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HomeMy WebLinkAboutM111907 1820 Jefferson Street P.O. Box 1220 Port Townsend, WA 98368 James A. DeLeo William S. Marlow Richard A. Broders MINUTES November 19, 2007 William S. Marlow Richard A. Broders James A. DeLeo Chairman Vice-Chairman Member Chairman William S. Marlow called the meeting to order at 10:00 a.m. in the presence of Vice-Chairman Richard A. Broders and Member James A. DeLeo. PETITION WITHDRAWALS AND ASSESSMENT CORRECTIONS Vice-Chairman Broders moved to accept the following petition withdrawals and assessment corrections. Member DeLeo seconded the motion which carried by a unanimous vote. " " APPEAL NO. BOE 07-95-LO BOE 07-194-R BOE 07-202-LO BOE 07-203-LO PARCEL NO. 942 600 606 990 600 303 990 400 106 990 700 077 APPELLANT David & Pamela Clevenger Ivo Gregov Richard & Madge Duce HEARINGS Henry & Margaret Nelson Nelson Living Trust 1228 E. Ludlow Ridge Road Port Ludlow, W A 98365 BOE: 07-115-R PN: 821104009 Henry Nelson was present. Appraiser Maryn Gossell represented the Assessor's office. After explaining the hearing process, Chairman Marlow swore in both parties. Under appeal is a residence situated on a waterfront lot located at 1228 E. Ludlow Ridge Road, Port Ludlow. Mr. Nelson stated that he is mostly concerned with the land value, but clarified that the Assessor's records incorrectly show the number of bathrooms in his home. He doesn't know if that makes any difference with respect to the valuation, but he wanted to point it out. His property is high-bank waterfront which he Phone (360)385-9100 Fax (360)385-9382 jeflbocC@Co.jefferson.wa.u8 Board of Equalization Minutes - November 19, 2007 Paj(e: 2 considers "water view" property as there is no access to the beach. There are no properties comparable to his property. He has looked at the documents and the comparable property sales relied upon by the appraiser. There are no comparable properties in the Tala Point area. Some of the comparable properties she used are located in other areas of the County with a significant difference in elevation compared to property located at Tala Point. She has also presented listing prices (Assessor's exhibits 1 & 2) for properties located at Tala Point that have been on the market for years. He assumes the appraiser relied upon these listings to some extent in determining the valuation. No properties in the area have sold for the listing prices. Valuations should not be based on "asking" prices and to do so is merely speculation on the part of the Assessor's office. The appellants have an issue with Washington State law which allows the Assessor to assess property at 100% market value. He believes there would be fewer appeals if properties were assessed more conservatively. In reviewing the Assessor's valuation ratio between assessments and sales that have occurred since the rolls have closed he found it alarming that several assessments exceeded the actual sale price ofthe property. That results in overtaxation which violates due process of the fourth amendment. The current assessment of the property is $] ,236,425 ($5] 0,000 for the land and $726,425 for the improvements). The appellant estimates the land value is $1,136,425 ($410,000 for the land and $726,425 for the improvements). Ms. Gossell presented an aerial photograph ofthe area as well as a map outlining the appellant's property; the comparable properties presented by both parties; and two properties currently on the market (one is a bare land parcel listed at $570,000 and the other is an improved parcel listed at $1,750,000 with an independent appraisal completed in December 2005 indicating a value of$I,320,000). Tala Point is a private gated community located off of Paradise Bay Road. All the parcels in this area are high-bank waterfront, so these properties are being valued per site rather than per front foot. The base land value is $500,000 per site. Because the property and houses in this area are unique, she had to look at other comparable properties outside of Tala Point to arrive at a value. She noted that the assessed value is below the four indicators of value that were considered in the assessment process. The market listings that were presented as exhibits 1 and 2 are not considered comparable and were provided for informational purposes only. Comparable property #1 sold in November 2005 for $],225,000. There were 13 more months of market growth before the appraisal date of January 1,2007. Based on sales, the market did not decline during that period, but rather increased significantly. The appellant's land value has an additional assessment of$IO,OOO for utility connections. She noted that the information they have on the number of bedrooms and bathrooms for houses is obtained from the construction permits. If the owner is home during the assessment inspection the appraisers will try to verifY the information in their records. The number of bedrooms and bathrooms does not affect the value. The information provided on the ratios between assessments and sales was compiled as a "report card". It was done to show whether or not the values determined by the Assessor's staff were close to market value. The sales that occurred after the rolls were closed show that the assessments are between 83% - 88% below market value. Board of Equalization Minutes - November 19, 2007 Paj(e: 3 All but one of the comparable property sales presented by the appellant occurred in 2003. While they did occur within the four year revaluation period, they occurred very early in that period and prior to the market increase which occurred in 2005 and 2006. The value of the property was based on 7 comparable property sales. She noted that she did not compare this property to property located within the Port Ludlow Master Planned Resort (MPR) because of the difference in amenities. After further discussion Chairman Marlow explained that the Assessor's office is required by state law to assess property at 100% of its fair market value. The Board is obligated to determine if the assessment was correctly valued as of the assessment date of January 1,2007. Hearing no further testimony, Chairman Marlow closed the hearing. A determination will be made at a later date. Nancy O'Neill 71 Olympic Lane Port Ludlow, W A 98365 BOE: 07-220-R PN: 990400431 Nancy O'Neill was present. Appraiser Maryn Gossell represented the Assessor's office. After explaining the hearing process, Chairman Marlow swore in both parties. The property under appeal is a residence situated on a lot located at 71 Olympic Lane, Port Ludlow. Ms. O'Neill stated that she disagrees with the current assessment of her property. She understands that property is assessed based on market value and she concedes that she paid $383,900 for the property. Due to her own lack of due diligence and her haste to get settled in a property she overpaid for the property in Port Ludlow. It is extremely difficult for citizens to understand the assessment process and gain information about how it works. In an attempt to understand the process she spent many hours at the Assessor's office doing research, talking on the phone with the Assessor's staff, and meeting with Realtors and tax activists. From this she learned there are three methods used for appraisal: I) market comparison; 2) cost approach; and 3) income approach. The market comparison is used primarily for residential appraisals. While this is good information, it does not begin to give citizens an understanding of the assessment process itself. She doesn't understand the formula used to value property. Significant factors contributing to the value include square footage, views, and the age ofthe home. Also considered is the type of construction, plumbing, garages, carports, etc., but it is not known how these are put into a formula. So for her and other citizens to understand the assessment process, it has to be understood how these pieces fit together. The home was built in 1976 and remodeled in 2005. She noted that the square footage of her house shown as 2,200 in the Assessor's records is incorrect. It shows 1,528 sq. ft. for the first floor and 672 sq. ft. for the second floor. Ms. O'Neill stated that there is no second floor in the house. There is only a loft that is 399 sq. ft. in size. Additionally, there is an error in the number of bathrooms reflected in the Assessor's records. There are not two full bathrooms, but rather I 3/4 bathrooms in the home. She also questioned the inequities among various basement valuations? Board of Equalization Minutes - November 19, 2007 Page; 4 The comparable property sales used in the assessment process by the Assessor are properties with new houses that are completely different in size. One comparable property that was used sold for $550,000. She questioned how the sale of that property could possibly be comparable to her property? She is also unclear about the relevance of the Assessor's exhibit #1 which is a 3,000 square foot home under construction. Even though her home was remodeled in 2005, it is still a 1976 home. The foundation, downstairs bathroom, and loft with deck were not part of the remodel and are still original. The property is currently assessed at $380,645 ($65,000 for the land and $315,645 for the improvements). The appellant estimates the value is $335,000 ($70,000 for the land and $265,000 for the improvements). Ms. Gossell commended Ms. O'Neill for all the time and effort she put into preparing for her appeal. It is by far the most information she has received from anyone. She noted that information on the appeal form shows there was a bank appraisal done on the property, but, there are question marks in the spaces where it asks the date and amount of the appraisal. She asked Ms. O'Neill if she had a copy of the appraisal? Ms. O'Neill replied that her son-in-law purchased the property for her to live there and she never saw the appraisal. In reviewing the documentation presented by Ms. O'Neill, it states that they paid in excess of market value for the property. This property has sold twice since the last revaluation cycle four years ago. It sold in April 2004, prior to being remodeled, for $115,000. Then sold to the appellant in August 2006 for $384,900. The sales listing flyer is included with the information presented that has photographs showing the appeal of the home and the finish work that was done and the materials that were used in the remodel. There is also a photograph of a hot tub and deck which is not in the Assessor's records and not currently being valued. She presented a sales chart that shows significant market growth in the North Bay area of Port Ludlow. In North Bay and South Bay combined there were a total of332 property sales that occurred since the last revaluation period four years ago. Of those sales, 105 were "double sales", which means they sold twice within the four year revaluation period. Four comparable property sales were provided, but, there were many more that occurred. There is so much evidence that supports the current assessed value. The number of bedrooms and bathrooms does not affect value, but, the appraisers do make an attempt to verifY with property owners that the information in the Assessor's records is correct. In order to address the issues with the loft, Ms. Gossell suggested the Board conduct a physical inspection of the property to determine whether it is indeed a loft or a second story. The previous owners said it was a two-story home and that is also what is reflected on the building permit. Other than that, the valuation is accurate and equitable. The fact that Ms. O'Neill and her family feel they paid too much for the property and did not research properties prior to making their purchase, is out of Ms. GosseIl's control. Ms. O'Neill stated that banks don't do fuIl appraisals so she doesn't feel it would have much weight on the value. The hot tub was manufactured in 1992 and is not new. She has photographs that clearly show the upper level is a loft. The Board is welcome to come and look at the home. Vice-Chairman Broders asked what the difference in value would be if the upper level is confirmed to have less square footage than indicated in the Assessor's records? Ms. O'Neill stated she doesn't know. Board of Equalization Minutes - November 19, 2007 Paj(e: 5 Ms. Gossell replied the difference would be between $10,000 and $12,000. With the concurrence from the Assessor's office, photographs of the loft were presented to the Board as additional evidence in support of the appellant's appeal. They will be relied upon in lieu of conducting a physical inspection of the property. Hearing no further testimony, Chairman Marlow closed the hearing. The Board will make a determination at a later date. John & Lori Carthum, Trust 694 Bywater Way Port Luldow, WA98365 BOE: 07-209-R PN: 821355030 John and Lori Carthum were present. Appraiser Charley Hough represented the Assessor's office. After explaining the hearing process, Chairman Marlow swore in both parties. The property under appeal is a residence situated on approximately 5 acres located at 694 Bywater Way, Port Ludlow. Mrs. Carthum stated that they are here to appeal their property revaluation. As stated on their petition form they have no dispute with the improvement value, and are only contesting the fair market value of the land which has increased 73%. They understand that one ofthe tools the Assessor's office uses to value property is sales of comparable property in the same area or neighborhood. They were pleased to see that comparable property #1 is the lot next door to them which sold in June 2002 for $86,000 after being on the market for quite some time. The increase in the value of that property was also 73%. Their lot and other lots which border their lot have a negative feature which is a large slope that makes 30% of the properties unusable. They have lived in their home since 2000 and can say that properties in the area do not sell quickly. The reason for this could be that they are located on a private road and are not considered part of the Port Ludlow development. It could also be due to the lack of proximity to the schools, hospitals and stores. They had the opportunity to purchase the lot next door to them and chose not to because they felt the risk outweighed the potential in terms of how long it takes property in the area to sell. With the downturn in the economy home sales are very soft right now and do not justifY a 73% increase in their land value. The National Association of Realtors has said that home prices fell 8% in September which is the largest decline since 1999. Home prices are still falling. They're down 4.2% from one year ago. The demand is weak and inventories are high. They don't see how the increase in their land value is warranted. They would not be able to sell their property today for the current assessed value. Of course they expect some increase in value, but, not 73%. The property is currently assessed at $507,550 ($159,300 for the land and $348,250 for the improvements). The appellants estimate the value is $440,550 ($92,300 for the land and $348,250 for the improvements). Mr. Hough presented a map outlining the appellant's property and the comparable property sales he used in the assessment process. The assessment date is January I, 2007 and based on market sales at that time the value is fair and equitable. He reviewed the comparable property sales. He valued all the lots in the Board of Equalization Minutes - November 19, 2007 Paj(e: 6 area using a base rate of$125,000 per site and a rate of $6,000 per acre for residual land. Plus an additional $10,000 is added to the land value for utility connections. Discussion ensued regarding the methodology used to determine the land value. Chairman Marlow asked about the appellants' contention that 30% of the property is unusable due the slope of the property and whether that was considered during the assessment process? Mr. Hough replied that the impact the slope has on the value is reflected in the $6,000 per acre rate for residual property. Mrs. Carthum explained their personal hardship which makes this increase in value even more burdensome. Chairman Marlow explained that while the Board sympathizes with the appellants' situation, the Board is unable to consider personal hardship in making its determination. Hearing no further testimony, Chairman Marlow closed the hearing. The Board will make a determination at a later date. Barbara J. Globus 110 West Ludlow Point Road Port Ludlow, WA 98365 BOE: 07-99-R PN: 969400021 Barbara Globus was present. Appraiser Maryn Gossell represented the Assessor's office. After explaining the hearing process, Chairman Marlow swore in both parties. The property under appeal is a residence situated on a waterfront lot located at 110 West Ludlow Point Road, Port Ludlow. Ms. Globus noted a correction in the documents she submitted. She realizes property values are determined by comparable property sales, but, her house is not comparable to the comparable properties used by the appraiser. Her house is ] 7 years old and has not been upgraded. It does not have the quality materials and state of the art appliances that are present in the other houses. There is also no unattached guest quarters. The view from her property is also significantly different from the view of the properties considered comparable by the appraiser. She has a view of the dingy and aging Port Ludlow condominiums, while the view from the appraiser's comparable properties have a view of Puget Sound and Hood Canal with more attractive beaches. While views are subjective, they do affect market value. She doesn't understand why the appraiser's comparable property #3 was discounted 50% when that lot has the same view quality as the appraiser's comparable property #1. It is known that the Real Estate market has declined nationally. Home prices have dropped, so why have property values almost doubled in this depressed climate? She presented an appraisal done in October 2006 which indicated a value of $873,0 II. A letter from a Realtor was also submitted stating that the market began to decline in 2006 and flattened in 2007. The Realtor estimates the property value is $885,000. Board of Equalization Minutes - November 19, 2007 Paj(e: 7 In closing Ms. Globus stated that her tax increase is 8x higher than any previous increase since 1998 and yet, market values have not even doubled. The property is currently assessed at $994,450 ($612,060 for the land and $382,390 for the improvements). The appellant estimates the value is $873,011 ($375,000 for the land and $498,011 for the improvements). Ms. Gossell presented a map outlining the appellant's property and comparable properties which have sold in the area. She explained that the parcels, including the appellant's parcel, located on the point, are all assessed using a base land value of $600,000 per site. The parcels on either side of the point do not have the same views and are assessed using a base land value of $450,000 per site. The Assessor's staff can value waterfront property on a per site basis or by the front foot. The low bank waterfront parcels to the south ofthe point located along Ludlow Bay Road are valued by the front foot. The parcels are generally 100 feet wide and are valued at $6,500 per front foot which equates to $650,000 per site. She noted on the large map where the parcels are divided by the Port Ludlow Master Planned Resort (MPR). All the parcels located within the MPR have water and sewer utilities. The owners of the parcels located outside the MPR boundary are responsible for their own wells and septic systems. The parcels located outside the MPR boundary are generally 100 feet wide and are valued at $5,000 per front foot equating to $500,000 per site. In October 2007 there were two sales (lot 7 & lot 8) that occurred in the area south of the point located off of Ludlow Bay Road. Lot 7 and 8 each have two very old outdated structures on them with a low improvement value. However, each lot sold for $925,000. They are currently assessed at $849,000 and $730,000 respectively, using a value of$6,500 per front foot. This shows the assessed value ofthese parcels is below the market value and verifies that the assessments are correct. The appraisal submitted by Ms. Globus is dated July 28, 2006. There were six more months of market growth after the appraisal was completed. She reviewed some favorable comments highlighting the attributes of the property that were written on the appraisal report. The report also states that no comparable sales could be found in the last twelve months that included a dock. She noted that her comparable property # I has a dock with 86 feet of waterfront and sold for $1,150,000 on July 3, 2006. Since the effective date of the personal appraisal was July 28, 2006, why was this sale not found and jncluded in the appraisal? The property is an excellent comparable that is located just down the street from the appellant's property which consists of 103 feet of waterfront. The personal appraisals lists a value for the dock at $75,000. The Assessor's office is currently valuing it at $40,000. Based on the description ofthe dock in the appraisal she feels she has it undervalued. While she can't make any changes to the valuation between revaluation periods, she will look at it again in four years. She noted that the personal appraisal lists comparable properties that are located outside ofthe Port Ludlow Master Planned Resort (MPR). All her comparable properties were within the MPR and have similar utilities. Based on sales she feels the valuations are correct and definitely not overvalued. Board of Equalization Minutes - November 19,2007 Paj(e: 8 Ms. Globus stated that the personal appraisal was not finalized until October 2006 and she believes the Assessor's comparable property #1 sold in December 2006 which would explain why he did not use the sale in his assessment. She noted that she can only use one side of her dock because there is a large rock preventing the mooring of a boat. Ms. Gossell stated that page 2 of the appraisal report shows the effective date of the appraisal is July 28, 2006. In addition, the Excise Tax Affidavit for the sale of comparable property #1 shows the sale closed on July 3, 2006. She noted that the house is being valued using an effective age factor of9 years which takes into account the appellant's concerns about age and quality. Hearing no further testimony, Chairman Marlow closed the hearing. The Board will make a determination at a later date. John & Susan E. Chamberlain 160 - 24'h Avenue San Francisco, CA 94121 BOE: 07-188-R PN: 990300129 John and Susan Chamberlain were not present. Senior Appraiser Robert Shold represented the Assessor's office and was sworn in by Chairman Marlow. The property under appeal is a condominium unit located in the Port Ludlow Admiralty 1 condominiums in Port Ludlow. On the petition form the appellants wrote the following reason for appealing their property value: "Substantial decrease in value of Port Ludlow Condos since fall 2006. Middle condo unit with view blocked to both sides (see photo). No construction in unit - 1970 original. Both 'end' units extensively upgraded. Condos in Admiralty I (38 yrs. old) are not selling. Fair market value has dropped substantially. Units on each side of mine have views on 2 sides. My view is one side. Both their units have been extensively remodeled. Their assessed market value is similar to mine." The property is currently assessed at $255,000 ($130,000 for the land and $125,000 for the improvements). The appellants estimate the value is $200,000 ($100,000 for the land and $100,000 for the improvements). Mr. Shold presented eleven sales of comparable properties that include condominium units with varying water views. Some units have been upgraded and some have not. The appellant contends that condo units are not selling. However, there were eight sales prior to the assessment date of January I, 2007 and five sales that occurred after the assessment date. This indicates that there is a market for the condos. Vice-Chairman Broders asked about the appellant's concern that his middle unit has a more restricted view than the ends units on either side of his condo, and why the appellant's property value reflects a 30% increase for view/location? Mr. Shold answered that while the appellant's property may not have as good a view as the end units in his condo, he does have a superior water view in comparison to some ofthe other condo units in the Port Ludlow Admiralty I complex. Hearing no further testimony, Chairman Marlow closed the hearing. The Board will make a determination at a later date. Board of Equalization Minutes - November 19, 2007 Paj(e:9 Vice-Chairman Broders moved to adjourn the meeting until 9:30 a.m. Monday, November 26,2007. Member DeLeo seconded the motion which carried by a unanimous vote. ATTEST: ~.c ~J Lu .. (LA . <-(AC- fin Lun~re, ler Oft~Board JEFFERSON COUNTY BOARD OF EQUALIZATION ;to William S. MarlOW'fbha' an .... /le, A i / ~ A. BV!/; ,ce-~air~ . (Dee e 'L5ed) James A. DeLeo, Member