Board of Equalization Meeting   7/22/2024

All right, this is the July 22nd, 2024 meeting of the Board of Equalization of Albemarle County.

And I'm Evan Mayo representing the Scottsville District.

Thank you.

We do have one error on it.

Just some of the numbers, the starting numbers in the

One of the branch lands, that's the only problem that we found with it.

We can certainly get those corrected.

Oh, you?

OK. Did we get a copy of it?

Well, I thought I saw another set

I'll get the numbers correct and then.

That would be fine.

So that's minutes and then I will swear in anyone who's going to give testimony on the three hearings this morning.

Raise your hands.

Do you swear that you will give in your testimony documentary evidence today that you will give the truth, the whole truth, and nothing but the truth?

I do.

Thank you.

Thanks for having me.

We own and operate, you know, our Fairwood properties, but we own and operate the Storage Solutions Center, which is a 1728 single-trail.

Just off of the Route 29 intersection, you've got CVS, Jefferson Co, and Gallipa, which is in between Gallipa and

and Carter Myers.

We've been there 20, some 25 years.

I think we've been operating pretty close to that.

We are a traditional self-storage facility.

Some climate control, some or a lot of non-climate control all drive up traditionally.

Real quick history, not to avoid details.

It was originally a storage USA that was built in about 1989.

We bought it around year 2000.

We have always approached our business from a long-term operational, not something that we're looking to sell.

So I have never

We've done a formal evaluation from an outside entity of any kind.

We operate the business and intend to do that for some time.

My concern and what brings us here is really assessments.

We cruise around in the, you know, like 2019, we're 4.4 million, 4.6.

Total value is 4.7.

and then from 22 to 23, we went from 4.8 to 6.7, 40% increase.

You're not used to the process and it's gone up another 5% since so we're properties assessed at 7 million for the property.

I looked when I got that just to get some on the GIS, just some of the local, I mean, the caliber building next door, which used to be the federal store, and before that the brand store went up 16% the same year from 22 to 23.

Meyers, been there a long time, they went up about 10% or so.

Looked at the Northside Library, it was up around 17%.

Where I found some higher increases would have been the daily progress building was up about 40%.

So it was in the same time period, the 22 to 23 assessment.

New storage facility went up similar numbers to us around the 40% rate.

So that's just what I found and just poking around on the, oh, and the public storage went up a bunch as well.

Didn't know what the connection was.

Since I've never done evaluation formally from outside to see, I kind of looked at it from, or I did look at it from if we were to try to sell.

to come up with some kind of numbers of what I think would be working.

We've done somewhere, this facility's done around 607, 637,000 in 23 and 636,000 in 23, 637 in 22.

So those are some of the higher numbers we've been able from about 18 to,

23, Denise, about 6% at SAMHSA.

We don't have any big jumps.

We've been fortunate enough to have a kind of slow, steady slog upward, which is a good thing in some of the manifold.

So really that works out to, if we use my 20,

23 sales numbers of $636,000 that works out to about $53,000 a month due in sales.

At a $7 million, in fact, I've talked to commercial and Mr. Mitchell or some of you guys that do some more commercial loans, 8% seem to be a number commercial rate that may be about where we are these days, plus or minus.

When we bought it, we did a,

on a 10-year note on a 20-year schedule and refinanced after 10.

So I did the same thing at 8%.

On a 10-year note on a 20-year schedule, payments work out to be about $58,000 a month.

My point is pretty straightforward.

With these valuations and numbers, since I didn't have much else to go on,

You can't, I can't sell it or nobody could buy it at current rates.

Granted, we bought it in 2001 or 2002.

You know, the price was around 3 million.

We were about 5%.

Those numbers, the monthly mortgage payments were somewhere in the, you know, 15 to 18,000.

I didn't go back and look at the actual numbers.

We tried to pay extra

on the note for some time because, like I said, the goal was to always operate and pay the note off as quickly as we can.

So even if a note at 8%

puts the value, I mean, to be able to buy this storage solution at our current sales, if we were trying to pay 25% of our sales as a bank note, it puts the valuation down into $3 billion range, which is kind of where it was when we bought it, which I don't think that's realistic, but just to kind of help me understand the valuation and the progression of where it goes.

So I think we could, you know, the four million range

Well, another thing too, at about a million dollars an acre there, we're 3.01 acres, also spoken to, we built a new traditional non-climate or a traditional drive up type of metal building facility.

It would work out somewhere in the 70 to $80 a foot range.

Our facility is 50,000 square feet, $80 a foot puts it in about,

for me, they're great for the land.

You know, we're 7 million if we build it brand new.

So, and this thing is, like I said, 30 years old.

And that's part of my other challenge, you know, the improvements in 2022 were made.

And then we jumped, our mobile mental buildings went from a million nine to 3.3 million, 3.6.

Like I say, without having done an outside evaluation of the property, this is kind of how I approach that some of these numbers are high.

And I think the numbers, the value would be closer to, you know, to the 4.7 range, you know, 20, 25, 27 million that's assessed now.

And that's a huge jump for us, like a 40% jump in real estate taxes.

So that's what prompted me to do my informal, I call it, evaluation to get to where I am.

So again, I don't have a template to do this kind of thing.

I've never done it the first time in front of me.

Well, this is some reasonable information to give you.

I don't know if I took 10 or not.

I apologize if I seem somewhat nervous.

Before Deb gets started, I just wanted to point out that there was no original review during the review period.

This came to the Board of Equalization as the first step.

we didn't do an internal review we didn't do that great we didn't do the internal review level we did review it for this and in that review we found that instead of a expense category one we should use the expense category two so we are asking you to reduce the value not as much as mr

The number that we are asking for is $6,224,000, and that is based on the change of the expense class, but because of the on-site.

Can you tell me what the difference between those expense classes are?

The on-site expense class number one between the three expense class one is typically single level projects,

So, and you see on the workup on page three, and we use 35% of that calculation.

And I just got a question.

The mini storage has changed quite a bit from the beginning of the pandemic on.

They're a pretty hot commodity, so cap rates went down so that the same revenue or similar revenue would actually create a higher value as the interest in mini storage went up.

during that period.

So we use the income approach.

And for the 2024 assessment, the 2022 operating expenses were used.

This is because 2023 would not have been available under the reassessment.

On page four is a discussion of the income and expenses.

We have the subject's total revenue of 637,340.

Based on the assessment model, we applied an assessment ratio of 35% for expense class two properties, which is what this changed to.

Expenses were $223,069.

Replacement reserves have been estimated for the model at 4% of effective gross income.

That's an additional deduction of $25,494 leaving a net operating income of $388,777 after deducting reserves.

The next thing that we look at is the class of property.

We have self-storage asset classes one, two, and three, which are listed on page five of your presentation.

This is a class two property, which is older than class one, still reasonably well maintained, often seen by investors as value add investments.

For the cap rates, they were supported by the PWC real estate investor survey for the third quarter of 2023 for the national self storage market.

Those overall rates range from 4.50 to 6.50 and average 5.61.

Looking at sales throughout Virginia, we found sales ranging from 3.67 to 6.75 with a median of 4.72.

and then on a price per square foot basis, the sales range from $52.64 to 419.27 per square feet with a median of 144.13.

The sales are located on the next page, page six.

And we've just kind of slotted in where the subject was key in terms of a price per square foot is 123.19 at this valuation, which is below the median.

The cap rate was determined for Class II as 6.25% for this model, and when you take the NOI of 388,777 divided by the cap rate of 6.25, we're asking for a reduction in value to 6 million to 2,400.

Did you have the 2022

Yes, we had a version of them.

Yeah, the total income and expenses, I think, were similar, were very similar, but some of the breakdown of utilities and stuff like that were different.

2022 data.

Right.

And you've got, that provided a 39, let's just call it 40% expense ratio.

We're all using 35.

And I guess, this goes back to the management fee probably.

I just did a quick count on his.

Management fees 12.8% of GRACE.

What do y'all think?

Do you have a number?

We typically use 4% of VGI on this model.

And that's in that 40%?

Correct.

Correct.

Four, 4%?

Yeah, effective growth.

So that's, I mean, that's not a full 5% difference.

Five of the units, I think, will rent into Mr. Wood.

Say that you asked.

Right.

If there is a notable amount of space that is owner occupied that either gets no rent or difference in market rent, we try to adjust for that.

I don't think we even noticed it.

was the case.

And this might not be a notable amount.

Did you form an opinion about the difference between the profit

It's very similar.

His categories have changed, so I can't speak to everything that changed because I couldn't reconcile it.

Do I get a report, an accession report, similar to what you had?

We can, we can provide.

That would be interesting to know.

It sounds very thorough.

There's a reduction.

Based on my sale, the percentage of the three main was way low.

The five is kind of where we were.

So I think the numbers sound great.

No, there was, we estimated, there was an opportunity to provide it to the 22 to 23.

So that's where that came, so that was the difference, really?

And does that mean the other facilities that

So yeah, so it could have been the cap rates, but it's a combination of things.

It could have been that properties were reporting more revenue.

It could be that the pepperings changed or it could be that they didn't provide and we estimated.

Well, in 2022 to 2023 is the big jump.

I mean, it took one and a quarter for Capri.

It's a big number, right?

And I'm gonna assume that I'm used to that during that time too.

I'd like to be in it.

If we were thinking about, like I said, not to ramble, but the big boys I call it are coming to town.

And hopefully, the positive is they may drive the market up.

It's an elevator versus a drive up, so I get that.

But I am intimidated.

I'm pretty intimidated, I think.

I'm guessing not to pull a number out of there.

I'm thinking 30% less for an adjustment until they fill up and then we see what we are.

So the market, even though on this corner we're on with

storage policing and community self storage over by the butt butt and public storage and youth storage of all four kind of coexisted for a long time.

Now we've got these big guys, Fifth Street extended, Pantops has got one, all these new facilities.

So the market has really changed.

So in hindsight, maybe we should have sold these things 10 years ago, but it's still the same.

We still have the same desire to operate this family business.

In the future, the cap rates are probably going to change next year.

Everything is.

There's always a cycle.

So we can stop taking care of it.

I appreciate it.

We're really trying to do this with Boren and like Stacy said, it's too late.

It's not that easy.

It may end up on the well-handed, but I think we can do some things.

I appreciate the thoroughness of yours.

Right, that's what we're asking for, yes.

It's assessors proposing after they adjusted it.

I will move that we reduce the assessment on

Application number 87, the 1728 Seminole Trail from 7,017,900 to 6,220,400.

Thank you, Mr.

Is there a second?

All in favor?

Aye.

All opposed?

Will you give me the land and improvement number?

I'll attempt to do that.

Okay.

Yes, similar.

Well, the same art.

I had a 40% increase.

Back off of that, we were down from $9.8 to $49,000 down to $8.4 to $8,000.

So we went back down about 7% there.

And our sales were down somewhat.

We should be pretty close somewhere between that 840 and 860 numbers this year.

Same deal if I was going to sell it.

If we use the 8.4 instead of the, well, 8.4 would be $70,000 a month based on my 8% 10 year, 20 year schedule.

And our sales were $70,520.

So again, the dose from that scenario would be more than right at our sales.

and if it was a 9 million valuation or assessment, you know, we would be underwater, we would, you know, the monthly payments would be $75,000, we'd be dealing with $72,000.

So that's why I thought those were high enough to reconsider.

Again, that 9 million valuation is still the same story, historic solution, but not a true valuation.

We operate it and tend to operate it.

Just in the same in the area,

I just looked at some of the local, the Putt-Putt property went up 22 to 23, 34%.

The Piedmont Power on the corner went up 22% and the Bank of America went up 18%.

So all those were pretty substantial increases on their own.

And like I said, community cell storage was up 42%.

And again, it's backed off a little bit.

Just on my sheet that I turned in, I did the same math, you know, a million dollars an acre for 2.56.

And then I used $80 a foot, 50,000 square foot was four million.

So six and a half million was the number there.

Again, I would discount personally the 25-year-old buildings.

They're not the same as new.

So I think from my example, the 6 million was a little more than I was talking a little bit.

So I think we're somewhere in that $6 million value I would put on the problem.

using the numbers that I've, that's how I got this.

I didn't have an official way to just announce how much profits are now worth compared to new, I feel like substantially less.

You're trying to maintain them the best you can, but they're not.

Again, it's your presentation, but it's very much similar to what I did on storage solutions, so.

All right.

Thank you.

It's not like the other property.

We already have this one in a class or an expense class, too.

So we're not proposing any change on this one.

We already had it basically the same way, but it does have

Quite a bit more revenue as part of the equation, which is why the two properties are not the same.

OK, again, we'll use the 2022 operating statement.

Total revenue reported was $861,571 based on the 35%

cell storage expense class two, expenses 301 and 550.

Replacement reserve again was 4% of effective gross net operating income was 525, 558 after deducting reserves.

Similar to the other property, this is also an asset class two.

And cap rate analysis is the same as what we had discussed.

The difference between the actual operating expenses and the estimated expenses of $100,000, was there any consideration for where that could have existed?

I wonder if it would have been associated with the operation, if you can call?

Any details on the expense?

Yes.

It was a limitation.

No.

Maybe that's it.

Yeah, looks like three times higher, right?

Yeah, 140.

This is the first one you had?

How is this facility staffed?

The view hall is labor intensive compared to just renting storage units.

The other issue, Mark Hammond, has been with us 25 years, and he makes it multiple.

You see hallways higher.

The other part of the payroll is the health insurance that we provide is a big part of the payroll.

We don't have that same well on.

Since it's the same ownership between companies, the health insurance goes through communities of storage.

So that contributes probably between Hammond's payroll, Hammond's pay,

Health Insurance, we provide them, we pay for their insurance, they pay for the deductible.

It's a goal plan.

And in fact, my insurance was on theirs most.

So that's the biggest difference in the period.

and to U-Haul is a little more like, well, a lot more intense.

On weekends, we've got two people working in the office.

Summer times are busy, winter times are not quite as much, but it is, I've grown to be more comfortable with U-Haul because the commissions have gotten, we've grown it to about a hundred thousand of them.

I think U-Haul changes, you know,

Roughly 80, and then setting up your time on the U-Haul side compared to the storage side.

So I was never a big fan in the beginning.

I've been able to run for some and it really helps.

It's a commission base.

You have to have somebody there anyway.

You have to handle a little bit of light judgment so it does help the community.

We have 121 in community cell storage.

I'm surprised there's not more difference in the utilities.

It's surprisingly, yeah.

We've got two.

I mean, it's an air-conditioned unit.

It's all 121 units in a long hallway.

We've got a

Unicode system that's in there that we just replaced that was 20 grand or 18 grand to replace one of them, but it does not affect the utilities or not tremendously.

My climate control

For everyone, it's your solution.

It's around $300 a month for, I've got it broken down between the office and the back party.

So the office is $40 a month.

That's around $300 a month for back or the private insurance, it's the widest in the bank.

That's substantially more.

I just was curious about that.

All we do is one big building, two big units, and we keep the thermostat as low as 50 in the high stage.

So in that range, it's good.

So in the summertime, it's not freezing cold.

And that's kind of standard.

It's stuff that 50 takes.

But you gotta use control too.

That's the big thing.

It's a little less than 50%.

And two, not to jump around, but it's storage solution.

We had no climate control.

We took a 5,000 square foot building and added air conditioned units and humidifiers, heating their fires to those units to get some climate control there.

That's a lot.

It's just a high number for me.

We're gonna try to sell it to somebody coming to buy it.

If I had 8 million, and this may not be relative, but if I had 8 million dollars to invest and I could go to the stock market and get 10% or even 5% and not have the quality or health insurance bill, I wouldn't buy stocks.

Before I got here this morning at 3.30 in the morning, I was thinking, what am I going to say?

These numbers don't really work if I had

even at 5% to not lift a finger would be more fun.

That's what it looks like.

So the reduction from the non-date to the 8-4.

Was it during the reassessing expense, a combination?

Because of the expense?

But is that a function, really, of the P&L?

It's not just reviewing the property and making a direct decision, correct?

That was changed in 23.

420.

Right, so it's a combination of the- To look at the trend.

But looking at, this is not necessarily part of the stuff, looking at the expense class descriptions,

That's really looking at the property and not so much in a P&L.

That's exactly right.

What does it have?

Does it have the onsite management?

How old is it?

It's hard to do that with one year of data and it's not unusual for it to vary.

If there were, I don't know what the date, what the timing of that was.

Uh, but if there was any, uh, capital items that might've been included in expenses that one year, but they, they weren't reported separately, uh, that could cause it.

So what do you take those out and then you put in this, some type of

like replacement reserve.

Yes.

If you think that their number, they have a 20% expense on something, but it's something that's going to last 10 years, right?

You would strip that out and replace it with a 4% reserve so you don't have to exactly down up to down up.

Yeah.

Yeah.

Otherwise, well, even with that detail, you do try to balance out.

You do try and balance it out.

So in the case that we identified something that would come out, in this case, with mini storage, we would take it out in order to determine what the true operating expense was.

And then we would have that information as we analyzed everybody.

So we would find maybe it was 38% on this property.

It was 30% on another property that were all the same expense class.

And then we would come up with a standard for that class using everybody's and the published data.

My maintenance guy split his hours between 20 hours into storage solution every further, well, 10 hours a week and 30 hours a week for my maintenance guy.

He's got some grass back and forth.

And if somebody calls in sick, they're gone.

I try to keep it as clean on both as I can and come up with something reasonable.

There's more maintenance and community shelf storage than storage solution.

What Mr. Wood explained about his own health insurance being included, I think that's what you said, would not be normal.

That would be an extra expense that would be above the market analysis than the management fee.

It might show up in a management fee and, you know,

We've seen it where the owner is involved in the management form or at least the field keeping or maybe where some of those expenses get included as an expense.

Sometimes they get included as a management expense.

I'll look at this.

It's like an investor's gonna come in and say, so he's gotta strip out the things.

Correct.

So that everybody's.

looked at equally.

I mean, we all run our businesses.

They are direct businesses, but an assessor kind of has to look at what does an investor class, when it comes to commercial properties, what would an investor class pay for this business and the revenue off of it?

And you have to equalize out your salary, things that an investor,

I mean, if the investor came in and bought one of your properties, their expense, they would look at every single expense that you're just not, like you said, you got to go outwards, you forgot.

That's expense you're willing to pay for lots of different reasons.

Whereas that percentage expense that the market bakes into these things and applies to your top line revenue is they're going to say, we're going to get it now.

It wouldn't necessarily pay a premium for a specific manager or cover their pays or stuff like that.

For me?

Yeah.

I get a paycheck from here, whereas I have a management fee at Barry.

That's an accounting issue too.

I mean, I work in both stores.

Say a lot, I may not work as much as some, but I mean, I work a lot of hours between the two stores.

And because of a previous ownership that I had with my father in the beginning, once the fee made sense to be there and to get a paycheck at a community self-store.

So my annual pay is split between the two.

Yeah, I end up feeling like the 35% is probably not a great fit for this facility.

Both of these facilities are significantly in excess of that number.

Even if you backed out the health insurance, I think they're going to both be more than 40%.

I see that the class needs to change over time, right?

but you know we can't upend the entire expense class system particularly well his expenses include real estate taxes right they do take that out sorry these aren't loaded that's just on apartments that we've done

I won't ask how we got to that point.

As long as it's equally to that.

Exactly.

All the apartments.

I think what might make sense would be to have like a class 1A or 2A kind of to begin with income-based departments where you say, hey, this is also a supplementary income source.

There's this other labor-intensive thing that's going on.

You're looking to keep all commissions or something else.

I have noticed that self-serve storage facilities tend to have some kind of secondary business line sometimes and if the staffing requirement on it is different or greater or more intensive, it seems like it would be fair to differentiate between those.

I do think the way you guys added it back sort of mutes the effect.

I mean, you ultimately, even though there's a $100,000 difference in expenses, you only end up $65,000 apart on the net operating income.

So it's not as bad as it could have been.

But I think if I were a property owner, I'd have to submit that number and just say, well,

But with that said, I don't think that the material submitted has overcome the presumption of correctness in favor of the Assessor's Office.

And if the 35% is a little too aggressive, I know it will be corrected for the upcoming year.

But I don't think there's better evidence in favor of any other particular number in light of the

sort of admitted overcompensation for certain of the staff inclusion of payroll calculation.

Anyone else have questions or thoughts?

Thank you, Mr. Mitchell.

Is there a second?

Mr. Norford, excuse me.

Thank you, Len.

OK, all in favor?

Aye.

All opposed?

Okay, Board of Equalization application number 23.

The assessor's number has been affirmed.

My speech and taste and edge made me appraiseably.

Like I said, just that was for our employees.

Not knowing what to grab a lot.

Flap-free flat.

We occasionally use it for overhauling.

There's no income or expense associated.

This would be funny or not, but we can play it in the bed again.

There's no income, no expense, so maybe no tax would be available.

I think that was going to go over too well.

Nothing like that.

I don't know what we'll do if it was originally and still or up until recent with the competition situation coming to town was going to be community cell storage too.

Some point some years ago approach the county to try to add another 50,000 square foot is just across from Putt Putt Lane from community cell storage.

We had challenges with site views and some other issues with the ARB too and it got down into 30,000 square foot range and the numbers just didn't seem to really warm up the issue at the time.

To be part of, to do an addition, if the Delaney lot next door was developed, I don't know if any of that may have made sense.

In that time of waiting for some development to happen next floor, we would have lost interest in, I think, an extra 50,000 square foot at the cost.

Even though we own the land, it makes things work and discourage problems with interest rates and competition.

So I think it lands on them to know what the value of the asset is.

It can be about a million dollars, as it seems to be.

We've got the number in that area.

Seems to be the number.

Seems so.

I don't have any other information.

I don't have any.

Okay, thank you.

So I was encouraged that we were pretty close to Will's appraisal.

And there are appraisers, and there are appraisers, as my old bosses used to say.

And we have no problem with Will.

He's good.

He knows what he's doing.

But you're going to come up, even the similar appraisers are going to come up with different variants of values as they're looking at information.

And so I was encouraged to be very close on this.

But we do master appraisal, and we've got information also.

Obviously, Mr. Sanford went through and has some specific comps that he used.

We have a 20-24 assembly value of $2,956,400.

This is a 2.459-acre highway commercial zone proposal vacant at street grades and level frontage and object works.

The property is located in the Route 29 BC corridor, which we've discussed it before.

We've had several other land discussions at Route 29 BC.

We equalized the base rate in this area at $40 per square foot.

Again, Pete mentioned that we based this on a mass appraisal method rather than looking at every property individually.

And so we've considered the sales transactions from 22 and 2023 for the 2024 assessment.

The $40 base rate has been adjusted by a downward by 25% for location.

The location, a dozenate map is located on page three of the presentation.

And we've also been down by 8% for the commercial mail size based on the table that's also on page three.

This is pretty good about it.

That's, Deb is an MAI.

She very closely follows USPAP, which is the guidance for appraisers.

So, hi.

Will created that appraisal.

There's very specific kind of rules about the intended user, the intended use of an appraisal, so that if somebody is looking at it without the requisite knowledge to understand it, it isn't used by that person because they don't understand the assumptions that are made.

So that's why the rules were set up.

In this case, you know,

It's an appraisal and I wouldn't object to it.

Like I said, you know, Will is a good appraiser.

This land is assessed exactly the same as the right across the street where the storage unit is, right?

Yes, they should be identical in the way it's calculated.

Yes, the $40 a square foot, the 75% location and that size adjustment.

You can see that on page three of the little map at the top.

And as Deb mentioned, actually earlier before the hearing started, it's unusual these days to have a level lot in the county or in the city.

We have a lot of

you know, graded lots that take a lot of, you know, a lot of work to get them ready to be used.

Oh, that's the old Bonanza building you're talking about.

It's now Piedmont Power.

It's an equipment place.

Piedmont Power, but before that it was Charlottesville Power.

Bonanza.

Are there any of those left, anywhere?

If there's any Bonanzas, I know there was just from talking, there's a few hundred of us left here and there.

A lot of fun at the time.

So your base rate is basically $1.7 billion an acre.

$40, right?

Yes.

I remember correctly when we were talking about the Red Lobster, that was $40.

What were the adjustments on that?

Can you remind me?

That is correct.

There might not have been a location on that one.

Yeah.

Oh, that was in the building.

We're just talking about it.

This one should.

Size and location, right?

Yes, size and location.

So, there's no access problem with this one.

And you can get back to the,

The other property?

Yeah, the Red Lops.

The Red Lops are correct.

Can you tell me if it has three adjustments?

Size, location, and access?

I'm trying to find it.

You look at it enough, you remember it right.

Because it was also, it faced off of, basically it faced Rio Road, and then the access was through the shopping center.

It's still, it's privately maintained.

Trying to figure out the logic between,

You have a privately maintained entrance into the shopping center, right, to get in off of Riot.

And then this is similar in that it's a privately maintained road to get off of Riot.

With the light.

First one had light.

No light on us.

No light on us.

Oh, I'm sorry.

Okay.

Yeah, there's a middle lane to turn left.

So you do have a decel going.

And then you have a lane to turn again.

So it's not signalized, but it's accessible both ways.

You know, sometimes that median hasn't yet and it will one day extend past Putt-Putt, VDOT's going to take them.

Eventually.

I'm sure you know.

Basically, there was a $50,000 bond put up for a traffic signal to go there at some point, but it's, you know, you wanted a traffic signal.

You never will.

You should get that right.

Well, we would like to.

That's the challenge.

We've always

and someone that comes in and out of that intersection often it's a challenge.

It's almost impossible to make a left at certain times of the day and traffic backs up to the light at Albemarle Square back past Putt Putt Lane now.

So, and this is either here or there, but it's, we would love to have a light or something different than V, or really the goal was for VDOT to take Putt Putt Lane

over as a public road at some point in its life, and that's why it was built to those standards.

Now, that's been so long ago.

I don't mean to get into the weeds with this, but that was the intent.

I thought maybe it was the standards then.

So we are just out of the, I mean, the traffic that I wish that the county's doing.

It looks like it stops somewhere between us and Northfield, the double lights there.

I've heard of the Peanut.

So 2210181, right?

I just feel it should be an access adjustment of some sort.

I think this is because of the left-hand turning movement, it's a suicide lane that at times is not accessible to you.

Whereas the light's always accessible.

It's a little bit more difficult.

We gave it to them.

I just feel there should be some adjustment.

I'm talking amongst ourselves here.

Some adjustment for access.

I don't have a problem with something you can use for size, because that's a pretty standard chart.

It's uniform and not a problem with the location, because you're essentially block off the main drag.

So there's a, that's a 10% reduction going on.

Supposed to represent the access to this road.

Correct.

And why would we do it this way?

This one, I'm sorry.

As an out parcel, correct.

It was five, but we changed it to 15.

Yeah.

The one down at Parkview Park.

That one had no light, which I didn't realize it at the time.

We realize after the... What we thought was a light are not actually the same.

Get it next year.

I mean, we're not perfect.

That's why it's hard to...

Some of these details are on the fly.

So we feel like we've addressed the access in the location on this street, because they all have the same.

Access, when it's access separate, it's typically because it affects a specific property.

Location is really more of something that affects a group of properties.

So that's why we would do it the other way.

Wordsworth describes the access as average for the commissary

So could the Assessor's Office, I guess, respond specifically to the appraisal and why the mass appraisal techniques are more compelling or ought to be perceived as more compelling than what you did?

Because this is kind of what you hope to get every time somebody challenges the appraisal, right?

It's an actual or a challenge to the assessment is an appraisal that's specific to the property performed by somebody with credentials that are

comparable to what you guys have.

They did it in this case.

So it would be great that we could come up with that type of analysis on every property.

But the problem, I understand what you're saying, but

And yes, this is much better than, you know, my property changed to different percentage and other properties, stuff like that, that we've seen in the past.

But to compare a specific property in light of a fee appraisal, kind of could

throw off the entire system where we can't appraise them all like that.

So why adjust one?

Unless there's some aspect of that appraisal that stands out.

That's what I would answer.

If there's something that the appraiser has found that is different than something that we used as an assumption in our model,

Absolutely, that makes sense.

It's kind of like finding an error in our assessment.

But just because an appraiser who comes up with a single property appraisal different than the mass appraisal model, in and of itself, I don't think is evidence, if you'd like.

What would be evidence then?

I mean, finding that

The location, something that indicated our location here, the adjustment we use is not appropriate as opposed to the other properties that exist, like the comparable properties.

I mean, it's difficult.

I mean, like I said, these are one appraiser's opinion of value and another appraiser's opinion of value.

And they use that term opinion of value

Very clearly whenever you're talking about appraisal because it's not an absolute science of this is the absolute right answer here.

So this person is wrong or this person is not as wrong.

It's not a comparative thing.

Do you trust the information in the appraisal more than you trust the information used in the assessment?

I mean, I understand what you're saying.

You've got a market that comes out like a market and there's 10 people that want to buy this thing.

and I look at them like the appraiser, like you get 10 assessors, you get 10 appraisers, you get 10 different appraisers, you get 10 people that want to buy something and you get 10 different prices that will take, you've got to kind of like get the average.

I am still persuaded, go back on this, to the access issue and that I think that, you know, if you felt that there was a 75%

I'd like to see the numbers broken out.

I would say all six or five of those parcels are 0.75 and then immediately to the right

Yeah, right.

Look at the one next to you.

Wow.

Oh, I get it.

I'm wondering if that shouldn't be a gradation at 0.75 to 0.7 or 0.8 to 0.7.

I mean, clearly, the back corner there is worse than the front corner.

There's no corner multiplier on.

There, you share the front one.

So two, two, three.

Two, one, five.

Two, two, one, five, oh.

I was talking about 22158 or whatever.

22158.

Yes.

Let me ask the location adjustment.

To me, that property should not have an equal location adjustment to the one that's behind it accessible through

I'm sorry, this is the Red Lobster.

You've got how many properties to access here.

You do the best you can and you apply what you can.

And then it's incumbent on the taxpayer to come forward and point out things that they think need to be taken into account.

It's not a moving target, but it's an active process.

and I don't know what the number is on if there's a consensus here.

Yeah, right.

I would like, I would rather see it as 0.75 and then another 5%, just for consistency of these are the things like, you know, the three big ones are size, proximity to basically 29, right?

Or other major thoroughfares and then access to it.

I guess those are the three big ones on land.

Yeah, right.

Environmental features, sure.

Right, exactly.

Are you here in the assessor's office though that like they don't use the access field in that way and that it would be unusual to do that?

That was a special case with the Red Lobster one.

I heard you but I don't think I understand you.

Just because we see that red lobster as a single property issue because of the way it sits inside the shopping center.

And we see this as a street that has access for all five of these properties.

So we don't call it access.

We don't treat it differently as access.

We treat it as its location.

I have a motion to reduce the land by an additional 5% specific.

Access Field.

I'll second.

Thank you, Mr. Norford.

Before you vote, would you like a number?

That'd be great.

So it's 2,808,500,000,808,500?

Correct.

OK. Approvements are still 100.

Is that just on placeholder?

All those in favor, Mr. Mitchell's motion.

Aye.

All those opposed, nay.

Okay, the pass is four votes to one with Mr. Mayo voting yes.

Okay.

3.30?

Definitely 3.30.

Today.

This is applications 14 and 15.

That is correct.

And we're going to have Jason.

Jeremy.

Jeremy Lee.

Jeremy.

Jeremy.

Would you like me to stop the recording?

Do we have new business?

I need to go.

OK, go ahead and find some layers.

So we're presenting the July 22, 2024 meeting of the Board of Equalization.

And we are returning to Chapter K, I remember it is.

where Reeve is convening on application number 77, related by the United Land Corporation, or sorry, by owner of Route 29, LLC, relating to property ID 4744.

Anyone who's preparing to give testimony today, if you've not already been sworn in, will you please raise your hand and repeat after me.

or confirm.

Do you swear that your testimony and documentary evidence presented today will be the truth, the whole truth, and nothing but the truth?

I do.

I do.

So I appreciate Mr. Lynn representing the Albemarle County Water and Sewer Authority joining us today.

And I think we'll hear testimony from him first.

That's it, everyone?

Mr. Lynn, we're grateful to

here and deliberate on any information that you have that you're going to share.

But what was of most interest to the board and the reason why we have to impose on your time for you to come down is just to understand how the Water and Sewer Authority perceived the development of this project as of January 1, 2024 and the likelihood that it would be completed on the most recent time frame or the most recently identified

timeline for the project.

So as of, you said, January 1, 2024, the CIP schedule had this project being constructed in fiscal year 2026 and fiscal year 2027.

And that schedule was accurate until the middle of February

And that was the time period where we were undergoing the development of our FY 2025 CIP schedule.

The FY 2025 CIP schedule is presented to the Albemarle County Board of Directors, Board of Directors

In that time period, we had opened up bids for an Avon operations center, which is a replacement facility for the service department because we were losing our space out in Crozet.

The bids were significantly higher than anticipated.

So a decision was made to move the airport trunk sewer project to the 2027 to 2028 timeframe.

So that decision was made and then presented to the board at their March and April board meetings in development of RCS.

That's the construction years.

Those would be the construction years.

FY 2027 and FY 2028.

The project is estimated to be

the $6.7 million project design and construction.

Okay, Jeff.

One last reason it might slip again.

Is the change sliding the construction piece I guess back one year and the construction date?

So we don't get to the month level, but what we have is it looks like 40% was in 2027 and 60% of the construction dollars was in 2028.

Some of that is a balancing game to try to make our 10-year CIP as smooth as possible.

There is significantly- There's some capacity, but do you know?

There is some level of capacity, whether that meets the CMO of L-29 LLC.

I don't know the answer to that.

There could be interim upgrades made to begin to increase capacities of limiting segments.

But in order to meet full build-out of

the Willow Glen development, and that's who we've been mostly talking with.

Willow Glen phase two, George Ray.

So he's hung up at three.

Well, we have a first come, first served policy.

There was complete time, 25.

You do reach full value.

Well, they had to delay.

I think I was maybe fine.

You're good.

You're up now.

I lost maybe about two minutes.

So the project has been moved at least once, maybe twice, back, backwards in time.

And I'm guessing that there are other projects that were kind of slotted in front of it from CIP, right?

Yes, sir.

Is that likely to happen again?

Is there a way that you prioritize those projects?

Which projects are a priority?

Some of our water main replacement projects where our customers are experiencing outages and breaks and disruptions, those start to rise to the top of the priority list.

With this project, easement acquisition has proved very, very challenging.

We've had property owners reach out to our board members expressing a desire to stop the project.

And so there's a lot of angst towards this project from customers who aren't gonna benefit from it.

The reality is it's required to serve the service district area.

Our board has the ability to condemn properly.

They've been asked to do it.

We're not going to bid this project until we have all of the easements.

This project will, in all likelihood, require our board to take condemnation action.

I don't see where we're going to be able to get all the property owners to accept financial competition.

The timeline to get this out for bid and get it finished.

We would use the time before 2027 to finish the design and obtain the necessary easements.

So with this schedule here,

Sorry, I wasn't really asking about the legal fees.

I'm sure those would be imminently reasonable.

Those are relatively quick.

Okay.

How long?

You're going to start in 27.

How many months ahead?

Given the number, probably there's a lot.

We would need to ramp up our efforts to make efforts to acquire these easements.

A lot of people are simply unresponsive.

Some that are responsive say no way.

So, what is the time period, you're talking about fiscal years, when did you

January 1st, 29.

So you would slot the scale?

Correct.

So you've already done the, you know, the heavier discounts at

When you had it under a five-year program, it was $56, $48, $39, $28, $15 in full value.

It was $29.

We were already paying the price.

We were already teaching higher numbers.

I think you can go forward with what you got.

So you slide it a year.

Yes.

So we would have, you would slide it a year from what's in here.

The 2024 would be 56%.

2024.

Well, 2025 would be 52.

I'm sorry.

I'm looking at the wrong one.

44.

Is that right?

Yes, 2025 would be 52%.

Yeah, 2024, the timing that we're talking about is the information as of January 1st, this was correct.

But restarting for next year's value means that we would be at, for 55, we would be at 52%.

We could adjust 20.

So the request, or I guess the CIP was under review and being drafted in February.

When did that process begin?

We start the process in January.

I think we were, I think it was in March, but we were getting the sentence based on the questions asked that ROC was gonna be a concern of the other project.

And so we were having worries that our budget was gonna be driven to.

Any questions for Mr. Len?

It begins below the Hollymead Dam, and then it goes up along Lake Hollymead, and then crosses under Route 29, just off of the coal site.

and then it ties into a sewer that was put in the Berkmar Drive extension.

Hunter expanded some of the sewer up there when the Berkmar Drive apartments went in.

He increased the pipe diameter kind of looking ahead.

So I have a question.

I know that we're only tasked with dealing with 2024, but what if

I think it would be incumbent on y'all to every year find out if there's a change in there.

So that it can be corrected before now.

Well, but that wouldn't have saved them here.

I mean, they would have received the same piece of information from Mr. Lander and his colleagues that the Assessor's Office got.

The problem is if we are restricted to considering data that was available as of January 1, 2024, which I think we are by statute, the February stuff can't come in.

But if it doesn't come in, we're going to overtax this person, because we're not going to be able to make the adjustment until next year slot into, right,

That would be attached to 22 for us.

Or actually compress it to four in step five, right?

If you compress,

We're just getting more set as of today.

You can't do anything in 2020.

Yeah, I think it's pretty clear that you can.

I don't think you need an attorney to interpret that.

Like that's true.

I'm not attacking anybody.

I understand.

I think they pretty much probably knew, as we did, that this was being pushed down.

before this, quote, January one deadline.

I think all people involved in this project of doing the sewer line extension didn't just come to knowledge.

I mean, we've had emails back and forth with Jeremy for the past two or three years just randomly every six months when we would have something come with us.

It's like we always tell them.

We don't know where it is.

It's gone here.

It's gone there.

So I don't think that this

January 1 is when all of a sudden we found out that this is not happening.

I think there's a pretty good, my opinion, I think there's a very good feeling that it wasn't going to happen in the time frame that was set out in 2020, 2021 when we first started this process of reducing the taxes.

So

I'm going to strongly disagree with this January 1 that nobody knew anything.

If you don't want to alleviate some of the burden, then I guess I would say, and I don't know how it's done, but then you need to somewhat

needs to give a much bigger discount 2025, 2026 to make up for what I've overpaid, what I believe I've overpaid for three, four, five years.

So I don't know what's the easiest route, but it's a matter of we can't do anything for 2024, which I disagree with.

I think you can.

I think I need a

readjustment at a greater scale for 25, 26, 27, 28.

We don't think we're going to be at full term, and we make it up that way.

We are a long-term picture player.

I'm not looking at the short term.

I look at the long term.

So is my father for 60-plus years.

So really, the older I get, I want to

easiest route of things to happen, but also I want it to be fair in the long run.

The adopted 2024 budget had 26 and 27.

Can we do like a half step on the project since we're expecting it to complete in like June of 2028?

Should that be 0.5 instead of zero?

Split the difference, complete all the steps.

Well, I mean here it says years to project completion in 2028 to zero, but actually we know for half of that year, you know, kind of a logarithmic production and half a year towards zero.

I just end up feeling like we need to make some adjustment on this in light of

resetting it as a five-year project every year that it's still paid by a year.

Fair to me.

It doesn't feel equitable for the landowner.

I mean, I think we could.

Are there other projects that have had this 18% discount rate applied?

Just these two?

60.

Well, I was actually thinking, you know, look at 18 and then just there, but you're right.

And then do whatever.

This is the present value of a dollar spoon.

And on a regional basis, we had unleveraged discounts.

rates for land development inclusive of developers profit ranging from 10 to 30 with an average of 15.3 to 16.8 depending on the property type.

And then PWC reported on leverage basis inclusive of developers profit, profit ranging from 12 to 30 averaging 18.7.

So

I heard Price Waterhouse Cooper is on the second set of numbers.

Where does that data come from?

How does that create it?

Where did you get that data?

The Central Virginia is done by an appraisal firm in Richmond, Knight-Dorney-Roundtree.

They provide the information.

And they did in the past.

They don't now.

They don't the S of this year.

Yeah, they do a lot of different studies for VCU as part of the real estate program.

And so they compile a lot of data for VCU.

10 to 30.

Wherever the client lenders, wherever they're interviewing and getting, requesting information from.

Well that tells me what you're talking about.

There's a range of 10 to 30 you can work.

understanding, I mean, Price-Warrior-Coopers is national.

Okay.

I'm just gonna borrow, but a different grade might be like.

Do you guys have a function database to plug this number in, or is this a by hand adjustment?

I have a calculator.

I have Excel, but I'm used to doing it the other way around.

God says that the appropriate discount that I would recommend

or 21 and a half, 22, but I would really like to see what that equated to as a percent adjustment for lack of super capacity.

And the goal would be by using that discount rate to try to approximate the 56% that it was last year and acknowledge that the project is no closer to being finished today than it was last year because of the slide.

if it wasn't affirmed until it was in February.

I understand that when the administrative process happened, but it's also hard for me to believe that any feature of the site came as a surprise to anybody in February.

Likely it was a foreseeable delay, especially based on the pushback from other landowners relating to the site and the project working in parallel.

Hey Jeremy, thank you.

Started serious condemnation for easement acquisition January 1st, right?

Before the schedule slipped.

Maybe even before that.

who will be more aggressive in our efforts to acquire these easements.

Some recognition prior to January 1st.

Not necessarily.

I mean, I think there are other underlying inputs that they use to probably derive a higher value.

I think I understand what you're asking for, though I don't agree with it.

I just want to put that out there.

Understanding that the regional numbers are from 10 to 30% average of right around 16%, 22 and a half doesn't seem outside the bounds of reasonableness to me in light of the particular factors, the sort of unique factors, delaying indefinitely and complicating the commercialization of the site, the development of the site.

I'm sure that that's an imperfect way of resolving it, but I think that asking the landowners to pay taxes on a project that actually not proceeded any further towards its timeline that we now know in retrospect is going to be, at the very least it was possible that it was going to be December.

less precise.

I agree.

I mean, also recognize it's in the range.

I think sewer is one of those things to see

And this has more unknowns.

So I think you push that button higher.

Any other thoughts or proposals?

I did want to respond to something Mr. Wood stated.

I don't think there's any mechanism by which we could sort of make this up to you in some future assessment, but that's why I didn't make a proposal along those lines.

sort of unworkable for you guys and also asks us to deviate from setting things to what they're worth in the year that we're tasked with doing so.

It's prescient.

Second.

Thank you, Mr.

Beard.

All those in favor?

Aye.

All opposed?

All right.

Application number 77, an adjustment to $2,021,700 is unanimously approved.

Turn now to application number 78.

It's the same thing.

Thank you.

Is there anything that the Assessor's Office would like to add on this application in particular for the board's consideration?

There's nothing different.

Anything by the applicant?

Okay.

Same 44%, number would be 694,500.

I'll make a motion to adjust the assessor's number on board of

Equalization Application Number 78 to 694,500.

Thank you, Mr. Norford.

Second.

The tie goes to the secretary.

Thank you, Mr. Mitchell.

All those in favor of adjusting Board of Equalization Application Number 78 to $694,500?

Aye.

Aye.

All opposed?

OK. That one is unanimously approved as well.

Thank you very much.

So are we going to, oh, okay.

So it has gone out again.

I'm going to walk down the stairs.

I'll run outside and just talk to you.

It's been a good half of two years.

And they paid a higher rate.

How do you have to try to go for it or anything like that?

Yeah, exactly.

The neighbors are going to fight it.

If you can't get that done that fast.

It's my next one.

But it's not until there's somebody.

It's my plan.

Let's finish, I think we have a couple of new matters, new business matters.

Right, so let's do the minutes first.

Has everyone had a chance to review the minutes from the July 15th, 2024 meeting?

You corrected the statement.

Oh, we did.

We did, yes.

OK.

Thank you, Mr. Miller.

Is there a second?

I'll second.

Thank you, Mr.

Beard.

All those in favor?

Aye.

All opposed?

OK.

The minutes have been accepted as written.

I did.

We had a request from Mr. McFarland's attorney, Shane Smith, which I shared with you.

I'm not sure it sounded like that, but I don't want to actually interpret.

But it sounded like that's what he wanted to do.

But it might have been situational.

So he misunderstood my first email about

Monday, they were going to be, they were going to be, yes, yes.

So he was trying to say he would show up for him today, uh, because he wouldn't be a them, Mr. McFarland wouldn't be a them.

Yeah, I mean, there were a number of factors that were discussed.

One was sort of keeping it with precedent.

Two was the timing of the request.

Three was the nature of the appearance.

I think it's going to be by telephone.

Mr. McFarland was here in person.

And four was comportment with the instructions that were provided as part of the application.

Other than COVID, did we do anything remotely?

No.

We never did a remote hearing prior to COVID.

Yeah, that's right.

Yes, that was that also.

And that was discussed at the same time.

I agree with that even from a pragmatic standpoint.

I think there's also, this wasn't brought by the Assessor's Office, but in my mind there's a question about whether Mr. McFarland should be permitted to submit any further materials individually or through his attorney, which weren't available at the start of the first hearing.

My personal thinking is that if the Assessor's Office has changed some aspect of the way it views the case between the time that we sat down to do the first piece,

Information relevant to that particular adjustment

Yes, there were.

Right, the parking on the separate parcel.

I brought up the fact that because of that size of lot, his parking was on a separate parcel, a common area.

That was a discussion amongst us all about

It's not new information.

Would any of this information make you change your classification of a hotel?

So my memory is that we had essentially closed input and we were just waiting to deliberate.

And then I proposed or I argued that in the interest of being fair to Mr. McFarland, that if there was an aspect of the assessors

review, even if ultimately in support of the applicant, which I think yours was, right, it ultimately lowered his assessment, the small change that you were proposing, that he ought to be able to present further evidence as to that specific point so that we've met his, so we've fulfilled his ability to rejoin or to rebut.

Is there any other views on that?

Okay, is there a motion, well do we need to make, what do you think Pete?

I would again make a motion like you did last time that this will be continued to a later date subject to us finding a time that works that's in the board's current schedule that works for Mr. McFarland and his attorney depending on

So that's an official decision.

I think it would also make sense to make a motion and vote on the scope materials, additional materials that the board will receive.

How could I expedient, how can I

And honestly, that's what I was hoping to get more information on from him was where is it in the expenses?

And if it's not in the expenses, where is it?

But it's in reference to the cost of the parking.

It probably can.

So I will make a motion then that the further document submissions or argument from Apple can be limited to addressing the topic of the

and the operating statement.

Is there a second?

I'll second that.

Thank you, Len.

All those in favor?

Aye.

All opposed?

Okay.

Mr. McFarland's application will be limited looking forward to new documentation or arguments addressing that point.

Is there a motion with respect to Mr. McFarland's attorney, Mr. Smith, his outstanding request to participate by...

Okay.

I'll second.

Thank you, Mr. Norford.

All in favor?

Aye.

All opposed?

Okay.

The request for remote participation by Mr. McFarland's attorney, Mr. Smith, is denied.

I'll make that motion that we continue this

Is there a second?

I can clarify that.

It's going to be one of the dates we've already got on the calendar.

That is correct.

That's right.

Okay.

Seconded by Mr. Miller.

All those in favor?

Aye.

All opposed?

Okay, that's unanimously agreed.

Is there any further new business?

I did want to let you know that Mr. Smith has requested that I email you the latest emails that he sent me and copy him.

I have reservations about that because they go to your personal email addresses and I've never emailed board members and copied anybody for that reason.

So I have talked to the, first I talked to my attorney and he suggested that I create and

email accounts through email for the equalization that would forward blindly to your addresses.

I've already put that request in.

I don't know how long it will take.

I'm not gonna forward the

latest emails to you until that's set up so that it can be done that way.

And then I'll re-forward the other ones to you so, and copy him when I do that so he can see those are going to.

It sounded like he does not believe that I've done it.

Would you feel comfortable advising Mr. Smith of the outcome of the book today and asking him from the port to set documents that

on live with the scope that we decided today.

Say that last part again.

Would you feel comfortable advising Mr. Smith of the vote of the Board of Equalization today about what the documents would consider and then leaving it open to have a few wishes to send anything farther?

Yes, I will let him know about all three of them that it's been continued to a date that we can come to agree on.

Okay.

And is there any blackout dates on the remaining schedule?

Okay, so we have a, of course we have next Monday, which is- Yeah, I'm okay on that.

But I don't think that's going to be, that's going to be too soon, probably.

Okay, so August 2nd, August 8th, August 12th.

And it has to be before September 1st.

8th is available for me.

August 12th.

I have to be in Massachusetts on the 12th, can't do the 12th.

It's okay both days for you, Mr.

Beard?

Okay, all right.

And Mr. Norford, you were fine with the second day also?

The 8th and the 12th.

8th and the 12th.

All right, so everybody's available.

Okay, so I would really like you all to be here.