In county, most appeals of reappraisals triumph

— Facing an increase in their property taxes, thousands of people and businesses appealed the values set by the Pulaski County assessor’s office during last year’s reappraisal of the county’s real estate.

Most of them will save money as a result.

GWG Inc., which owns a warehouse at 5800 Lindsey Road in Little Rock, is an example.

The Pulaski County assessor’s office initially valued the warehouse at more than $1.9 million, an increase of almost 70 percent from the value that had been in place since the last countywide reappraisal in 2009.

Sanford Wilbourn, the company president, appealed to the county Board of Equalization, then to County JudgeBuddy Villines.

In November, Wilbourn and the assessor’s office reached a settlement, approved by Villines, putting the value at $1,379,000.

That’s still 20 percent higher than the 2009 value of just over $1.1 million, but Wilbourn said he’s satisfied with it.

The lower value will save his company thousands of dollars a year in taxes.

“The service from the assessor’s office was good,” Wilbourn said. “It just took some time and some work, but that’s kind of what goes with property management.”

Wilbourn’s victory in lowering the value for his company’s property wasn’t unusual.

The Board of Equalization lowered the values of 4,700 parcels out of 6,500 that were appealed after the reappraisal - that’s more than 70 percent of those appealed, records show.

The board’s decisions can be appealed to Villines, and those who did so had an even higher success rate.

Out of 55 parcels where values were appealed to Villines, the county judge lowered the values on 42 - more than three-fourths of the total.

The values that were lowered in those appeals included 24 that resulted from settlements between the property owner and the assessor’s office and 18 that were set by Villines after a hearing.

Of the remaining parcels, the county judge upheld Equalization Board rulings on five, and one appeal was dismissed because the owner had not first appealed to the board.

Seven property owners dropped their challenges of values set by the board.

In the case of one other parcel, the assessor’s office agreed to drop its attempt to place a recently built house west of Little Rock on the tax roll for 2011 that the office contended was erroneously left off that year.

The values set during the reappraisal affect property taxes that will be due this year. Under the state constitution’s Amendment 79,passed by voters in 2000, the increase in the taxable value of a homeowner’s primary residence is limited to 5 percent per year, and the value is frozen for homeowners age 65 and older.

The amendment caps the increase in taxable value of commercial property at 10 percent per year. The county’s next reappraisal will be in 2017.

Villines said he generally signs off on settlements presented to him by the assessor’s office. When the assessor and property owner can’t reach an agreement, Villines said he makes a decision based on the facts presented.

“They all boil down to a difference of opinion between the assessor, the [Equalization Board] and the taxpayer,” Villines said.

He added that the number of appeals was small compared with the 95,000 parcels that increased in value in the reappraisal.

Assessor’s office employees “work awfully hard,” Villines said.

“I think they do a pretty good job of it.”

Villines heard his final appeal for the year on Dec. 17.

So far, only one of the county judge’s rulings has been appealed to Pulaski County Circuit Court. In that case, involving a west Little Rock house, the assessor’s office filed the appeal.

In preparation for his appeal of the warehouse’s value, Wilbourn said he researched values that had been set on nearby properties.

The warehouse is leased by the Norcross, Ga.-based Unisource Worldwide paper distribution company.

Adjustments by the assessor’s office lowered the value to $1,775,400. At a hearing Aug. 14, the Equalization Board lowered it further, to $1,550,000.

Wilbourn said he was discussing his case with assessor’s office employees on Nov. 13, just before his hearing before Villines was scheduled to start, when the settlement was reached.

“We got to comparing our figures, and we were so close, we just settled on a figure,” Wilbourn said.

Joe Thompson, chief administrator of the assessor’s office, said the office set the value of warehouses and other commercial properties using estimates of lease income and expenses.

In some cases, however, the office agreed to recommend a change if the value that was calculated was higher than that of other, similar properties, he said.

“If someone can convince us that they’re not being treated equitably, then we will lower it for that reason,” Thompson said.

James George wasn’t as happy with the outcome of his appeals of Equalization Board rulings on 11 rental houses in North Little Rock, between West 15th Street and Pershing Boulevard.

George settled with the assessor’s office on the value of seven of the houses. On four others, Villines lowered the value, but not by as much as George wanted.

George faulted the assessor for calculating the value of the houses based on estimates of rental income instead of on the sales prices of other houses in the neighborhood.

He said he presented Villines with information on the sales of 37 other houses in the neighborhood over the past two years. The median sales price was about $16,400, George said.

On the basis of the assessor’s office recommendation, Villines lowered the values of each of the four houses to values ranging from $19,101 to $30,338.

That’s still too high, George said.

“I’ll give them a 20 percent discount of what they say they’re worth, and I’ll walk away with a smile on my face,” George said.

Villines noted in his rulings that the assessor’s calculations took into account the neighborhood conditions and vacancy rates and that the same method was used to calculate the values of all rental property in the area.

Thompson added that the sales George presented to Villines included some that were the result of foreclosures.

“Anyone can pick and choose” house sales for comparison, Thompson said.

The reappraisal found that more than half of the county’s 173,000 taxable real-estate parcels increased in value compared with 2009.

Between Aug. 1 and early November, error corrections by the assessor’s office and Equalization Board rulings lowered the 2012 value of real estate in the county by almost $2 billion, from $30 billion to $28.1 billion, records show.

Rulings by Villines, including his approval of values resulting from settlements, lowered the value by an additional $18.3 million, with the parcels that were lowered decreasing in value by an average of about 24 percent.

Thompson said most people who file appeals have a legitimate argument about why their appraised value was set too high. With so many properties to appraise, he said, it’s expected that about 5 percent of the initial values set will be too high, and 5 percent will be too low.

“It’s just because the very nature of a mass appraisal doesn’t hit everything on the head,” Thompson said.

Front Section, Pages 1 on 01/02/2013

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