Board of Equalization Meeting   7/12/2023

Thank you all.

The background of everybody here is real estate.

So any other questions before we begin?

The materials that I provided a couple of days ago have been circulated and then

We have everything and I imagine all of us have reviewed it before.

There were two different, there was an initial submission and then an additional one that we sent I think yesterday.

Great.

And so the data I've tried to lay out as best I can, and I hope you'll give some thought to that in your assessment.

Any questions from the board at this time?

Do you have any official rights remaining on your time?

Maybe I can legally unwind it.

Thank you.

And finally, I think I have one more point, but it's eluding me now.

Any questions from the board?

Is it applied to the building improvements and the land?

And I don't know if that changed this year.

All three of those apply to the improvements only.

And that's based on it being, I believe, was it a one and a half story?

Or one story, one and a half.

$88 to $108 roughly?

Okay.

So that would have been the initial change we make to the model to get all properties up to close to 100% median ratio.

Okay.

It was 100% last year, it went to 105%.

And the grade factor temps.

Correct, and we've had other neighborhoods that we've talked about where we went from 100% to 120% on the improvement value, I mean the multiplier to capture the value of the improvements.

Any other questions?

I have a question.

Does the county adjust anything for that same six months out of the year?

Did you see that from the house or do you have that?

At that time I couldn't see it from the house because the foliage was on the trees and everything then, so now you can.

Or is that building away from his house?

Yeah, I can tell you that.

that's lit, there's a massive amount of traffic.

We thought conservation easement meant conservation easement, but obviously it does not.

Yeah, Mr. Rodriguez, do you feel like your home is probably great?

If I'm allowed, I just hold because there's not very many pictures in the system.

These are L holes.

Those are all Ls.

We're running obviously over time now, but do you have any other rebuttal you wanted to add?

It needs to be looked at and evaluated properly.

Just one last comment.

So it's not comparable to having great views out of the house.

Important considerations, the question.

So

So the 7,400 square feet is above grade.

I can't dispute what they're doing.

That doesn't sound right to me.

I mean, what they do is they'll take measurements from the outside.

like the basement's under that main section right here.

That's the second floor.

And I think we talked about this three years ago also.

So they've already taken into consideration that microcephaly reduction.

We would have normally called this size house a mansion, which we did originally.

So if you go around the whole perimeter, that's a lot of space.

Okay, any other, anything further?

Nope.

Thank you.

Thank you.

It's McFarland, Stonefield LLC.

And if maybe you want to pull up another chair, it's the side of it.

Thank you.

Good morning.

And I'll share with you that.

The appeal

And therefore, the adjustment should be in an amount close to $3 million of value to get us closer on a per unit or per square foot basis of the other comp properties in Albemarle County.

Any questions from the board?

Do you pay for that parking?

We have some dedicated parking but most of the parking that we have is shared parking with the other uses within Stumpf.

I'll just turn it over to the assessor.

based on results.

And you would have no problem adjusting the assessment to what the average of the comp set is?

But we feel that this is appropriately assessed.

Back to the hearing.

and I think that's a fair basis of appeal and I think, I hope you all would agree that that is sort of, you know, it's an inequitable, you know, allocation of value and then again in this instance.

Any questions at this time?

Mr. Carlin, we thank you for your time and we will confirm, make a decision and send it out within two weeks.

And which one is this?

yeah i do two two one seven so gonna probably undergo sort of the ribbon yellow

I have been here, actually at that time we actually met at the mall.

I also want to make sure that the board got your name.

Awesome, yeah it's very nice to see everybody.

And before we begin, I'm going to swear at the witness.

So that looks like you want to give us...

Oh, that's a good one.

Thank you.

to break down the points on May.

All right, so let's go ahead and do the swearing in of the witnesses.

Jordan, any questions for me again?

I don't think so.

Please proceed.

And then there's also the stuff showing the values from the county on the different parts.

You know, would, would Belk leave if it didn't get a break on its assessment?

That would make some sense to me, but that's not a decision that I've made, so.

Is that a ground lease or is it?

No, no, no.

The whole property is underground.

The inside is a lease lease.

Appreciate it.

They don't know what they're going to do with the rest of them all.

I'm sorry, you said 20 million?

We have the land value plus the cost approach, which in our, for these big boxes, it's the best approach that we can use to come up with an equitable value.

Any questions?

Yeah, so why did you use 20% on the women's side and 30% external on the men's side?

Any other questions?

And it's part of the mall ownership.

Any other questions?

Do you have anything else to add?

and once again, if the land is what it is, we're not debating that, there's a little bit left for the building and that's really what it ought to be, a little bit left for the building.

Any other questions?

I appreciate y'all's time, thank you very much.

We have a 10 minute break.

What do you want to say about that?

I always love one.

Always the first.

What should we start with?

It fronts 29, has that much front on 29, does it make a difference when you guys are devaluing those small properties?

but we do the same thing I believe for all of these properties.

I'm inclined to reduce it as an initial kind of thought on this one just because the structural value seems high.

We need to solve part of that.

So that's about a $1.6 million reduction.

oh okay and so what would be the per square foot of the land i mean of the building improvements then of just the building uh yeah because right now he's got 11 you know he has he's also making an argument that the uh eleven dollars a square foot versus what do you say twenty five dollars so what would that bring your building improvements down to so let me let me find the square footage

$12.58 for building.

So with the building value is 1.57.

I'm sorry.

It's 1,575,500.

Because now there's a lease, right, Almono County lease though?

Looks like there's actually a lot of thousand dollars on the increase.

The shape of it.

Yeah, I mean, she said 7289.

It was 7,289,300.

Do we have a second?

I'll second.

It was 1,570,500 for the approval.

Next one.

Let's do, we'll go in backwards order.

Any discussion there?

So any further comment on this?

Something like that.

So do we have a motion then?

You know, did you ever do an analysis on room rates?

So the closer you are to the urban ring, the higher your rate and the more your occupancy.

So is his rack rate, in fact, higher than these comparables?

I think it was like a bedroom, 116.

Yeah, that's 116.

So yeah, we had no problem with any of those issues.

What did you do with that?

Right, so she called it nominal.

I mean, we're not making an estimate and saying you should be higher because you're closer to town, but we're reflecting exactly what it's getting.

Okay.

Now, Mr. Rodriguez's property, application number 51.

Do you mind pulling this one off?

Oh, it was 14262.

What's 14261 Assess?

Or is that his?

I want to ask on my command.

Is there not a building site at all?

Correct.

It's just this property down here.

I believe he both combined the parcels together and bought this one just so he wouldn't have any neighbors close.

So in that neighborhood, are there any other large lots?

No, in this immediate neighborhood, which only had, and we did separately at one point, only has like 11 parcels, I think.

That might have been a preservation flaw.

Probably a few pieces.

Well, it could have been that one of them was the large preservation, but I don't think so, because then we would actually be treating it as a easement property if it was a preservation.

I bet, but who knows?

That might likely be the case, yes.

I think that proximity to that warehouse is an interesting dilemma.

He does have a, I imagine that property has a view.

Yes, I believe it does have a nice view, a nice view of the open area down to the winery itself, to the vineyard and to the mountains.

But let me go back to that one, see what we have.

And then yes, a 1.5 view for those mountains in the wire.

So what's the breakdown of the valuation on the lot?

of the land, they've got the home site at 356.9 and the remaining land at 993.

We may, maybe we should adjust for that warehouse, but on the residual, that seems fine.

24,746.

I was supposed to, if it's all, if what he's saying is accurate in terms of the trees, like they can't cut down any of the trees.

All the restrictions were in place when he bought it.

But he bought it a lot when he went in to buy the property.

See if there's a.

He had it for sale.

I don't see a parcel next door.

But we're talking about the, he said that this parcel, the main parcel that's 43 acres was actually two parcels that were combined.

that we're going to plant in 2010.

The second lot, I would have to find where that second lot was.

Yeah.

Well, you could have just bought it and made sure no one moved next door.

You have to combine it.

So we would have more value if there, if it was a second

And there's traffic, and the fact that there's probably a lot of, he was

This is not a tasting room.

Is that the second one?

The one that was just built?

OK, there you go.

The traffic is the only thing I question.

It's not awful.

I mean, it's not like an ice work.

The house is definitely angled to look the other way.

I would sell it in the summer when you can't see it.

I feel like unless it really impedes the use of enjoyment in the house it's just very slow to say like you need to evaluate like a 360 degree view out of every house you know but we really don't do that for other properties.

It doesn't apply to the residual or does it?

Yes, and I'll confirm that, but that's what it should do.

I mean, if the argument is the view adjustment is too high, I'm open to that, then I think it's hard to just sort of apply absent an already increased adjustment.

This one's a really tough one in terms of the comparables or any of the other things.

It's a very unique, like- Do you adjust for the warehouse?

So it's like, there isn't you, we're adding 50% for the view, deducting, making that view, it's not as big of a thing because your view has some- I think because it's on the side, I would not quite make a huge adjustment, but maybe

If we say 1.4 versus 1.5.

1.4 or 1.35.

The view is really something you have to see and we should have a picture of it to show you that this is the mountains you see here, this is the... You can only see it on one side of the house, right?

Like it's not like when the trees are there, when the leaves are there, you're on the scene.

I mean, if you go out to the side of the house and get on your tiptoes, you might see a little more of the building.

Anyone else have a thought on?

I mean, is it just a run and shed or is it a... Well, it's open most.

I mean, there is a closed part, but I mean, it's a store.

That's...

They can do certain things, whether it's additional dwellings or additional accessory building.

if we change it to what number do you want?

Let's say 1.4 instead of 1.5.

That would adjust the home site to 333.100 from, and now I can't remember what it went, but the total land to 1,326,000

It's not huge, but it's also, there should be some reflected.

Even though the neighborhood adjustment's 5%, that's really for those small, because I think the concept where that 5% is coming from, you didn't have anything to, the neighborhood sales in the market area are all under a million dollars.

So that's my, my potential suggestion there would be to remove that 5%.

Then I would agree with you that perhaps this is a conflated value that has been exaggerated by the fact that he's actually in over agreement.

It is, but this year it sounds like the L plus ones went up a bigger factor based on sales.

Based on L plus one sales.

How will we do that with the neighborhood?

We just reduced the five percent.

The total increase in value to comparison to his 19%, the 14 and the 17, the 17, if you see that page, I'm going to tell you if they're in the adjustments, comments, other files.

They all changed about the same amount.

Also, it changed 17%, has changed 19%.

That was March of 2005.

Now we don't always have the full range of sales grades in a market area, but in his, obviously we don't have any of the larger, the L pluses, but we do in other market areas in which we made both of those adjustments.

and that one does not.

And if we reduce that improvement 5% to take that out, what would be the revised number?

It's great.

And the value is now total $4,072,300, which is just under $200,000 reduction from where it was.

72, 300.

Total value, correct.

You know, it's not really year-over-year, it's not us.

13 million.

13 million, okay.

I mean, I think that's, I think that 5%, I think there's a 5% SKUs thing when you do that mark there, you know, because it's fair.

Do we have a second?

I'll second.

instead of having to come back to this later.

That does not include the 1.4% on the land.

All right, so this is with a land value of $1,326,100 based on the 1.4 view adjustment and a $2,722,400 improvement value for a total value of $4,008,500.

No, thank you for catching my record.

So this is the apartments, another apartment, and film fields.

I guess as the assessor,

Yeah, I mean, we presented everything in our packet, but we'll go over some highlights.

We used the model vacancy loss of 5%, $300 a unit for replacement reserve and the cap rate based on the grade 1 is 4.25% resulting in apartment value of $50,319,100.

But the expense ratio should be appropriate in comparison to the income in this case.

I think that's all, unless you have some questions, that's all I have.

This is, I'm looking at this, I'm seeing your effective gross of $3,466,000.

Right.

So potential gross?

Potential gross was $3,648,940, and I believe we used a 5%.

I'll make it even bigger.

I can see that.

All right, there you go.

So we basically have the per unit, basically the rent roll amount times 12 months, we take $1,000 per unit for other income, and then we reduce that by 5% per vacancy to market vacancy to come up with the $3,466,000 that she's referring to.

Mel, should I just start?

Sure.

You know, because I just think that it's, you know, there has to be some kind of internal reconciliation

We're using a market expense ratio.

And so on some of these other newer ones, you're using a higher expense ratio.

I thought the indicated sales of the other Grade 1 properties supported something more like 4.5.

And then I know interest rates have gone up since the other sale in October 2021, you should think with

And then we, you know, we use that further support of the regional sales to support that four and a quarter.

That's not the actual cap rate.

The cap rate, I think, we looked at an income sheet from CBRE, used a 4.9.

That's a pro forma.

And some of those might've actually sold for a lower cap rate, even the way we do it using the older, they might've sold for a lower cap rate or a higher cap rate but we have to create the model to accommodate all of the ones within the same grade with the same grade.

As long as the grade's right then,

No.

I don't believe they were.

And it appears that it was at 100%.

And then what about, was it still in LISA during 22, going to 22, January 23, or were they, was it stabilized by that point?

So it's curious also about the mixed-use aspect of it.

We actually haven't valued that commercial area at all as part of our assessment.

Correct.

It was vacant.

Yes.

Other than the area that they're using for their rental office and maybe something like that.

and this, is this the first apartment mixed use apartment complex that we have?

In the county.

I actually would say that there's a, there is value associated, they're probably not paying rent for the use of that space.

Too much.

They would have had to pay rent anywhere else, I guess, which would be decreasing further.

All of them have that.

That's like an amenity of the property itself.

So it's baked in.

Yeah.

It will be rented, and it will be part of their statements they give us.

That's probably why they can't rent something.

Yeah, as a percentage, it's not huge, but it is a part of it.

It's a little something like 20,000 square feet.

Or do you think the tax, I mean, with what Pete said on the tax,

So I think I have an open question.

I mean, if you face your 37% on other, your 38% expense ratio on other local comparables,

I don't think so.

I don't think so.

Yeah, because of the cost of their corporate unit that they've derived here at 333 actually includes the cost of building the 20K in commercial.

No contingencies.

All right, I think we're ready for a next hearing.

excuse me

You can please have a seat up here.

Ready for you.

Good morning.

We have been. Okay, so I'll bring it up and confirm. Now remember, yes. Good morning and welcome. What?

Do you have any questions before you begin?

So I really appreciate and thank you for your service.

And please go ahead and proceed.

And as I say, mainly when I realized with two, which was after our last hearing was based on a valuation of 414,000 by my homeowner's insurance.

Anyone on the board have any questions about that?

Do you know what that referred?

I didn't even research that.

The cost that the insurance company is indicating, I would definitely reach out to them and have that updated because it doesn't seem so great.

And that's really, the insurance value is not the same as market value.

And it's not really something that we would use to indicate market value in any way, but that would concern me.

Assessment and it's certainly not a surprise that a property that sold for that much three years ago would be assessed for that much more at this point.

Also the size of the property is different.

As you look at the comparables, that missile wall is provided 29 acres, two acres, and 5.6 acres, and hers is 6.6.

So, you know, and that is not unusual.

Again, the grades range from B, B plus two, C minus one, so it brackets her home, the sizes bracket her home that they varied, they're larger and smaller, and the sale prices are above and below hers.

John, did you have anything to add about the solar home that you mentioned?

She mentioned to me when I was out there and you really can't see it that well, but she did make note that it was there and I looked at it and I mean, I really don't see where it would really affect.

So you would have to be able to see it through the trees there.

And it's one of those seasonal things.

When the trees are bare through five or six months, I can see right into their house.

We don't adjust anything for that.

Any further questions for the board?

They vary in condition also and in size, but yeah, we believe that these are just the best comps available.

Because the other one has no basement.

Of 3408?

Oh, of her basement.

Oh, yeah, absolutely.

One, two, one, two, basement.

34,000, approximately 34,000.

And then the difference between the attached garage and the detached garage is probably significant with the attached garage being superior?

The year built.

So the rest of it is based on the age?

And it's a slightly lower grade.

It is a C and hers is a C plus one.

What was your depreciation percentage on those two sales?