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E&R 2003-06-16 I I I ,.., NEW HANOVER COUNTY BOARD OF EQUALIZATION AND REVIEW MEETING, JUNE 16, 2003 ASSEMBL Y The New Hanover County Board of Equalization and Review met on Monday, June 16, 2003, at 2: 10 p.m. in the Assembly Room ofthe 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. BOOK 1 PAGE 330 Members present were: Chairman Ted Davis, Jr.; Vice-Chairman Robert G. Greer; Commissioner Julia Boseman; Commissioner William A. Caster; Commissioner Nancy H. Pritchett; Tax Administrator Robert Glasgow; Tax Appraisal Supervisor Larry Bolick; Assistant County Attorney Holt Moore; and Deputy Clerk Teresa P. Elmore. Chairman Davis called the meeting to order and welcomed everyone present. He apologized for the late start of the meeting due to the Regular Board meeting running behind schedule. 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 PRESENT A TIONS T AX APPEAL: THE OLEANDER COMPANY, 5026 OLEANDER DRIVE, WILMINGTON, NC, TAX MAP NUMBER R06100-004-001-001 Tax Administrator Glasgow stated that the assessed value of the 13.2 acre tract of land is $2,611,685. The property consists of a 1,500 square-foot metal building constructed in 1993 and a 17,000 square-foot parking lot. It is zoned Community Business - Special Use District CB(SD) for use as a golf driving range. The property has 1,020 feet of frontage on Oleander Drive. The Tax Department felt that the property was assessed correctly based on other commercial properties along Oleander Drive. Charles Meier, attorney representing the Oleander Company, presented the appeal of the property on Oleander Drive. He reported that in 1992 the property was rezoned from R-15 Residential District to CB(SD) Community Business/Special Use District for a golf driving range. As far as they knew the property was assessed correctly at that time. A letter from Dolores Williams, Assistant City Attorney with the City of Wilmington, stated that the property cannot be used as anything other than a golf driving range and if the permit is revoked, no other use of the property is permitted unless and until another special use permit is issued. As oftoday, the property is no longer being used as a golf driving range. In 2002 the Oleander Company was notified by the Tax Appraisal Supervisor that an error was made in thatthe property was assessed as a multi - family low-density residential property instead of central business. The property was reassessed as allowed under the discovery provisions of the statutes at $2,611,000. At the time of the revaluation in 1999, the value was increased from $275,000 to $409,982. Mr. Meier argued that the County was incorrect in increasing the property value by 637% from $31,000 an acre to $200,000 per acre. He presented a letter from the City that showed the property was rezoned from an R-15 Residential District to a Community Business/Special Use District for a golf driving range. GS 105-283 provides that all property should (~L8 ~ NEW HANOVER COUNTY BOARD OF EQUALIZATION AND REVIEW MEETING, JUNE 16, 2003 BOOK 1 PAGE 331 be appraised at its true value and GS 105-317 allows that it shall be the duty of the person making appraisals to consider its advantages and disadvantages as to the location, zoning, past income, probable future income, and any other factor affecting its value. Mr. Meier cited the Belk Broome Court of Appeals Case in which the Property Tax Commission and Catawba County were told to consider the property as it finds it. Publicly created encumbrances such as zoning designations should be considered in appraisals for property tax purposes and it is generally accepted that the income approach to value is the most reliable method in reaching the market value of investment property. Mr. Meier argued that the County failed to consider the provisions of GS 1 05-317, which requires the County to consider zoning, past income, and probable future income in determining the value ofthe property. The Tax Office changed the zoning classification of the property, but they did not consider the special use permit that restricts the use ofthe property. Since the property cannot be used for any other purpose, he felt it should be appraised on that basis. Mr. Meier said that Gene Merritt, a local state certified general real estate appraiser, appraised the property at $368,000, based on the income approach to value. The appraised value is 10% less than the County's assessed value prior to April 2002. According to the Belk Broome court decision, the income approach to value is the most reliable method in reaching the market value of the property. He compared the Oleander property to two other golf driving ranges in the Wilmington area, the Valley Golf Center at 4420 S. College Road and Carolina Custom Golf at 7001 Market Street. The Valley Golf Center is zoned R-15 with a special use permit for a golf driving range. The property is not rented and the County assessed the property at $40,000 per acre. Carolina Custom Golfis rented at $3,000 per month and has the same rental rate that the Oleander Company received for its property in 1999 and 2000. He requested the Board to consider the restrictions ofthe special use permit in determining the value of the property. If the property is not used as a golf driving range, he gave the opinion that it cannot be used for anything else. Mr. Merritt spoke concerning the appraisal ofthe property zoned. He pointed out that the golf course on College Road is zoned R-15 and has a special use permit for the driving range. Ifthe permit is revoked, the property would remain R-15. The Oleander property was rezoned from R-15 to CB(SD) for the purpose of a golf driving range. In appraising the property, Mr. Merritt said that the only legally permissible use ofthe land is for a golf driving range. Since there is a limit to the amount of money the property will bring in, he appraised the property at $368,000 as of January I, 1999. The owner of the golf driving range on Market Street renegotiated his lease ofthe property because he was unable to generate enough income as a golf driving range. In rebuttal, Tax Administrator Glasgow said that the property had been incorrectly identified as residential property. A letter of discovery was sent to the owner, but no appeal was received within the 30 day appeal period and the value became final. The 2003 value is being appealed. lLE I I I ,.., NEW HANOVER COUNTY BOARD OF EQUALIZATION AND REVIEW MEETING, JUNE 16, 2003 BOOK 1 PAGE 332 In the assessment support, Tax Appraisal Supervisor Bolick said that the assessment for the property was reviewed in conjunction with another appeal last year and the land value was corrected. In 1998, a vacant lot on Oleander Drive next to Jungle Rapids sold for $1.3 million and the assessed value was $1.39 million. The property owned by the Oleander Company was assessed in the same manner as other properties on Oleander Drive in this area. If the property is not used as a golf driving range, the owner could request the City for another use. Chairman Davis asked the use of the property that was sold in 1998. Tax Appraisal Supervisor Bolick reported that the property at the corner of Englewood and Oleander sold in 1999 and it was being used as a parking lot. Property along Oleander Drive is assessed at $1800 a running foot for a standard depth. An assigned value of $99,000 an acre is applied to anything over that standard size depending on the appraiser's opinion of value for the property as of January 1,1999. Chairman Davis asked if the property could be changed and used for some other purposes after it was uniquely developed as a driving range. Tax Appraisal Supervisor Bolick responded that the owner can apply to the City for another use of the property. The value on the property is fairly represented as other properties along Oleander Drive. Vice-Chairman Greer asked if the Board could consider other uses for the property instead of the current use. Tax Appraisal Supervisor Bolick responded that the Board should consider the highest and best use of the property. The zoning of the property is considered in the value. The property can be rezoned for another use. In March 1998, the vacant 6.42 acre tract next to Jungle Rapids was purchased for $1 ,334,000. The Tax Department's appraised value is within 4.5% of the qualified sale of this property. The same land rates that were used to appraise the vacant property were equitably applied to the subject property. The Valley Golf Driving Range at 4416 S. College Road, a similar property with a less desirable zoning ofR-15, is for sale at $3 million. Vice-Chairman Greer asked ifthe property is assessed at $3 million. Tax Appraisal Supervisor Bolick responded that the property is assessed according to the schedule of values as other R-15 residential properties in that area. Commissioner Caster said that he considered the CB(SD) zoning for a golf driving range to be the only use of the property. Until the zoning is changed, the assessed value should remain the same. Tax Administrator Glasgow replied that the Tax Office does not identify a specific use for commercial property, whether a golf driving range or a restaurant. The value is based upon the front 8L€ . ~ NEW HANOVER COUNTY BOARD OF EQUALIZATION AND REVIEW MEETING, JUNE 16, 2003 BOOK 1 PAGE 333 footage along Oleander Drive. The Tax Office based the $2.6 million value on appropriate schedule of values as of the January 1, 1999. The fair market value is based on it being commercial property. Commissioner Caster objected to the property being assessed as anything other than a golf driving range. Unless somebody jumps through the hoops to change the zoning, the Board should only consider its current use. City Council may not allow a change to the special use permit and they may want to keep it as a golf course. Tax Administrator Glasgow responded that the Tax Department must consider the subject property equitably and consistent with other properties on Oleander Drive. He recommended to uphold the assessed value of$2,611,685. Chairman Davis asked Mr. Meier why the evaluation was not appealed in 2002. Mr. Meier responded that the Oleander Company has a pending lawsuit with the County regarding the taxation for 1997 to 2002. The Board of E&R is being asked to determine the value ofthe property for tax year 2003. No change or improvement was made to the property that would change the valuation. The County discovered a mistake in the taxation of the property and reassessed it based on the Central Business designation. Although the discovery was done in 2002, the County has revalued the property starting in 1999 at $2,611,000. He requested the Board to reduce the value back to $368,000. The determination oftaxes for prior years is a matter before the New Hanover County Superior Court. Assistant County Attorney Moore agreed with Mr. Meier saying the 2003 tax value is the only issue before the Board. Mr. Meier said if the Board was inclined to affirm the value of$368,000 for 2003, he would ask that the value be applied back to 1999. However, the value for prior years will be the subject of a lawsuit between the Oleander Company and the County. He reported that Mr. Merritt asked Mr. Fullerton ofthe Wilmington Zoning Department if rezoning the property to the Community Business designation was likely. He had responded that it is unlikely because of high traffic volumes. Since adjacent properties are zoned for R -10 and R -15 Residential, Mr. Fullerton did not think the property would be rezoned to a more intensive zoning classification. Mr. Meier requested the Board to consider the current use of the property as a golf driving range and to assess the property accordingly. The Tax Office did not use the income approach to value, but based the value on the sale of property further down the street. Although the County does not consider a special use permit when determining the value of property, he argued that the general statutes do. Tax Administrator Glasgow pointed out that the clerical error was found in 2002 and the new assessment was retroactive for five years. Statute 105-394 does make provision for the correction to the revaluation. The zoning classification was incorrect which of course shows a much different value than the actual use ofthe property. Similar type properties were used to determine the value. The values of the Valley Golf Driving Range and Carolina Custom Golf Driving Range are based on the location. This property was not coded correctly in 1997 when the special use permit was approved. The clerical error was found when investigating an appeal for another property. Lit; I I I ~81 ~ NEW HANOVER COUNTY BOARD OF EQUALIZATION AND REVIEW MEETING, JUNE 16, 2003 BOOK 1 PAGE 334 Hugh MacRae, an owner of the Oleander Company, expressed concern that the Tax Office used the sale of one property at $1.3 million as the basis to determine the assessed value of properties along Oleander Drive. He did not believe that one sale should be the reason to raise the property taxes for nearby properties. The Oleander Company has never argued the value of any of its property in New Hanover County before the Board ofE&R. Ifthe value had increased by $200,000 or $300,000, they most likely would not have appealed the value. He also reported that the company missed the 30 day deadline to appeal the 2002 tax value. Mr. MacRae reported that the Oleander golf driving range has proven unsuccessful and the owner ofthe business was unable to pay the $3500 a month rent as per the lease agreement. Ifthe Oleander Company was able to collect higherrent, the Tax Office would be correct in its assessment. He noted that the owner of the Valley Golf Range may be asking $3 million for the property, but the residential property has been for sale for several years. Chairman Davis informed Mr. Meier that the Board would listen to all of the appeals and then meet to make the decisions. The Tax Administrator would notify him of the Board's decision. Mr. Meier presented his exhibits to the clerk to be filed with the appeal in the Tax Office. At the conclusion of the hearings on this date, the Board discussed whether the lawsuit by the appellant would be affected by the Board's decision ifthe value was reduced. Chairman Davis asked if the Board affirms the value and later the lawsuit determines that the 2002 tax value is wrong, whether the Board would be able to reduce the 2003 value. Assistant County Attorney Moore responded that it is unlikely that the courts would rule on the value. However, ifthe Superior Court ruled in favor of the Oleander Company and reduced the value for 2002, it would be incumbent upon the County to change the value for subsequent years. He advised that the Board could change the 2003 assessed value at a later time based on the outcome of the lawsuit. Chairman Davis asked ifthe Board reduced the assessed value for 2003, whether the decision would have any bearing on the courts in determining the value for 2002. He suggested that the Board may need to affirm the value and wait to see what happens with the court case. Ifthe courts change the value, it would be incumbent on the Board to change the value for 2003. Nevertheless, he did not want the Board's decision to have an affect on the lawsuit. Assistant County Attorney Moore responded that it was conceivable for the Board to be subpoenaed to testify as to the reduction in value. He advised that as a matter of strategy, the most consistent action by the Board would be to keep the value the same as in 2002. However, the Board is not required to affirm the value. If the court changes the value for 2002, he agreed that the County would be bound to that value for subsequent years Chairman Davis agreed saying if the court dismisses or rules against the appellant, the County would be consistent with its value for 2003. ~ ~R? NEW HANOVER COUNTY BOARD OF EQUALIZATION AND REVIEW MEETING, JUNE 16, 2003 BOOK 1 PAGE 335 Assistant County Attorney Moore advised that the appellant did not make a timely appeal for the 2002 value. The court should rule only on whether the appeal was timely, but not on the merits of the value. Tax Administrator Glasgow advised that if the Board felt that the value should be corrected, this is the time for the Board to make the change unless it is reconsidered in 2004. Commissioner Boseman commented that if the courts do not dismiss the case, they may deal with the value ofthe property. Assistant County Attorney Moore agreed that if the appellant is successful in getting the courts to hear the case, the courts may get into the merits of the case. If the courts affirm the County's position, the 2002 value will remain the same. He reminded the Board that this would be the only opportunity for the Board to consider whether the 2003 value is appropriate. Commissioner Caster commented that the property zoned for a golf driving range would have a value ofless than $409,000 and it would not be valued at $3 million. He believed that the City would rezone the property if a potential buyer came forward with an option to purchase based on its approval. Motion: Commissioner Caster MOVED, SECONDED by Vice-Chairman Greer, to reduce the assessed value to approximately $410,000. Upon vote, the MOTION FAILED 2 TO 3. Commissioner Boseman, Commissioner Pritchett, and Chairman Davis voted in opposition. Motion: Commissioner Pritchett MOVED to uphold the assessed value of $2,611,685, as recommended by the Tax Administrator. Commissioner Boseman asked if the value should be based on the fair market value of the property. Tax Administrator Glasgow explained that the fair market value is the value agreed upon by a willing seller and willing buyer in an arms-length transaction. Ifno restrictions were on the use of the property, it would be worth $2.6 million. The County does not know whether the property can be used for something other than a golf driving range unless someone petitions the City to rezone the property. Chairman Davis said if the Board reduced the value based on the appellant's argument that the property only can be used as a driving range, then the market value would increase ifit is rezoned for another use. Tax Administrator Glasgow agreed saying that the County would have to keep the same assessed value on the property until the next revaluation. The County does not evaluate property based on special use permits, but based on the coding for the type of structure and its use. In this case, the County considers the land value as commercial property at its highest and best use. I I I 38~i -.., NEW HANOVER COUNTY BOARD OF EQUALIZATION AND REVIEW MEETING, JUNE 16, 2003 BOOK 1 PAGE 336 Commissioner Boseman asked the value of the property if it was sold to Home Depot or a large retailer. Tax Administrator Glasgow responded that the County would pick up the value of the new building structure, but not the land value. Commissioner Boseman SECONDED THE MOTION to uphold the value of$2,611,685. Chairman Davis said that if the court reduces the value, he would expect the tax appeal to be brought back before the Board to make the 2003 value consistent with 2002. Assistant County Attorney Moore explained that the appellant went through another avenue to Superior Court because they missed the County's deadline for an appeal. Normally it would have gone to the Property Tax Commission. He was unaware of a case where one ruling was in Superior Court and another with the Property Tax Commission and the rulings were inconsistent with each other. If Superior Court sets one value for 2002 and the Property Tax Commission determines the 2003 tax value, the County would be bound to the Property Tax Commission's ruling for 2003. Otherwise the 2002 ruling from the courts would carry forward and the Board would be able to change the value for 2003. Tax Administrator Glasgow agreed saying that if the Board upholds the value, the Oleander Company does have the right to appeal to the Property Tax Commission where they would have the responsibility to hear the case and adjust the value for 2003. Chairman Davis expressed concern that the Board's decision may have a bearing on the pending lawsuit. Vote: Upon vote on the motion to deny the appeal and to uphold the assessed value of$2,611,685, the MOTION CARRIED 3 TO 2. Commissioner Caster and Vice-Chairman Greer voted in opposition. TAX APPEAL: JOHN C. DREWRY III, 86 WAYNICK BOULEVARD, WRIGHTSVILLE BEACH, NC, TAX MAP NUMBER R06308-025-006-000 Tax Administrator Glasgow reported that the property is a 2,484 square-foot brick building on a 5,575.68 square-foot lot at Wrightsville Beach and it is assessed at $385,637. Built in 1962, the property is leased to Kohls Frozen Custard. The Town ofWrightsville Beach has the property zoned C-I Classification. Like similar properties in the area, the property has limited parking. The highest and best use of the property would be some type of retail store. The Board reduced the value last year. The appellant's appeal stated that the property value was too high based on the small size of the lot, poor access to the property, and limited parking. The appellant complained that the majority of uses allowed under the C-1 zoning would require a large number of parking spaces. Mr. Drewry, a state certified appraiser, provided an appraisal report listing the value as $276,802. Three ....1 384 NEW HANOVER COUNTY BOARD OF EQUALIZATION AND REVIEW MEETING, JUNE 16, 2003 BOOK 1 PAGE 337 ~;; comparable properties were submitted to support his appraisal. He argued that the value was excessive by $25,000 when compared to adjoining properties using a square foot rate of$35. John C. Drewry, III, property owner of 86 Waynick Boulevard, presented his appeal by saying that he had studied the area and the best and closest comparable property is the restaurant business adjacent to his property. While his property has 40 feet of access on Waynick Boulevard, the adjoining property has 77 feet on Waynick and 85 feet on Lumina Avenue. The adjoining property is assessed at $49.98 per square foot, while his property is assessed at $48.98. He believed that proper adjustments were not made for his limited access or for the fact that a special use permit cannot be granted for the small lot. With the limited use of the C-l property, he felt the value should be $35 per square foot. He said that Louis Frost, another certified state appraiser, and John Hooten, MAl, concurred with his appraisal of$35.00 per square foot. However, no written appraisals were presented. Mr. Drewry reported that the rent of$1 ,500 per month was for two-thirds of the building. He proposed that renting the entire building for $2500 per month would indicate a value of$250,000 and would be close to the appraised value of $35 per square foot. He contacted Cheryl Roberts in the Spring of 2000 with his concern about the County's assessment and he appealed the value in May 2001, which he lost. After last year's meeting, he received a letter from Mr. Bolick saying that the assessed value was adjusted to the rental area of the building for 1999, 2000, and 2001. He requested the Board to reduce the value of the property to $35 per square foot and apply the reduction retroactively to 1999. The value was reduced to $385,000 for 2002 and 2003. .._.li~ Tax Administrator Glasgow advised the Board that it could consider only the 2003 property value and it could not reduce the assessed value back to 1999. In the assessment support, Tax Appraisal Supervisor Bolick reported that the building value was reduced by $25,764. Since some of the building was not usable, an adjustment was made to correct the clerical error for 1999 to 2002. In addition, the Board reduced the land value by $142,734 to be comparable to adjacent properties. The land value of $273,066 is an accurate reflection of values in this neighborhood as of January 1, 1999. He presented sales of comparable properties in the neighborhood which validated the value of the appellant's property as of January 1, 1999. · South Beach, 101 Waynick Boulevard -Map #R0308-025-003-000, sold in December 1994 for $ 500,000 ($49.98 per square foot for the building) and Tax Value of$ 675,770 ($83 per square foot) · Buddy's, 17 Lumina Avenue - Map #R063087012-008-000, sold in November 1995 for $425,000 ($42 per square foot for the building) and Tax Value of$ 678,596 ($44 per square foot) Red Dogs, 5 Lumina Avenue - Map #R06308-017-004-000, sold in October 1996 for $430,000 ($84 per square foot for the building) and Tax Value of$439,932 ($47 per square foot) I I I ,.., NEW HANOVER COUNTY BOARD OF EQUALIZATION AND REVIEW MEETING, JUNE 16, 2003 BOOK 1 PAGE 338 Tax Appraisal Supervisor Bolick said that the assessed value of the Drewry property at $48.98 per square foot and building value of $44.60 per square foot was comparable to the selling prices of the comparable properties. Mr. Drewry used the Middle of the Island, which is assessed at $21 per square foot, as a comparable property. But that property would not command the same value as property in the heart ofWrightsville Beach. Tax Appraisal Supervisor Bolick said that the Tax Department felt the assigned tax value of the Drewry property was supported by comparable sales and he recommended to uphold the assessed value of$385,637. Mr. Drewry responded that the neighboring restaurant is more similar to his property than the others mentioned because of being at the same location with the same zoning. Since his property was limited to uses such as an ice cream parlor or real estate office, it would not generate enough income to warrant a higher value. The property has five parking spaces behind the building with one space jutting out into Waynick Boulevard. At the conclusion of the hearings on this date, Tax Administrator Glasgow pointed out that the Board reduced the value last year based on a correction to the portion of the building in use. He recommended to uphold the value which is consistent with other properties. Motion: Commissioner Boseman MOVED, SECONDED by Commissioner Pritchett, to deny the appeal and to uphold the assessed value of$385,637, as recommended by the Tax Administrator. Upon vote, the MOTION CARRIED UNANIMOUSLY. TAX APPEAL: LELAND D. EGLAND, 2016 PELICAN REACH PLACE, WILMINGTON, NC, TAX MAP NUMBERS R05110-008-027-000 Tax Administrator Glasgow reported that the property, located in the Landfall Development consists of a 1.47 acre lot and a 6,600 square foot house built in 2002. The land value of $248,525 and house value of$1,226,148 have a total assessed value of$I,374,673. The structure has a 350 quality grade, which is the highest value that can be assigned, and a special architectural feature code of 2. The exterior finish is Augusta brick with a Spanish barrel tile roof. The appellant's appeal stated that the property was assessed above fair market value, but he did not provide any support for his argument. The owner felt the land value should be increased to $299,000, which was the selling price in 2001, and the building value should be reduced to its cost of $735,000, with a total assessed value of $1,034,000. However, the Tax Department does not consider the building cost to be the same as the market value. Since the appraisal staff was unable to determine the square footage of the house because of the different angles of the house, the listing agent was contacted for the square footage. Upon review of the property with the appellant, a correction was made to the size of the heated living space. The square footage was reduced by 559, which reduced the assessed value by $95,000. Michael Klettmer, of MLK Construction and representing Mr. Egland, spoke saying the appellant's house was built before the economic downturn for less than $1 million. He argued that the appraised value should be based on its replacement cost. The property is located in a newer 98€ ~ NEW HANOVER COUNTY BOARD OF EQUALIZATION AND REVIEW MEETING, JUNE 16, 2003 BOOK 1 PAGE 339 section of Landfall and the house was one of the most expensive homes for that area. The 4,800 square-foot house across the street sold for $800,000, and two other houses on Pelican Reach Place have not sold and have been on the market for several years. The owner of the property was misled by the real estate company saying that the area would support a $1.7 million house. Since then, Landfall Development fired the marketing regime. The tax appraiser may have been unable to get an accurate square footage, but the Inspections Department should have a correct record for the building permit. Although a very nice house, it will not sell as well in that particular section of Landfall. He proposed that the selling price would be less than $900,000. Vice-Chairman Greer asked the correct square footage of the heated space in the house. Mr. K1ettmerresponded that the house has 5,500 square feet of heated space. The Tax Office may be including the garages and other unheated areas of the house. Commissioner Pritchett noted that the ad in the Tax Department's backup for the appeal stated the house has 6,600 to 6,700 square feet. She felt that the ad was misleading and it should not have included the garage and screened porch areas in the square footage. Mr. Klettmer responded that the ad was to entice people to come see the house. It is a 6,600 square foot building, but the heated space is 5,500. Chairman Davis asked ifthe Tax Department reduced the appraised value by $98,089 after removing 560 square feet of non-heated area. Tax Administrator Glasgow explained that a cupola is on the back ofthe house and the listing agent said that the house has 6,600 square feet of heated living area. The owner/builder may sell for $900,000, butthe property was initially listed for $1.575 million and then reduced to $1.475 million. Mr. Glasgow recommended to correct the square-footage error and to uphold the new value of $1,374,673. At the conclusion ofthe hearings on this date, the Tax Administrator Glasgow explained that the Tax Office found the structure to have 6,600 square feet and assessed the property for $1,374,673. Although the sale price was more, the owner argued that the assessed value should be the actual cost ofthe property. Motion: Commissioner Pritchett MOVED, SECONDED by Commissioner Boseman, to deny the appeal and to uphold the revised assessed value of $1,374,673, as recommended by the Tax Administrator. Upon vote, the MOTION CARRIED UNANIMOUSLY. T AX APPEAL: E. MARC AND ELIZABETH BIDDISON, 138 BRADLEY PINES DRIVE, WILMINGTON, NC, TAX MAP NUMBER R05611-002-007-012 Tax Administrator Glasgow reported that the property consists of a 2,654 square-foot brick two-story house built in 1980. It is in good condition with a quality grade of good. The house, valued at $158,393, has a 32 foot by 40 foot brick detached garage valued at $27,904 and a land value of $55,000, for a total assessed value of $242,262. The appellant's appeal stated that the S8S I I I ,.., NEW HANOVER COUNTY BOARD OF EQUALIZATION AND REVIEW MEETING, JUNE 16, 2003 BOOK 1 PAGE 340 property was assessed above fair market value compared to four sales in nearby neighborhoods. After making adjustments for the properties, the owner estimated the value of the house to be $169,000. Marc Biddison, owner of the property at 138 Bradley Pines Drive, spoke saying his property is located off Rogersville Road between Wrightsville Avenue and Eastwood Road. He received a new assessment last year while he was out of the country and he was unable to appeal the value before the deadline. The garage was built two years after the revaluation. His assessed value in 1999 was $169,000, but after adding the garage, the assessment was changed to $242,262. He argued that it should be $196,940, which he said is supported by the sales in nearby neighborhoods as verified in the MLS book. In the assessment support, Tax Appraisal Supervisor Bolick reported that the sales provided by Mr. Biddison were in neighborhoods of equal value, but no adjustments were made for the lot value or the detached garage. He argued that based on sales oftwo houses in Cavalier Woods, Mr. Biddison's house should be assessed at $59.68 per square foot. Tax Appraisal Supervisor Bolick presented the following sales of comparable properties in the neighborhood, which supported the assessed value of Mr. Biddison's property as of January 1, 1999. · 302 Gregory Road, Map #R05015-017-001-000, sold in August 1998 for $163,500, Tax Value $161,903, selling price per square foot at $54.33 and Tax Value of$53.65 · 127 Cavalier Drive, Map #R05608-004-004-000, sold in December 1997 for $187,000, Tax Value $197,624, selling price per square foot at $58.76 and Tax Value of$63.99 · 148 Cavalier Drive, Map #R05612-006-00 1-000, sold in July 1999 for $182,000, Tax Value $189,490, selling price per square foot at $55.86 and Tax Value of$59.39 Tax Appraisal Supervisor Bolick explained that lots in the Bradley Pines Subdivision are 8/1 Oth of an acre and Mr. Biddison's lot is being assessed the same as these lots at $55,000. Other comparable properties included: . 106 Bradley Pines, Map #R05611-002-007-020, Built in 1984, 2,597 square feet, Quality Grade: G, 1.75-Story Wood Frame, Tax Value of$198,122 ($55.11 per sq. ft.) 310 Rill Road, Map #R05606-004-0 18-000, Built in 1968,2,376 square feet, Quality Grade: G, 2-Story Brick, Tax Value of$176,215 ($58.84 per sq. ft.) 334 Rill Road, Map #R05606-004-0 12-000, Built in 1970,2,271 square feet, Quality Grade: G, 1.75-Story Brick, Tax Value of$156,163 ($60.49 per sq. ft.) 115 Cavalier Drive, Map #R05608-004-007-000, Built in 1978,2,504 square feet, Quality Grade: G, 2-Story Wood Frame, Tax Value of$212,422 ($56.55 per sq. ft.) . Tax Appraisal Supervisor Bolick concluded that the taxpayer did not prove the assigned tax value was incorrect. Based on the comparable sales given by the Tax Department, he recommended to uphold the value of $242,262. 88S~ NEW HANOVER COUNTY BOARD OF EQUALIZATION AND REVIEW MEETING, JUNE 16, 2003 BOOK 1 PAGE 341 Mr. Biddison objected to the Tax Department using sales of homes that he was unfamiliar with and he felt he should have been allowed time to review the information. He explained that he had used properties in Windemere Subdivision, a nicer neighborhood close to his home, and he believed that they were comparable properties of similar sized homes. Tax Administrator Glasgow responded that the taxpayer is responsible to show the assigned value is incorrect. The Tax Office has shown that the value is comparable to other properties in the community. At the conclusion ofthe hearings on this date, Tax Administrator Glasgow recommended the Board uphold the assessed value of $242,262. Commissioner Caster estimated that the total assessed value should be $241,297 and asked for clarification. Tax Administrator Glasgow responded that the tax record card shows the land value of $55,000, the house value of$158,393, and miscellaneous improvements of$28,869 which includes the garage value of $27,904. In questions and review of the tax record information, it was determined that the value per square foot consisted of the heated area, but the total tax value included all of the property. In response to questions on the comparable sales, Tax Appraisal Supervisor Bolick explained that the tax value of 302 Gregory Road is $163,000, which includes a lot value of $35,000. The 2,365 square-foot house sold at $54.33 per square foot and it was assessed at $53.65 per square foot. The Biddison's 2,654 square-foot house was assessed at $59.68 per square foot. Tax Appraisal Supervisor Bolick pointed out that other comparable properties were presented to show that Mr. Biddison's property value was fairly assessed as other houses in the area. In further discussion of the tax value listed for 115 Cavalier Drive, stafflater confirmed that the tax value included both land and building value. The value listed per square foot was the value for the heated space of the home. Commissioner Pritchett said that the location of a property is a significant factor in determining the value of a home, she agreed that the Bradley Pines area would be greater in value than the Cavalier Drive location. Motion: Commissioner Pritchett MOVED to uphold the assessed value of $242,262, as recommended by the Tax Appraisal Supervisor. Vice-Chairman Greer asked ifthe property at 115 Cavalier Drive included a garage. Tax Administrator Glasgow replied that a garage is attached to the home, but it is not included in the per square foot value of the heated space. /8S I I I ~ NEW HANOVER COUNTY BOARD OF EQUALIZATION AND REVIEW MEETING, JUNE 16, 2003 BOOK 1 PAGE 342 Vice-Chairman Greer commented that if302 Gregory Road was assessed at $53.65 for the 2,365 square feet of heated space and has a lot value of $35,000 lot, the garage was not included in the tax value. In figuring the value of the Biddison property at $55 per square foot, the value should be $200,000, which did not include the garage. He questioned whether the price per foot included the garage areas. Tax Administrator Glasgow explained that the built-in garage of the Gregory Road property has a value of$l 0,005 before depreciation and it was not included in the square footage of the heated area. Vice-Chairman Greer estimated the value to be $219,859, based on using $ 5 5 per square foot for the heated area, plus $55,000 for the lot, and $18,869 for the garage. Tax Administrator Glasgow responded that the value of $219,859 did not include any exterior fixtures such as the deck. Mr. Bolick explained that in comparing the square footage, the values may be in the same range of$53 and $57 per square foot, but this does not mean that by taking anyone house times the square footage that the same values would apply. In this case, all of the amenities were included in the rate of$54.33. The deck or porch would need to be assessed. In this case, one is charged with a one-car garage and the other has a 30 foot by 40 foot garage. Vice-Chairman Greer asked why one house is $80,000 more with an additional 300 square feet of space. Mr. Bolick explained that the lot at 302 Gregory has a value of $35,000, a difference of $20,000. When including the value of the deck, porches, an additional 300 square feet of heated area, and a 30 x 40 detached garage, a large difference in value occurred. Chairman Davis seconded the motion. Upon vote on the motion to uphold the value, the MOTION FAILED 2 TO 3. Commissioner Boseman, Commissioner Caster, and Vice-Chairman Greer voted in opposition. Commissioner Caster said that based on using $56 per square foot for the house, $55,000 for the lot, and the original value of$27,904 for the garage, he calculated the total value to be $231,528. Substitute Motion: Commissioner Caster MOVED, SECONDED by Commissioner Boseman, to reduce the assessed value to $231,000. Tax Administrator Glasgow explained that those values did not include the 12 foot by 13 foot wood deck or the 4 foot by 8 foot porch. Based on the motion, the deck and porch will not be taxed. Commissioner Caster responded that the information provided to the Board did not include a deck or porches. 068 ~ ~ NEW HANOVER COUNTY BOARD OF EQUALIZATION AND REVIEW MEETING, JUNE 16, 2003 BOOK 1 PAGE 343 Vice-Chairman Greer suggested using the value of $55 per square foot in order to include the amenities. Commissioner Caster responded that he would not change his motion. Vote: Upon vote, the MOTION CARRIED 3 TO 2. Commissioner Pritchett and Chairman Davis voted in opposition. TAX APPEAL: ARTHURR. BULLOCK JR., 3317 CHALMERS DRIVE, WILMINGTON, NC, TAX MAP NUMBER R06607-010-006-000 Tax Administrator Glasgow reported that the property is a brick veneer two-story house containing approximately 1,998 square feet of heating living space. The home built in 1966 is in average condition with a quality grade of good. The house has a tax value of $114,733 which computes to $57.42 a square foot. The lot has a tax value of$30,000 for a total value of$144,733. Tax Administrator Glasgow said that Arthur Bullock, the appellant, contacted the Tax Department on numerous occasions and he has sent letters to local, state and federal elected officials concerning the tax value of his property. He appealed the value last year, but was told that he was unable to appeal because he was not the recorded owner as of January 1,2002. His tax record cards were reviewed for clerical errors. Mr. Bullock believed the Tax Department erred when appraising the property during the 1999 revaluation and the value should be the same as his purchase price of $121,500. A summary real estate appraisal of March 20, 2002 established a value of$128,000. Mr. Bullock further argued that the property was on the market for an extended period of time, initially in August 1998 for $149,000 and reduced seven times, increased once and then reduced again with a final listing on October 21,2001 of$129,000. Mr. Bullock pointed out that the appraisal staff did not enter the residence during the revaluation review and did not identity a bathroom that was missed on the tax record card. He further pointed out that the property is located one block from South College Road and the road noise was a negative factor in the value of the house. He requested the assessed value be reduced to less than or equal to his purchase price of$122,000. Arthur Bullock, property owner of3 317 Chalmers Drive, spoke concerning his appeal ofthe property value. After he purchased the property in March 2002, he wrote several letters of appeal to the Tax Office. He complained that he had to take a day off from work as an engineer in order to present his appeal. Mr. Bullock said that after hearing the prior appeals, he felt that the Tax Office has used arbitrary methods to obtain the values of those properties. In the five cases heard, he thought that five different methods were used to determine the tax values. He argued that his property value was incorrect based on the evidence of an appraisal done by a licensed appraiser. The property appraised in 2001 for $128,000 was worth more today than in 1998. The house was built in 1966 and had the original fixtures and a 20-year old roof. Mr. Bullock said that he provided the Tax Office, County Commissioners, and other elected officials marketing information on the property from August 31, 1998 to October 16, 2001; an appraisal of the property as of March 12,2002 by Carolina Appraisal Group; his offer to purchase 68t: I I I ~ NEW HANOVER COUNTY BOARD OF EQUALIZATION AND REVIEW MEETING, JUNE 16, 2003 BOOK 1 PAGE 344 and contract dated December 4,2001; and a home inspection report showing the condition of the property. He expressed frustration in working for more than 1 12 years trying to get an adjustment on the tax assessment when he considered the fair market value of his property to be the purchase price. He felt that the appraisal report should establish fair market value. The fact that the property was for sale at the time of the 1999 evaluation and the owner was unable to sell it at the tax value showed that it was assessed incorrectly. He requested the Board to reduce the assessed value to his purchase price of$122,000. Commissioner Pritchett noted the letter from Carolina Appraisal Group saying that the appraisal for 3317 Chalmers Drive belonged to Aaxa Discount Mortgage and she asked Mr. Bullock if he had authority to use the appraisal. Mr. Bullock responded that he applied to Aaxa Mortgage to get a mortgage loan for the property and he paid for the appraisal. He did not know whether he had the legal right to use the appraisal, but the appraisal was performed when he applied for a loan on the property. Commissioner Pritchett said that according to the notification from Carolina Appraisal Group, Mr. Bullock should receive a written release to use the appraisal. She asked if the appraisal could be used as evidence. Mr. Bullock said that he was not aware the appraisal could not be used as evidence. The Tax Office had told him to provide his evidence before the day of the meeting, but they did not say he could not use the appraisal. If he had known he would have requested permission to use the appraisal. If the Board does not want to consider the appraisal, the contract to purchase should establish the fair market value. He felt he had the right to use the appraisal report since he paid for it. Mr. Bullock apologized for not providing a release for the information. Tax Administrator Glasgow responded that the Tax Office had informed Mr. Bullock on several occasions that the appraised value has to be based on sales prior to 1999. The assessed value was based on the accumulation of data that the County took from 1997 to 1998 in preparation for the January 1, 1999 standards of values. Mr. Bullock's appraisal and summary reports were done specifically for the purchase of property and permission from the appraisal company is needed before using the appraisal. Anytime an appraisal report is used, the Tax Office looks to see if approval was given for its use. When he did not see the approval, he contacted the appraiser. Chairman Davis asked the Assistant County Attorney if he had a legal problem with the Board considering the appraisal report. Assistant County Attorney Holt Moore responded that it may be an appraisal practice or a standard of the industry, but he was unaware of any legal reason why the Board should not consider the appraisal. Chairman Davis responded that ifhe had paid money for an appraisal, he would feel justified to use it. He told Mr. Bullock that he would not disregard the appraisal in making his decision on c6E ~ NEW HANOVER COUNTY BOARD OF EQUALIZATION AND REVIEW MEETING, JUNE 16, 2003 BOOK 1 PAGE 345 the value of the property, since the County Attorney's Office has advised that the Board could use the appraisal. In the assessment support, Tax Appraisal Supervisor Bolick reported that the Tax Office used sales of 1997 and 1998 to determine the value of property in the Pine Valley community. He said that the comparable sales presented would validate the value placed on the appellants property as an accurate reflection of properties within this neighborhood as of January 1, 1999. . 3302 Bragg Drive, Map #R06607-008-011-000, sold in July 1997 for $131,000, Tax Value of $131 ,51 0, consisting of 1,764 sq. ft., and selling price per sq. ft. of $ 75.03 921 Reilly Drive, Map #R06607-005-008-000, sold in February 1998 for $116,500, Tax Value of$117,715, consisting of 1,540 sq. ft., and selling price per sq. ft. of$75.65 933 Hood Drive, Map #R06607 -002-0 I 0-000, sold in August 1999 for $137,000, Tax Value of $134,800, consisting of 1,918 sq. ft., and selling price per Sq. ft. of$71.43 . . A house that is almost identical to Mr. Bullock's property was found in the neighborhood and sold within $1 per square foot of the same value as Mr. Bullock's property. Tax Appraisal Supervisor Bolick recommended to uphold the assessed value of$144, 73 3 based on the comparable sales of 1997 and 1998 in the neighborhood. Mr. Bullock responded that location is the prime factor in determining the value of real estate in a particular residential neighborhood. Chalmers Drive is a road in Pine Valley that loops off of South College Road. Since two rows of houses separate his house from South College Road, which is one ofthe busiest and highest traffic volume areas ofthe County, he did not believe the sales used by the Tax Office were comparable because the houses were located further away from South College Road. Another prime factor is the condition of the property. Although his property is in good condition and structurally sound, it has not been updated since it was built in 1966. It has the original tile, plumbing fixtures, drop-in range, and other features. While the appraisal report may not be legally accepted, it is more comprehensive than what the Tax Office used to assess the property in 1998. He purchased the property in March 2002 for $121,500, and the appraisal was $128,000. As a citizen of the County, he requested the Board to do the right thing and lower his property value to the fair market value of $122,000. Tax Administrator Glasgow explained that Mr. Bullock has not provided or proven that the value established January 1, 1999 is incorrect. The County must base its values on the standards established in 1999 and cannot change the value based on deterioration that may have occurred since then or for any normal improvements to the property. The burden is on the taxpayer to show that the value is incorrect. Tax Appraisal Supervisor Bolick explained that a correction was made when Mr. Bullock pointed out that the number of bath fixtures was wrong. The value was changed from $143,523 to $242,262. L.bE I I I ~ NEW HANOVER COUNTY BOARD OF EQUALIZATION AND REVIEW MEETING, JUNE 16, 2003 BOOK 1 PAGE 346 Mr. Bullock said that it was odd that the Tax Office admits to making a mistake about the bathroom fixtures, but will not admit to making a mistake on the price of the property. His house has a half bath downstairs and in the master bedroom, plus a full bath upstairs. When he asked for help, the Tax Office gave him a $1,200 increase in value for a fixture. Tax Administrator Glasgow explained that appraisals are done when the house is first built. If additions are done and no permits are issued, the County is unaware of any changes. When appeals are made, there is an exchange of information and the tax records are corrected. Appraisers do not go inside the house during revaluations, but building additions are noted. The valuation is based on the exterior condition of the house. At the conclusion ofthe hearings on this date, Tax Administrator Glasgow recounted that Mr. Bullock felt the assessed value should be based on the March 2002 purchase price of$121,500, and he requested a reduction to $122,000. The Tax Office contended that no evidence was submitted to show the value was inconsistent with the January 1, 1999 value. Motion: Vice-Chairman Greer MOVED, SECONDED by Commissioner Caster, to reduce the assessed value to $128,000 for 2003. Commissioner Boseman responded that the commercial appraisal of property may not be the actual value of the property. Sometimes an appraiser will stop the appraisal process once the purchase price has been reached, which may be why the appraisal company did not want the appraisal report to be used. Vice-Chairman Greer responded that the property was listed for sale in 1999 at $149,000, but it did not sell. He pointed out that one of the comparable sales used by the Tax Office was after January 1, 1999. Tax Administrator Glasgow explained that the assessed value was based on the standard of values established in January 1, 1999, and the value was corrected to include the missed bathroom fixtures. Vote: Upon vote on the motion to reduce the value to $128,000, the MOTION FAILED 2 TO 3. Commissioner Boseman, Commissioner Pritchett, and Chairman Davis voted in opposition. Motion: Commissioner Caster MOVED, SECONDED by Vice-Chairman Greer, to reduce the assessed value to $136,000. Upon vote, the MOTION FAILED 2 TO 3. Commissioner Boseman, Commissioner Pritchett, and Chairman Davis voted in opposition. Motion: Chairman Davis MOVED, SECONDED by Commissioner Pritchett, to deny the appeal and affirm the assessed value of $144,733. Upon vote, the MOTION CARRIED 3 TO 2. Commissioner Caster and Vice-Chairman Greer voted in opposition. 1708 ~ NEW HANOVER COUNTY BOARD OF EQUALIZATION AND REVIEW MEETING, JUNE 16, 2003 BOOK 1 PAGE 347 ~". TAXAPPEAL-JOSEPHR. PA WLIK,PH.D.,304 SECOND STREET, WILMINGTON,NC, TAX MAP NUMBER R05405-018-010-000 Tax Administrator Glasgow reported that the property owner withdrew the appeal for the two-story home. At the conclusion of the hearings, the consensus of the Board was to uphold the assessed value of$305,469, as recommended by the Tax Administrator. TAX APPEAL - DANNY L. AND SUE G. ALVIS, 142 GAZEBO COURT, WILMINGTON, NC, TAX MAP NUMBER R08510-009-001-000 Tax Administrator Glasgow reported that the property owners withdrew the appeal for the two-story home. At the conclusion of the hearings, the consensus of the Board was to uphold the assessed value of$433,756, as recommended by the Tax Administrator. ADJOURNMENT There being no other business, Chairman Davis requested a motion to adjourn the Board of Equalization and Review for 2003. Motion: Commissioner Caster MOVED, SECONDED by Commissioner Boseman, to adjourn. Upon vote, the MOTION CARRIED UNANIMOUSLY. The meeting adjourned at 5:15 p.m. Respectfully submitted, ~~f~ Teresa P. Elmore Deputy Clerk to the Board . \ (" , ". r-/ot,