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E&R 2000-06-20 I I I ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20, 2000 Page 243 The New Hanover County Board of Equalization and Review met on Tuesday, June 20, 2000, at 9:00 a.m. in the Assembly Room of the New Hanover County Courthouse, 24 North Third Street, Wilmington, North Carolina. The purpose of the meeting was to hear appeals filed by property owners regarding their tax value assessments. Members present were: Commissioner Charles R. Howell; Vice-Chairman Robert G. Greer; Chairman William A. Caster; Tax Administrator Robert Glasgow; Tax Appraisal Supervisor Larry Bolick; Assistant County Attorney Holt Moore; and Deputy Clerk Teresa P. Elmore. Commissioners Buzz Birzenieks and Ted Davis, Jr., were absent. Chairman Caster called the meeting to order and welcomed everyone present. Appellants were informed that the Board would make decisions following the hearings and notification of each decision would be mailed within a week. TAX APPEAL PRESENTATIONS TAX APPEAL - MIRIAM BROOME, 288 SHANNON DRIVE, WILMINGTON, NC, TAX MAP NUMBER R07908-003-015-000 Tax Administrator Robert Glasgow reported that Mr. James Piner was present to represent Mrs. Marian Broome. The property, consisting of a 768 square-foot house built in 1998 on the Intracoastal Waterway, has an assessed value on the land at $199,998 and the house at $45,099. Mr. James Piner spoke on the negative factors that affect the value of the property in the Myrtle Grove community. The access road to the property is a dirt road with a ten foot right-of- way. The original house was used as a vacation home for the family and was built after Hurricane Hazel in the 1950s, but it was destroyed by Hurricane Fran. Because of the Presidential disaster declaration, the owner was allowed to rebuild in the same footprint of the previous structure. Current CAMA rules and setbacks will not allow a new structure unless it is destroyed in a natural disaster. The lot size of 200 feet by 52 feet on one side and 62 feet along the other side is not comparable to the lots that the Tax Department has used in its support of value. One lot has a 13 foot elevation on twice the size lot, whereas the Broome property has a 5 foot elevation. Other lots around Loder Avenue are twice the size and do not have wetlands on both sides as Mrs. Broome's property does, and they do not have the construction limitations of the small lot. Mr. Piner showed a video tape of the property and the dirt road leading to the property. He pointed out that the tide rises up to 4 feet in the marsh areas. The property on the south side is assessed at $100,000 and another lot is valued at $30,000 because it has been declared unbuildable. Commissioner Howell commented that people who are unable to rebuild a house on their lot are also unable to sell their property. He asked the Tax Department if any consideration was 917<3 ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20, 2000 Page 244 given to those owners. Tax Administrator Glasgow responded that the General Statutes require that as long as the property has use, it has value. During recent storms and natural disasters, many lots in the Figure 8 Island area took a tremendous beating and became unbuildable. The Tax Department relied on CAMA to make that determination and then it placed a nominal value on the property. Mr. Piner responded that he does not deny the lot has value, but it should not have the same value as the lot next door at $30,000 or the lot on the other side at $200,000. Furthermore, other property owners can build larger houses on their lots, but the Broome property is limited to the footprint of the current structure. No buyer would pay the same amount of money for this lot as the lot next door. In the assessment support, Tax Appraisal Supervisor Larry Bolick recommended to keep the value on the land until such time that the house was destroyed or declared unbuildable. He identified the following sales of comparable properties in the area: 1644 Sunrise Lane sold for $235,000 in August 1997: tax value $243,000, land value $199,998 410 Loder Avenue sold for $250,000 in January 1999: tax value $262,762, land value $199,998 The value of 299 Shannon Drive was upheld at the 1999 Board of Equalization and Review: land value $199,998 He said many homes in the county are located off dirt roads and are maintained by private individuals, and the value of these lots along the waterfront does not appear to be affected. Commissioner Howell commented that the value is in the view of the waterway. Many buyers will demolish a small house and rebuild a larger home. Because of CAMA restrictions, many valuable waterfront lots will eventually be deemed useless except for campers. He asked if those comparable lots were similarly restricted by the CAMA regulations. Tax Administrator Glasgow replied that the Broome property was uniquely restricted, but values are based on current value and use and not anticipated value. Tax Appraisal Supervisor Bolick noted that an adjustment can be made to the land value if and when the house is destroyed and declared unbuildable. He recommended to uphold the assessed value of $199,998 for the land and $45,099 for the house. Mr. Piner requested the Board to reduce the value of the land to $65,000. At the conclusion of the hearings on this date, Commissioner Howell stated that the County should consider the selling price or whether the property is saleable. Since another house cannot be built on the small property, the property should not have the same value as neighboring r'17 "'7 \ '" 1 (" I I I ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20,2000 Page 245 properties that do not have the same restrictions. Vice Chairman Greer agreed that the lot should not have the same value because of the CAMA restrictions. A buyer will choose property that can be built upon before purchasing this property; consequently, the lot is not as valuable as the other lots. Tax Appraisal Supervisor Bolick replied that a 50% adjustment would be applied to the land value if the house was destroyed by fire. He suggested that a 25 % adjustment could be applied to the land value. Motion: Vice Chairman Greer MOVED, SECONDED by Commissioner Howell, to reduce the assessed value of the land by 25 %, from $199,998 to $149,999. The total assessed value for the land and house was reduced from $245,097 to $195,098. Upon vote, the MOTION CARRIED 3 to O. TAX APPEAL - JAMES F. BROWN, JR., 402 BOBBY JONES DRIVE, WILMINGTON, NC, TAX MAP NUMBER R08413-007-009-000 Tax Administrator Robert Glasgow reported that the 2,231 square foot house was constructed in 1996 and is in excellent condition and quality grade. The property, located in the Pinehurst Section of The Cape, sold in 1997 for $225,000 and again in 1999 for $228,000. The tax value for the land is $35,000 and for the house is $191,082. The total assessment is $226,082. Mr. James F. Brown Jr., owner of the property, stated that the square footage should be corrected to be 2,100 square feet because it does not have a room over the garage and the house appears to be larger than it is. He felt the value of the property should be the same as comparable homes on golf courses at $196,000. A 2,527 square-foot home on the golf course at 227 Cape Boulevard was assessed at $210,075. Tax Appraisal Supervisor Larry Bolick stated that three of the five comparable properties provided by Mr. Brown in his written appeal were not assessed at the correct quality grade. He recommended that the Board approve a correction to the quality grade for those properties. Outside measurements were taken of Mr. Brown's house to confirm the value based on the costs schedules for the quality grade of architectural features, such as dormers and cuts in the roof. The house was sold twice at $225,000 and $228,000 in recent years, which supports the assessed value of $226,000. A conservative value for lots along golf courses in the area is $40,000. Mr. Brown questioned whether the house should be assessed based on both its aesthetic appeal and square footage. He felt that larger homes in the area should have a higher value than his home. Tax Administrator Glasgow explained that the State requires the Tax Department to be as close as possible to the market value. As of January 1, 1999, New Hanover County was "8172: ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20, 2000 Page 246 approximately 98.6% of market value based on sales of comparable properties. Based on the condition, quality grade, location, and cost of land, the value of the property was correctly assessed . At the conclusion of the hearings on this date, Tax Administrator Glasgow noted that the three properties assessed at a lower quality grade will be changed to reflect the correct assessment. Although the Board does not want to penalize appellants or others because of an appeal review, the Tax Department is required to make those adjustments. He recommended that the Board approve the corrections for the three properties and to uphold the value for Mr. Brown's property. Motion: Chairman Caster MOVED, SECONDED by Vice Chairman Greer, to uphold the assessed value of $226,082 for Mr. Brown's property and to correct the assessment on the properties at 223 and 327 Cape Boulevard and 322 Bobby Jones Drive, as recommended by the Tax Appraisal Supervisor. Upon vote, the MOTION CARRIED 3 to O. TAX APPEAL - STEPHEN T. C. AND MICHELE M. COLEMAN, 3317 ASTER COURT, WILMINGTON, NC, TAX MAP NUMBER R06612-014-003-000 Tax Administrator Glasgow reported that the two-story single-family house built in 1989 and containing approximately 2,350 square feet, was in good condition and had an above average quality grade. The assessed value of the property in the Whisper Creek Subdivision is $210,527. Mr. Coleman stated that he purchased the property in July 1999 for $187,500. The purchase price included tangible personal properties, such as the refrigerator, dryer, and microwave, at an estimated value of $2,500. He was unable to appeal the assessed value last year because he had purchased the property after the appeal deadline. He considered his purchase to be an arm's length transaction and that the Tax Department should have to prove that it was not. Neighbors had told him that the previous owner was asking more than he had paid. The tax assessment of $229,000 was higher than the MLS listing for the house. Houses in the neighborhood have a wide range of values, but his home did not include any custom or special features, such as hardwood or tile flooring, as some of the houses. He reported that two years ago, a larger house at 3529 Aster Court had sold at the assessed value. A 2,740 square foot house sold for $172,000. The house at 3521 Aster Court sold for $200,000 and was in better condition than his house and included a swimming pool, but the seller was not interested in reducing the selling price. Another house had sold for $76.22 per square foot. Mr. Coleman paid $79.65 per square foot for his house, but his assessed value was $89.43 per square foot. He argued that the purchase price should be his assessed value. Tax Administrator Glasgow explained that the selling price listed on the recorded deed did not identify any personal property. Furthermore, the time for establishing market sales and marketability for revaluation purposes was based on sales prior to January 1, 1999. Normally sales after that time frame will need an adjustment. Currently, the County is in a recessionary period, and the values are not as high as they were two years ago. 'fT;; L- l/ C' I I I ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20, 2000 Page 247 In support of the assessment, Tax Appraisal Supervisor Larry Bolick stated that the Tax Department looked at sales in 1997 and 1998 to establish the costs schedule, and Mr. Coleman's property was assessed using the adopted costs schedule. A sales analysis of the neighborhood showed a 99% rate of the market value. The value is further supported by the sale of a 2,327 square-foot house at 3308 Aster Court, which sold in 1998 for $205,000 and its assessed value is $218,144. A 2,186 square foot house at 3312 Aster Court sold in April 1998 for $191,500 and its assessed value is $203,375. A 2,598 square foot house at 3408 Aster Court sold for $220,000 and its assessed value is $225,413. A 2,078 square foot house at 5400 Lark Court sold in March 1999 for $207,000 and its assessed value is $217,828. The assessed values were established by mass appraisal using the adopted costs schedule. Mr. Coleman replied that the mass appraisal process should be sufficient in determining the market value, but the Board should consider contradictory evidence as shown in the selling price of the property. He pointed out that the property at 3312 Aster Court was purchased one year earlier than his property and that the buyer paid $87.60 per square foot. Additionally, the house is larger, includes hardwood floors on the first floor and a small storage building in the back of the property that is color coordinated to match the house, and the yard has better landscaped areas and lawn. Tax Administrator Glasgow replied that when using the mass appraisal process, the appraiser uses the exterior dimensions to determine the square footage of the house and any large discrepancies should be reported to the Tax Department. The Board established the baseline of January 1, 1999, and the Tax Department cannot arbitrarily change a value unless there is an error. The next revaluation will be effective January 1, 2004. At the conclusion of the hearings on this date, Tax Appraiser Jeff Clemmons reported that the previous property owner had moved to the State of Maryland and was under a compulsion to sell. Generally, these type sales are lower than market value. Since the property was on the market for approximately a year, the County did not consider it an arm's length transaction. Commissioner Howell commented that sometimes a relocation company will sell below market value in order to get rid of the property. Motion: Commissioner Howell MOVED to uphold the assessed value of $210,527, as recommended by the Tax Appraisal Supervisor. Vice Chairman Greer stated that he felt the assessed value was a little high. Mr. Clemmons suggested that the Board could reduce the value to around $200,000 by increasing the effective age group of the house, which will add more depreciation. Substitute Motion: Chairman Caster MOVED, SECONDED by Vice Chairman Greer, to OSG ..... ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20, 2000 Page 248 reduce the assessed value from $210,527 to approximately $200,000 by changing the depreciation factor to Effective Age Group 3. Upon vote, the MOTION CARRIED 3 to O. COMMENTS REGARDING THE ABSENCE OF APPELLANTS Vice Chairman Greer commented on appellants who were not present to give their appeals. He suggested that appellants should be notified that they must come before the Board if they expect to receive an adjustment. If they do not appear, the Board will accept the Tax Department's recommendation. TAX APPEAL - CYPRESS GREEN INC., CYPRESS ISLAND SUBDIVISION, WILMINGTON, NC Tax Administrator Robert Glasgow reported that the appeal is on 72 vacant lots in the Cypress Island Subdivision. The amenities of the subdivision include a private nine-hole golf course, tennis courts, club house and swimming pool area, a 14 acre nature preserve, nature trail and stocked ponds. Mr. Thompson's appeal is based on his using $25,000 as a basis when determining the selling price of a house and lot. However, the assessed value of $35,000 per lot was supported by comparable sales in the areas. The owner of the property, Dick Thompson, was not present to give his appeal. Tax Appraisal Supervisor Larry Bolick reported that the lots are located on a par 3 golf course. The developer chooses to sell a packaged deal with more of the value in the patio home than in the land. Sales of individual lots close to the subdivision supported the assessed value of $35,000. Motion: At the conclusion of the hearings on this date, Vice Chairman Greer MOVED, SECONDED by Chairman Caster, to uphold the assessed value of $35,000 per lot, as recommended by the Tax Appraisal Supervisor. Upon vote, the MOTION CARRIED 3 to O. TAX APPEAL - SHEILA F. FAZZARI REVOCABLE TRUST, 246 CHIMNEY LANE, WILMINGTON, NC, TAX MAP NUMBER R07908-003-015-000 Tax Administrator Robert Glasgow reported that the 2,944 square-foot single-family home was built in 1981, and has a hard stucco exterior. The house, located on the Intracoastal Waterway, is in the Old Chimney Subdivision. Mr. Anthony Fazzari, representing his wife Sheila Fazzari, the owner of the property, spoke concerning his appeal that began in November 1998. The Tax Department had corrected a $400,000 error in the assessment of the land, but he was appealing the value of the house. He submitted an independent appraisal by White and Associates, a reputable firm in the community, that stated the value of the property was approximately $100,000 less than the County's assessment. The appraisal listed comparable properties in Inlet Point. He disagreed with the County using a comparable sale of the house at 241 Chimney Lane, because the house was never listed on the open market. The house is 1,395 square feet larger than his house and it is four years Ch? (__1 V '-J I I I ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20, 2000 Page 249 newer. Furthermore, the house did not flood with Hurricanes Floyd and Fran as his house did. By using the data from the Tax Department, Mr. Fazzari calculated that the value for the larger house was $77.62 per square foot. By applying the same value to his 2,792 square foot house, the assessed value should be $216,715. After adding the value of the land, the total property assessment should be $502,715, which is within 4% of White and Associates' appraisal. Using 1.5 to 2% depreciation, another credit of $30,000 to $40,000 should apply. Mr. Fazzari did not agree with the Tax Department concerning the difference in the quality grade of construction. He felt that the houses were of similar architectural appeal, and that his house should be less in value because it was 50% smaller. Mr. Fazzari reported that a house in Inlet Point had been assessed and sold for $567,000. The house had 1300 square feet more living space than his house, another bedroom, two additional half baths, an elevator, hardwood floors throughout, teakwood and mahogany flooring in some rooms, a three car garage, an outside hot-water shower, and a 70-foot boat slip. The newer and larger house was assessed at the same value as his house. In support of the assessment, Tax Appraisal Supervisor Larry Bolick reported that the house was measured to determine the correct living space. Although Mr. Fazzari had stated that the house contained 2,792 square feet of living space, the Tax Appraiser measured the house at 3600 square feet. As in mass appraisals, outside measurements were used. Additionally, Mr. Bolick stated that the selling price of the house next door was not used to make the assessment, but the house was used to show that both assessments were in line with the adopted costs schedule. By taking a conservative 6 % increase per year for waterfront properties, he stated that the assessed values were correct. Additionally, the sale of vacant lots supported the land value of $300,000. The Tax Department did not agree with Mr. White's appraisal of the land because he had used canal lots instead of waterway lots in his comparisons. In comparing the White appraisal with the County's assessment, there was a difference of $50,000 in the value of the house and $50,000 in the value of the land. Tax Administrator Glasgow stated that the intent of the Tax Department was not to disparage Mr. White's appraisal as Mr. Fazzari had implied. Commissioner Howell asked why there was a large discrepancy in the square footage of the house and asked how much of the house was in the downstairs area. Mr. Fazzari replied that he had used the County's data. The area of the finished basement should be factored down, showing 2,945 square feet. Tax Appraisal Supervisor Bolick stated that the new measurement was 3,675 square feet, which included the finished basement area. GS~ ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20, 2000 Page 250 Mr. Fazzari asked why he was blind-sided on the day of the hearing with a new number of 3,675 square feet. The Tax Office had told him that the White and Associate's appraisal was essentially worthless, so he went with the County's data. On the day of the hearing he has been told that the data is wrong. Yesterday they said the square footage was 2972 square feet, a letter dated today stated 2,945, and now they say it is 3600. He said that he used the County's number so that there would be no dispute. Mr. Fazzari stated that he considered the sales of properties on canals to be true comparables. These sites had views of the waterway, had sheltered harbors, and had the same attractive features of the lots along the waterway. Some inland lots may not be as valuable, but the lot in Inlet Point has a view of the waterway and northern part of Carolina Beach as well as a lot of appeal. If the Board wanted to ignore that particular house, then he suggested that a comparable sale in the fourth quarter of 1998 be used. The 4,100 square foot house sold for $567,000 and had special features that his house did not have. Commissioner Howell asked if he agreed with the land value. Mr. Fazzari stated that the Tax Department initially assessed the lot at $686,000, but then reduced the lot to the same as the other five lots along the waterway valued at $286,000. Tax Appraisal Supervisor Bolick stated that the appeal packet was prepared several days ago, but the Tax Department continued to review all the cases to ensure that everything was in order. Mr. Fazzari was unable to keep an appointment to meet at his house for the re- measurement of his house. There was no attempt to blind-side him with anything and he apologized for the error in the square footage. The land value is correct and is supported by sales of waterfront lots on the waterway. The sale that Mr. White used was at least $50,000 below value. Although Mr. Fazzari's basement may flood, numerous other properties flood along the waterway. It is unfortunate, but the County must charge him for the value of his property. The assessed value fairly represents the value on the open market as of January 1, 1999. Mr. Fazzari apologized for being unable to make the appointment saying he needed to prepare for the appeal hearing to better understand the analysis. When he had called to cancel, Mr. Bolick had left the office. Tax Administrator Glasgow stated that an estimate of the square footage was used before the measurement was taken. Last year a tax appraiser had changed the structure to a two story and basement. Mr. Bolick and Tax Appraiser Tom Nolan had agreed to review and verify the site yesterday with Mr. Fazzari. Vice-Chairman Greer asked Mr. Fazzari if he agreed that based on the square footage of 3,665 multiplied by the cost per foot of $77.62, the appropriate property value should be $570,477. lSG I I I ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20,2000 Page 251 Mr. Fazzari stated that he had calculated the value of the property to be $483,000. He was astounded that the data from the Tax Office had significantly changed since he had first appealed the value one and one-half years ago. Although they had corrected the value on the land, he had not heard from them on the value of the house. Tax Administrator Glasgow responded that whenever a change in value is made, a change notice is sent out. The notice does require an appeal to be received in a certain period of time. The Tax Department did not have a record of receiving another appeal from Mr. Fazzari until this year. Mr. Fazzari noted that Mr. Sniffin had assisted him in the preparation of his appeal; and they had used sales of waterfront properties in the annual report of the local Real Estate Association to support the value. Mr. Fazzari felt that the County should give an adjustment to houses that are prone to flooding. Tax Appraiser Tom Nolan remarked that Mr. Sniffin would have appraised Mr. Fazzari's property value at $597,000, based on the values as of June 1, 1999. Motion: At the conclusion of the hearings on this date, Vice Chairman Greer MOVED, SECONDED by Commissioner Howell, to reduce the assessed value from $594,488 to $583,879. Upon vote, the MOTION CARRIED 3 to O. TAX APPEAL - CALVIN K. AND NANCY M. JONES, 8140 BALD EAGLE LANE, WILMINGTON, NC, TAX MAP NUMBER R08140-002-015-000 Tax Administrator Robert Glasgow reported that Ms. Jones was not present to give her appeal. The property is a two story vinyl-sided home located in the Porters Neck neighborhood. The house contains approximately 3,540 square feet of heated living space and faces the Intracoastal Waterway. A building permit was issued for the construction of decks and a pier in February 1999. After construction was completed, the Appraisal Office increased the value for the additions by $16,026 to a total value of $748,276. The assessed value was supported by comparable sales in the area and reflected the value as of January 1999. He further stated that there was some incorrect information in a letter from Mrs. Jones to the Commissioners. Chairman Caster had written to Mrs. Jones to inform her of the subdivision review process. Chairman Caster stated that Mrs. Jones had complained about the Commissioners approving the construction of Eagle Point Golf Course. Although the current Commissioners were not involved, the Planning Department had approved the subdivision plan and the State had issued the permits for the wells on the site. The property was properly zoned to allow golf courses by right. Chairman Caster asked that his letter of May 25, 2000, to Ms. Jones be read into the record of the minutes. 17SC3 ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20, 2000 Page 252 Dear Ms. Jones: Thank you for your letter of May 9, 2000, indicating that the Tax Department had not respotuled to your letter of April 8 protesting the tax year 2000 value of 8140 Bald Eagle Lane. I have asked the Tax Administrator, Bob Glasgow, to provide information on your concerns. Mr. Glasgow indicated that ill February, 1999, a building perin it was issued for the construction of decks and piers at 8140 Bald Eagle Lane. On March 28, 2000, the Appraisal Office added the piers and decks to the Property Record Card after a site visit to appraise the completed cOllStruction. TIle construction permit generated the visit, which is in keeping with the way the Appraisal Office identifies repairs, improvements and new construction. Once the changes were identified and entered into the tax data base, a Value Change Notice was generated and sent to you. Your Value Change Notice increased the assessed value of 8140 Bald Eagle Lanejrom $732,250 to $748,276, an increase of $16,026. In that Value Change Notice, you were given 30 days to protest the value, which you did on April 8. Ms. Roberts, Appraiser for your neighborhood, called your residence on May 2, 10, 12 atull5, leaving voice messages. TIle Appraisal Office reviewed your protest and sellt a letter on May 18, indicating the value was considered to be at fair market value and no change in value would be made. I understand you have until June 2 to formally protest the value to the Board of Equalization and Review. I have enclosed a Complaint Form if you wish to use it. Mr. Glasgow has reviewed the property at 8212 Bald Eagle Lane which you itulicated sold for less than $700,000. TIle Register of Deeds recorded a sale at this address 011 October 25,1999 for $737,000. It is reported that this property has 700 squarefeet less heated space and was not as extellSively renovated as was yours. If this house had the same squarefeet of living space as your property, but using this property's lower quality grade, age and condition, it would be appraised for $742,395. That is a difference of just less than $5,900 between your house and this house that recelltly sold. TIlere was another recent sale at 8236 Bald Eagle Lane in November, 1999. This 2,460 square foot house which is just less than 700 square feet smaller than your house, soldfor $735,000. Property values are established during revaluations. In North Carolina it is required to cotuluct a revaluation at least every eight years. New Hanover County's most recellt revaluation was effective January 1, 1999. TIle next revaluation will be effective January 1, 2004. Ulltil that time, values can only be adjusted if there are changes to the buildings or grounds which would cause the values to increase or decrease. An example of changes which would cause the value to increase would be additions or improvements to buildings. Decreases in value could be caused by the removal of buildings or storm damage not repaired by January 1 of the tax year. I do utulerstand your concerllS about the water problem this area is dealing with. The Engineering Depanment has budgeted money for the design phase in order to get water to your neighborhood. We are committed to this project, but unfortunately it is a very expellSive one which will require additional money,' and as you mentioned in your letter, the taxpayers have sent a message that they don't want to see taxes increase. The Eagle Point Golf Co urse you mention was originally approved as an additional 18 hole golf course and residential community to be constructed after the original Porters Neck Plantation Golf Course atul residential community were completed. Porters Neck decided not to develop that phase of the project and sold the property, which was then developed as the Eagle Point Golf EgG I I I ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20, 2000 Page 253 Course. Thefuture development phase of what is now the Eagle Point Golf Course was approved in 1989. In closing, Mr. Glasgow indicated that the phone does ring in the Tax Department on weekends, and the phone voice mail records messages which are responded to the following Monday. I hope this information is helpful. I1zank you again for taking the time to write me on this issue. Motion: At the conclusion of the hearings on this date, Commissioner Howell MOVED, SECONDED by Vice Chairman Greer, to uphold the assessed value of $748,276, as recommended by the Tax Appraisal Supervisor. Upon vote, the MOTION CARRIED 3 to O. TAX APPEAL- WILLIAM MORINE, 101 WINDLESS DRIVE, WILMINGTON,NC, TAX MAP NUMBER R06309-001-016-000, R06309-002-003-000, AND R06309-001-020-000 Tax Administrator Robert Glasgow reported that the property in Shandy Point Subdivision contains three individual parcels: a marsh area valued at $300, a boat and dock area valued at $45,000,and the lot with the house on it is valued at $699,993. The parcels have a combined value of $745,293. The house, facing the Intracoastal Waterway, has an assessed value of $326,998. The concrete bulkhead and two piers have a value of $13,959. The combined value of the land and structures is $1,086,248. The residence, built in 1974, is an excellent grade of quality and average condition. The house consists of 4,053 square feet of living space, the basement area is within 50% of the outline of the house. Eighty percent of the basement area is finished living space. Mr. Morine spoke concerning the economic forces that have affected the value of his property. An appraisal by Mr. David King, an independent appraiser in Wilmington for 21 years, placed the value of the combined properties at $1,001,500, using the market approach to value. However, Tax Appraiser Jeff Clemmons had informed him that the Tax Department is unable to combine all three parcels into one value. Mr. Morine presented copies of his recorded deeds that showed the dock area as a part of the whole property and contended that it could not be dis-aggregated. He felt that separating the parcels did not give an accurate appraisal since the deed stipulated the combined parcels. Secondly, Mr. Clemmons had disputed the comparable of 6454 Shinnwood Road, because it was on the books as one vacant lot. But Mr. King felt that it was comparable because the lot can be divided into two lots. The back lot was removed from the value, which is an acceptable practice within real estate appraisals in getting comparable properties. His appraiser estimated his value to be 8% less than the County's value, a significant difference of $84,500. In support of the assessment, Tax Appraisal Supervisor Larry Bolick stated that the appellant's appraisal used comparable sales of properties on canals instead of the Intracoastal Waterway. The Tax Department's comparable properties included: ~~gG~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20, 2000 Page 254 841 Inlet View Drive sold for $1,075,000 and has a tax value of $980,000 6309 Seamist Court sold for $700,000 and has a tax value of $699,993 6454 Shinnwood Road, which has a finished and unfinished basement of2,727 square feet, sold for $1,150,000 and has a tax value of $1,035,435 Since a building permit was issued for an addition to the house in July 1999, the Tax Appraisal Office visited the site and increased the assessed value by $50,000 for the added space. Although the deed restrictions require the parcels to stay together, the Tax Office must assess the property as three separate parcels, because the lot with the dock area and the lot with the house are not contiguous. Because of having to use separate lot values, the assessed value is more than the value of having one combined lot. From the Tax Department's standpoint of equity in mass appraisal practices, he said that the assessed values represented the fair market value. Tax Appraiser Jeff Clemmons pointed out that Mr. Morine had some damage to his basement from one of the hurricanes and an adjustment was made to remove the unusable property. After the repairs were completed, the area under adjustment was replaced. Mr. Morine responded that a permit was issued to repair the downstairs area and to add an additional 540 square feet of living space to the area above the flood zone. He asked if the discrepancy in the appraisals was in the value of the home or the land. Tax Appraisal Supervisor Bolick responded that the assessed value for the comparable land values were $980,000 and $699,000. Other comparable sales provided were for improved lots. Mr. Morine presented the following comparable sales of lots in the area: 6427 Hawksbill Drive sold for $629,500 6301 Towles Road (a canal lot ) sold for $675,000 (a differential of $200,000 was used) Commissioner Howell asked Mr. Morine if his comparable sales were for similar properties or did they have contiguous docks. Mr. Morine responded that two of the comparable sales were in the same subdivision and had similar situations of separate lots. Another comparable on Shinnwood Road did have a contiguous dock area, but he was unaware of the situation on Old Military Road. He stated that his dock was inferior to the docks in the area. After his dock was reconstructed, the pier was smaller by 6 t010 feet and did not have running water or electricity. At the conclusion of the hearings on this date, Tax Administrator Glasgow commented on the value being $50,000 more based on a $64,000 permit to upgrade and improve the property. Mr. Morine's property included three separate pieces of property instead of being considered as one lot, which would make a large difference in values; however, the law requires the Tax Department to assess each parcel separately. The lots could not be combined because of their ~SG I I I ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20, 2000 Page 255 location. Vice Chairman Greer asked if a building permit for an additional structure or renovation project causes an automatic increase in the assessment. Tax Administrator Glasgow responded that sometimes a house may be completely renovated and the value will increase by 100 % because the renovation had upgraded everything in the house. If someone just changes out a bathroom, there may not be a change in value. Vice Chairman Greer clarified by saying that an upgrade may not affect the value, but a major remodeling or enlargement will increase the value. Tax Administrator Glasgow responded that Mr. Morine had enlarged his living space. In any case, the assessed value is an accurate reflection of values in the area. Commissioner Howell commented that the lots may not have much value individually since he is unable to sell them separately. However, each lot gives more value to the residential property, which is already valued at $1,026,991. Tax Appraisal Supervisor Bolick pointed out that the comparable properties listed were for vacant lots. The lot on Inlet View Drive sold for $1,075,000 and the other vacant lot sold for $700,000. The value of the lot at $45,000 and the piers at $13,957 have a combined value of $58,957. The value of the house last year was $50,000 less than the current value. The increase was due to the $64,000 upgrade. Usually, building permit values are lower than the actual cost of the work. Tax Appraiser Clemmons stated that 445 square feet was added to the house plus the repaired downstairs area increased the value by $50,000. The house consists of 4,200 square feet and is valued at $326,000. An adjustment of $200,000 was made on the comparable property that was subdividable. Tax Administrator Glasgow responded that after Hurricane Pran had flooded the bottom area of the home, the square footage of the space was removed from the assessment. The $50,000 increase in the assessment was based on the repairs and the addition. Discussion continued on the extremely high value of the properties in the area. One home was listed for over $3 million. Motion: Vice Chairman Greer MOVED, SECONDED by Commissioner Howell, to uphold the assessed value of$1,026,991, $58,957 and $300 on the three parcels, as recommended by the Tax Appraisal Supervisor. Upon vote, the MOTION CARRIED 3 to O. TAX APPEAL- PATRICIA MYERS, 1279 SHANNON DRIVE, WILMINGTON, NC, TAX R'7 _Sv ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20, 2000 MAP NUMBER R07908-003-012-000 Tax Administrator Robert Glasgow reported that the property is a 64 foot x 200 foot lot facing the Intracoastal Waterway in the Myrtle Grove community. The property is not affected by zoning restrictions and setbacks because it was plotted prior to the subdivision ordinance of 1984. The owner has stated that the property will not perk for a septic tank system; however, no documentation has been provided to support her claim. Page 256 Tax Appraiser Jeff Clemmons confirmed that he had told the owner an adjustment could be made if those documents were provided. Motion: At the conclusion of the hearings on this date, Vice Chairman Greer MOVED SECONDED by Commissioner Howell, to uphold the assessed value of $199,998, as recommended by the Tax Appraisal Supervisor. Upon vote, the MOTION CARRIED 3 to O. TAX APPEAL - EDITH T. SULLIVAN, 310 FOURTH STREET, WILMINGTON, NC, TAX MAP NUMBER R05405-020-013-000 Tax Administrator Robert Glasgow reported that the property is a two story frame house built in 1903 and it is in poor condition in need of extensive repairs and painting. The house has four bedrooms and 3 baths, but only one bathroom is functioning. The second floor is not in a liveable condition. The property is assessed at $99,881, and the 33 foot x 150 foot lot is assessed at $31,701. Mrs. Edith Sullivan, the property owner of 310 Fourth Street, stated that her husband purchased the house in 1954 for $5,500, and that her insurance coverage on the house was for $77,000. The policy had paid $3,000 for damages to the house from the last hurricane. Last year her tax bill was $800.00. She said that she was 76 years old and in need of a reduction in the amount of taxes she has to pay. She requested the Board to reduce the value to $50,000, because she would not be able to sell her house for more. Tax Appraisal Supervisor Larry Bolick stated that comparable properties were not provided because the Board had heard the appeal last year. The Board agreed to reduce the property from $148,941 to $99,881. Mrs. Sullivan did submit an appeal to the Property Tax Commission, but withdrew the appeal prior to the hearing date. Mrs. Sullivan responded that she was unable to travel to Raleigh for the hearing. Also she complained that she did not receive her tax bill in the mail. Tax Administrator Glasgow responded that he would check into the matter. Motion: At the conclusion of the hearings on this date, Vice Chairman Greer MOVED, SECONDED by Commissioner Howell, to uphold the assessed value of $99,881, as recommended by the Tax Appraisal Supervisor. Upon vote, the MOTION CARRIED 3 to O. ,... (< , l ~ ~< 4-..::J I I I ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20,2000 TAX APPEAL - JULIAN SA V AGE AND NELL C. WALKER, 2005 TURNER NURSERY ROAD, WILMINGTON, NC, TAX MAP NUMBER R04500-004-004-000 Tax Administrator Glasgow reported that the property is a vacant lot located on the Intracoastal Waterway in the Middle Sound Loop area. The lot is divided into two sections, one lot valued at $404,996 and the other .47 acre is valued at $32,900. The property under appeal is one of two lots which were split from the parent parcel in March 1999. The second lot is owned by the appellant's brother. Both parcels were assessed as one building site with residual land. Other waterway lots within the neighborhood are assessed similarly. Consideration was given for the shape and size of the lot and for the 30 foot easement on the rear of the property. Page 257 Mr. Kelly Jewell stated that his wife's grandfather purchased the property in 1960 for $4,000. The property is accessed by an eighteen foot easement leading to the property. The property belonged to the two brothers after the elder Mr. Walker died. Before the property was divided, the assessed value was $493,000. Afterwards the two parcels have doubled in value and are assessed at $900,000. His father-in-law, Julian Walker, was told by Tax Appraiser Cheryl Roberts that a 50 foot lot had sold for $500,000, but that parcel included a house. The Walker property does not. The lot has 50 feet on the waterfront and narrows down to 35 feet before coming to the main piece of property. He felt the property should be assessed as a second-row waterfront property because a house would have to be setback a minimum of 270 feet from the water. If a privacy fence was erected on the adjoining property, there would not be a view of the water. Although the property has water access and currently has a water view, ultimately the property will be considered second row instead of waterfront. All but 19 feet of the buildable property is behind the brother's property. An independent appraiser, Mr. Jay Cottle, appraised the property at $375,000, and used comparable sales of $385,000, $375,000 and $385,000. In support of the assessment, Tax Appraisal Supervisor Larry Bolick reported that the property was assessed the same as similar lots in the neighborhood, including the brother's property. Property at 1827 Buena Vista Circle assessed at $449,996 had sold for $534,500 in September 1997 and again in November 1999 for $600,000. Property at 1821 Buena Vista Circle, with the tax value of $479,555, had sold in February 1998 for $477,500. Mr. Jewell replied that his property was not comparable because it was not in a subdivision and it did not have the amenities found in a development. The property is accessed by an 18 foot wide easement. Tax Appraisal Supervisor Bolick noted that an 18 foot access to property has not kept people from purchasing waterfront property and paying as much as a million dollars for the property. Mr. Jewell reiterated his point about the property having the view of a second-row property once a house is built on the site. Tax Administrator Glasgow explained that the Tax Department cannot change the value cn JJG ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20,2000 Page 258 based on what is anticipated for the property, but must use the current use and features of the property. Tax Appraisal Supervisor Bolick stated that he had visited and reviewed the property extensively. When standing on Tract B, there is an unobstructed view of the waterway. A new house would be set back in accordance with the adjacent Johnson property to the right on the hill. Sales of other fifty-foot lots on the waterway supported the assessed value of the property and he recommended to uphold the value. Additionally, Mr. Walker has controlling interest of the marsh area and the canal accessing the waterway. At the conclusion of the hearings on this date, Vice Chairman Greer questioned whether the property had as much value as the adjoining lot in front. Tax Administrator Glasgow replied that Mr. Walker has control over the 4.7 acres of marsh area and can determine what can be built on both properties. Anyone purchasing the property will have to have Mr. Walker's consent to build a pier or dock on the property. The brother owning the other property did not appeal the value of his property. The brothers inherited the property and agreed to the subdividing of the property. Tax Appraisal Supervisor Bolick explained that the older house on the other property has a 200 foot setback. Both properties have beautiful views of the waterway. Although the lots have an odd shape, the property is still very valuable. An adjustment in value was made for the easement and the shape of the property. Motion: Commissioner Howell MOVED, SECONDED by Vice Chairman Greer, to uphold the assessed value of $437,896, as recommended by the Tax Appraisal Supervisor. Upon vote, the MOTION CARRIED 3 to O. TAX APPEAL - P. R. SMITH JR AND LILLIAN J. SMITH, 615 FOREST HILLS DRIVE, WILMINGTON, NC, TAX MAP NUMBER R07908-003-015-000 Tax Administrator Robert Glasgow reported that the property, located in the Forest Hills neighborhood, is a two-story wood-frame house built in 1939. The property is divided into two sections: the house is located on a .60 acre parcel valued at $54,000 and a vacant lot consists of 4.3 acres valued at $129,000. The lot is adjacent to Burnt Mill Creek and 75% of the land is located in the floodplain. The owner has complained about a drainage problem from the overflow of Burnt Mill Creek caused by debris caught in a 30 inch drain pipe. An adjustment was given in 1990, which reduced the value by 40 %. The appellant felt the fair market value should be between $275,000 and $325,000. Motion: At the conclusion of the hearings on this date, Commissioner Howell MOVED, SECONDED by Vice Chairman Greer, to uphold the assessed value of $481,487, as recommended by the Tax Appraisal Supervisor. Upon vote, the MOTION CARRIED 3 to O. bSc I I I ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20,2000 TAX APPEAL - WILMINGTON CHAMBER OF COMMERCE, 1 ESTELL LEE DRIVE, WILMINGTON, NC, TAX MAP NUMBER R04716-001-002-003 Tax Administrator Robert Glasgow reported that Attorney Frank B. Gibson, Jr. was representing the Chamber of Commerce. The property at 1 Estell Lee Drive is a two-story brick- veneer professional office building in good condition. The building has 8,900 square feet of heated space and includes an elevator, covered entrance area, and parking area. The land value is $438,323, the building value is $817,135, and the value of the elevator is $19,360. Page 259 Tax Administrator Glasgow reported that the Chamber had filed a request to see if the exchange of property would entitle them to a continuation of a tax exemption on the new property. The Tax Department determined that the Chamber did not qualify for the tax exemption based on the North Carolina Attorney General's opinion of February 4, 1966, that stated there was no provision in the Statutes exempting Chambers of Commerce from Ad Valorem taxation. However, the Board of Commissioners in November 1992, gave the Chamber an exemption with the stipulation that the Tax Department review the tax status after the completion of the construction and the building was rented out. Since the Chamber has submitted the request regarding the exchange of property, the Tax Department has reviewed the exemption and has recommended a denial of the request. Chairman Caster stated that he serves as the Commissioners' representative as an ex-officio member of the Chamber's Board of Directors. He did not believe there was a conflict in his hearing the appeal and asked if the Chamber or the Board had a problem with him hearing the case. Attorney Gibson responded that the Chamber of Commerce did not object to Mr. Caster hearing the appeal. Tax Administrator Glasgow stated that if the Chamber objected to Mr. Caster hearing the appeal, the hearing would have to be rescheduled since the Board would not have a quorum. Attorney Gibson presented the argument for the Chamber of Commerce to receive a tax exemption for the property. He explained that the Chamber is a civic organization recognized by the Internal Revenue Code 501(c)6 as a tax exempt organization and not a charitable organization as the Chamber Foundation is. The deeds that the Chamber received in 1967 and 1974 were used to purchase the property on Market Street. The property received a tax exemption under the State Statutes. After the Market Street property was sold, the Chamber and Foundation purchased the new property on Nutt Street. The Chamber Foundation is a North Carolina non-profit charitable corporation and has tax exempt status pursuant to Section 501(c)(3), which is the charitable section of the IRS code. The Foundation was established in 1973 for charitable purposes in support of efforts to improve education in New Hanover County. The Foundation received a gift of a 2.5 acre tract of land on Nutt Street and continues to hold title to the property. In 1992 while the new building was under ~9G ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20,2000 Page 260 construction, the Foundation entered into a ground lease that provided the real estate to be leased to the Chamber and the Chamber would construct and own the building and would hold interest on all the real estate. The Foundation, which is the charitable 501(c)(3) organization, owns the fee simple title to the real estate. Under the agreement, the majority of the first floor of the building including the entrance hall, common area, and board room is subleased from the Chamber by the Foundation. The Foundation uses the area for its charitable work and activities and it allows other community groups to use that part of the building. Among other activities, the Foundation administers and supports programs in support of education and the improvement of education in the community, such as the Community in Schools Program and sponsors the Best Foot Forward program. The lease amount that the Chamber pays to the Foundation equals to the rent that the Foundation pays to the Chamber for use of a portion of the building. Attorney Gibson said in his view, the Chamber has the use of the total property under a gratuitous arrangement. The rent is off-set by the rent it would be entitled to from the Foundation for its portion of the building. However, there is a portion of the building (500 square feet), which has been subleased to a for- profit organization, WISE, a local Internet provider. WISE has used the areas for storage and placement of their equipment and does not accommodate any interaction with customers coming in the facility. The lease expires at the end of June 2000, and will not be continued. The building is used by members of both organizations and the public. The Chamber offers the facility for public service events to provide informational and educational purposes, but not for commercial or profit-making purposes. The primary use of the building is for the two organizations. The Statutes allow public commerce as one of the purposes of the property which does not disqualify the property for the tax exemption. In 1992, when the Commissioners considered granting the tax exemption to the property, the Chamber had title to the deed. The County Attorney had informed the Board that since the use of the property was for non-profit, the exemption could be granted. The Board granted the exemption, but they wanted to review the exemption in the future. The exemption is allowed for buildings or land that is wholly owned by an agency that is set out in the Statutes and that includes a charitable association or institution or a non-profit community or neighborhood organization and if the property is wholly and exclusively used by its owner for non-profit educational or charitable purpose. He argued that the Foundation owns fee simple title to the entire tract of real estate and the Foundation is a charitable 501(c)(3) organization, existing solely for charitable educational purposes, and part of the property is used by the Foundation. Mr. Gibson further explained that the situation of the property that is leased by the Chamber is less clear. Under the terms of the ground lease, the Chamber owns the building. The Chamber of Commerce is not a charitable organization, but it is a non-profit organization. The Statutes refer to a non-profit educational or charitable organization, but not that the organization has the 501(c)(3) status under the IRS code. He believed the exemption should be granted based on the building or land that is actually occupied gratuitously by the Foundation. It is occupied by T9(; I I I ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20,2000 Page 261 the occupant for non-profit, educational, or charitable purposes. One argument against the exemption is the small area that is leased to a public company, but the lease will terminate soon. Mr. Gibson concluded that the portion of the property that is owned and used by the Foundation, which is the charitable group, should be exempt from taxation by G.S. 105- 278.7a(1). The portion of the building and the real property used and occupied by the Chamber, which is a non-profit community organization, should be exempt from taxation under G.S. 105- 278.782. An exception would be the area that is leased to the commercial establishment. Another factor that the Board should consider when making the decision concerns an agreement between the Chamber and the Foundation with Live Oak Development Company. The agreement provides that the Chamber will exchange a portion of the Chamber property with Live Oak, for a portion of the tract of land presently owned by Live Oak, which adjoins the Chamber property. Live Oak is developing the property north of the Chamber and the design plan includes the Chamber property in the development. The agreement contains a contingency that the Chamber and the Foundation continue to receive the same exemption that they currently enjoy. A letter to the Tax Department on February 3, 2000 included a map and plan of the area to be developed. The property that the Chamber will receive from Live Oak is much smaller and is located between the present building and a waterfront lot. He urged the Board to consider that the property received by Live Oak will add value to the development and will be subject to tax at the normal assessment when it is owned by Live Oak. Tax Administrator Glasgow stated that the decision by the Tax Department was based on the Attorney General's decision on whether Chambers of Commerce were exempt organizations. The Honorable Thomas Wade Bruton ruled that the General Statutes did not give any provisions to exempt Chambers of Commerce from the Ad Valorem Taxation. The ruling is still applicable. The Board was to review the exemption status on the building once it was constructed. The land was exempt. Chairman Caster asked if the land should be taxed. Tax Administrator Glasgow responded that all of the property should be taxed because the Chamber is not an exempt organization. There are 501(c)(3) organizations that are exempt from income taxes by the IRS, but not exempt from taxes in the State of North Carolina. General Statutes 107-275 contains a list of organizations that can be considered for exemption. The list does not include Chambers of Commerce. In Wake County, the Chamber has a facility worth $1.9 million, which is taxable. All nine Chamber properties in Forsyth County and properties in Guilford County are taxed based on the February 1966 decision. Chairman Caster asked if any of these locations was owned by a foundation. Tax Administrator Glasgow replied that the counties were not making a distinction between 179G j MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20, 2000 Page 262 _. the two, that they were both Chambers of Commerce. Commissioner Howell asked if the Board has the authority to exempt the organizations. Tax Administrator Glasgow responded that Chambers of Commerce are taxed in other counties. The Board can exempt the Chamber, but there is always the possibility of repercussions of someone challenging the exemption. The individual Commissioners would be responsible for paying the taxes if a challenge were upheld. Wake County had told him that they would not consider exempting the Chamber's property. Mr. Gibson said that the Attorney General's opinion in 1966, was based on a previous Statute. The current Statute was established in 1973 with additional changes in the 1990s. The opinion did not differentiate between Chambers of Commerce and a Foundation. It states that Chambers of Commerce are not exempt organizations. He contended that the old opinion did not apply to the current situation. It is a unique situation regarding a Foundation owning the land and the Chamber owning the building in North Carolina. Upon a question from the Board on whether the Tax Office was aware of any cases of a Chamber receiving the exemptions, Tax Administrator Glasgow responded that he did not know of any. However, the Board has the authority to give an exemption to the Foundation because it meets the requirements of the Statutes and the Board can continue the exemption, which was put into effect by a prior Board. Commissioner Howell asked if the prior Board would be liable for the taxes if the exemption was challenged. Tax Administrator Glasgow responded that he had denied the current request for exemption based on information that he had received from the Department of Revenue. Chambers are 501(c)(6), which is a trade organization. The 1966 decision was based on Chambers of Commerce being trade organizations. Until it is tested in the courts, the Department of Revenue has determined that Chambers of Commerce are not exempt organizations. Commissioner Howell commented that the members in the organization are people who make a profit and the Chamber serves for their benefit and use. Mr. Gibson responded that the language in the Statutes of Subsection A states that property will be exempt from taxation if it is wholly owned by an agency listed in Subsection C, which states that one of these agencies is a non-profit community or neighborhood organization. He contended that the Chamber fits that definition of eligible entities. Tax Administrator Glasgow replied that the Statute also states that the property be "wholly and exclusively used" and the fact that the property was rented should disqualify the Chamber. Conceivably, the establishment of a foundation may be a way for a group to circumvent the law, since the Statutes say that Chambers of Commerce are not exempt organizations. E9G I I I -.., MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20,2000 Page 263 Vice Chairman Greer asked if the Foundation came under G.S. 105-278.7(d), which exempts the part of the property used for non-profit purposes from taxation. Also, it states that notwithstanding the exclusive use requirements of Subsection A: if part of the property otherwise meets the subsection requirement and is used for purposes that required an exemption if the entire property was so used, the valuation of the part so used shall be exempt from taxation. Mr. Gibson explained that to him that meant if part of the property meets the exemption then the Board can exempt the property, and if part of the property does not, then it would be subject to taxation. As he had pointed out, part of the building was rented to a commercial establishment and would not qualify for the exemption. Chairman Caster commented that the Foundation meets the requirements as a non-profit and he thought the Chamber meets the same requirements and should be non-taxable, with the exception of the commercially rented area. In considering the Chamber's function in the community, it meets the non-profit criteria. At the conclusion of the hearings on this date, discussion was held on whether the issue should be decided by the Property Tax Commission. Assistant County Attorney Holt Moore stated that the case did have an unusual circumstance with the ownership of the property and may be a good case to go before the Property Tax Commission and have the law changed. He advised that the Chamber's argument is not frivolous and does have potential. Chairman Caster felt that the Chamber should not have to spend the time and money to argue the case. Vice Chairman Greer agreed saying that since there was support for either argument, the Board should not force the Chamber to challenge the courts when they could win the appeal. Tax Administrator Glasgow reiterated that the Department of Revenue had stated that the Chamber was not an exempt organization. Other counties with similar situations would have to consider other 501(c)(6) organizations or organizations that establish foundations to avoid the requirements of the General Statutes. Motion: Vice Chairman Greer MOVED, SECONDED by Chairman Caster, to continue the tax exempt status for the Chamber of Commerce. Upon vote, the MOTION CARRIED 3 to O. TAX APPEAL - HARBOR UNITED METHODIST CHURCH, 4853 MASONBORO LOOP ROAD, WILMINGTON, NC, TAX MAP NUMBER R07908-003-015-000 Tax Administrator Robert Glasgow reported that the property is a 14.32 acre parcel located on Masonboro Loop Road and has the assessed value of $666,355. A building on the property is valued at $60,000. In 1999, the 4.1 acres fronting the road received an exemption for religious ~~9G ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20,2000 Page 264 purposes, thereby reducing the taxable value to $408,800. The appellant felt that the remaining 10.22 acres should be exempted because the property is used for church functions. Youth group activities, including those of the Boy Scouts, and other children's activities are held on the property, and make use of Serenity Trail. Tax Administrator Glasgow stated that when he visited the site, he found parts of the area saturated with water, overgrown with vegetation, and large piles of debris that made it difficult to reach the back of the trail. To receive the tax exemption, the property had to be "wholly and exclusively used" for religious purposes as of January 1, 2000. He had denied the exemption and appeal because in the opinion of the Tax Department, the land was not wholly and exclusively used for religious purposes as required by General Statute 105- 278.3(a)(1). Tax Administrator Glasgow recommended that the Board deny the exemption for the remaining wooded areas until such time that the land is used by the church for parking, camping by the Boy Scouts, or other activities. Tax Appraisal Supervisor Larry Bolick stated that the church will be able to submit a yearly application to update the number of acres that is being used. Motion: At the conclusion of the hearings on this date, Vice Chairman Greer MOVED, SECONDED by Commissioner Howell, to deny the request for an exemption on the remaining 10.22 acres of the property, as recommended by the Tax Administrator. Upon vote, the MOTION CARRIED 3 to O. TAX APPEAL - GOODWILL COMMUNITY FOUNDATION, INC. 709 SOUTH KERR A VENUE, WILMINGTON, NC, TAX MAP NUMBER R07908-003-015-000 Tax Administrator Robert Glasgow reported that the property is a 14 foot high metal building containing approximately 13,050 square feet of heated space. The building is used 70% for retail sales and 30% for warehouse storage. The building, constructed in 1995, is of an average quality grade and is in excellent condition. The property has the assessed value of $837,634. Goodwill Industries of North Carolina gave the building and land to the Goodwill Community Foundation and then leased the property from the Foundation for $89,000 per year. The Foundation has requested a tax exemption for the property. He had reluctantly denied the appeal because General Statutes 105-278.7(a)(2) states that in order to qualify for tax exemption, property must be "occupied gratuitously by an agency listed in subsection (c) below, other than the owner, and wholly and exclusively used by the occupant for nonprofit education, scientific, and literary or charitable purposes." Allowing an exemption appeared to be in conflict with the intent of the General Statute, since the property was being rented, although both organizations are taxed exempted under the IRS code. He was reluctant to deny the appeal because the General Statutes does allow one organization to be used by another organization. Tax Administrator Glasgow explained that gratuitously should mean without any expense, S9G I I I ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20, 2000 Page 265 but the Foundation charged a rental fee of $89,000 to the other organization to use the facility, which is why he had denied the request for exemption. However, Mr. James A. Cole, attorney representing the Goodwill Foundation, submitted a case law that seemed to apply. The law had determined that if the fee did not exceed the actual mortgage payment, the fee could be deemed gratuitous use of the facility. The fee of $89,000 is less than the mortgage payment of $101,000 and staff agreed that the Foundation was gratuitously allowing the organization to use the facility and that it should be an exempt property. The issue differs from the Chamber's appeal because Goodwill is recognized in the General Statutes as an exempt organization, whereas the Chamber of Commerce is not an exempt organization. He recommended that the Board approve the exemption for Goodwill Community Foundation, Inc. Motion: At the conclusion of the hearings on this date, Vice Chairman Greer MOVED, SECONDED by Chairman Caster, to approve the exemption for the Goodwill Community Foundation, as recommended by the Tax Appraisal Supervisor. Upon vote, the MOTION CARRIED 3 to O. ASSESSED VALUES REDUCED Tax Administrator Robert Glasgow reported several appellants have met with the Tax Appraisal Staff and based on these discussions the appellants have concurred with the proposed reductions in values or have withdrawn their appeals. He recommended that the Board approve the reductions or uphold the assessed values for the remaining appeals. Motion: Commissioner Howell MOVED, SECONDED by Vice Chairman Greer, to accept the value or to reduce the assessed values on the properties as recommended by the Tax Administrator. Upon vote, the MOTION CARRIED 3 to O. The Board of Equalization and Review reduced the assessed value on the following appeals: TAX APPEAL - APPLIED ANALYTICAL INDUSTRIES, INC., 1726 TWENTY-THIRD STREET, WILMINGTON, NC, TAX MAP NUMBER ROllOO-009-006-000 Tax Administrator Robert Glasgow reported that tax records have the same building charged on two parcels. The appellant, Applied Analytical Industries, had reported that the building was removed from the property. The assessed value was reduced from $2,840,372 to $45,000 for the vacant lot. TAX APPEAL - LEO J. AND MARGARET A. BATTISTELLI, 1604 BASSET COURT, WILMINGTON, NC, TAX MAP NUMBER R02920-003-020-000 Tax Administrator Robert Glasgow reported that by correcting the quality grade of the dwelling at 1604 Basset Court to the same as similar dwellings in the neighborhood, the value was reduced from $130,001 to $125,781. TAX APPEAL - BENEDICT ARNOLD ASSOCIATES, 519 MARKET STREET, 89G ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20,2000 WILMINGTON, NC, TAX MAP NUMBER R04817-029-008-000 Tax Administrator Robert Glasgow reported that the effective age on the record card was changed to more accurately reflect the age of the two-story office building built in 1927. The assessed value was reduced from $527,880 to $311,085. Page 266 TAX APPEAL - ARTHUR ANDREW BEST, 4111 PEACHTREE AVENUE, WILMINGTON, NC, TAX MAP NUMBER R05518-020-004-000 Tax Administrator Robert Glasgow reported that after correcting errors on the quality grade and land value for the 1,020 square foot home in the Winter Park area, the assessed value was reduced from $104,862 to $91,189. TAX APPEAL - MARY LOUISE BONIN, ETAL, 2422 MIDDLE SOUND LOOP ROAD, WILMINGTON, NC, TAX MAP NUMBER R05200-001-003-000 Tax Administrator Robert Glasgow reported that a reduction was given based on a 30 foot easement and ditch in the back of the residential property. The assessed value was reduced from $146,885 to $133,249. TAX APPEAL - THOMAS C. CROSSLAND, 829 FOURTH STREET, WILMINGTON, NC, TAX MAP NUMBER R04813-001-016-000 Tax Administrator Robert Glasgow reported that depreciation had not been applied to the 6,000 square foot building when the revaluation was done in 1999. After the correction, the value was reduced from $119,577 to $105,418. TAX APPEAL - DEVIPRY A, 3903 MARKET STREET, WILMINGTON, NC, TAX MAP NUMBER R04913-009-001-001 Tax Administrator Robert Glasgow reported that errors were found in the assessment of the land value based on the values of neighboring properties. Once corrected, the value was reduced from $1,420,724 to $974,227. TAX APPEAL - MORRISON W. DIVINE, III TRUSTEE, 416 FRONT STREET, WILMINGTON, NC, TAX MAP NUMBER R05308-013-006-000 Tax Administrator Robert Glasgow reported that the tax record cards were corrected by removing charges for a bathhouse and retaining wall that were no longer on the property. Once the effective age and condition were corrected for the three story brick house, the value was reduced from $1,032,216 to $974,227. TAX APPEAL - PEGGY POWELL DREYFORS, ETAL TRUST, 310 SAMSON STREET, WILMINGTON, NC, TAX MAP NUMBER R04000-001-001-000 Tax Administrator Robert Glasgow reported that upon visiting the site, an error was found in charging the building to the wrong parcel. After removing the building from the property record card, the value was reduced from $357,260 to $71,925. L9G I I I -.., MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20,2000 TAX APPEAL - MURAT ERDEM, 322 DONALD E. GORE DRIVE, WILMINGTON, NC, TAX MAP NUMBER R06S12-002-006-000 Tax Administrator Robert Glasgow reported that upon visiting the site, an error was found in the coding of an enclosed porch and the effective age of the 1977 brick house. After correcting the codes, the value was reduced from $141,709 to $126,360. Page 267 TAX APPEAL - JOHN E. FRAGOS, 116 MARKET STREET, WILMINGTON, NC, TAX MAP NUMBER R04720-012-00S-000 Tax Administrator Robert Glasgow reported that after visiting the site, the appraiser found the upper floors were in poor shape from a leaking roof. Due to the condition of the three story brick building that was constructed in 1904, the value was reduced from $371,887 to $196,136. TAX APPEAL - GODWIN OIL COMPANY, INC. HIGHWAY 421 NORm, WILMINGTON, NC R04000-002-003-00A AND R04000-002-003-000 Tax Administrator Glasgow reported that after an inspection of the properties and talking with the property owner, it was determined that a liquid storage tank was removed from the property several years ago and the property record card was not changed. By moving miscellaneous improvement to the other parcel, the values were changed from $11,830 and $77,120 to $0 and $86,449 respectively. GARY E. GRAHAM, ETUX, 718 KELLY ROAD AND 101 DOUGHTON DRIVE WILMINGTON, NC, TAX MAP NUMBER R06620-001-00S-000 AND R06616-001-016-023 Tax Administrator Robert Glasgow reported that upon reviewing the site, the tax appraiser found that the properties were not depreciated appropriately. After correcting the depreciation, the value of the brick house at 718 Kelly Road was reduced from $118,222 to $109,077 and the value of the vinyl sided house at 101 Doughton Drive was reduced from $155,401 to $147,775. .. TAX APPEAL - WILLIE GRAINGER, JR., 710 KIDDER STREET, WILMINGTON, NC, TAX MAP NUMBER ROS414-023-00S-000 Tax Administrator Robert Glasgow reported that upon inspecting the property, the tax appraiser found that the land value was entered into the computer incorrectly and an adjustment was needed because of the condition of the 1955 two-story block home. After the adjustments, the assessed value was reduced from $141,709 to $51,095. TAX APPEAL - ALEXANDER M. AND MARIA C. HALL, 419 CASTLE STREET, WILMINGTON, NC, TAX MAP NUMBER ROS409-004-011-000 Tax Administrator Robert Glasgow reported that the land value was corrected from $195,602 to $163,477. TAX APPEAL- BILLY A. F. HAMMOND, 1604 SOFfWIND WAY, WILMINGTON, NC, TAX MAP NUMBER ROS615-003-028-000 AND R05615-003-099-000 Tax Administrator Robert Glasgow reported that the value of the two vacant lots in the Sounds Edge Subdivision were reduced from $159,998 each to $129,000 and $99,999, based on OLG ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20, 2000 Page 268 the location of the lots and the selling price. TAX APPEAL - JOE A. AND PATRICIA M. HARDEN, 1717 FUTCH CREEK ROAD, WILMINGTON, NC, TAX MAP NUMBER R03017-001-005-000 Tax Administrator Robert Glasgow reported that upon review of the property, the Tax Assessor found the pier was no longer in existence. The value was reduced from $487,309 to $479,297. TAX APPEAL- CHARLIEH. HARVIN, 110N. 31ST STREET, WILMINGTON,NC, TAX MAP NUMBER R04913-017-007-000 AND R04913-017-018-000 Tax Administrator Robert Glasgow reported that upon review of the site, it was discovered that rooms were added on to the house and both lots were smaller than charged. The value of the house was reduced from $81,713 to $73,964 and the value of vacant lot was adjusted from $5,715 to $8,165. TAX APPEAL - RICHARD J. AND ELKA M. JAROSS, 6609 COVE POINT DRIVE, WILMINGTON, NC, TAX MAP NUMBER R06710-006-004-000 Tax Administrator Robert Glasgow reported that after correcting the effective age of the building, the value was reduced from $707,999 to $628,828. TAX APPEAL-JAMES T.JOHNSON, 302 CASTLE STREET, WILMINGTON,NC, TAX MAP NUMBER R05409-014-001-000 Tax Administrator Robert Glasgow reported that after correcting the effective age of the property, the value was reduced from $48,433 to $43,810. TAX APPEAL- EVELYN J. MCFEE ETAL., 1112 TWELFTH STREET, WILMINGTON, NC, TAX MAP NUMBER R04818-014-004-000 Tax Administrator Robert Glasgow reported that after correcting the quality grade and effective age of the building, the value was reduced from $38,530 to $35,639. TAX APPEAL-JOSEPH CURTIS MCNAIR, 1405 WOOSTER STREET, WILMINGTON, NC, TAX MAP NUMBER R02920-003-020-000 Tax Administrator Robert Glasgow reported that after correcting the measurements of the house, the value was reduced from $87,761 to $77,395. TAX APPEAL - TIMOTHY F. AND LYNN E. MEEKER, 2005 MONTROSE LANE, WILMINGTON, NC, TAX MAP NUMBER R05106-012-002-000 Tax Administrator Robert Glasgow reported that after correcting an error on the property record card, the value was reduced from $349,997 to $255,497. TAX APPEAL - LISA P. PACE, 1911 PRESTWICK LANE, WILMINGTON, NC, TAX MAP NUMBER R05706-010-005-000 Tax Administrator Robert Glasgow reported that after correcting the effective age of the tJ9G I I I ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20, 2000 Page 269 building and an architectural code, the value of the property was reduced from $264,903 to $243,674. TAX APPEAL - WILLIAM GARY AND PAMELA L. SIGMON, 259 SHANNON DRIVE, WILMINGTON, NC, TAX MAP NUMBER R07908-003-003-000 AND R07908-003-004-000 Tax Administrator Robert Glasgow reported that based on the appellant being unable to build on the lots, the value of the land was reduced from $62,815 and $35,000 to $45,315 and $17,500. TAX APPEAL - TONY BROOKS WARD, 1205 S. FOURTH STREET, WILMINGTON, NC, TAX MAP NUMBER R05413-030-002-000 Tax Administrator Robert Glasgow reported that upon review of the property, extensive damage was found on the single family home. The value of the house was reduced from $45,295 to $30,566. TAX APPEAL - H. W. WELLS III AND CALVIN F. WELLS PARTNERSHIP, WILMINGTON, NC, TAX MAP NUMBER R04817-032-008-000 Tax Administrator Robert Glasgow reported that after correcting a clerical error, the value of the two story office building was reduced from $1,480,489 to $940,158. TAX APPEAL - ROBERT L. YUNASKA, 8118 MARKET STREET, WILMINGTON, NC, TAX MAP NUMBER R03600-005-010-002 Tax Administrator Robert Glasgow reported that in review of the site, the Tax Department discovered that the building was in poor condition. Afer applying the correct depreciation, the value of the 10,000 square foot warehouse was reduced from $736,315 to $611,578. TAX APPEALS WITHDRAWN Tax Administrator Robert Glasgow reported that the following appellants have withdrawn their appeals: N. D. Buck, 14 Island Drive and 12 Island Drive, Wilmington, NC, Tax Map Number R06307-001-005-000 and R0637-001-008-000 Jeffrey P. Cottle - Life Estate, 351 Carolina Beach Road, Wilmington, NC, Tax Map Number R06511-001-012-000 A. T. and Ann Dombroski, 107 Tom A venue, Wilmington, NC, Tax Map Number R01805- 001-009-002 Norman E. and Donna D. Durham, 106 S. Fifth Street, Wilmington, NC, Tax Map Number R065405-004-016-000 (~LG ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20,2000 Page 270 George Harriss, 4008 Oleander Drive, Wilmington, NC, Tax Map Number R06106-00s-031- 000 Gerald Dwayne and Cynthia Hatchell, ssOl Bernhardt Court, Wilmington, NC, Tax Map Number R07119-013-014-000 Island Petroleum Development, 100 W. Salisbury Street, Wilmington, NC, Tax Map Number ROs716-001-01s-000 JHT Realty L.L.C., 105 Cinema Drive, Wilmington, NC, Tax Map Number R04914-00s- 026-000 Spiro J. Macris, 1019 North Third Street, Wilmington, NC, Tax Map Number R04712-004- 001-000 Medac Group L.L.C. 1442 Military Cutoff Road, Wilmington, NC, Tax Map Number ROs612-002-011-000 JohnD. Pickelsimer, Etux, 4713 College Road, Wilmington, NC, Tax Map Number ROss08- 002-004-000 John and Cheryl Possehl, 117 Bump Along Road, Wilmington, NC, Tax Map Number R03600-003-042-007 Charles J. III and Barbara M. Rogers, 2400 Sunburst Court, Wilmington, NC, Tax Map Number R03s00-00s-37s-000 C. Ernest and Anne M. Simons, 2129 Forest Lagoon Drive, Wilmington, NC, Tax Map Number ROs11s-003-023-000 Anna B. Strickland, Etal, 331 Pine Cliff Drive, Wilmington, NC, Tax Map Number R0661s-006-021-011 Harold E. Trask Jr. Etal., 90S Lumina Avenue South, Wilmington, NC, Tax Map Number R06806-003-002-000 George R. and June M. Tregembo, 5815 Carolina Beach Road, Wilmington, NC, Tax Map Number R07600-004-066-000 ILG I I I ~ MINUTES OF THE BOARD OF EQUALIZATION AND REVIEW JUNE 20, 2000 ADJOURNMENT Page 271 Tax Administrator Glasgow stated that General Electric was not notified earlier of the date of the meeting and was not prepared to discuss their case. The meeting should be recessed in order to hear the appeal at a later time. Appreciation was expressed to staff for resolving most of the appeals prior to the meeting of the Board of Equalization and Review. Motion: Vice Chairman Greer MOVED, SECONDED by Commissioner Howell, to recess the meeting. Upon vote, the MOTION CARRIED 3 to O. The meeting recessed at 2:00 p.m. Respectfully submitted, J~f~ Teresa P. Elmore Deputy Clerk to the Board PLG ~