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HomeMy WebLinkAboutM081808• ok EQU�� r William S. Marlow Richard A. Broders Dave Garing William S. Marlow MINUTES August 18, 2008 1820 Jefferson Street P.O. Box 1220 Port Townsend, WA 98368 Richard A. Broders Dave Garing Chairman Vice - Chairman Member Chairman William S. Marlow called the meeting to order at 9:00 a.m. in the presence of Vice - Chairman Richard A. Broders and Member Dave Garing. APPROVAL OF MINUTES Vice - Chairman Broders moved to approve the minutes of July 15, 2008 as presented. Member Gating seconded the motion which carried by a unanimous vote. ASSESSMENT CORRECTIONS /PETITION WITHDRAWALS Vice - Chairman Broders moved to accept the following assessment corrections and petition withdrawals. Member Garing seconded the motion which carried by a unanimous vote. APPELLANT APPEAL NO. David Tonkin & Karen Samuelson BOE 08 -05 -R Sanda & Brian Everette BOE 08 -06 -R Nathan & Diane Thomton BOE 08 -11 -R Melvin & Vicki Caskey BOE 08 -22 -R Matt Kithcart & Alesha Robbins BOE 08 -26 -R Donald Dahms & Lam Ray BOE 08 -27 -R Karen L. Best BOE 08 -29 -R ASSESSOR'S UPDATE LAUT004 McColl 962 114 501 821 182 012 981 002 211 998 700 058 901 221 003 990 603 165 995 500 013 Assessor Jack Westerman III stated that the current Board, as well as past Boards, have done a great job in making the appeal process easy and comfortable for property owners. The job of the Assessor's staff is to provide the Board with as much information as possible to make the correct decision. It may mean Phone (360)385 -9100 Fax (360)385 -9382 jeffbocc( co.jefferson.wa.us Board of Equalization Minutes - August 18, 2008 Page: 2 overruling the Assessor and reducing the assessed value. He does not expect his staff to be correct every time. In general, his staff does a good job and usually they are conservative in their appraisals. It's not about winning for them. It's about making sure property is valued correctly. Typically, Real Estate increases at a higher rate than inflation which makes it a good investment. From early 2001 through August 2006 there was the largest and longest spike in the Real Estate market that Mr. Westerman has seen during his 33 years working in the Assessor's office. Since, August 2006 the number of transactions have declined, however, they have not seen the market value of property decrease except in the North Bay area of Port Ludlow which was revalued as of January 1, 2007. The decline in the market is evidenced by sales of only residential properties in the North Bay area. Sales of bare land, townhouse condominiums, the Admiralty condominiums, properties located on the point and commercial properties do not reflect a decrease in their market value. As of January 1, 2008 our local Real Estate market began to experience a drop in the market similar to what has occurred nationally. Property in the revaluation area this year was assessed as of January 1, 2008 using sales data from the last four years (between 2004 and 2008). While property values have already declined nationally in other areas of the country, it is noted that the Northwest has been identified as being less affected or slower to see decreases in property values. The change of value notices being mailed to property owners will reflect the increase in value over the last four years. Mr. Westerman feels the Board can expect a large number of property owners to appeal their valuations. Some of the appeals will be from individuals who own residential property in the North Bay area of Port Ludlow. If the Board should decide to lower any of those assessed values than Mr. Westerman recommends that the Board equalize all the other properties located within the North Bay area only. The Assessor's office would provide information to the Board identifying all the North Bay parcels and valuations. These parcels were valued as of January 1, 2007. However, in looking at sales data in the North Bay area between October 2007 and March 2008, maybe what we should be doing is considering a reduction to the improvement values by 15 %. Sales indicate land values have not decreased, so they would remain unchanged. Vice - Chairman Broders stated that the market trend may be declining in the North Bay area of Port Ludlow, but, for the purpose of equity, the Board is required to look at the market values of those properties as of the revaluation date of January 1, 2007. Mr. Westerman agreed and stated that is the challenge for the Board in making their decision on the properties from that area that are under appeal this year. He wants the Board to know that should it decide to equalize the North Bay area, his office will not appeal those decisions to the State Board of Tax Appeals on the basis of the assessment date. The reason they will not appeal is because the Assessor's office is discomforted by the idea of any of the areas knowingly being over - assessed. Chairman Marlow stated that the Board will first need to hear and decide the cases. Discussion ensued regarding the Senior Citizen and Disabled Person Exemption program and changes to the Deferral program. Board of Equalization Minutes - August 18, 2008 Page: 3 HEARINGS Richard & Ruth Ann Merritt BOE: 08 -09 -R PN: 961 601 002 2314 Quail Point Circle Medford, OR 97504 Mr. and Mrs. Merritt were not present. Senior Appraiser Bob Shold represented the Assessor's office and was sworn in by Chairman Marlow. Under appeal is a condominium unit located in the Inner Harbor Village Condominiums at 50 -B South Chandler Court, Port Ludlow. The appellants' reason for appealing the assessed value is written on their petition form as follows: "Market is dropping - last unit sold was $275,900 with water view. Not the time to raise taxes - been on market 16 months." Currently, the property is assessed at $316,300 ($55,000 for the land and $261,300 for the improvements). The appellants estimate the value is $259,000 ($45,036 for the land and $213,964 for the improvements). Bob Shold stated that this property was revalued as of January 1, 2007. He presented sales information and explained that the property which sold for $275,900 is only assessed at $254,000. No sales of property have taken place that are less than the assessed values. There are only three or four units in the complex which are currently listed for sale. There is no evidence that values have declined below the assessed value. Vice - Chairman Broders asked about the different values among the units? Mr. Shold explained that the units vary in size and location. Some units are larger and have better views than others. Each unit in the complex is valued using the same base rate and then adjustments are made to each unit for size and location. Hearing no further testimony, Chairman Marlow closed the hearing. The Board will make a determination at a later date. Daniel & Betty Quail BOE: 08 -13 -R PN: 961601501 41 B South Keel Way Port Ludlow, WA 98365 Daniel Quail was present. Senior Appraiser Bob Shold represented the Assessor's office. After explaining the hearing process Chairman Marlow swore in both parties. Under appeal is a condominium unit located in the Inner Harbor Village Condominiums at 41 -B South Keel Way, Port Ludlow. Currently, the property is assessed at $304,550 ($55,000 for the land and $249,550 for the improvements). Mr. Quail estimates the value is $276,000 (a breakdown between land and improvements was not provided). Board of Equalization Minutes - August 18, 2008 Page: 4 Mr. Quail stated that his property was assessed close to the peak of the market. Since the time of the assessment, property values have considerably declined. Value has to be established by the sale of property. Many properties in the Inner Harbor Village have been listed for sale, but, there have been no sales. As a result of no activity, many owners have taken their property off the market. He noted that there was one property which sold in the last year for $275,900. His property was assessed in 2007 for $304,550. While that was probably a realistic value at that time, it is not now reflective of its current market value. The property which sold for $275,900 is in close proximity to their property. He believes this comparable sale establishes the fair market value. The Inner Harbor Village consists of 46 condominium units in 16 buildings (duplexes and fourplexes). Both his property and the comparable sale are a fourplex. The comparable property is slightly smaller in size than their property, but, that is offset by the fact that it has a better view. The information presented by the Assessor's office in support of their assessment includes sales information and property listings which are not relevant in determining the value. The basis of their appeal is the most recent comparable sale which is also shown as the Assessor's exhibit #3. Mr. Shold agrees with the appellant's testimony. This property was assessed as of January 1, 2007. The sales information he provided is what was available to him at the time of the assessment. He also included listings of properties currently for sale on the open market. He acknowledged that views are subjective and explained that the difference among the values is due to the size of the units. Chairman Marlow closed the hearing. The Board will make a determination at a later date. Edwin & Dixie Kraght BOE: 08 -25 -R PN: 961 601301 41 B South Keel Way Port Ludlow, WA 98365 Dixie Kraght was present. Senior Appraiser Bob Shold represented the Assessor's office. Chairman Marlow explained the hearing process and swore in both parties. Under appeal is a condominium unit located in the Inner Harbor Village Condominiums at 71 -A North Chandler Court, Port Ludlow. Currently, the property is assessed at $293,550 ($105,000 for the land and $188,550 for the improvements). Ms. Kraght estimates the value is $268,000 (a breakdown between land and improvements was not provided). Ms. Kraght stated that when she received her change of value notice last year she observed that the property value was assessed higher than the listing prices of other properties in the complex that were for sale. She paid $268,000 for her property three years ago. Looking back at the Assessor's records it showed her property had already been increased in value by 30 %, so she feels she paid over market value for the property at that time. She presented sales of comparable units that all have the same floor plan. They include her 2005 purchase, another 2005 sale for $245,000 and a 2008 sale for $275,900. Her assessment is $293,550 and does not reflect the market value based on these sales. She noted that her view is blocked by tree growth and is not comparable to the better views of some of the other units. Board of Equalization Minutes - August 18, 2008 Page: 5 Mr. Shold presented information he used to value the property including sales data that was available at the time of the assessment. He also presented listings of properties currently for sale on the open market. The appellant's view may very well be obstructed. At the time of the assessment he did not make any change to view factor. Discussion ensued regarding the view. Chairman Marlow closed the hearing. The Board will conduct a physical inspection of this property and make a determination at a later date. Safeway Store #538 BOE: 08 -21 -C PN: 948 303 106 1980 - 112" Avenue NE, Suite 100 Bellevue, WA 98004 Randall C. Scott of NW Property Tax Consultants was present on behalf of Safeway Store 4538. Senior Appraiser Bob Shold represented the Assessor's office. Chairman Marlow explained the hearing process and swore in both parties. Under appeal is commercial property known as the Safeway Store located at 442 W. Sims Way, Port Townsend. Currently, the property is assessed at $4,715,250 ($1,379,500 for the land and $3,335,750 for the improvements). The appellant estimates the value is $3,608,600 ($1,379,500 for the land and $2,229,100 for the improvements). As a requirement of the Uniform Standard of Professional Appraisal Practices (USPAP) Mr. Scott stated that he is a licensed appraiser, however, he is not here today as an appraiser, but rather as an advocate of his client's (Safeway) interest. He noted that they are only disputing the value of the improvements and not the value of the land. Mr. Scott continued by stating that generally they rely on "Marshall Swift Cost Estimator" which is a device that is widely utilized to compute the value of property. In this process they used the chronological age of the building as the effective age for estimating depreciation. This appears to be the substantive difference in opinion from the Assessor's representative who is using a lower effective age. According to their records the building was constructed in 1981 and most of the alterations since that time have been made only to the fixtures which, for valuation purposes, are considered personal property and not actual improvements to the building. Using the cost approach they computed a total value of $3.6 million as of January 1, 2008. After reading the information from the Assessor's office with respect to Jefferson County being on a four -year revaluation cycle, he computed the cost a second time as of January 1, 2005 and arrived at a value of $3.9 million. So, even when adjusted to the appropriate revaluation time, there is still a difference of several hundred thousand dollars between their estimate of value and the Assessors assessed value. Mr. Shold stated that he is in agreement with the appellant on everything except for the application of the depreciation factor. This property was revalued as of January 1, 2005. The constant remodeling of the Board of Equalization Minutes - August 18, 2008 Page: 6 building and facade being worked on a number of times was taken into account when determining the depreciation factor. The only issue here is the difference in opinions with regard to the depreciation rate that should be used in valuing the property. Mr. Scott stated that effective age is an appraisal judgement. The food marketing business is very fragile for traditional grocery stores primarily because of the massive competition from Costco, Walmart, etc. As a result, Safeway is remodeling all of their stores into what is called a "lifestyle format ". This means there is a greater abundance of prepared foods available, and it simply looks a lot better than it did prior to the remodel. In terms of valuation, they feel that most of the remodeling only affected the interior and did not change the building. It is similar to changing the interior of a hotel in that one day purple is the "in" color and the next day it's gold or green. The point is, that once a building is constructed, it begins to depreciate and at a certain point it will need to be replaced. All the paint and floor coverings changed throughout the years will not change that fact. Mr. Scott used a depreciation factor of 49% for determining his estimate of value, although, the percentage would be lower using the revaluation date of January 1, 2005. The Assessor's office used a depreciation factor of 10% in setting the value. Chairman Marlow closed the hearing. The Board will make a determination at a later date. Vice - Chairman Broders moved to adjourn the meeting until 9:30 a.m. Tuesday, August 19, 2008. Member Gating seconded the motion which carried by a unanimous vote. Meeting adjourned JEFFERSON COUNTY Attest: BOARD OF EQUALIZATION Erin Lundgren, Clerk of th6toard �W2illiamS-. Marlow, C airman L Z,4 chard A. Broders� Vice - Chairman Dave Garing, M�ember