The Virginian-Pilot
©
PORTSMOUTH
The 25-story building soars at the center of Portsmouth's skyline in a panoramic photo the city chose to crown its Web site.
People who live in the high-rise have a good ringside view of the downtown harbor - the best, some might argue.
But not that good, according to the owner of Harbor Tower Apartments.
Not $14.6 million good.
The company, Goodeed LLC, has filed suit against the city, arguing the property has been over-assessed since 2005.
"We think the overcharge is material and that the property owner will be entitled to a significant refund in taxes and interest," said William Devine, one of the company's lawyers.
The property owner thought the pattern of increased assessments was incorrect and hired an independent appraiser, who confirmed what the owner believed, Devine said.
The attorney did not give an exact figure but said the company believes the property should be assessed at "less than $10 million."
According to city records, Harbor Tower was assessed at $9.2 million in 2005 and $13.3 million in both 2006 and 2007. Its current assessment is $14.6 million.
Harbor Tower rises between the Holiday Inn being demolished for redevelopment and the Portsmouth Renaissance Hotel and Waterfront Conference Center. The apartment tower was built in 1982 and has 191 apartments and a leasable area of about 218,600 square feet, according to city records. Rents there currently range from $1,030 to almost $1,500, according to information posted on ForRent.com.
Alethia Bryce, the city assessor, said she knew nothing of the lawsuit and could not comment other than to say the company did not appeal the assessment this year.
She would not discuss specifics about Harbor Tower but said in general that such an assessment would be based on many factors, including the size of the property, its waterfront location and the market rents.
Janie Bryant, (757) 446-2453, janie.bryant@pilotonline.com
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Bloggin I'll sell you some
Bloggin I'll sell you some income producing property! While you allowed for vacancy, the proper procedure is to value a building by its cash flow before debt service. You cap the NOI (Net Operating Income) which includes deductions for management, allowance for real estate taxes (ironic huh?), insurance, maintenance, common area utilties, replacement reserves, etc... Since it's friday night I'm not going to spend a lot of time with the calculator, but the owner likley is closer to today's resale value than the assessment.
I am NOT an appraiser
I don't pretend to actually KNOW the value of this type of property, but I am willing to bet that if the owner were to list it for sale, the price would be more than $15M.
Doesn't make sense
This building owner is complaining about the assessed value but it is right in line with the true value of the building. This is prime waterfront property and would probably sell in the $35,000,000 range. It is easy to derive a value of what the property is worth by using the income value of the rents. Take 191 units which have an average monthly rent of $1295. Subtract 20% from the 191 to allow for vacancy so you now have 153 units to base your value off of. Multiply 153x$1295 and you come out with monthly rents of $198,135. Now multiply that by 12 months which is $2,377,620 in yearly income. If you use the standard CAP rate for this market when dealing with the income to get a value then you would divide $2,377,620 by 8.5% which gives you a building value of $27,972,000. Now this doesn't take into consideration the huge value of the property being on waterfront! Now....how many of you would like your assessed value to be below 50% of you homes appraised value? Right now most of the housing market is paying more in taxes value then what the real value of the house is. I say P-Town has this one right!
Good Point!
I wonder if Goodeed LLC would sell for $10 million -- the appraised value that their independent appraiser came up with. Or even the $15 million that the city appraised it for.
Can I get in on this?
My Ptown house is assessed at $200k. It sure as hell isn't worth that much, but I'm still paying taxes on that amount. My neighbors have been having a difficult time selling their (almost identical) houses for less than $150k.
Everything is over assessed
Portsmouth jumped on the bandwagon like our neighboring cities. The spike in sales and assessments of properties around 2005 encouraged the city management to boost tax revenues to highly inflated levels. The reality of real housing costs finally came to bear and markets across our country fell into despair. The city council made no effort to correct the values. Why would they give up such a windfall and tighten the city budget? They were 'gracious' enough the hold some assessments at present value. The houses in Portsmouth are seriously over valued. The reason this area has not succombed to the recession like other areas is the military presence. It has provided stability that otherwise would have crippled us. Portsmouth has too much property controlled by the federal government. We do not get true value in federal funding to cover this land. Our council also loves subsidy funds so we cater to an ever increasing number of NON-tax paying residents. We'll have to shutter this city if council doesn't change it's faulty course of direction.
What were the rents in
What were the rents in 2005?
I bet if they went to sell the building they'd want $20 million.
Look at the leaning tower of Norfolk. Purchased for something very low. Then condemned. Now the guy wants to sell for 3 times what he paid a few years ago, before it was condemned.
I bet the owners of the Portsmouth apartment building are making a killer profit. Maybe tax them in a wey to help punish them for high rents?
Hampton Roads needs rent control, like NYC.
Beautiful spot
I am surprised the rents are so low....it's a very nice building built on a beautiful spot right on the river, beautiful views, and in a very lovely part of Olde Towne.
While their leasable space is about 99 times the size of my house in Cradock (which is NOT prime real estate nor on the waterfront), their current assessment is only 58 times mine. Sounds like they have a pretty good deal!
Quit your crying and pay your bill like the rest of us!
America chickens have come home to roost
The day of reckoning is almost upon us and the sheeple with be wandering around like zombies in the streets. Sounds like the city of Portsmouth is ringing that washcloth for every drop of water they can get. Now they will end up wasting more on lawyer fees. Gross mismanagment of public funds. Soon it will not matter becasue the US Dollar will not be worth much. Little Ben can print as much money as he wants but when the money is worthless who is going to bailout the bailouts. Our politicians have squandered away an unimaginable amount of money through the years and the wasteful spending is finally catching up. Now they spend more! Good luck citizens of the United States your going to need it. Pilot you should do a story on California and what is about to happen there.
Why would someone say double the tax?
Any tax, other than a useage tax, is wealth redistribution. This includes federal and state income taxes, personal property tax and real estate taxes. Taxes on property are already excessive. Then during the overinflated real estate boom (caused by corruption between banks and realty companies) the cities cashed in with the inflated assessements levied on the property owners. The local cities, whose councils never plan ahead about being thrifty with the publics money, got used to this large amount of extra cash and spent accordingly. Now the prices of real estate has decreased significantly here in the Tidewater Area; but have the real estate assessements matched the decrease in the sale prices of homes? No way, otherwise the cities would be hurting worse than they are now for money. However, we have to have the light rail to no where and Town Point. All payed for by public money. So when the money is short does the council cut back on services or pet projects? No they cut employees salaries. Say no to any increase in taxes. Let the cities go BROKE!