or$7.09 per square foot. Although this sale was not considered in the revaluation due to the sale occurring after January 1, 2021,it is important to note that the subject property is indeed saleable and developable in its current state. Additionally the land is already receiving a-75%value reduction and is being valued at$3.69 per square foot. Mr.Anderson stated however that after reviewing the subject property and comparable sales in the area,the County recommends applying 99%depreciation to the garage listed as a yard item.As a result of this review, Orange County recommends a revised valuation of$3,698,500 for the subject property. The Board reviewed all documents and information provided by the appellant and the County. After deliberation and review,Mr. Beattie made a motion to accept the County's revised valuation of $3,698,500. Ms. Levine seconded the motion and the motion carried. Yes: 3 Noes: 0 PALIOURAS ENTERPRISES LLC PIN 9873694294 John Cocklereece appeared before the Board on behalf of Paliouras Enterprises to appeal the valuation of the 1.98 acre property identified as Lot 2,Paliouras Enterprises LLC,PB 118/44,Hillsborough. The current assessed value of the property is $2,030,500. A list of evidence follows: APPELLANT COUNTY 9873694294 Appeal 9873694294 County The appellant is requesting that the Board lower the valuation citing the fact that the subject property has the same environmental and other issues as was discussed for PIN 9873698276 affecting the subject's timeframe and cost for development. The appellant's opinion of value for the property is $950,000. Cyle Anderson represented the County and stated that after reviewing the subject property and comparable sales in the area,the County recommends removing the+60%market adjustment applied to the land.As a result of this review, Orange County recommends a revised valuation of$1,269,100 for the subject property. The Board reviewed all documents and information provided by the appellant and the County. After deliberation and review,Mr. Beattie made a motion to accept County's revised value of$1,269,100 for the property. Mr.Meyers seconded the motion and the motion carried. DocuSign Envelope ID:639C5139-26DA-4AC3-8274-8C6D5BE5A52A Yes: 3 Noes: 0 ORANGE COUNTY HEALTHCARE PROPERTIES INC. PIN 0801155134 The appellant elected not to appear before the Board and requested that the submitted documentation serve as the appeal. The appellant is appealing the value of the property located at 5935 Mt. Sinai Road, Durham. The current assessed value of the property is$4,522,400. A list of evidence follows: APPELLANT COUNTY 0801155134 Appeal 0801155134 County Roger Gunn represented the County and stated the property known as Carolina Point,is currently recorded as a 60,553 square feet skilled nursing and rehabilitation center. The appellant is appealing the valuation on the basis that COVID-19 has caused a 15%reduction in resident population and because a substantial portion of the property is located in Durham County. The appellant's opinion of value for the property is $4,100,000. Mr. Gunn stated that County conducted a site visit on December 7,2021 where it was discovered that the correct building area of the facility was 45,916 square feet above grade and 3,029 square feet below grade. Of the 45,916 square feet above grade,the east wing contains 7,185 square feet. Durham County is valuing 5,854 square feet of this wing. Therefore, it is the recommendation of the County to correct the building area in Orange County to 40,062 square feet above grade and 3,029 square feet below grade. None of the below grade space is located in Durham County.Also,as a result of the site inspection,the County recommends changing the primary building frame from Class D(wood)to Class C (masonry) for both the above grade and lower grade levels in addition to adding a carport/canopy and covered porch to the structure. The result of the recommendations would be a reduction in value to $3,568,100 for the property. The Board reviewed all documents and information provided by the appellant and the County. After deliberation and review,Mr. Beattie made a motion to accept the County's revised value of$3,568,100 for the property.Ms. Levine seconded the motion and the motion carried. Yes: 3 Noes: 0 Mr. Beattie made a motion to recess the meeting until 2:00 PM. Mr. Beattie called the meeting back to order at 2:00 PM. DocuSign Envelope ID:639C5139-26DA-4AC3-8274-8C6D5BE5A52A Tri City Investments LLC PIN 9799692931 This meeting is a continuation from prior meeting on November 17, 2021 where the Board requested the terms of the lease to determine value and requested County Attorney Anne Marie Tosco's presence. Michael Benak from McCarter&English appeared before the Board to continue the appeal of the value of the property located at 1801 Fordham Boulevard, Chapel Hill. The current assessed value of the property is $16,045,200. A list of evidence follows: APPELLANT COUNTY 9799692931 Appeal 9799692931 County Michael Benak presented a PDF from the previous meeting with the income approach and additional assessment comparables showing the reasoning for the appellant's opinion of value of$65.00 per square foot for the subject property. Mr.Benak discussed the fee simple interest versus a leased fee interest and provided more evidence explaining how the appellant does not think the leased fee sales by themselves without adjustments is the proper way to reassess commercial properties. Mr. Benak provided evidence of two stores from different counties in which the values were settled using fee simple sales including a number of sales whose valued had been adjusted based on the lease term remaining,Evidence of stores selling twice including one of the County's comparable sales. A Gaston County appraisal report showed a sale of a Lowe's Home Improvement in South Carolina sold twice with the second sale indicating a 4% rate adjustment. The appellant recommends using the 4%per year for the remaining lease as used by the Property Tax Commission for other counties' appeals.Applying the 4% adjustment to the subject property leads to an opinion of value of$69.00 per square foot.with an overall assessment of$8,838,900. Kelly Wells represented the County and stated that upon review of this property by CCA, CCA weighted the sales comparison approach at 40%and the income approach at 60%for a reconciled valuation of $11,467,369. As a result of this review,the County recommends increasing the economic market adjustment on the property from E20 to E43 for a revised valuation of$11,432,100. Chris Mashburn with CCA reviewed the additional documents provided by the appellant and going through the PDF said that on the surface of the evidence,no disagreements can be found. However,the appellant provided no lease agreement and his only concern is if County adjusts the 4%per year amount of the time remaining on the lease,the lease terms would be needed to calculate the value. Mr.Benak clarified he is not valuing the subject lease but rather the leases of comparable sales. Mr. Beattie addressed Ms. Tosco in regards to a suggestion on how the Board could effectively settle a value per square foot issue in which Board members have not encountered before to avoid an appeal going to the Property Tax Commission.Mr.Beattie stated that he has the impression that this Board should look at whether the taxpayer has provided competent material and substantial evidence in their valuation and not just settle the valuation out of convenience or to avoid going to the Property Tax Commission, as was suggested in the previous meeting. Mrs. Tosco advised if the value were to be changed,the Board would need substantial evidence to support the change and it might be the case that the other counties' Boards did hear competent and substantial evidence in the way settlement was used. DocuSign Envelope ID:639C5139-26DA-4AC3-8274-8C6D5BE5A52A The Board reviewed all documents and information provided by the appellant and the County. After deliberation and review,Mr. Beattie made a motion to accept the appellant's recommended value of $8,838,900 for the property. Ms. Levine seconded the motion and the motion carried. Yes: 3 Noes: 0 WILSON PIN 9788281298 Valerie Bateman appeared before the Board on behalf of Etta Wilson to appeal the valuation of the property located at 500 Church Street, Chapel Hill. The current assessed value of the property is $249,700.A list of evidence follows: APPELLANT COUNTY 9788281298 Appeal 9788281298 County Ms. Bateman is requesting that the Board reduce the valuation to between$237,440 and$254,852 citing the fact that the property's valuation was originally reduced for 2021 to $249,700,which was an increase of$15,405 or 6.5%over the 2020 property value.Ms. Bateman proceeded to summarize the subsequent valuation of the property stating that the back area of the residence was originally considered an enclosed porch but during a site visit for the appeal,that determination was changed and the area was subsequently considered to be fully enclosed and heated and therefore should be included as living area. However, because of the COVID-19 situation,the County did not request entry into the residence to verify physical characteristics and interior condition. The total square footage of the residence was then calculated to be 2,116,which is above the 1,800 square foot cut off to be determined as conforming to the Northside Conservation District regulations, so a 20% economic factor was removed from the property. The property value then increased to $296,800,which was a 25.2% increase over the 2020 value. Ms. Bateman stated that several factors should allow this property's value to be reconsidered and re- calculated. First, 308 Lindsay Street is a comparable property in terms of size, design, external condition, and location and its value increased by only 6.5% for 2021. Second,the interior condition of the subject property,which could have been determined on the site visit, is Poor and not Fair. Third, the appraisal process does not limit itself to only the 1,750 square foot limit for being nonconforming in the Northside Conservation District and the County's"rounding"factor limited to 1,800 square feet is arbitrary. Given that 500 Church Street is clearly not"nonconforming"in the sense that newer properties of that size are intended to be income-producing,the subject is not. Therefore, 500 Church Street should still have the benefit of the 20%value reduction factor applied to both the lot and residence. 500 Church Street should maintain its 20%reduction for"design." Ms. Bateman stated that the primary objective of mass appraisal for tax purposes is to equalize property values as the. Orange County 2021 Reappraisal, Schedules Of Rules, Standards And Values For Market Value And Present-Use Value states in its introduction that the primary objective is to maintain an equitable tax base among all taxpayers." Kelly Wells represented the County and stated that after a site visit on October 18,2021 and further review of the property,the County recommends reducing the effective year built from 1958 to 1952, increasing the functional depreciation for design on the house from 20%to 30%, adding 20%physical depreciation and remove the E20 economic factor from the property as the residence is above the maximum square footage to conform to the size restrictions of the Northside Conservation District. These changes would result in an increase in the valuation from$249,700 to $282,400. DocuSign Envelope ID:639C5139-26DA-4AC3-8274-8C6D5BE5A52A Ms. Wells clarified the current value is if properties are below 1,800 square feet then the properties in the Northside Conservation District area would have the 20% economic factor. In addition,the County rounds measurements to the nearest foot. Ms. Bateman requested Hudson Vaughan present evidence on behalf of Mrs. Wilson and Mr. Beattie moved for the Board to accept evidence from Mr. Vaughan. Mr.Vaughan provided additional information about the Northside Conservation District and the 1,750 square foot limit for new construction and expansion of existing homes. Mr. Vaughan stated that although there are 16 property sales over 1,750 square feet,the problem in analyzing these properties are that the comparable sales available for the subject property are multifamily student rental properties that were in newer condition and skewing the whole data analysis. Mr.Vaughan explained that properties like the property of Ms. Wilson end up being compared to similar sized properties that are newer with economically different characteristics and no comparable sales for subject property exist. Mr. Gunn agrees with Mr.Vaughan and clarified there are no good comparable sales for the subject property and this is one of the issues the County faces with older and larger properties in this neighborhood. Mr. Gunn stated that one way to address this property was to apply the Schedule of Values and adjust the value of the building offering at$57,400 with the remainder of the land value at$225,000 similar to other lots on Church St that are single family residences with greater than 1,750 square feet. Ms. Bateman requested Kathy Atwater testify that Ms. Atwater is a resident in the Northside Community and a staff member of the Jackson Center that works alongside Northside residents with their property taxes. Ms. Atwater testified Ms. Wilson is 80 years old,is currently still working trying to make tax payments, and the new valuations are a burden with an increase to the taxpayers, especially to those with fixed income.Ms.Atwater stated that in speaking with Ms. Wilson,Ms. Wilson stated the back enclosed porch contains laundry room and is not well insulated. Mr. Beattie asked if the Board had any additional questions and stated that he questions if the 2,100 square foot house in poor condition might not be salvageable and restored rather than torn down where only a 1750 square foot home could then be built. In Mr. Beattie's opinion,he feels the 20%economic factor has not reproduced the intended outcome that the county commissioners hoped for every property and is inclined to asked the County to reapply the factor to the property. Mr.Meyers gave an opinion to return the property value to $249,700. Mr. Gunn presented the calculation that if the 20%economic factor was reapplied to the property and keeping all other recommended changes,the overall value would be reduced to $226,000. Ms. Levine gave the opinion of also returning the property value to$249,700. The Board reviewed all documents and information provided by the appellant and the County. After deliberation and review,Mr. Beattie made a motion to return the property valuation to $249,700. Ms. Levine seconded the motion and the motion carried. Yes: 3 Noes: 0 J K B COMMERCIAL LLC PIN 9799038088.013 DocuSign Envelope ID:639C5139-26DA-4AC3-8274-8C6D5BE5A52A Jacques El-Chayeb appeared before the Board to appeal the valuation of the property located at 101 Conner Drive Unit 201, Chapel Hill. The current assessed value of the property is$585,600. A list of evidence follows: APPELLANT COUNTY 9799038088.013 Appeal 9799038088.013 County The appellant is requesting that the Board lower the valuation to$520,000 citing a 6%capitalization rate would produce a valuation of$520,000 for this income producing property. Cyle Anderson represented the County and stated the subject property is an office condominium located off Conner Drive in Chapel Hill and upon review of this property by CCA, CCA determined that the indicated value of the property by the sales comparison approach is $632,570 and the indicated value by the income approach is$527,131. The indication of value from the sales comparison approach was weighted 60% and the indication of value from the income approach was weighted 40%for a reconciled valuation of$590,395. As a result of this review, Orange County recommends no change to the current valuation of$585,600. The Board reviewed all documents and information provided by the appellant and the County. After deliberation and review,Mr. Beattie made a motion to accept the County's recommendation of no change in value for the property. Mr. Meyers seconded the motion and the motion carried. Yes: 3 Noes: 0 HALL PIN 9874066658 James Ray Hall elected not to appear before the Board and requested that the submitted documentation serve as the appeal. The appellant is appealing the value of the property at 138 N. Churton Street, Hillsborough. The current assessed value of the property is $772,600.A list of evidence follows: APPELLANT COUNTY 9874066658 Appeal 9874066658 County Cyle Anderson represented the County and stated the appellant is appealing the valuation on the basis that the building is in various states of disrepair. The appellant provided a detailed written summary of the issues with the building as well as the driveway. The appellant's opinion of value is $735,200 for the property. Mr. Anderson stated that the County conducted a field inspection on December 6°2021 and after reviewing the subject property,the County recommends decreasing the effective year built from 2005 to 1996. This change would lead to a revised valuation of$736,600 for the subject property. The Board reviewed all documents and information provided by the appellant and the County. After deliberation and review,Mr. Beattie made a motion to accept County's revised valuation of$736,600 for the property. Ms. Levine seconded the motion and the motion carried. DocuSign Envelope ID:639C5139-26DA-4AC3-8274-8C6D5BE5A52A Yes: 3 Noes: 0 CHAPEL HILL FOUNDATION REAL ESTATE HOLDINGS INC PIN 9788268572.001 Hailey Garrett from Ryan LLC elected not to appear before the Board on behalf of Chapel Hill Foundation Real Estate Holdings Inc. to appeal the valuation of the property located at 113 W. Franklin Street, Chapel Hill. The current assessed value of the property is $106,220,100. A list of evidence follows: APPELLANT COUNTY 9799038088.013 Appeal 9799038088.013 County Cyle Anderson represented the County and stated that the subject property,known as Carolina Square is a mixed-use development with retail apartments, a performing arts theatre and a parking deck. The subject contains three buildings with 52,591 combined square feet gross building area of retail space valued at $6,537,800. The appellant suggests that the retail portion of this development and the impacts of COVID- 19 on the retail portion were their main concern with this appeal. The appellant provided a list of the tenants who have either left,were not paying rents, or were paying discounted rents. The appellant also provided income and expense information that suggests, in their opinion, a lower valuation of$5,390,000 for the retail portion of the development and an overall valuation of the property of$95,600,000 although no other information was provided as support for their overall opinion of value. Mr.Anderson stated that upon review of this property by CCA, CCA determined that the indicated value of the retail portion of the subject property by the sales comparison approach is$6,047,965 and the indicated value by the income approach is $5,932,877. The indication of value from the sales comparison approach was weighted 40%and the indication of value from the income approach was weighted 60%for a reconciled valuation of$5,978,912 for the retail portion of the development. Mr.Anderson stated that as the retail space was the only portion of the assessment being challenged by the appellant, Orange County recommends adding 10% economic depreciation to the three retail buildings located in the subject development. The application of this depreciation would reduce the value of the retail space to $5,862,800 and the overall assessed value of the property to $105,544,900. The Board reviewed all documents and information provided by the appellant and the County. After deliberation and review,Mr. Beattie made a motion to accept County's revised valuation of$105,544,900 for the property. Mr. Meyers seconded the motion and the motion carried. Yes: 3 Noes: 0 AKS REAL ESTATE HOLDINGS LLC PIN 9787143928 Larry Burks elected not to appear before the Board on behalf of AKS Real Estate Holdings LLC to appeal the valuation of the property located at 3819 S. Columbia Street, Chapel Hill. The current assessed value of the property is $2,258,000. A list of evidence follows: DocuSign Envelope ID:639C5139-26DA-4AC3-8274-8C6D5BE5A52A APPELLANT COUNTY 9787143928 Appeal 9787143928 County Roger Gunn represented the County and stated that the subject property is an 8,081 square foot office building and the appellant is appealing the valuation on the basis that the appropriate income and expense indicators would suggest a lower valuation of$1,601,162 for this property. Mr. Gunn stated that upon review of this property by CCA, CCA determined that the indicated value from the sales comparison approach was weighted 50%and the indicated value from the income approach was also weighted 50%for a reconciled value of$1,763,900 for the property. As a result of this review, Orange County recommends applying an E22 economic market adjustment to the property for a revised valuation of$1,761,400 for the property.Mr. Gunn stated that the County's recommendation was communicated to the appellant in which the appellant agreed with the proposed reassessment. The Board reviewed all documents and information provided by the appellant and the County. After deliberation and review,Mr. Beattie made a motion to accept the County's revised value of$1,761,400 for the property. Ms. Levine seconded the motion and the motion carried. Yes: 3 Noes: 0 NP LODEN 505 FRANKLIN LLC PIN 9788150842 Reed Hollander elected not to appear before the Board on behalf of NP Loden 505 Franklin LLC and requested that the submitted documentation serve as the appeal. The appellant is appealing the value of the property located at 505 W. Franklin Street, Chapel Hill. The current assessed value of the property is $7,310,800. A list of evidence follows: APPELLANT COUNTY 9788150842 Appeal 9788150842 County Roger Gunn represented the County and stated the subject property is a 22,151 square foot office and warehouse building. The appellant is appealing the valuation on the basis that the recent appraisal and purchase price of the subject suggest a lower valuation of$4,100,000 for this property. Mr. Gunn stated that upon review of this property by CCA, CCA determined that the indicated values communicated in the client's appraisal report were accurate as of January 1,2021. The indicated value from the sales comparison approach was $4,400,000 and the indicated value from the income approach was $4,105,000. CCA recommended adjusting the value to $4,105,000,which coincides with the June 15, 2021 sales price fort this subject property. As a result of this review, Orange County recommends applying an E44 economic market adjustment to the property for a revised valuation of$4,094,000. DocuSign Envelope ID:639C5139-26DA-4AC3-8274-8C6D5BE5A52A The Board reviewed all documents and information provided by the appellant and the County. After deliberation and review,Mr. Beattie made a motion to accept the County's revised valuation of $4,094,000 for the property. Mr. Meyers seconded the motion and the motion carried. Yes: 3 Noes: 0 Mr. Beattie made a motion to recess the meeting until 4:30 PM. Mr. Beattie called the meeting back to order at 4:30 PM. ASRANI PIN 9798654944 Sanjay Asrani appeared before the Board to appeal the valuation of the property located at 329 Circle Park Place, Chapel Hill. The current assessed value of the property is$1,140,500. A list of evidence follows: APPELLANT COUNTY 9798654944 Appeal 9798654944 County The appellant is requesting that the Board lower the valuation citing the fact that the townhouse was bought three years ago for$895,000 and the prior sales of the subject property involved internal arrangements with the same family members and do not reflect the current market value for the property. The appellant stated that the subject property is one of the larger townhomes on the circle and seems hard to sell due to the size and because the population to which the sale is usually targeted is retired people. The appellant stated that no renovations have occurred for the subject property since construction in contrast to other properties surrounding subject property. The appellant's opinion of value for the subject value is $1,040,000. Cyle Anderson represented the County and stated the appellant provided an appraisal with the informal appeal with an effective valuation date of May 14, 2020 and an opinion value of$975,000 for the property. After reviewing the property and the appraisal, Orange County recommends removing a screen porch from the sketch and changing the basement from 75%finished and 25%unfinished to 50%finished and 50%unfinished. Comparable properties that have sold in the subject's neighborhood were also reviewed and an equity analysis was also performed. These properties were all"fan lots"like the subject property. After reviewing both the comparable sales and performing the equity analysis,no further changes are recommended. The County recommends a revised valuation of$1,107,000 for the subject property. The Board reviewed all documents and information provided by the appellant and the County. After deliberation and review,Mr. Beattie made a motion to accept the County's revised valuation of $1,107,000 for the property. Ms. Levine seconded the motion and the motion carried. Yes: 3 Noes: 0 DocuSign Envelope ID:639C5139-26DA-4AC3-8274-8C6D5BE5A52A Mr. Phillips recommended all Board members participate in a Department of Revenue training for county Boards of Equalization and Review. Having heard all of the appeals scheduled on this date ,Mr. Beattie made a motion to adjourn this Board at 4:48 PM. The motion was seconded by Mr. Meyers and the meeting was adjourned. E ed by: btAffic. E Hunter Beattie, Chair 4/12/2022 /DocuSigned by: Vrinlli Flores,Recording Secretary 4/13/2022