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Commercial property owners prepare to appeal Concord assessments

As many commercial property owners in Concord prepare to appeal their assessments, experts and representatives from the Greater Concord Chamber of Commerce are suggesting that property owners share information and resources.

The assessed value of commercial properties increased last year for the first time since 2008. The total value of commercial properties increased 13.77 percent with the city’s 2012 assessments, while the total value of residential properties decreased 2.64 percent. The assessments have frustrated many commercial property owners; more than 30 of them attended a seminar yesterday morning about applying for tax abatements.

At the meeting yesterday morning at Red River Theatres, some property owners asked whether they could take joint legal action against the city. Attorneys advised them to move forward with individual appeals. Phil Hastings, an attorney and chairman of the Greater Concord Chamber of Commerce’s local government affairs committee, said the chamber will help property owners share information as they appeal their assessments. He said many commercial property owners have received “what could be termed excessive increases” in assessed values.

“But I think the single most effective way that we’re going to have a reasonable resolution is if a significant number of property owners go through the process of filing tax abatements,” Hastings said. “So I’m really thrilled that there’s so many people here, I know there’s a lot of other people in the city that are pursuing the same course.”

Lengthy process

Experts warned property owners yesterday that their appeal fights could be lengthy and expensive. After the March 1 deadline to apply for tax abatements, they may not have decisions for years. Concord’s Board of Assessors makes decisions by July 1, and property owners have until Sept. 1 to appeal in Merrimack County Superior Court or to the state Board of Tax and Land Appeals. Attorney Jennifer Parent said the state board and the superior court are hearing cases about 2010 assessments. Parent, who works with McLane Law Firm, advised property owners to hire attorneys because appeal cases can become complex.

Brian Underwood, an appraiser with B.C. Underwood in Rye, said property owners could share the cost of hiring experts or appraisers.

“Now the challenge with your group, just speaking generically, is that you all have different property types. But there’s only so much data in the city of Concord, there’s only so much data on the (Interstate) 93 corridor, so there would be some economies of scale,” Underwood said. “So that’s something to consider going forward if you’re organized. . . . But remember that each of your cases still have to be individually tried.”

Underwood said property owners have three reasons to appeal their assessments: the assessor used incorrect facts, such as a property’s size; the assessment does not reflect fair market value; or the property was disproportionately assessed compared to similar properties.

“Has there ever been an instance where there’s essentially a class of disproportionality?” asked state Sen. Andy Sanborn, who owns The Draft sports bar on South Main Street and other downtown properties. “We’re all commercial property owners as a class reviewing what happened, compared to what just happened to residential when it went down.”

Parent said the argument of disproportionate assessments could not be used if all commercial property assessments increased at the same time.

Kathryn Temchack, the city’s director of real estate assessments, has said that commercial property assessments increased last year because the city updated its data to reflect an improving economy. The residential market has not improved at the same rate, she said. City officials met with property owners at the chamber of commerce last month, and last week Temchack held a public meeting about assessing.

Hastings said yesterday that property owners were “underwhelmed by the presentation” in December, and he disagrees with the city’s assessing methods.

Grounds for abatement

State law allows 50 property owners to file a petition and force the city to reassess its properties, but Hastings said he advised against that option. It would require hiring out-of-state experts, and could take until 2015 to resolve. Even if the property owners won that fight before the state Board of Tax and Land Appeals, they would win a reassessment rather than the immediate reduction in taxes they could receive through individual appeals.

“Maybe it’s a card to have out there as a bargaining chip with the town,” Hastings said. “I frankly don’t find it that effective of an option.”

Commercial property owners spoke yesterday of substantial increases in their assessed value or tax bills, but Underwood told them that change alone is not grounds for an abatement. He refers to previous assessments while researching for a client, but he said complaints of an increase should not be included in appeals.

“I don’t care what the old value is,” he said. “I’m more interested in the components of the old (tax assessment) card just to say what changed.”

When hired by property owners, Underwood said he researches tax information for a property, meets with the city’s assessor and researches sales of similar properties. But after an initial inquiry, he said 30 percent of potential clients decide against appeals after he asks them to focus on fair market values rather than changes in assessments from year to year.

“What you want to focus on is . . . the new number that the city gave you, is that indicative of market value?” Underwood said. “Could you sell your property today for that, is that a realistic number?”

Experts also said yesterday that property owners should consider whether the values and taxes at stake are high enough to spend money appealing.

“You want to assess what’s the value and is it worth challenging,” Parent said.

Scott Walker, owner of Premiere Properties commercial real estate company in Concord, encouraged property owners yesterday to apply for abatements even though the process appears complex.

“I’ve had lots of clients, acquaintances call to vent,” Walker said. “Forty-two – I kept a list, just in case we needed it. . . . This is good information, it sounds a little cumbersome . . . But if you don’t file your abatement, then you can’t bitch. You have to do it. And I think at least it makes a statement at city hall that something might be wrong here. Whether you get relief or not, I don’t know.”

(Laura McCrystal can be reached at 369-3312 or lmccrystal@cmonitor.com or on Twitter @lmccrystal.)

Legacy Comments3

High property tax bills and high business profits taxes, together with no individual income tax, create huge problems like this in many NH towns. Meanwhile a few high per capita income/low property tax towns enjoy their NH Advantage.

The state is not doing it's job as far as market values are concerned. If they were, they would know what those market values are. The state could call up any RE agent and ask, how are your properties selling, are market values up or down, etc. When most RE agents list a property, they also list other properties in that neighborhood and tell you what they sold for. This information is not hidden, hard to find or difficult to calculate. All any property owner has to do is compile a list of sold properties and what the value of them was an what they sold for. If the state is assessing properties too high, it will become very evident.

""Could you sell your property today for that, is that a realistic number"", a pretty effective barometer. One does have to wonder why it takes the city and state years to resolve a dispute about a property value when it takes a realtor about an hour to come up with a “fair market value” to list a property at. I’m thinking that there should be an ordinance saying every time a realtor lists a property for sale it should be reported to the state, a simple one liner saying the property is listed at this price. The value trends can then be looked at without a multimillion dollar re-evaluation every few years..….. They should all remember that after the new "main street" goes in that the property values "must" rise again with all the improvements. All the hype is the increase of customers and improved business environment - that means higher property values for commercial property.

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