The way Worcester assessor Bill Ford sees it, if you own property, you should know what it is worth. He believes that philosophy should apply to the owners of the beleaguered Palladium – home to a thriving heavy metal music scene, but in danger of being silenced permanently.
The city this year valued the property at 255-261 Main St. – which in addition to the Palladium includes office and retail space – at $2.3 million. That was slightly more than triple its assessed value of $688,700 in 2011. The tax bill more than doubled, from $23,863.46 in fiscal 2011 to $65,887.16 in fiscal 2012. Local attorneys John Fischer and John Sousa bought the building in 1990 for $1.3 million. Three years later, it was assessed at just $391,600. Until this year, it had been assessed two straight years at $688,700.
“In my opinion, they should know the value of their property,” Ford says. “If you bought something for $1.3 million, and it is assessed at $600,000, wouldn’t you think that was strange?”
Fischer doesn’t think so. He and Sousa have appealed their assessment, filing for an abatement of $494,904. No decision has been made yet on that request. At the same time, Fischer has made it clear he thinks the price tag is too steep. He and Sousa have openly questioned the future of the Palladium, going so far as to threaten demolition. Just last week, Fischer brought forward a request for a waiver from the city’s demolition delay ordinance. That measure requires a 12-month wait before historical property can be razed. The Historical Commission unanimously denied the waiver, ensuring the building will remain in place – for now.
As for why he never took issue with earlier, much lower assessments of his property, Fischer says, “It’s not uncommon for properties to be valued less than what they were purchased for.” Some have questioned how much the owners did to increase the value of the building, which Fischer admits is in need of “repairs and upgrades.” Ford raised that issue directly, saying, “The fact is the property owners did not properly maintain that building. (They) allowed the building to deteriorate, but now they say, ‘Wait. I have to tear the building down because you’re taxing me.’”
Worcester officials have made no secret of their opposition to any attempt to destroy the building and the Palladium. The Historical Commission’s vote provided added emphasis and followed a strong recommendation from Joel Fontane, director of the city’s Planning and Regulatory Services Division. He advised members to deny the waiver, saying, “Demolition of this historically significant structure would be detrimental to the architectural and historical resources of the city … and because the applicant has not demonstrated undue economic hardship.”
Mayor Joseph Petty has also taken a stance on the issue, telling Worcester Mag in a statement: “The Palladium is a unique destination and cultural venue in our city and it is our desire that this structure not be demolished.” He declined further comment “until the city assessor makes his final decision” on the abatement request.
The abatement, according to Chris Besaw, is “the key.” Besaw is general manager for Mass Concerts, which has booked shows at the Palladium since 1990. John Peters owns Mass Concerts, a major promoter of shows in arenas throughout New England. How big? In November 2000, under Peters’ guidance, Mass Concerts booked Prince at the Palladium, when the pop icon was performing mostly in theaters and small arenas. Fischer admits the Palladium would be a barren place without the promoter.
“Mass Concerts has been there for 12 years,” says Fischer. “He’s the person who has been keeping the place alive all that time.”
The next big show scheduled at the Palladium is Summer Slaughter Tour North America 2012 on Aug. 10. It will no doubt be music to the ears of heavy metal fans and supporters who do not want to see the building torn down. Among them is Jonathan Noble, a Worcesterite known for his participation in the grassroots movement, Occupy Worcester.
“We don’t have the most vibrant reputation outside Worcester,” Noble says. “What we are known for is pretty much being a nexus of the heavy metal scene.”
Noble and others can take some comfort in knowing the Palladium won’t be going anywhere in the immediate future. Fischer himself isn’t quite ready to write the building’s epitaph. “There’s more than a 50-50 chance it will be there next year at this time,” he says. “We’re going to keep it alive for the next year. Hopefully, word will get out and someone will see there’s a hell of an opportunity there.”
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Thursday, August 2, 2012
Monday, July 30, 2012
Telegram: Dust yet to settle on abatements
By Nick Kotsopoulos Politics and the City
The way things are trending, those Worcester property owners waiting to hear from city assessors about their real estate abatement applications may have more than a puncher’s chance of getting their property assessment knocked down a bit.
That’s because 55 percent of the abatement applications reviewed and acted on by city assessors through last Monday have been approved.
According to City Assessor William J. Ford, 383 abatements have been granted and processed, returning $483,927 to taxpayers. Another 14 abatement applications have been approved and are being processed, he said.
In comparison, 323 abatement applications have been denied.
Mind you, 2,395 property owners have challenged their fiscal 2012 assessments by filing for abatements and city assessors have only acted on roughly 30 percent of those applications. But the fact that 55 percent have been approved so far has to provide some hope to those still waiting to hear back on their challenge.
That’s not to say that the odds are in their favor but, hey, while a puncher’s chance may not be much, it is certainly better than no chance at all, as has been the case in other years.
Historically, abatement approval rates don’t often run more than 50 percent.
In 2010, for instance, only 34 percent (483) of the 1,432 abatement applications filed were approved, while in 2009 roughly 47 percent (844) of the 1,784 applications were granted, and in 2008 nearly 43 percent (406) of the 952 applications were approved, according to the assessor’s office.
Perhaps a better apples-to-apples comparison would be other triennial revaluation years such as this — those years when the city conducts full field reviews in updating the valuations of all properties.
In 2007, the city’s last triennial revaluation, 58 percent (342) of the 587 abatement applications were approved. In other triennial revaluation years, the approval rate was close to 50 percent; in 2004, 47 percent (196) of the 414 applications were approved, while in 2001, 49 percent (330) of the 679 applications were granted.
Of the 720 abatement applications that have been reviewed and acted on, a majority of them have dealt with residential properties (559), while far fewer commercial, industrial or apartment properties (148) and mixed-use properties (13) have been taken up
Wait until assessors act on the bulk of the 780 abatement applications that were filed for the latter two classes of properties; that is when things should really get interesting.
Why?
Because many of those properties were hit with major increases in their assessments, which, in turn, have caused their tax bills to skyrocket. In comparison, residential property assessments dropped 3.8 percent, on average, compared with the previous year.
Of Worcester’s 2,278 commercial parcels, the assessed valuations of 540 of them went up by 40 percent to 100 percent, while the assessment for 174 commercial properties increased by more than 100 percent.
Meanwhile, of the 598 industrial properties in the city, 101 properties shot up 40 percent to 100 percent, while 60 had their valuations more than doubled.
Just along the business corridor on the Southwest Cutoff, no fewer than 28 business property owners have filed for abatements, and in many instances their property assessments nearly doubled or more.
A business property at 37-69 Southwest Cutoff, for instance, saw its assessment jacked up from $2.1 million to $4 million, for an increase of 92 percent.
Another property at 126 Southwest Cutoff saw its assessed valuation skyrocket from $196,200 to $1 million, for a whopping 433 percent increase, while another business at 182 Southwest Cutoff saw its assessed valuation jump 106 percent, from $347,600 to $717,500.
The Southwest Cutoff isn’t the only major commercial corridor in which a number of business owners have filed abatement applications. The same is true along Main Street, Park Avenue, Shrewsbury Street, Southbridge Street, Grafton Street and Chandler Street.
In the downtown, many owners of office buildings have also filed for abatements, as have eight of the 11 major property owners on Front Street.
Many of the abatement applications for those properties have yet to be taken up by the assessors because they were submitted just before the June 25 filing deadline. It will be interesting, though, to see the outcome of all those abatement applications, because some pretty significant bucks will be at stake
The fact that the city has set aside $3 million to fund abatements and exemptions is an indication that city officials are well aware of what is involved. That is underscored by the fact that in the past 11 years the most the city ever paid out on abatements and exemptions was $917,004 in fiscal 2007, followed by $708,649 in fiscal 2009 and $702,389 in fiscal 2011.
Most other years, the city spent less than $500,000 on abatements and exemptions.
City assessors have until Sept. 25 to act on all abatement applications, but that doesn’t mean the process will end then.
Those taxpayers whose abatement requests were denied by the assessor will then have until Dec. 25 to file an appeal with the state Appellate Tax Board.
As a result, the city won’t really know the full impact of those appeals until sometime in January, and then the process before the Appellate Tax Board could be a long, drawn-out one.
In other words, it could be months, even years, before the dust settles on all the challenges to last fiscal year’s new property assessments.
The way things are trending, those Worcester property owners waiting to hear from city assessors about their real estate abatement applications may have more than a puncher’s chance of getting their property assessment knocked down a bit.
That’s because 55 percent of the abatement applications reviewed and acted on by city assessors through last Monday have been approved.
According to City Assessor William J. Ford, 383 abatements have been granted and processed, returning $483,927 to taxpayers. Another 14 abatement applications have been approved and are being processed, he said.
In comparison, 323 abatement applications have been denied.
Mind you, 2,395 property owners have challenged their fiscal 2012 assessments by filing for abatements and city assessors have only acted on roughly 30 percent of those applications. But the fact that 55 percent have been approved so far has to provide some hope to those still waiting to hear back on their challenge.
That’s not to say that the odds are in their favor but, hey, while a puncher’s chance may not be much, it is certainly better than no chance at all, as has been the case in other years.
Historically, abatement approval rates don’t often run more than 50 percent.
In 2010, for instance, only 34 percent (483) of the 1,432 abatement applications filed were approved, while in 2009 roughly 47 percent (844) of the 1,784 applications were granted, and in 2008 nearly 43 percent (406) of the 952 applications were approved, according to the assessor’s office.
Perhaps a better apples-to-apples comparison would be other triennial revaluation years such as this — those years when the city conducts full field reviews in updating the valuations of all properties.
In 2007, the city’s last triennial revaluation, 58 percent (342) of the 587 abatement applications were approved. In other triennial revaluation years, the approval rate was close to 50 percent; in 2004, 47 percent (196) of the 414 applications were approved, while in 2001, 49 percent (330) of the 679 applications were granted.
Of the 720 abatement applications that have been reviewed and acted on, a majority of them have dealt with residential properties (559), while far fewer commercial, industrial or apartment properties (148) and mixed-use properties (13) have been taken up
Wait until assessors act on the bulk of the 780 abatement applications that were filed for the latter two classes of properties; that is when things should really get interesting.
Why?
Because many of those properties were hit with major increases in their assessments, which, in turn, have caused their tax bills to skyrocket. In comparison, residential property assessments dropped 3.8 percent, on average, compared with the previous year.
Of Worcester’s 2,278 commercial parcels, the assessed valuations of 540 of them went up by 40 percent to 100 percent, while the assessment for 174 commercial properties increased by more than 100 percent.
Meanwhile, of the 598 industrial properties in the city, 101 properties shot up 40 percent to 100 percent, while 60 had their valuations more than doubled.
Just along the business corridor on the Southwest Cutoff, no fewer than 28 business property owners have filed for abatements, and in many instances their property assessments nearly doubled or more.
A business property at 37-69 Southwest Cutoff, for instance, saw its assessment jacked up from $2.1 million to $4 million, for an increase of 92 percent.
Another property at 126 Southwest Cutoff saw its assessed valuation skyrocket from $196,200 to $1 million, for a whopping 433 percent increase, while another business at 182 Southwest Cutoff saw its assessed valuation jump 106 percent, from $347,600 to $717,500.
The Southwest Cutoff isn’t the only major commercial corridor in which a number of business owners have filed abatement applications. The same is true along Main Street, Park Avenue, Shrewsbury Street, Southbridge Street, Grafton Street and Chandler Street.
In the downtown, many owners of office buildings have also filed for abatements, as have eight of the 11 major property owners on Front Street.
Many of the abatement applications for those properties have yet to be taken up by the assessors because they were submitted just before the June 25 filing deadline. It will be interesting, though, to see the outcome of all those abatement applications, because some pretty significant bucks will be at stake
The fact that the city has set aside $3 million to fund abatements and exemptions is an indication that city officials are well aware of what is involved. That is underscored by the fact that in the past 11 years the most the city ever paid out on abatements and exemptions was $917,004 in fiscal 2007, followed by $708,649 in fiscal 2009 and $702,389 in fiscal 2011.
Most other years, the city spent less than $500,000 on abatements and exemptions.
City assessors have until Sept. 25 to act on all abatement applications, but that doesn’t mean the process will end then.
Those taxpayers whose abatement requests were denied by the assessor will then have until Dec. 25 to file an appeal with the state Appellate Tax Board.
As a result, the city won’t really know the full impact of those appeals until sometime in January, and then the process before the Appellate Tax Board could be a long, drawn-out one.
In other words, it could be months, even years, before the dust settles on all the challenges to last fiscal year’s new property assessments.
Sunday, July 22, 2012
Tuesday, July 17, 2012
Monday, July 2, 2012
Friday, June 29, 2012
T&G: Letter to the Editor - Housing assessments don’t make sense
The Telegram & Gazette has been writing about what the city manager and the tax assessor’s office have been saying, that the single-family home valuation has dropped on average 3 percent. Does the T&G want to hear the real story?
I received my parcel information from the assessor’s office, and to my surprise (shock) the value of my single-family home went up 23 percent. When I called the assessor’s office the person I talked to told me he would look into it. He called me back a week later and told me he had a little room to work with, and then told me upfront not to expect the value to be less than last year, because that was not going to happen. They did drop the value down, but it’s still at 10 percent higher. I think they are just picking numbers out of the air and hope most people won’t say anything.
I have talked to a number of people, and they say their property values have all gone up. The house next door to mine sold for $225,000 in 2005. That house is now on the market for $135,000. And my property value has gone up?
When you file for your abatement, who is going to do the review, the assessor’s office?
I don’t trust them, and I can’t see how they can be trusted to be fair. They should prove to us where they got these numbers, not us having to prove they are wrong.
RONALD ROY
Worcester
I received my parcel information from the assessor’s office, and to my surprise (shock) the value of my single-family home went up 23 percent. When I called the assessor’s office the person I talked to told me he would look into it. He called me back a week later and told me he had a little room to work with, and then told me upfront not to expect the value to be less than last year, because that was not going to happen. They did drop the value down, but it’s still at 10 percent higher. I think they are just picking numbers out of the air and hope most people won’t say anything.
I have talked to a number of people, and they say their property values have all gone up. The house next door to mine sold for $225,000 in 2005. That house is now on the market for $135,000. And my property value has gone up?
When you file for your abatement, who is going to do the review, the assessor’s office?
I don’t trust them, and I can’t see how they can be trusted to be fair. They should prove to us where they got these numbers, not us having to prove they are wrong.
RONALD ROY
Worcester
Sunday, June 24, 2012
Telegram: Tomorrow is deadline to contest Worcester real estate assessments
It’s last call for property owners wishing to contest their new real estate and personal property assessments.
Tomorrow is the deadline for property owners to file an abatement application with the assessor’s office and the way things are trending the city could see its biggest number of applications in years.
As of Friday, the city had received 1,217 real estate abatement applications, according to City Assessor William J. Ford.
While that number is consistent with previous year application numbers, Mr. Ford said, his office expects to receive “a large volume” of applications by tomorrow’s filing deadline, especially from commercial and industrial property owners.
The assessor said it is difficult to determine just how many applications have been requested or obtained because there are multiple ways in which a property owner can obtain an abatement application, including printing one off the city’s website at www.worcesterma.gov.
Of the 1,217 real estate abatement applications to date, Mr. Ford said the breakdown of the filings is as follows: 822, residential; 371 commercial, industrial and apartments; 24, mixed-used.
In addition, the city has received 79 abatement applications for personal property values, the assessor said.
Mr. Ford said about 40 abatements have been granted so far, and all have been for residential properties.
“Of the total applications received, we have reviewed and inspected 238 properties (212 residential and 26 commercial/industrial/apartments),” Mr. Ford wrote in a report that goes before the City Council Tuesday night. “An additional 24 inspections have been scheduled.”
Last fiscal year, the city received 1,257 abatement applications, while 1,432 were received in fiscal 2010 and 1,784 in fiscal 2009.
In 2009, 844 abatements were granted, totaling $708,648, according to the assessor. Meanwhile, 483 abatements, totaling $457,117, were approved in 2010 and 277, totaling $702,389, were approved last year.
The city assessor must act on an abatement application within three months of the date of its filing, unless the applicant agrees in writing before the three-month period expires to extend it. If the assessor does not act on the abatement application within 90 days, it is deemed denied.
Mr. Ford said when an application is received by his office, it is time stamped and logged. He said the information on the application is then entered into the Vision assessment system for tracking and approval, and scanned into the city’s electronic record database.
Each application is assigned to an assessor for further review and inspection.
Because city officials anticipate there will be an increase in the number of applications, the city has hired KRT Appraisals to assist with the review and interior inspection of residential properties.
Mr. Ford said that frees up in-house staff to focus on the review and interior inspections of commercial and industrial properties.
City officials are bracing for an influx of abatement applications from commercial and industrial property owners because of dramatic increases in their assessed valuations.
Of the city’s 2,278 commercial parcels, the assessed valuations for 317 have gone up 10 percent to 20 percent; 498 went up 20 percent to 40 percent; and 540 went up 40 percent to 100 percent.
Meanwhile, the valuations of 174 commercial properties have increased by more than 100 percent.
Of the 598 industrial properties in the city, the assessed valuations of 58 of those properties have increased by 10 percent to 20 percent; 98 properties went up by 20 percent to 40 percent and 101 properties shot up 40 percent to 100 percent.
In addition the assessed valuations of 60 industrial properties have more than doubled.
In comparison, residential property assessments decreased by 3.8 percent on average compared with the previous year.
Property owners are encouraged to pay the tax as assessed to avoid any loss of rights or additional charges. If the tax due is more than $3,000 for the entire year, the full tax must be paid without incurring interest, otherwise, the right to appeal to the state Appellate Tax Board is forfeited.
The assessor is required to provide written notification of the disposition of all abatement applications. Those who wish to appeal the decision of the assessor have 90 days to file an appeal with the state Appellate Tax Board.
Tomorrow is the deadline for property owners to file an abatement application with the assessor’s office and the way things are trending the city could see its biggest number of applications in years.
As of Friday, the city had received 1,217 real estate abatement applications, according to City Assessor William J. Ford.
While that number is consistent with previous year application numbers, Mr. Ford said, his office expects to receive “a large volume” of applications by tomorrow’s filing deadline, especially from commercial and industrial property owners.
The assessor said it is difficult to determine just how many applications have been requested or obtained because there are multiple ways in which a property owner can obtain an abatement application, including printing one off the city’s website at www.worcesterma.gov.
Of the 1,217 real estate abatement applications to date, Mr. Ford said the breakdown of the filings is as follows: 822, residential; 371 commercial, industrial and apartments; 24, mixed-used.
In addition, the city has received 79 abatement applications for personal property values, the assessor said.
Mr. Ford said about 40 abatements have been granted so far, and all have been for residential properties.
“Of the total applications received, we have reviewed and inspected 238 properties (212 residential and 26 commercial/industrial/apartments),” Mr. Ford wrote in a report that goes before the City Council Tuesday night. “An additional 24 inspections have been scheduled.”
Last fiscal year, the city received 1,257 abatement applications, while 1,432 were received in fiscal 2010 and 1,784 in fiscal 2009.
In 2009, 844 abatements were granted, totaling $708,648, according to the assessor. Meanwhile, 483 abatements, totaling $457,117, were approved in 2010 and 277, totaling $702,389, were approved last year.
The city assessor must act on an abatement application within three months of the date of its filing, unless the applicant agrees in writing before the three-month period expires to extend it. If the assessor does not act on the abatement application within 90 days, it is deemed denied.
Mr. Ford said when an application is received by his office, it is time stamped and logged. He said the information on the application is then entered into the Vision assessment system for tracking and approval, and scanned into the city’s electronic record database.
Each application is assigned to an assessor for further review and inspection.
Because city officials anticipate there will be an increase in the number of applications, the city has hired KRT Appraisals to assist with the review and interior inspection of residential properties.
Mr. Ford said that frees up in-house staff to focus on the review and interior inspections of commercial and industrial properties.
City officials are bracing for an influx of abatement applications from commercial and industrial property owners because of dramatic increases in their assessed valuations.
Of the city’s 2,278 commercial parcels, the assessed valuations for 317 have gone up 10 percent to 20 percent; 498 went up 20 percent to 40 percent; and 540 went up 40 percent to 100 percent.
Meanwhile, the valuations of 174 commercial properties have increased by more than 100 percent.
Of the 598 industrial properties in the city, the assessed valuations of 58 of those properties have increased by 10 percent to 20 percent; 98 properties went up by 20 percent to 40 percent and 101 properties shot up 40 percent to 100 percent.
In addition the assessed valuations of 60 industrial properties have more than doubled.
In comparison, residential property assessments decreased by 3.8 percent on average compared with the previous year.
Property owners are encouraged to pay the tax as assessed to avoid any loss of rights or additional charges. If the tax due is more than $3,000 for the entire year, the full tax must be paid without incurring interest, otherwise, the right to appeal to the state Appellate Tax Board is forfeited.
The assessor is required to provide written notification of the disposition of all abatement applications. Those who wish to appeal the decision of the assessor have 90 days to file an appeal with the state Appellate Tax Board.
Monday, June 18, 2012
Thursday, June 14, 2012
Sunday, June 10, 2012
Wednesday, June 6, 2012
Monday, June 4, 2012
Telegram: Questions remain over Worcester's commercial property valuations
WORCESTER — In the 2008 property tax revaluation, city assessors rated a four-story office building near Lincoln Square to be largely obsolete by the construction standards of the day, a decision that contributed to reducing the value of the building for tax purposes by millions of dollars.
It was a curious move, however, given that construction on the building, the Life Sciences and Bioengineering Center at Gateway Park, had only been completed the year before.
City officials said this past week they could find no explanation or justification on file as to why assessors would judge a new, state-of-the-art office building to be so outdated that it qualified for a significantly reduced property tax assessment.
The situation also has produced some head scratching at Worcester Polytechnic Institute, which owns the building through a subsidiary corporation.
“I have no idea how that transpired, frankly,” said WPI Chief Financial Officer Jeffrey S. Solomon, who added that he wasn't aware that the city had rated the building largely obsolete until he was contacted for this report.
The life sciences center is just one of hundreds of commercial structures across the city for which obsolescence ratings were set unusually high, which has the result of reducing the taxable values of those buildings, according to city records and independent assessing experts.
Most of the questionably high obsolescence ratings have been dialed back in this year's revaluation, but serious questions remain about how so many commercial buildings in productive use came to be assessed as mostly obsolete and whether the cash-strapped city lost untold millions in commercial property taxes as a result.
The functional and economic obsolescence ratings for WPI's life sciences center were reset to zero in this year's revaluation, which contributed to more than doubling the building's assessed value from just under $8 million last year to $17.1 million this year.
That was one of many jaw-dropping jumps in commercial property valuations unveiled as City Assessor William J. Ford combed through the property tax rolls slashing or eliminating high functional obsolescence rates set under his predecessor, Robert J. Allard Jr.
In one method of placing a value on a commercial building for tax purposes, known as the “cost approach,” assessors start with the replacement cost of a building. That amount is then reduced based on several factors, including the condition of the building and how well it suits the needs of modern business tenants. In assessing terms, that is, the value of the building is depreciated based in part on the degree to which it is functionally obsolete.
A moderately outmoded building might be judged to be 5 percent functionally obsolete. A completely outdated structure, such as a brick mill building from the 19th century, typically would be capped at 25 percent functionally obsolete, according to Mr. Ford and other assessing experts.
But hundreds of commercial and industrial buildings in Worcester were rated far more than 25 percent functionally obsolete as of the previous revaluation four years ago.
The functional obsolescence of 552 buildings was judged to be between 25 percent and 40 percent, while another 135 buildings were rated at between 41 percent and 70 percent, and 27 buildings were rated between 71 percent and 100 percent, according to a Telegram & Gazette review of city assessing records. All told, a quarter of the city's inventory of 2,900 commercial and industrial buildings was judged to be 25 percent or more functionally obsolete.
Massachusetts Association of Assessing Officers President Ronald Keohan said he couldn't recall ever having seen a functional obsolescence percentage higher than 25 percent in his work as the deputy assessor in Saugus. Larry Clark, the director of professional development for the International Association of Assessing Officers based in St. Louis, said he occasionally has seen them as high as 50 percent but only for long-disused industrial plants in the Midwest.
Mr. Ford, the city assessor who inherited the high commercial obsolescence figures when he took over the office three years ago, said he couldn't speak to how things were done before his appointment because the old software didn't provide a space for comments explaining unusual depreciation calculations and he couldn't find any written records justifying the high percentages. He has since overseen the installation of a new assessment software package.
“If my guys put something down as 15 percent obsolete, I'm not going to question that, but if it's 80 percent, you better have an explanation why,” Mr. Ford said.
After he took over, with the city manager's backing, Mr. Ford set about hacking away at what he considered to be questionably high obsolescence rates applied to commercial and industrial properties throughout the city.
The resulting spike in commercial property valuations incited an uproar among building owners fearful that the new assessed values would send their tax bills skyrocketing. Under intense pressure from the business community, the City Council last month approved a lower commercial tax rate, negating the financial impact of the higher valuations for some properties, and thus, quieting the tumult.
In defending the new higher values from strong business community pushback, City Manager Michael V. O'Brien initially seemed to cast doubt on the propriety of the former valuations. But Mr. O'Brien later backpedaled, assuring councilors that the previous values had been calculated in accordance with state regulations.
That puts Mr. O'Brien in the contorted position of publicly accepting the validity of the previous valuations, which were set on his watch, while at the same time systematically undoing them. He did not respond to several interview requests over the last two weeks.
The previous assessor, Mr. Allard, now retired and living in California, again defended the appropriateness of his valuations in a recent telephone interview. His position is backed up by the state Department of Revenue, which certified Mr. Allard's valuations in 2008 and continues to stand by that certification today.
Mr. Allard maintained that the high obsolescence percentages under his tenure had no impact on commercial property taxes because his assessors analyzed the rents earned by comparable buildings to arrive at an initial valuation, known as the “income approach” to assessments. The resulting valuations are then depreciated based on factors such vacancy rates and expenses.
The Department of Revenue requires assessors to calculate commercial valuations using at least two assessment approaches and further mandates that the resulting values must be within 15 percent of each other.
“The assessors were essentially matching the cost approach to the income approach by adjusting the obsolescence percentages. But it's meaningless,” Mr. Allard said. “We used the income approach. That's really the only way to value these commercial properties.”
But Mr. Ford said he also found many unusually high depreciation percentages in the income approach assessments calculated by his predecessor.
Late last month, the Department of Revenue certified the new, sharply higher commercial property values calculated under Mr. Ford's supervision.
Department spokesman Robert Bliss said he sees no inconsistency in signing off on a set of valuations that all but wipes out an important factor in arriving at the previously certified values.
“All I can say is that in our sampling of the values the city proposed, we looked at them, conducted a sort of audit. We felt it passed muster, and we approved it,” Mr. Bliss said. “I think what we've seen four years later is a conversion to a new data system, and the new assessor having the ability to exercise his own judgment.”
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