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E&R 1991-06-18 I I I 67 ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW MEETING JUNE 18, 1991 ASSEMBLY The 1991 Board of Equalization and Review met on Tuesday, June 18, 1991, at 8:05 a.m. in the Assembly Room of the New Hanover County Administration Building, 320 Chestnut Street, Wilmington, North Carolina. Members present were: Commissioner Jonathan Barfield, Sr. Commissioner Robert G. Greer Commissioner E. L. Mathews, Jr. Commissioner william H. Sutton Chairman Fred Retchin Chairman Retchin called the meeting to order. TAX APPEAL - GENERAL ELECTRIC COMPANY, PARCEL R01700-001-000-000, CASTLE HAYNE ROAD Mr. Jim Bethune reported that after several conferences with representatives from General Electric, an agreement was reached between the Tax Appraisal Department and the appellant in reducing the assessed value on the property. The buildings involved in the manufacturing process were depreciated further because of applying additional obsolescence. Mr. Joe Taylor, representing General Electric, was present and acknowledged the company's agreement with the compromise on the new assessment. Mr. Bethune said that the tax department concurred with the detailed plant analysis for the tax assessment appeal which was provided earlier. He also reported that the Land Records office was able to determine through the use of aerial photographs that the actual "primary site" should be corrected to 106 acres. Motion: Commissioner Greer MOVED, SECONDED by Commissioner Barfield, to accept the reduction as recommended by the appraisal staff in reducing the assessed value to $30,147,968. Upon vote the MOTION CARRIED UNANIMOUSLY. TAX APPEAL - HOSPITALITY INVESTMENT (HOWARD JOHNSON), PARCEL R04915 -002-006-000, 5032 MARKET STREET Mr. Ramesh B. Gokal, president of Hospi tali ty Investment International, spoke on the appraised value of his property being greater than the fair market value. He argued that the income approach to value was more indicative of the market value on his property. with the current market, he felt it would be extremely difficul t to get investors to buy at the appraised fair market value and requested the tax valuation be based on the income approach with the use of a 13% capitalization rate. ~ 68 MINUTES OF BOARD OF EQUALIZATION AND REVIEW, JUNE 18, 1991 - Mr. Bethune rebutted that the cost approach to value is a more accurate measure of value on property recently constructed and where land value can be supported by the market. He further explained the formula used to determine the capitalization rate. Motion: At the conclusion of the hearings on this date, Commissioner Barfield MOVED, SECONDED by Commissioner Sutton, to uphold the assessed value of $5,013,780. Upon vote, the MOTION CARRIED UNANIMOUSLY. TAX APPEAL - LUMINA AVENUE CORPORATION (HOLIDAY INN), PARCEL R05813-003-001-000, 1706 N. LUMINA AVENUE Mr. Maxie Coker, owner of Lumina Avenue Corporation, and Mr. Dick Tharrington, President of First Carolina National Corporation (the managing firm of the hotel), spoke in opposition to the assessed value of the property. They argued that recent sales of similar hotels do not support the valuation and that the income approach to value supports a value of $4,500,000. Mr. Tharrington said a typical cap rate for a hotel the age of this facility would not be less than 12%, but more likely at 13-14%. Mr. Bethune reported that the income approach to value was the best and most accurate approach to estimate the fair market value on this property and it was reached by removing the property tax from the reported expenses and included in the overall capitalized income with the capitalization rate of 10%. Mr. Bethune also considered the assessed value supported by the fact that the present owners purchased the property in 1987 for $5,730,180. _. MOTION: At the conclusion of the hearings on this date, Commissioner Barfield MOVED, SECONDED by Commissioner Mathews, to uphold the assessed value of $6,162,247 as recommended by the Tax Appraisal Supervisor. Upon vote, the MOTION CARRIED UNANIMOUSLY. TAX APPEAL - HAROLD GREEN (RAMADA INN), PARCEL R04915-001-010-000, 5001 MARKET STREET Mr. Peyton Cooper, of Avtax, Inc., representing Mr. and Mrs. Harold Greene, owners of the Ramada Inn, spoke regarding his client's opinion that the appraised value of the property is greater than the fair market value and not equally appraised as nearby Holiday Inn. Mr. Cooper provided an appraisal based on the income approach to value and requested the assessed value to be $1,665,833. He explained that the cost approach method would be applicable to specialized property or newly constructed property, but property such as older hotels built in excess markets may not be worth the value established by the cost approach method. Mr. Bethune reported that the appellant's income approach to value is based on unsupported percentages of annual expense and not by actual income and expense statements, therefore, no reduction of the assessed value could be justified. Mr. Bethune also explained I I I 69 ~ MINUTES OF BOARD OF EQUALIZATION AND REVIEW, JUNE 18, 1991 that Mr. Cooper's comparisons of the assessed value of the Holiday Inn and the Ramada are not equal since they are not comparable in size. He rationalized that the unit value per room would decrease as the size of the complex increases. MOTION: At the conclusion of the hearings on this date, Commissioner Barfield MOVED, SECONDED by Commissioner Greer, to uphold the assessed value of $2,396,125 as recommended by the Tax Appraisal Supervisor. Upon vote, the MOTION CARRIED UNANIMOUSLY. TAX APPEAL - MAQ/PINES ASSOCIATES (THE PINES APARTMENTS), PARCEL R06019-006-009-000, 1272 SHIPYARD BOULEVARD Mr. Allen Kersey of Real Estate Tax Services, representing the owners of the pines Apartments, presented documentation in support of an assessed value based on the income approach. He proposed the fair market value of the 18-year old, flat roof apartments should be $3,500,000. Mr. Kersey said the cost of continuing to maintain this type of structure would prohibit further investment. Mr. Bethune responded that the 12% capitalization rate used in the income approach value was too high, but that he would agree with a rate of 10.83% as suggested in another market analysis. With the revised income approach to value, he concluded that the tax office's assessed value is reasonable and fairly supported. MOTION: At the conclusion of the hearings on this date, Commissioner Barfield MOVED, SECONDED by Commissioner Mathews, to uphold the assessed value of $4,936,424 as recommended by the Tax Appraisal Supervisor. Upon vote, the MOTION CARRIED UNANIMOUSLY. TAX APPEAL - MANOR APARTMENTS ASSOCIATES (FOUNTAINHEAD APARTMENTS), PARCEL R05510-008-020-001, 702 MONCLAIR DRIVE Mr. Scott vincent of REVAC, representative for Manor Apartments Association, owners of Fountainhead Apartments, spoke regarding the poor condition of the apartments due to prior owners not expending funds on maintenance. The current owners do not have the money to upgrade the apartments at this time. Mr. Vincent thought the property value to be grossly over assessed and asked the Board to consider the income and market approach to value as submitted. with the income approach method, he proposed a valuation of $3,957,077; however, he proposed a valuation of $3,866,631 based on the market analysis. Mr. Jim Bethune, Tax Appraisal Supervisor, responded that with the information submitted on the market analysis, he agreed a reduction in the assessed value should be considered. He proposed adjusting the vacancy rate to 11.4% and the Effective Tax Rate to 1.18%, which would adjust the Capitalization Rate to 10.83%. He recommended reducing the assessed value to $4,467,000. MOTION: At the conclusion of the hearings on this date, ~ 70 MINUTES OF BOARD OF EQUALIZATION AND REVIEW, JUNE 18, 1991 .........\ Commissioner Barfield MOVED to uphold the original tax assessment of $5,703,752 saying the owners over the years have not made the necessary improvements to keep the complex in good condition and that tax payers should not have to compensate for this neglect. The MOTION FAILED DUE TO NOT RECEIVING A SECOND. MOTION: Commissioner Greer then MOVED, SECONDED by Chairman Retchin, to accept the Tax Appraisal Supervisor's recommendation to reduce the assessed value to $4,467,000 as recommended by the Tax Appraisal Supervisor. Upon vote, the MOTION CARRIED AS FOLLOWS: Voting Aye: Commissioner Robert G. Greer Commissioner E. L. Mathews, Jr. Commissioner william H. Sutton Chairman Fred Retchin Voting Nay: Commissioner Barfield TAX APPEAL - SUMMER HILL ASSOCIATES, PARCEL R06006-001-001-000, 2019 EAST FALL DRIVE Mr. Neal Sanders of Strassburg and Company, and representing Summer Hill Associates, requested the Board to reduce the assessed value of the apartments to $3,318,000. His income approach to value was based on a capitalization rate of 12.2%. Mr. Jim Bethune responded that he did not receive the report prior to the meeting, but using the income and expense information provided he was able to construct an income approach to value which was only slightly less than the assessed value. In reviewing both analyses, the amounts differed by the Capitalization Rate and total operating expenses. MOTION: At the conclusion of the hearings on this date, Chairman Retchin MOVED, SECONDED by Commissioner Mathews, to uphold the assessed value of $4,777,218 as recommended by the Tax Appraisal Supervisor. Upon vote, the MOTION CARRIED UNANIMOUSLY. TAX APPEAL - LONG LEAF MALL ASSOCIATES, PARCEL R06114-004-001-000, 4310 SHIPYARD BOULEVARD AND SOUTH COLLEGE ROAD Mr. Neal Sanders of Strassburg and Company, and representing the owners of Long Leaf Mall, spoke concerning his approach to value was based on the income and expenses of the rental property. He calculated the indicated value of the property to be $4,120,720 and asked the Board to consider reducing the assessed value based on those figures. Mr. Jim Bethune responded that the position taken by the Tax Office was based on actual income and expense figures provided by the appellants. He said the owners of Long Leaf Mall have not invested additional money into the property which has resulted in dissatisfied tenants and a higher vacancy rate. Mr. Bethune - I I I 71 ", MINUTES OF BOARD OF EQUALIZATION AND REVIEW, JUNE 18, 1991 counseled the Board that the owners' financial problems should not be a factor in reducing the assessed value. MOTION: At the conclusion of the hearings on this date, Commissioner Mathews MOVED, SECONDED by Commissioner Greer, to uphold the assessed value of $5,188,790 as recommended by the Tax Appraisal Supervisor. Upon vote, the MOTION CARRIED UNANIMOUSLY. TAX APPEAL - WILMINGTON HOLDING CORPORATION, PARCELS R03400-003- 011-005, R03400-003-011-006, R03400-003-011-007, MURRAYSVILLE ROAD Mr. Register reported that Mr. Terry Hughes of Marvin F. Poer and Company, wrote a letter of withdrawal of the tax appeal. After conferring with the Tax Office, he conceded that the assessed value of the properties to be fair and acceptable. TAX APPEAL - HYTON BABSON, ETAL, PARCELS ROs713-004-001-000 AND ROs713-004-002-000, 2005 EASTWOOD ROAD Mr. Hyton Babson spoke concerning his property at 2005 Eastwood Road. He complained the assessed value of this property increased by 975%. Although the home has been on the market to sell, there has not been any buyers. He explained that before the SHOD restrictions were removed, the setback requirements on this property limited its use. It is now off the market and used only as a seasonal home for the family. He requested the Board to assess the value of the property based on its residential use and not as commercial property. Mr. Bethune explained the property was reduced by 50% to $900 per front foot because the house was located on the property. MOTION: At the conclusion of the hearings on this date, Commissioner Greer MOVED to reduce the assessed value on the small parcel by $10,000 due to the small size and to reduce the assessed value of the home by $15,000. In discussion, it was decided that by reducing the value of the house instead of the value of the land, the property would not decrease in value if the property was sold and used commercially. Commissioner Greer then withdrew his motion. Commissioner Sutton then MOVED, SECONDED by Chairman Retchin, to combine the parcels and reduce the value by $25,000 from the residence. Upon vote, the MOTION CARRIED UNANIMOUSLY. TAX APPEAL - EDWARD H. SOUTHERLAND, JR., PARCELS R05713-008-002- 000, R05713-008-003-000, AND R05700-002-009-000, 7040 WRIGHTSVILLE AVENUE Mr. Edward H. Southerland spoke concerning his property located on Wrightsville Avenue. He said that he is unable to pay additional taxes on this property which is now assessed at $196,360. The taxes will be approximately $1,223 while in recent years his tax bill has been $242. ~ 7. y / MINUTES OF BOARD OF EQUALIZATION AND REVIEW, JUNE 18, 1991 Mr. Bethune said that although the property is zoned for residential use, the property has commercial potential. The property was originally valued as commercial property at approximately $400,000. Commissioner Barfield citizens on limited income penalized with increased commercial development. spoke of his concern that senior and others in residential areas are taxes because of encroachment of In discussion at the conclusion of the hearings on this date, the Commissioners considered the size and shape of the properties involved and felt a reduction was warranted. MOTION: Chairman Retchin MOVED, SECONDED by Commissioner Barfield to reduce the assessed value by discounting the land value by 75% instead of 50% for residential use. Upon vote, the MOTION CARRIED UNANIMOUSLY. TAX APPEAL - ROBERT G. DUKE, PARCEL R05515-003-003-000, SOUTH COLLEGE ROAD Mr. Robert Duke spoke concerning the 95'x200' vacant piece of property that was purchased in 1964 as part of a larger tract of land. Although the property is zoned O&I, he felt the assessed value of $169,733 is not at true market value. Based on this appraisal, an acre of land would be valued at $339,466. The property has been on the market to sell for three years at $140,000 to $220,000, but Mr. Duke has not received any offers to purchase. The State is reluctant to give two drive way cuts onto S. College Road. In 1984, the property was assessed at $54,730. In discussion at the conclusion of the hearings on this date, the Commissioners agreed that the location and the size of the parcel limits the use or development of the property. MOTION: Commissioner Greer MOVED, SECONDED by Commissioner Sutton, to reduce the assessed value by discounting the land value by 70% instead of the 80% rate based on the size and topography of the property. Upon vote, the MOTION CARRIED UNANIMOUSLY. Chairman Retchin adjourned the Board of Equalization and Review for lunch at 12:30 p.m. and announced that the meeting would reconvene in approximately one hour. The meeting reconvened at 1:45 p.m. TAX APPEALS: 1. LONNIE B. AND JANICE G. WILLIAMS, PARCEL R06700-003-004-000, 6428 QUAIL RUN 2. AGNES M. MAYER, PARCEL R06700-003-007-001, 6406 QUAIL RUN 3. RICHARD H. MARSTON, PARCEL R06200-006-002-000, 6442 QUAIL RUN I I I ~ ,73 MINUTES OF BOARD OF EQUALIZATION AND REVIEW, JUNE 18, 1991 Mr. Roland Register reported that Mrs. Mayer is not present, but would like for the Board to consider her appeal along with Mr. Williams and Mr. Marston. Mr. Lonnie Williams spoke concerning the 80% increase in the assessed value of his home. Mr. Williams said he considered a fair evaluation of his property to be $325,000. He provided a recap that compared the current evaluation of the eight homes in the area to the 1982 evaluation. Based on the figures, he said his property is valued more than the other homes which have better views of the water. Mr. Williams gave some disadvantages of owning property in this subdivision: 1.} the minimum lot size of 5.96 acres is not subject to further lot division; 2.} three-fourths of property should be considered wetlands; 3.} the road is an unpaved private road; 4.} there is no home owners association; 5.} the owners have to pay by voluntary contributions to dredge out the canal; 6.} the land is lower than the road which results in a cost of $5,000 for each home owner to purchase a lift station to connect to the sewer system; and 7.} there is no water system. Mr. Williams felt these items should be considered in comparing the properties with other water front properties. with the construction of Cedar Island, Mr. Williams said the State agrees that the lower lands should be defined as wetlands instead of marshlands. Mr. Richard Marston spoke agreeing with the facts and figures as presented by Mr. Williams. He said that he is now retired at age 69 and will have to eventually sell his property if he does not get some relief on the valuation. He paid $12,000 for the property and $37,000 for the house. Because of the wetlands and limitation on the property, he felt the value of the land was too high. Commissioner Greer suggested Mr. Marston and Mr. Williams request the State representatives to adopt the Homestead Act, which could cut their tax bill in half. At the conclusion of the hearings on this date, discussion continued on the need for clarification of wetlands. MOTION: Chairman Retchin MOVED, SECONDED by Commissioner Greer, to uphold the assessed value on the three tax appeals of Quail Run as recommended by the Tax Appraisal Supervisor. Upon vote, the MOTION CARRIED UNANIMOUSLY. TAX APPEAL - GEORGE AND ANNA Y. SAKASH, PARCEL R03418-002-006-000, 311 BEACH ROAD NORTH Mr. George Sakash spoke concerning his property on Figure 8 Island. He said similar pieces of property were listed for much ~ 74 MINUTES OF BOARD OF EQUALIZATION AND REVIEW, JUNE 18, 1991 lower prices than his property. He showed a realtor listing of comparable lots for sale in the 120,000 to $140,000 price range. Mr. Sakash estimated the fair market value at $130,000. Mr. Bethune responded that the other lots were smaller in size and that this property is a more desirable ridge lot located on the northern portion of the island. MOTION: At Commissioner the assessed Supervisor. the conclusion of the hearings on this date, Sutton MOVED, SECONDED by Commissioner Greer to uphold value of $274,997 as recommended by the Tax Appraisal Upon vote the MOTION CARRIED UNANIMOUSLY. TAX APPEAL - MILTON D. AND LAURA T. LADD, PARCEL R08208-001-003- 000, 300 WILLIAMS ROAD Mr. Mil ton Ladd spoke concerning his property located off Myrtle Grove Road on Williams Road. He explained that the property next to him, which is 15 feet wider, was purchased for $75,000. He estimated the value of his property to be $56,800. He felt that the neighbor's pier, which was allowed by Coastal Area Management, decreased the value of his property because the pier is parallel to his water front. MOTION: At the conclusion of the hearings on this date, Commissioner Barfield MOVED, SECONDED by Commissioner Sutton, to reduce the assessed value of the property to $76,000 based on the size of the lot, access to the lot, and the lower elevation of the lot. Upon vote, the MOTION CARRIED UNANIMOUSLY. TAX APPEAL - EDGAR D. ANDERSON, JR. ETUX, PARCEL R04510-001-015- 000, 221 DENISE DRIVE Ms. Randolyn Anderson spoke concerning her property on Denise Drive. She said the property assessment should not be based strictly on the fact that it is water front property. She believed the surrounding area of a non-conforming marina and a travel trailer park should be considered in assessing her property. Mr. Anderson stated he purchased the property in 1969 for $11,000, which was less than the market price. He said that he knew the marina would effect the price of his property if he was to sell it. MOTION: At the conclusion of the hearings on this date, Commissioner Barfield MOVED, SECONDED by Commissioner Greer to reduce the assessed value of the property to $200,728. Upon vote, the MOTION CARRIED UNANIMOUSLY. CONTINUED ITEMS: TAX APPEALS - RICHARD C. AND SARA JO PHILLIPS, PARCEL R05719-003- 021-052, UNIT A502 SEAPATH TOWER, AND VERNE W. AND ANN COHOON BLALOCK, PARCEL R05719-003-021-058, UNIT A508 SEAPATH TOWER I I I MINUTES OF BOARD OF EQUALIZATION AND REVIEW, JUNE 18, 1991 Mr. Register reported that two tax appeals were deferred at the June 6, 1991 meeting in order for the tax appraisers to submit information on the site value and building value for each unit of the Seapath Condominiums. Mr. Register submitted the charts requested and explained how the values were determined. CONSENSUS: It was determined that the assessed values of the units agreed with the original assessments and that no reductions would be considered. There being no additional appeals, the Chairman adjourned the meeting at 4:10 p.m. Respectfully submitted, ,f 0' ~~ j' ~y-~ Teresa P. Elmore Deputy Clerk 75 ~ ~