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E&R 1987-05-22 '18 f. MINUTES OF 1987 BOARD OF EQUALIZATION AND REVIEW MAY 22, 1987 ASSEMBLY The 1987 Board of Equalization and Review met on Friday, May 22, 1987, at 10: 00 0' clock A.M. in the New Hanover County Administration Building, 320 Chestnut Street, wilmington, North Carolina. Members present were: Commissioner W. Albert Corbett, Jr. commissioner John Dolan commissioner Fred Retchin Chairman Nolan O'Neal Members absent were: Commissioner Jonathan Barfield, Sr. Chairman O'Neal called the meeting to order stating the Board of Equalization and Review would hear the following tax appeals: Tax Appeals -Ramada Inn - 5001 Market Street - Green Tree Inn - 5023 Market Street - University Arms Apartments - 4922 Pepys Lane - OWner Harold Green Chairman 0' Neal asked anyone present wishing to give testimony with reference to the tax appeal to step forward to be sworn in by the Clerk. The following persons were sworn in: Mr. James E. Riney Mr. Roland Register, Tax Administrator Mr. Jim Bethune, Tax Appraisal Supervisor Mr. Ken G. Silliman, Assistant County Attorney The following persons testified under sworn oath. Tax Administrator, Roland Register, commented on the three tax appeals asking if the Board of E & R wished to re-hear these appeals. He presented background information on action taken by the 1983 Board of E & R, which granted a reduction of the assessed value to Green Tree Inn and Ramada Inn through assignment of additional depreciation guidelines for motels. He also presented background information on action taken by the 1984 Board of E & R, which heard an appeal on the University Arms Apartments and sustained the assessed value at $1,832,470. He stated this decision was not appealed to the North Carolina Property Tax commission; therefore, he could see no justification for re-appraisal as set out in the statutes authorizing a re-assessment since the 1984 MINUTES OF E & R MEETING, MAY 22, 1987 ( CONTINUED) ~ 29 I Board of E & R sustained the assigned value for the 1983 octennial revaluation as fair and equitable. He recommended not hearing the appeal since there is no justification for reduction of the assessed value. Tax Administrator Register stated the owner has the right to file an appeal with the North Carolina Property Tax Commission stating Mr. James E. Riney, the attorney representing the owner, is prepared to appeal to the state. Mr. James E. Riney, Attorney representing the owner, Mr. Harold Green, presented additional data to substantiate his claim that the current value placed on the property by the assessor exceeds the fair market value. He stated the intent of his appeal to the state would be only if no reduction was granted at this hearing. Assistant County Attorney Silliman expressed concern for the Board of E & R not hearing the cases stating generally appeals are heard with the right of appeal to the N. C. Property Tax Commission. County Attorney Silliman asked Tax Administrator Register if he was comfortable with not hearing the cases. I Tax Administrator Register stated he saw no new grounds for reducing the value stating new information introduced by Mr. Riney this morning had not been substantiated since it was not received until 9:00 A.M. After discussion of information received and previous hearings of the Board of E & R, Commissioner Retchin MOVED, SECONDED by Commissioner Corbett not to rehear the appeals wi th the owner having the right of appeal to the N. C. Property Tax Commission. Upon vote, the MOTION CARRIED AS FOLLOWS: Voting Aye: Commissioner Corbett Commissioner Retchin Vice-Chairman Dolan Chairman O'Neal Absent: Commissioner Barfield Tax Appeal - Galleria Shopping Center - Wrightsville Beach Chairman O'Neal asked anyone present wishing to give testimony with reference to the tax appeal to step forward to be sworn in by the Clerk. The following persons were sworn in: I Mr. Tim Jaeckle Mr. Roland Register, Tax Administrator Mr. Jim Bethune, Tax Appraisal Supervisor The following persons testified under sworn oath: ~ 30 MINUTES OF E & R MEETING, MAY 22, 1987 (CONTINUED) Mr. Register gave background information on problems wi th the construction of the mall. He stated after an on-site review which revealed signs of inferior construction, the Tax Department recommended that the class reflecting quality in materials and construction be down graded from an A6 to AB6. He also recommended a 5% reduction in the value of the building to to functional obsolescence created by inappropriate customer-access design for the mall area (i.e., stairs and only one small, inadequate elevator). .......-. Mr. Tim Jaeckle, Agent, Arthur Inc., stated he was pleased with presented by the Tax Administrator. D. Little Valuation, the recommendation After discussion, Commissioner Retchin MOVED, SECONDED by Commissioner Corbett to accept the recommendation of the Tax Department to reduce the value of the building to $3,015,190 and the total assessed value to $3,577,450 for a reduction in value of $893,990. Upon vote, the MOTION CARRIED AS FOLLOWS: Voting Aye: Commissioner Corbett Commissioner Retchin Vice-Chairman Dolan Chairman O'Neal Absent: Commissioner Barfield Withdrawal of Tax Appeal for Murrayvi11e Shopping Center - Wi1mington Holding Corporation Tax Administrator Register gave background information on the appeal stating the cost approach to the value was properly applied through approved schedules of values as reflected in the fair market value. He stated the agent for the taxpayer had not furnished income and expense figures on this property, indicating they felt the assessed value was in line. The Tax Administrator recommended upholding the assessed value of $1,290,090 stating Mr. Tim Jaeckle, the agent representing the owner, would like to comment. Mr. Tim Jaeckle stated after discussion with the Tax Administrator, he would like to withdraw the tax appeal on the Murrayville property and accept the assessed value of $1,290,090. Tax Appeal Federal Point Shopping Center Wilmington Holding Corporation Chairman 0' Neal asked anyone present wishing to give testimony with reference to the tax appeal to step forward to be sworn in by the Clerk. The following persons were sworn in: Mr. Tim Jaeckle Mr. Roland Register, Tax Administrator Mr. Jim Bethune, Tax Appraisal Supervisor MINUTES OF E & R MEETING, MAY 22, 1987 (CONTINUED) ~ 31 The following persons testified under sworn oath: I Tax Administrator Register gave background on the appeal presenting figures on the cost value and the income approach based on actual projections supplied by the taxpayer's recommended upholding the assessed value of presented by the Tax Department. information approach to expense and agent. He $2,754,560 as Mr. Tim Jaeckle, Agent, representing the owners, expressed concern for the classification of a "B" grade stating this was the only major shopping center graded higher than a "C:. He presented a schedule indicating the value computed using the income approach. He stated using the actual income and expense statement for the calendar year 1986, the current vacancy rate of 4.89%; and a capitalization rate of 10%, plus the tax rate of 1.17% the fair assessed value should be $2,529,292. Mr. Jaeckle requested acceptance of this assessed value instead of the $2,754,560 as recommended by the Tax Department. I After discussion of the income value versus the 85.84% ratio study and the methods of valuation, Commissioner Corbett MOVED, SECONDED by Commissioner Retchin to uphold the Tax Department's assessed value of $2,754,560. Upon vote, the MOTION CARRIED AS FOLLOWS: Voting Aye: Commissioner Corbett Commissioner Retchin Vice-Chairman Dolan Chairman O'Neal Absent: Commissioner Barfield Tax Appeal - Plaza East Shopping Center - The Wilmington Holding Corporation Chairman 0' Neal asked anyone present wishing to give testimony with reference to the tax appeal to step forward to be sworn in by the Clerk. The following persons were sworn in: Mr. Tim Jaeckle Mr. Roland Register, Tax Administrator Mr. Jim Bethune, Tax Appraisal Supervisor The following persons testified under sworn oath: I Tax Administrator Register gave background information on the appeal stating Income and Expense Statements for 1985 and 1986 had been received supporting an income approach. He stated after review of the statements, the Tax Department felt adjustments were necessary in establishing the appropriate net income and established an assessed value of $2,634,560. Tax Administrator Register recommended no ~ Ii r \ .. L MINUTES OF E & R MEETING, MAY 22, 1987 (CONTINUED) action to confirm or alter personal property values at this time in order to allow the taxpayer to appeal to the state and the Tax Department to audit and discover values as necessary. Chairman O'Neal asked if anyone present would like to present testimony. The following person commented: Mr. Tim Jaeckle, the Agent representing the owners, presented the income approach to value recommending an assessed value of $2,275,000. After discussion, Commissioner Retchin MOVED, SECONDED by Commissioner Corbett to uphold the Tax Department's assessed value of $2,634,560. Upon vote, the MOTION CARRIED AS FOLLOWS: Voting Aye: Commissioner Corbett Commissioner Retchin Vice-Chairman Dolan Chairman O'Neal Absent: Commissioner Barfield Tax Appeal of Lots 82, 88, 89, and 94 - Figure 8 Island - Monroe Development Company Tax Administrator Register stated Mr. Clarence Gosnell, Jr., a partner of Monroe Development Company, would not be present and had accepted the recommendation of the Tax Department to reduce the assessed value of lots 82, 88, 89, and 94 on Figure 8 to $74,000 each due to extensive beach erosion. He stated the lots will not meet CAMA requirements for improvements; therefore, they have a limited marketability. - commissioner Retchin MOVED, SECONDED Commissioner Corbett to accept the recommendation by the Tax Administrator to assess the value of lots 82, 88, 89, and 94 at $74,000 each for the year 1987. Upon vote, the MOTION CARRIED AS FOLLOWS: Voting Aye: Commissioner Corbett Commissioner Retchin Vice-Chairman Dolan Chairman O'Neal Absent: Commissioner Barfield BREAK Chairman 0' Neal recessed the meeting for lunch from 11:45 o'clock A.M. to 1:00 o'clock P.M. MINUTES OF E & R MEETING, MAY 22, 1987 (CONTINUED) ~ 33 I Tax Appeal - Lot A6, Section 4, Figure 8 Island - Heyward C. Bellamy Chairman 0' Neal asked anyone present wishing to give testimony with reference to the tax appeal to step forward to be sworn in by the Clerk. The following persons were sworn in: Dr. Heyward Bellamy Mr. Roland Register, Tax Administrator Mr. Jim Bethune, Tax Appraisal Supervisor The following persons testified under sworn oath: Tax Administrator Register gave background information on the property stating Dr. Bellamy does not feel the lot is suitable for an on-site conventional sewage disposal system; therefore, it is not worth the appraised value of $80,000. He commented on the sale of the following lots previously classified by the Health Department as being unsuitable for a septic system: Sale #1 - Lot 3, Section 9, Block A Sale Price: $110,000 I Sale #2 - Lot 1, Section 19, Block A Sale Price: $120,000 Tax Administrator Register stated the Health Department has approved alternative systems for 21 lots on Figure 8 Island wi thin the past year. He stated based on the sale price of Lots 1 & 3 and the possibility of installing an alternative system, he felt the appraised value of $80,000 was a fair market value. Dr. Bellamy stated he could not use the property for construction emphasizing the fact that if he decided to apply for an alternative septic disposal application, there would be no guarantee a system could be installed. He respectfully requested leaving the property as previously assessed until the Health Department approves a septic system and at that time appraise the lot at market value. A lengthy discussion was held on the current value of the lot. It was the consensus of the Board of Equalization and Review to defer action under further information can be obtained from the Health Department. Chairman O'Neal was requested to discuss this matter with the Board of Health. I Tax Appeal - Thomas Davenport Wright - Cape Golf & Racket Club Chairman 0' Neal asked anyone present wishing to give testimony with reference to the tax appeal to step forward ~ 34 MINUTES OF E & R MEETING, MAY 22, 1987 (CONTINUED) to be sworn in by the Clerk. sworn in: The following persons were ~. Mr. Joseph C. Hearne Mr. Roland Register, Tax Administrator Mr. Jim Bethune, Tax Appraisal Supervisor The following persons testified under sworn oath: Tax Administrator Register gave background information on the appeal stating the cost approach was used to determine the value of the property since the Cape Golf and Racquet Club is a new facility. He stated the developers of the club incurred cost in excess of the assessed value assigned to the property, therefore, the purchase price of $1,000,000 was not an indication of fair market value. Records reflect that the former owner sold the club at a greatly discounted value but at the same time retained rights and access to the facility in order to enhance sales. Tax Administrator Register requested the Board to support the assessed value at $2,675,150. Mr. Hearen commented on the purchase of the golf course and racquet club at a cost of $1,000,000 on September 17, 1986, with a tax appraisal received in the amount of $3,128,190. He expressed concern for an income approach to justify an appraisal of $2,675,150 and respectfully requested the Commissioners to consider reducing the assessed value to $1,000,000. After discussion of the golf course enhancing the value of the property, Commissioner Corbett MOVED, SECONDED by Commissioner Retchin to support the assessed value at $2,675,150 as recommended by the Tax Administrator. Upon vote, the MOTION CARRIED AS FOLLOWS: Voting Aye: Commissioner Corbett Commissioner Dolan Commissioner Retchin Chairman O'Neal Absent: Commissioner Barfield Tax Appeal - Thetford Properties - Market Street Apartments III and IV Chairman 0' Neal asked anyone present wishing to give testimony with reference to the tax appeal to step forward to be sworn in. The following persons were sworn in: Mr. curtis West Mr. Roland Register, Tax Administrator Mr. Jim Bethune, Tax Appraisal Supervisor MINUTES OF E & R MEETING, MAY 22, 1987 (CONTINUED) ~ .'35 I The following persons testified under sworn oath: Tax Administrator Register gave background information on the tax appeal stating the cost approach to value was used in assessing the property. He stated the reported sales of the properties are not accepted as "market value;" therefore the Tax Department does not consider the buyer and seller to be "arms length" or that the property was offered for sale on the "open market." Tax Administrator Register stated North Hills, Inc. was the developer of the property and managed the property. He stated the subsidized housing project had reached a point which allowed advantages to the buyer and seller for a "change" in ownership at a discounted value, which he felt had occurred in the ownership change. Therefore, North Hills has more than a managing agent's interest, and the change in ownership was not an "arms length" transaction as defined by statute. He requested the Board to uphold the appraisal of $4,466,900. Mr. Curtis West, representing Thetford Properties, stated the appeal was based on the properties being over assessed as to market value and sale price. He requested the Board to consider a reduction in the assessed value. I After discussion of an "arms length" transaction as defined by statute and the properties involved, Commissioner Retchin MOVED, SECONDED by Commissioner Corbett to accept the appraisal in the amount of $4,466,900 as recommended by the Tax Administrator. Upon vote, the MOTION CARRIED AS FOLLOWS: Voting Aye: Commissioner Corbett Commissioner Dolan Commissioner Retchin Chairman O'Neal Absent: Commissioner Barfield ADJOURNMENT Commissioner Retchin MOVED, SECONDED by Commissioner Corbett to adjourn the regular business items as submitted and to accept rehearing of information regarding Dr. Heyward C. Bellamy. Upon vote, the MOTION CARRIED AS FOLLOWS: Voting Aye: Commissioner Corbett Commissioner Dolan Commissioner Retchin Chairman O'Neal I Absent: Commissioner Barfield ~ 3 6 MINUTES OF E & R MEETING, MAY 22, 1987 (CONTINUED) Chairman O'Neal adjourned the meeting at 2:21 o'clock P.M. ........ ~p~c~~, ~ F. Harrell, Clerk MINUTES OF CONTINUED BUSINESS OF 1981 BOARD OF EQUALIZATION AND REVIEW, JANUARY 19, 1988 ASSEMBLY The 1987 Board of Equalization Monday, 19, 1988, 11:56 o'clock A.M., County Administration Building, 320 Wilmington, North Carolina. and Review met on in the New Hanover Chestnut Street, Members present were: Commissioner Jonathan Barfield, Sr. Commissioner W. Albert Corbett, Jr. Commissioner John M. Dolan Commissioner Fred Retchin Chairman Nolan O'Neal Chairman O'Neal called the meeting to order stating the appeal of value was unfinished business of the 1987 Board of Equalization and Review. _. 1987 Appeal of Value by Dr. Heywood Bellamy R045-002-018-000 - Lot A, Section 4, Figure 8 Island Tax Administrator Register gave background information on the appeal stating Dr. Bellamy was receptive to a reduction in value of $10,000. He stated the waste disposal system, if approved by the Health Department, would cost approximately $18,000 installed. After discussion, Commissioner Retchin MOVED, SECONDED by Chairman O'Neal to approve the $10,000 reduction in value for Lot A6, Section 4, Figure 8 Island. Upon vote, the MOTION CARRIED UNANIMOUSLY. ADJOURNMENT Commissioner Retchin MOVED, SECONDED Corbett to adjourn. Upon vote, the UNANIMOUSLY. by Commissioner MOTION CARRIED Chairman O'Neal adjourned the meeting at 11:58 o'clock A.M. ro~Cd~ ~ F. Harrell, Clerk ~".