LITTLE ROCK — Error corrections and rulings by the Pulaski County Board of Equalization lowered appraised real-estate values in the county by almost $2 billion, wiping out more than half of the initial increase caused by the countywide property-tax reappraisal, county records show.

A report completed by the county assessor’s office last week put the value of the county’s taxable real estate at nearly $28.1 billion, down from the initial $30 billion listed in a report filed with the state Assessment Coordination Division in August.

The decrease reflects rulings by the Board of Equalization, primarily on appeals by taxpayers, that lowered appraised values by $857 million, records show.

The Equalization Board lowered the value of 5,052 parcels and raised the value of 610.

The rest of the decrease came from error corrections that did not require the board’s approval, said Joe Thompson, the assessor’s office chief administrator.

For instance, he said, one piece of property was a 100-foot-long car wash, but a clerk had listed it as having 100 car washes.

“Some of those were very huge swings,” Thompson said.

The reappraisal, completed in July, initially found that about 95,000 of the county’s 173,000 taxable real-estate parcels had increased in value since the last reappraisal was conducted, in 2009, with the total value of real estate rising 12 percent.

The error corrections and Board of Equalization rulings lowered the increase to 5 percent compared with the 2009 value of $26.8 million. The increase includes new construction as well as rises in the value of existing property.

The values set this year will affect property taxes due next year. The next countywide reappraisal will be in 2017.

Among those whose property values were lowered by the board was Little Rock Mayor Mark Stodola.

The notice Stodola received from the assessor’s office in July informed him that his 3,500-square-foot house on Grandview Street in the Heights had more than doubled in value to $732,950, up from $360,485 in 2009.

That increase “took my head off, frankly,” Stodola said.

“I thought it was a typo,” he said.

At the recommendation of the assessor’s office, the board on Oct. 19 lowered the appraised value to $524,783.

Thompson said the appraisal initially overstated the value of the land under the mayor’s house. The house sits across two lots, and the appraisal had incorrectly valued them as two separate lots instead of one large one, he said.

The appraisal had also overstated the house’s living space by 350 square feet, Thompson said.

Stodola also appealed the values set on two rental houses he owns.

One, on North Lookout Drive, was lowered by the board from $217,100 to $197,380. Thompson said the assessor’s office recommended the change after discovering it had initially incorrectly listed a crawlspace under the house as part of the living area.

The other, on South Filmore Street, was lowered, also at the recommendation of the assessor, from $45,650 to $40,803. Thompson said the change was recommended after the assessor’s office revised its opinion on the house’s condition.

Bill Kerr, a retired business owner and former state legislator, appealed the assessor’s finding that his house in Maumelle had increased in value to $408,850 from $275,200 in 2009.

Kerr said he never received a hearing before the board, which ruled on its last case for the year on Nov. 2. Last week, however, he received a notice informing him that the assessor’s office had lowered the value to $383,000.

Thompson said his office revised its opinion of the house’s construction quality. Because of its location, on a hill overlooking the Arkansas River, Thompson said, the value of the lot the house sits on is probably understated, but he didn’t think it would be fair to recommend raising it without revising the values of other lots in the area.

By the time the issue was discovered, Thompson said, it was too late to raise the land values and still allow time for property owners to appeal.

Thompson said he plans to contact Kerr and give him the option of appealing to County Judge Buddy Villines, who presides over appeals of board decisions.

Kerr said he doesn’t expect to appeal the revised value.

“It’s probably a little high, but it’s probably not worth going down there and fighting them for,” Kerr said.

Even if the value increase stands, it won’t affect Kerr’s taxes because he is 67. Amendment 79 to the state constitution freezes the taxable value of homes for property owners who are 65 or older.

While the owners of more than 6,500 parcels appealed to the board, a report from the assessor’s office shows that the board ruled on only about 5,000 of them. Thompson said the owners of the remaining parcels dropped their appeals.

Board of Equalization Chairman Jim Peacock said he was impressed with the thoroughness of the reappraisal and the presentations to the board by assessor’s office employees.

“I think we got a better appraisal this year than we’ve ever had in the past,” said Peacock, who was first appointed to the board in 1966.

In addition to hearing appeals, the board adjusted the value of about 900 parcels in Little Rock’s Heights neighborhood, where it ordered a second reappraisal after the assessor’s office found evidence that the initial values were set too low.

The second reappraisal resulted in board-approved increases in value for 574 parcels, and decreases for more than 300 others, for a net value increase of about $50 million.

The board last month also ordered a second reappraisal of businesses along and near Kavanaugh Boulevard in Little Rock’s Hillcrest neighborhood.

At a meeting on Oct. 26, assessor’s office appraiser Tommy Ferstl told the board that the businesses were “extremely undervalued” during the countywide reappraisal.

For example, he said, the complex housing Rhea Drug Store, the Hillcrest post office station, Hillcrest Artisan Meats and a frame store was valued at $599,900, even though the owner, BSMD Holdings LLC of Little Rock, bought it in 2007 for just more than $1 million.

The same company bought The House restaurant at 722 N. Palm St. for $459,000 in 2009. It was valued during the reappraisal at $230,200.

“If it’s a restaurant it’s wrong and it’s valued at half to a third of what it’s worth,” Ferstl told the board.

Thompson said the assessor’s office calculated values of the businesses using two methods. One, known as the cost approach, estimates the construction cost of a structure and adjusts the value based on the structure’s condition and neighborhood prices. The other method, the income approach, uses information about market rents and operating expenses.

The values derived from the income approach were more accurate, Thompson said, but the assessor’s office inadvertently used the ones it had calculated using the cost approach.

The board directed the assessor’s office to calculate new values for the businesses and present them to the board when it begins hearing appeals again in August.

William “Buzz” Dougherty, an attorney who is president of the Hillcrest Merchants Association, said last week that he hasn’t researched the values set by the assessor’s office but doesn’t think the market values have increased since 2009.

“Everybody knows that real-estate values in the last five or six years have continued to go down and down,” Dougherty said.

Front Section, Pages 1 on 11/12/2012