Property Tax Resources


Defending Against Tax Jurisdictions’ Attacks on Market Value

Michigan's Menards case offers valuable lessons to help taxpayers get fair property taxation.

While taxpayers typically pay property taxes based upon their property's market value, assessors frequently misapply evidence or even redefine market value to rake in excessive taxes.

The recently resolved Michigan Tax Tribunal case of Menard Inc. vs. City of Escanaba illustrates several of these efforts to collect excessive taxes and suggests arguments a property owner can use to challenge them.

What is market value?

Market value is the price willing, knowledgeable buyers and sellers in an arms-length transaction would agree the property is worth. Market value differs from insurance value or replacement value because it reflects what a typical buyer would pay for a property as it is. Market value also differs from value to the owner, which reflects how a particular property contributes to the owner's business operation.

Appraisers typically determine market value using one or more of three valuation techniques:

The sales comparison approach adjusts sales of similar property to indicate the likely selling price of the subject property. The income approach values property by considering the present value of the income it would likely earn if rented, whether or not it actually is rented. The cost approach values property by considering its cost of replacement, reducing that cost by all forms of depreciation including physical deterioration, functional obsolescence and economic obsolescence. Such depreciation can and should be quantified by data also utilized in the income and sales approaches.

The Tax Jurisdiction's Evidence

The subject property in the Menard case was a big box retail store, larger than most, with a main floor area over 150,000 square feet and with additional accessory space. The owner used the space as part of its multistate retail business operations and as a delivery point for its internet sales. The building was not subject to a lease.

The tax jurisdiction proposed valuing the store using sales of smaller home improvement stores occupied by Lowe's or Home Depot as tenants pursuant to build-to-suit leases. It also sought to use the rental rates in these build-to-suit leases as evidence of market rent. It claimed that the Menards store suffered no material obsolescence, based on evidence drawn from this build-to-suit data.

As the term suggests, tenants under build-to-suit leases have contracted with a developer to build the store to their specifications. The parties set lease terms before construction even starts, calculating the lease rate to cover all construction costs and provide the developer's expected profit. In essence, such leases recover replacement cost even if market value is less than replacement cost.

Taxpayer's counterpoint

The taxpayer successfully argued such evidence did not reflect the market value of Menards' store. The selected sales reflected the value to the owners of using the stores in their specific retail operations. The lease rates were high enough to recover actual construction costs for each property—not what any other retailer would pay to rent a space not built specifically for its business model. This data, virtually by definition, would not indicate obsolescence in the subject property.

When such stores sold, the taxpayer argued, the sales price reflected the value of a lease to a creditworthy tenant that of course was already using the building in its retail operations. Besides generating cash flow designed to recover construction costs, the specific leases were signed during periods of higher interest rates than on the valuation dates, so that by the time of valuation, the leases provided an above-market return on the original building investment. What the tax jurisdiction called sales of comparable buildings were effectively bond sales from one investor to another secured by a retail building.

A buyer of Menards' property, if it sold, would not receive cash flow from a build-to-suit lease. In fact, it would not receive cash flow from any lease. The tax jurisdiction should have either adjusted the sales to remove the effect of above-market leases, or used sales unencumbered by a lease and for which no lease adjustment would be necessary. Some tax jurisdictions derisively call such transactions "dark store" sales, but they are frequently the best evidence of a building's market value. It is the building that is subject to property tax—not the business operating within the building.

Lessons learned from the Tribunal's decision

The tribunal rejected the tax jurisdiction's build-to-suit lease rates and sales with build-to-suit leases in place.Instead, the Tribunal used the taxpayer's proposed lease rates for conventionally leased buildings in the local area.Such lease rates better reflected the market rent a buyer of the subject property could reasonably expect to collect, and therefore best indicated obsolescence suffered by the subject property.

These lessons apply to valuing any type of building. Build-to-suit rents do not reflect market rent-- except by accident. Alleged comparable sales with build-to-suit leases are typically not comparable to a subject property that is owner occupied.

Even if the subject property is already fully leased with a build-to-suit lease, if local law requires use of market rent, the actual rent from the build-to-suit lease could be given far less or no weight. During the Great Recession, in market lease states, even fully occupied buildings at high contract rent had their values reduced because market rents had fallen. Finally, increased e-commerce volume and changing consumer habits may render many existing retail stores oversized. Office buildings and the tenants' current spaces may be oversized due to higher proportions of people working from home or virtually. Oversized buildings in light of current market conditions suffer from obsolescence that must be reflected in market value.

The Michigan Tax Tribunal resolved the Menard case this year after several years of litigation. Perhaps that resolution can now help other taxpayers to recognize unfair assessment practices, and to build stronger cases as they seek fair assessments for their own properties.

Steven P. Schneider is a partner and Tax Appeals Practice Group member in the law firm Honigman LLP, the Michigan member of American Property Tax Counsel, the national affiliation of property tax attorneys.
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How Operators Can Reduce Hotel Property Tax Bills

When the early pandemic sent hotel occupancies plummeting and uncertainty soaring, it also created clear opportunities for many hotel operators to reduce property tax bills by appealing their assessments.

Today, however, it can be difficult to know whether appealing an assessment still makes sense. Record selling prices are being reported on a macro level despite increasing interest rates, rapid inflation and ongoing unpredictability in many markets. This gives taxpayers a potentially confusing array of mixed messages affecting valuation.

Hotel operators should heed the real estate adage that "all properties are unique," a saying that certainly rings true in the current hospitality market. To really understand hotel values, it has become essential to delve into what drives demand at each property.

Value Judgments

I recently heard an appraiser sum up the hotel market recovery as follows: "At the beginning of the pandemic, we thought it was going to take five years [for hotels to recover], but it turned out it was more like two to three," he said. "And if a property isn't recovering by now, then it's probably not going to."

This was, admittedly, an oversimplification, but it seems to reflect the reality in many places.

Laurel Keller, an EVP at of Newmark Valuation & Advisory's gaming and leisure division, observed that the recovery has been uneven across different markets and hotel types. "I've seen a range of recoveries, from midscale hotels that recorded their best top-line revenue and profit margins ever last year, to full-service hotels still performing at levels below pre-pandemic," Keller said. "In most instances, average rate growth has been substantial over the past 18-plus months, though occupancy recovery has been slower."

So, how can an owner or operator know if their hotel is fairly assessed?

For property tax purposes, most states recognize that hospitality properties are operating businesses (also called going concerns) of which real estate is only one value component. The other components are the furniture, fixtures and equipment, and the intangible business value.

To reduce property taxes, an owner must challenge the assessor's property value assessment, and that value pertains only to the real estate component. Failing to prove the proper allocation of overall value among the going concern components can result in an owner paying taxes on non-taxable property.

Two Approaches

There is widespread agreement that a lodging operation carries a business value that must be separated from the real estate to determine taxable property value. However, for the past two decades there has been debate about how to tease out those separate values. This ongoing discussion is dominated by two generally accepted valuation methods. The more conservative of the two assumes that the removal of management and franchise fees from the income stream offsets the hotel's business value. That approach gained favor in many jurisdictions in the early 2000s for its straightforward and simplistic nature.

Several prominent court decisions in recent years have endorsed a more robust analysis, however, to ensure that all non-taxable assets are removed from the real estate assessment. This more detailed approach considers the values associated with intangible items such as a trained workforce, reservation systems and brand goodwill.

One expert witness recently described post-pandemic hotel analysis as "granular," and noted that seemingly minor differences between properties have become more important than ever. As an example, he pointed to two properties in his market with the same flag which would have been considered comparable three years ago, but subtle differences in their locations relative to office submarkets, sporting facilities, and hospitals could now make a big difference in performance and valuation. Despite appearing similar on the surface, each property has unique demand factors.

In a similar vein, an owner of hotels throughout the United States used the term "hyperlocal" to describe property performance in 2022. As an example, the owner cited two upscale hotels about a mile apart from each other in the same submarket, just outside of a large metropolitan area. Pre-pandemic performance at both properties was similar and relatively predictable. Today, the property slightly closer to the airport is thriving while the other struggles to get back to 2019 performance levels.

It also can be difficult to make sense of the news around recent acquisitions. Even as billions of dollars are pouring into the extended-stay sector nationwide, owners in some markets are looking to convert their extended-stay properties to apartments. Similarly, 2022 has seen significant investment in hotels along interstate highways despite indications that occupancy may be starting to decline in that subsector.

"Pandemic recovery has varied widely from property to property and market to market and been far more protracted for some hotel assets," Keller said. "More surprisingly, we are now seeing performance decreases at some hotels that experienced a surge in leisure-oriented travel last year. So, the recovery is ongoing, and perceived rapid recovery at some hotels may have been slightly misleading."

Perhaps the key takeaway from all this is that the reported "recovery" in the industry doesn't equate to a recovery for every hotel.

Just as all properties are unique, all taxing jurisdictions have their own rules and idiosyncrasies. Understanding the intersection between accepted appraisal practices and a jurisdiction's particular laws around the assessment of going concern properties is essential to ascertaining whether a particular hotel is fairly assessed.

Operators seeking assistance in evaluating their property tax assessments should lean toward qualified appraisers and tax counsel with local knowledge, which can help identify opportunities to right-size taxes and articulate the narrative behind each property in question.

Brendan Kelly is a partner in the Pittsburgh office of law firm Siegel Jennings Co. LPA, the Ohio, Illinois and Western Pennsylvania member of American Property Tax Counsel, the national affiliation of property tax attorneys.
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The Sanctity of Fair and Square Property Taxation

Assessors often need reminding that property owners are entitled to equal, uniform treatment, notes Stephen Grant of Popp Hutcheson PLLC.

Across the country, state constitutions require that property taxes be equally and uniformly assessed. And thank goodness for that.

Without such constitutional guarantees, local taxing authorities would have the unfettered ability to single out individuals, property types, or categories of property owners for taxation by a different standard, possibly taxing them out of existence.

Fairness Trumps Market Value

Generally, taxpayers can challenge their property tax assessments by arguing that the appraised value of their property exceeds its fair market value. However, if a conflict exists between taxation at market value and equal and uniform taxation, equal and uniform taxation must prevail. Various court cases have upheld this principle and underscore its importance. In short, the guarantee of equal and uniform taxation is designed to protect taxpayers and ensure equal treatment of all commercial and residential property owners.

Despite constitutional protections, unequal appraisal by local taxing authorities persists. There are several reasons for this, including data errors and tax officials' willingness to single out recently sold properties to assign value, commonly referred to as "sales chasing."

Tax assessors continue to appraise recently sold property at or near its actual sales price but leave the taxable values of other, similar properties unchanged. A business cannot compete in its respective market if it is being taxed more heavily than its competitors. Compounding the issue, many commercial leases pass through property tax expenses to tenants who ultimately bear the brunt of higher property tax bills.

Further, a property appraised according to the high end of market values may nonetheless be unequally assessed if other comparable properties are valued at the lower end of the market. Over time, the variation created by that practice would result in affected property owners being saddled with higher assessments and potentially higher tax liabilities than similarly situated properties. At the minimum, this practice raises a question of whether properties within a taxing district are being taxed to an equal and uniform standard.

Taxpayer Recourse

When one parcel is unequally appraised compared to similar properties, what recourse do taxpayers have to ensure equitable taxation?

While most state constitutions require that taxation be equal and uniform, only a few states have adopted a statutory remedy to accomplish that goal. Where available, the statutory unequal appraisal provision permits taxpayers to appeal or protest when an assessor has appraised their property using a different standard than those used for other properties. Accordingly, a property owner can seek relief if their property was treated differently from other properties in the same tax base, even when their appraised value does not exceed fair market value.

Texas has what may be the most robust statutory unequal appraisal remedy in the country. The provision states that a property shall be valued for property taxes based upon the median level of appraisal of a reasonable number of comparable properties, appropriately adjusted.

When selecting comparable properties, it is important to consider several factors, including but not limited to the properties' use, competitive set, neighborhood, and size. While the Texas statute does not define what a "reasonable number" of comparable properties is, consideration should be given to the quality and number of comparable properties used.

After selecting a reasonable number of comparable properties, adjustments are then made to the appraised values of the comparable properties to put them on equal footing. The adjustments account for differences between the selected comparable properties and the subject property, such as location, age, and size. When determining what adjustments to make, the focus should be on elements that directly affect the properties' value.

The final step is to compare the median adjusted value per square foot of the comparable properties and see how they correlate to the subject property. If the subject property has a higher value per square foot than the calculated median, then there is an equity issue.

Fair Fights

The equal and uniform remedy serves as a helpful tool for taxpayers when challenging their property's assessed value. For instance, disputing a property's market value may not be viable in some situations, and a taxpayer's only recourse may be to argue that their property has been unequally appraised.

For example, a hypothetical taxpayer purchased a 300,000-square-foot, Class-A office building for $55 million during the prior tax year. The appraisal district subsequently assessed the building for property tax purposes based upon the purchase price, despite assessing other Class-A office buildings of similar size and location at a lower price per square foot.

By engaging in sales chasing, the appraisal district has unfairly appraised the subject property in relation to its competitors. However, if the state had adopted an equal and uniform remedy, then the taxpayer could challenge the property's value on the grounds that it was unequally appraised even if the assessor deemed the sales price to be fair market value for property tax purposes.

Challenging tax values on an equal and uniform basis is an effective remedy. It addresses the practice of sales chasing, counters assessors' tendency to use high sales prices to raise property taxes across an entire market and offers a coherent alternative to simply arguing that an assessment is excessive.

The unequal appraisal remedy is a readily accessible argument, particularly for homeowners, because it provides taxpayers with a more straightforward option than a market value appeal. It enables taxpayers to forego the high cost of procuring expert appraisers by allowing them to instead build an argument by identifying a representative sample of similar properties from the appraisal district's own website.

In sum, if your state has an equal and uniform remedy—use it. If your state does not have an equal and uniform remedy, consider urging lawmakers to adopt one in your state.

Stephen Grant is an associate at the Austin, Texas, law firm Popp Hutcheson PLLC. Popp Hutcheson focuses its practice on property tax disputes and is the Texas member of American Property Tax Counsel, the national affiliation of property tax attorneys.
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Seniors Housing Needs Long-Term Tax Care

Follow these steps to stop excessive property tax assessments.

In a nation that has faced a host of new challenges since the pandemic began, the seniors housing sector has carried one of the heaviest burdens. COVID-19-related mortality risk for those 85 years old or older is 330 times higher than for those 18 to 29 years old, according to the Centers for Disease Control and Prevention.

Notwithstanding those odds, 51% of all seniors housing properties including independent care, assisted living and skilled nursing reported zero deaths from COVID-19. Yet the industry continues to grapple with increased costs, worker burnout, hiring challenges and occupancy issues that have ravaged their operations.

Like a vaccine that stimulates a stronger immune response, hard times can spur organizations to boost efficiency and fortify themselves against other threats, such as inflation. In this vein, seniors housing owners must identify ways to turn their troubles into positive influences.

As the industry seeks to allocate money from areas that don't compromise care, property tax strategy should be near the top of their lists for potential savings. Moreover, reduced taxes tend to have a long-term impact. When assessments are low, they tend to stay low, which may serve to insulate the industry from the impacts of inflation.

How to reduce property tax liability

Obtaining those property tax savings is not easy, however. Although it seems apparent that the industry has suffered, taxpayers that want a reduction in taxes must prove their property has lost value; they cannot rely on the good will of assessors to adjust the assessment.

Taxpayers must look at their tax challenges in a way that reflects the impact to the business. That said, assessors will want to concentrate on real estate value irrespective of the business. Many will reference sales of properties that were priced on the value of contractual leases to the operator, or assessors may look at the income to the owner based on contract rents. Taxpayers need well-documented arguments to counter these positions.

While separating the real property value from the business value, real estate assessments must also consider the negative effect that a struggling business exerts on the real estate.

Taxpayers can follow a three-step financial feasibility study to help prove the need for an assessment reduction.

1. Determine the net operating income (NOI) under COVID-19 and its legacy. It is important to document the new costs necessary to safeguard and serve residents in this new environment.

2. Separate income associated with services from real estate income. Be sure to remove from income any governmental stimulus that will not be ongoing.

3. Finally, use the resulting real estate NOI to show the effects of that income stream on real estate value.

Step 2 is critical, and it must start with the business. Conduct a forward-looking income analysis that includes all increased costs, from the added costs of employing and motivating a weary workforce to inflation and expenses associated with new health standards.

After documenting the new NOI from the independent living, assisted living, or skilled nursing operation, determine whether that income is sufficient to justify the business. Taxpayers can do this by applying a return to the cost of services. The expenses that are separate from normal real estate operations are associated with the service side of the business, and those outlays are expected to generate sufficient income to create a return on that investment. Remove the return from the overall net operating income, thus separating the income from business and real estate. The result is NOI that reflects more closely that of the real estate.

Perform a similar analysis to determine whether the net income attributable to real estate is sufficient to justify the real estate cost. It is important to remind the assessor that the operating business can only pay rent if there is money available, even if that rent is just a figure used in a formula to determine real estate value. At this point, the taxpayer can apply a capitalization rate to the net real estate income to arrive at the real estate value.

Apply to other valuation approaches

The financial feasibility study described above will also help taxpayers and assessors determine how to adjust the cost approach to valuing real estate. Likewise, the analysis can inform adjustments to comparable sales data. Indeed, that initial financial feasibility will help in all aspects of the tax challenge and should be well documented.

Assessors are not all-knowing, so unless the taxpayer shows them a good reason to change approaches, they will work with their normal procedures. Often, assessors look to the property's construction cost (less physical depreciation based on age), sales of similar properties and/or the income generated from contract rents to determine an assessed value.

Without an initial feasibility analysis, an assessor may focus on construction costs without regard to whether the property's use will justify those costs. Or they may use contract rents for the subject property or competing properties, either of which were likely established with pre-pandemic metrics.

Simplistic shortcuts, such as assuming a percentage of the total net income that should be attributable to business and the other to real estate, are not ideal and may lead to inflated values of taxpayers' properties.

In theory, there should be a greater impact on the value of those properties that require more service. But because of the variations between properties and nuances of seniors housing types, a fresh look is needed for all of them.

A good starting position for the taxpayer is to ask, "what would we pay to acquire the property, knowing what we know today?" Comparisons to sales of other properties are more complicated than in the past and should be adjusted with an eye toward the feasibility analysis. Properties that cannot achieve sufficient occupancy and income to justify operation are not directly comparable to optimally occupied properties.

There are states where a reduction in the assessment may carry forward indefinitely. Approaching assessed value with a strong team will pay dividends for years. Conversely, an approach that is not well thought out will make future attempts to reduce taxes more difficult. But by taking the proper steps, a taxpayer can position themselves to drive the best result and be able to provide the service and living standards that our most vulnerable residents deserve.

J. Kieran Jennings is a partner in the law firm of Siegel Jennings Co. LPA, the Ohio, Illinois and Western Pennsylvania member of American Property Tax Counsel, the national affiliation of property tax attorneys.
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Net-Lease Tenants Can Appeal Property Taxes

New York Court of Appeals rejects lower court decision, affirms that occupiers obligated to pay property tax have the right to protest assessments.

In a far-reaching decision, New York's highest court has affirmed the rights of tenants under a commercial net lease to protest assessments and reduce their real property tax burden. The ruling reversed a State Supreme Court dismissal of a petition on the grounds that only a property's owner can file an administrative grievance with the Board of Assessment Review.

In a net lease, the tenant is responsible for paying real estate taxes and other expenses stated in the lease. In The Matter of DCH Auto vs. Town of Mamaroneck, the Court of Appeals in June 2022 published a unanimous decision stating that tenants contractually obligated to pay real estate taxes and authorized to protest assessments may file tax appeals even when they do not hold title to the underlying real estate.

Restoring a precedent

DCH Auto operated a car dealership in a net leased property in Mamaroneck, New York. Its lease with the owner required DCH to pay the property's real estate taxes in addition to rent.

Commercial tenants with this type of lease commonly file tax appeals to correct excessive tax bills and mitigate operating costs. These occupiers include retailers such as department and big-box stores, office building users, banks, drug stores and other businesses.

In the subject lease, DCH had the express right to challenge the subject tax assessment. Pursuant to the statute, it filed an administrative grievance with the town's Board of Assessment Review. The Board denied the challenge, after which DCH petitioned for judicial review.

The town moved to dismiss, arguing that the petition was invalid because the incorrect party had filed the administrative grievance before the Board of Assessment Review. They alleged that the failure of the property owner to file the administrative appeal precluded judicial review of the board's determination.

The lower court agreed and dismissed the petitions on the ground that only a fee owner may file the initial grievance complaints under the New York statutory scheme. The State Supreme Court's Appellate Division, Second Judicial Department, affirmed the petition's dismissal.

Thus, in one fell swoop, the Appellate Division obliterated over 100 years of precedent, which held that a net lessee that pays the real estate taxes is a proper party to file an administrative complaint challenging the assessment. Prior to the DCH lower court decision, it was never disputed that a net lessee was a proper complainant for filing both an administrative complaint and judicial petition. The lower court's ruling effectively required absentee property owners – who do not pay the real estate taxes and have no skin in the game – to file an administrative appeal before a net lessee can file a judicial petition.

The Appellate Division decision placed in jeopardy thousands of real estate tax assessment appeals filed by commercial net lessees who have relied upon common, accepted practice and precedent, and interposed an owner standard where none is present in the plain terms of the relevant statutes.

Fortunately, the Court of Appeals reversed the lower court's decision.

Who's who?

The case turned on statutory interpretation and analysis of legislative intent. At issue was Section 524(3) of the New York Real Property Tax Law (RPTL), which sets forth the process for the review of real property tax assessments. The provision specifies that an administrative complaint must be made by "the person whose property is assessed." If a complaint is denied, then "any person claiming to be aggrieved" can file a judicial appeal pursuant to Article 7 of the RPTL.

The Town of Mamaroneck's position was that the property owner must file the administrative complaint before any aggrieved person can challenge the result in court.

The Court of Appeals held that DCH and all commercial net lessees with the right to challenge assessments are included within the meaning of "the person whose property is assessed" under RPTL Section 524(3).

In its decision, the Court of Appeals considered the text of the statute and noted that "a person whose property is assessed" is not defined. A comprehensive review of the legislative history ensued, beginning with an analysis of the initial text of the statute as it existed prior to 1896. The original statute permitted "any person" to file an administrative complaint. In 1896, lawmakers amended the wording to "a person whose property is assessed." The Court examined the record, cited the New York State Commissioners of Statutory Revision that addressed the change in 1896, and noted that "there is no change of substance" with the revised wording.

In reversing the lower court's action, the Court of Appeals based its decision upon the evolution of the statutory text and the consideration of the underlying legislative intent. The Court made clear that it was not the legislature's intent to limit the meaning of "a person whose property is assessed" to the owners of real property, and that the reference includes net lessees contractually obligated to pay the real estate taxes.

Notwithstanding the DCH decision, commercial net lessees should ensure their tax appeals are not challenged by making certain that their right to file a tax appeal is clearly stated in their lease.

Jason M. Penighetti is an attorney at the Mineola, N.Y., law firm of Koeppel Martone & Leistman LLC, the New York State member of American Property Tax Counsel, the national affiliation of property tax attorneys.
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John Stark: Obtain Fair Property Tax Assessments for Student Housing

Student housing valuation is often saddled by two common units of comparison that multiply the opportunities for confusion and disagreement in appraising value for property taxation. For a more convincing property tax appeal, it is important for the taxpayer to ensure their property's valuations line up on both a per-square-foot and a per-bed basis.

This article will discuss the importance of a proper unit mix and rent roll analysis to reconcile values between these units of comparison. We will also discuss current trends in student housing, including free services and concessions designed to boost occupancy, that should be accounted for in an income analysis to make sure appraisal districts do not overvalue the real estate.

Price Per Square Foot vs. Price Per Bed

Although student housing owners typically lease their properties by the bed and calculate investment value by that metric, many appraisal districts value student housing on a price per-square-foot basis. This can lead to errors in an assessor's potential gross income assumptions. Further exacerbating overvaluations, many appraisal districts do not distinguish lease-per-bed student housing from traditional, lease-per-unit multifamily apartments. This failure to differentiate leads to erroneous assumptions of market rents and cap rates.

Student housing properties often have different rental rates and occupancy rates for various lease tiers. One-bedroom units, for example, typically garner the highest rents; the more beds in a unit, the lower the per-bed rental rate is likely to be. These variations make it imperative that an assessment accounts for occupancy in relation to the lease tiers in which those occupancies or vacancies occur. In reviewing an assessment or building a case for revaluation, make sure the more expensive, one-bedroom rental rates are not grossed up against cheaper, four-bedroom vacancy rates.

The taxpayer can factor rental rates and occupancy by unit type into mirrored, weighted-average analyses to establish two parallel income calculations with matching indications of value. Showing a similar value result on both a per-square-foot basis and on a per-bed basis makes for a persuasive property tax appeal.

Other Income and Intangibles

Within these mirrored, weighted-average analyses, it is also important to consider other income and any intangible property that may not belong in the calculation of taxable real estate income. Market definitions may vary by jurisdiction, so be sure to follow local practices in determining what income is attributable to the real estate.

Common examples of other income and intangibles include free internet, valet trash collection, utility allowances, pet fees, free shuttle service to campus, meal plans, premiums for unit add-ons (view, balcony, high floor), in-unit washer/dryer vs. appliances rental fees, furnished units, and free vs. paid parking. There are sure to be other examples of "freebies" and "perks" that a property provides to entice occupancy.

Because many assessors will include an assumed 8 percent to 12 percent of other income on top of the potential gross income gleaned from the rent roll and income statement, it is easy for an assessor to accidentally double dip on other income or accidentally include as taxable some intangibles baked into the achieved or scheduled rent.

Likewise, when performing a comparative analysis or determining market rents, it is also important to adjust for these sources of other income and intangibles. Not every competing property within the same market will offer an identical set of perks, amenities, or concessions to drive up occupancy.

Market Trends

Since COVID-19 and the return to campus, many student housing properties are providing substantial concessions to stabilize occupancy. At some properties, these concessions equate to as much as 25 percent of potential gross income for the 2022/2023 academic year.

It is hard to know whether this trend will continue in coming academic years, but it is important to realize that many assessors do not automatically adjust for concessions when using asking rents in their calculations of potential gross income. When discussing the property with an assessor, be sure to distinguish between asking rents (often labeled "market rents" on a rent roll) and actual achieved or scheduled rents after concessions.

Because assessors frequently lump together student housing with traditional multifamily properties in their market surveys, they often use cap rates driven by traditional, multifamily transactions when they value student housing. Given that student housing cap rates are typically 50 to 100 basis points higher than conventional multifamily cap rates, it is important to make sure assessors are using appropriate cap rates in their analyses.

When preparing property tax appeals for student housing properties, it is important to keep in mind how much these properties differ from traditional multifamily real estate. The differences in leasing structure, units of comparison, higher rates of other income, numerous intangibles, required concessions and higher cap rates all contribute to a unique model that is distinct from traditional multifamily apartments.

Providing a reconciled approach that combines price per square foot with price per bed is a great place to start discussions with the assessor and to make sure you are talking "apples-to-apples." Additionally, differentiating asking/market rents from achieved/scheduled rents – while adjusting for intangibles, other income, and concessions – will smooth out most differences with the assessor's income-based assessment.

John Stark is a tax consultant at the Austin, Texas-based law firm Popp Hutcheson PLLC, which focuses its practice on property tax disputes. The firm is the Texas member of American Property Tax Counsel, the national affiliation of property tax attorneys.
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New Legislation, Programs Incentivize Affordable Housing Developers

Owners who understand the nuances of tax incentives, abatements and exemptions can gain an upper hand in reducing their property taxes.

The Low-Income Housing Tax Credit (LIHTC) has long been a key device in the affordable housing tool chest. Although it has been the primary source of financing for the construction and preservation of affordable housing, the tax credit has not allowed the vast expansion of affordable housing development
that many communities need to keep up with rapidly growing demand.

With rents and materials costs rising amid rapid U.S. inflation, cities and rural areas alike need more resources to help keep many Americans in quality affordable housing.

According to the National Low Income Housing Coalition, only two states (West Virginia and Arkansas) have housing costs that put a two-bedroom rental within the reach of a fulltime worker earning less than $15 per hour.

The recent spike in residential real estate prices and now increasing interest rates are forcing more potential home buyers to rent. This has left fewer units available, which drives up rents and further reduces the supply of affordable housing throughout the country. As of April 2022, more than half of U.S. consumers were living paycheck to paycheck, reports financial services company LendingClub.  

According to the U.S. Department of Housing and Urban Development, the Federal Reserve Bank of St. Louis and the U.S. Census Bureau, the national median rent increased more than 145 percent from 1985 to 2020, while median income increased by only 35 percent.

Clearly, more needs to be done to assist developers in the construction of affordable housing. Fortunately, many cities and states are implementing new legislation and programs that will directly assist developers who expand the affordable housing market.

State, Local Initiatives
Texas — In Austin, Affordability Unlocked is a development bonus program that waives or modifies some development restrictions in exchange for providing affordable housing.

In return for setting aside half of a development's total units as affordable, developers can receive increased height and density limits, parking and compatibility waivers and reductions in minimum lot sizes for the project.

The program is designed to increase the number of affordable housing units developed in Austin and to fully leverage public resources by allowing housing providers to build more units in developments that include significant amounts of affordable housing.

Washington, D.C. — Tax abatements for affordable housing are available that provide a reduction equivalent to 75 percent of the difference between the property tax owed before and after development. To be eligible, at least 5 percent of the units in the development must be reserved for low-income households, and an additional 10 percent of units must be reserved for households earning up to 60 percent of area median income (AMI).

The tax abatement is good for 10 years. The affordability requirements apply for at least 20 years, with a $10,000 penalty per year for each unit that does not meet income set-aside requirements during the final 10 years.

Illinois — In 2021, Illinois enacted legislation to develop and coordinate public and private resources targeted to meet the affordable housing needs of low-income and very low-income residents. The act applies to all counties within the state and allows each county to administer the applications for the property tax incentive.

In Cook County, for example, property owners with seven or more multifamily units may apply for the Affordable Housing Incentive, if they can prove a set of conditions that would qualify the property for one of three tiers of relief.

For example, an applicant with a pre-existing building that has spent more than $8 per square foot on rehabilitation of major building systems and has at least 15 percent of the units available at or below 60 percent of AMI qualifies for the "15 Percent Tier" incentive.

Major building systems include heating and cooling, electricity, windows, elevators and more. This incentive will reduce the property tax assessment by 25 percent for 10 years and can be renewed for two consecutive terms.

New York — Although state lawmakers allowed New York's longstanding 421a abatement to expire in June 2022, some property owners can still qualify for relief under the New 421a Program. The New 421a is available to projects that began construction between Jan. 1, 2016, and June 15, 2022, and will be completed on or before June 15, 2026.

Projects that commenced construction on or before Dec. 31, 2015, also may opt into the new program if they are not currently receiving 421a benefits. Applications must be filed within one year after completion, and construction benefits would be retroactive.

Benefits of the New York program include a construction period tax exemption of up to three years, plus post-construction exemptions of 10 years (two years full, plus an eight-year phase-out period); 15 years (11 years full, plus a four-year phaseout); 20 years (12 years full, plus an eight-year phaseout); or 25 years (21 years full, plus a four-year phaseout).

In post-construction periods, qualifying properties are exempt from the increase in real estate taxes resulting from the work. The length of benefits depends on location, commencement of construction and affordability within the project.

All market-rate rental units become subject to rent stabilization for the duration of the benefits, with initial rents approved by the Department of Housing Preservation and Development. Affordable rental units are rent stabilized for 35 years.

Massachusetts — Multifamily property owners can claim a tax exemption for any portion of the property used for affordable housing purposes. The exemption is calculated by multiplying the amount of tax ordinarily due by the percentage of floor area set aside for affordable housing purposes.

The exemption is granted on a year-to-year basis for units serving households earning up to 80 percent of AMI, and the local board of assessors reviews tenants' income information to confirm eligibility. Because the exemption is granted on a year-to-year basis, there is no long-term affordability requirement.

Oregon — The Multiple-Unit Limited Tax Exemption Program requires that at least 20 percent of rental units be affordable to households earning 60 percent of AMI,or 80 percent of median family income in high-cost areas, for the 10-year term of the exemption.

Hundreds of programs throughout the country offer tax credits, abatements or other incentives. In markets that are happy to assist willing partners in providing affordable rental housing for their communities, developers can gain an upper hand by learning to fully understand and navigate the application process.

Molly Phelan is a partner in the Chicago office of the law firm of Siegel Jennings Co. L.P.A., the Ohio, Illinois and Western Pennsylvania member of American Property Tax Counsel (APTC) , the national affiliation of property tax attorneys.
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New Jersey Tax Court Supports Taxpayers’ Rights

A New Jersey township learns that tax courts don't always buy into theoretical constructs.

Our tax courts live in a hypothetical world where they review property tax assessments in a theoretical manner to mimic the actual marketplace. Often municipal officials use this paradigm to distort concepts and achieve high values that cannot be realized in the market. The case of CIBA Specialty Chemical Corp. vs. Township of Toms River highlighted this dichotomy.

The subject property is an industrially zoned, 1,211-acre former chemical plant in Toms River, New Jersey. The plant produced industrial dyes and resins for over 40 years. Unfortunately, the manufacturing process also created significant industrial waste that was treated and disposed of on site, significantly contaminating the soil and groundwater.

The environmental contamination was so severe and pervasive that the entire property was designated a Superfund Site and was placed on the U.S. Environmental Protection Agency's (USEPA) National Priorities List in 1983.

Commercial operations at the site ceased in 1996, but environmental remediation work has been both active and ongoing. The controversial nature and extent of the contamination has embroiled the property and township in public controversy, federal criminal prosecution, and a number of civil lawsuits initiated by both public entities and private citizens.

Further complicating matters, the subject property is in a protected coastal zone adjacent to a tributary known as Toms River. This added layer of government oversight by the New Jersey Department of Environmental Protection serves to safeguard sensitive coastal areas and endangered species from overdevelopment. When put into practice at the subject property, these regulations either completely prohibit or severely restrict redevelopment activity on most of the property.

Any proposed redevelopment at the property would require the prospective developer to navigate this labyrinth of federal and state regulations, obtain consent and cooperation from a number of federal and state agencies, and garner support from the local municipality and public interest groups to avoid politicization of the zoning and planning processes at all levels.

Undaunted by these regulatory restrictions, the town asserted that not only could the property be developed, but that numerous residential housing units could be constructed on the site despite the current zoning or the pervasive contamination. And, of course, the town sought to tax the property on its potential residential value.

It was undisputed that the USEPA was the primary regulatory authority from whom a market participant would have had to obtain approval before attempting to redevelop any portion of the site. The town's own expert conceded this fact. The USEPA has total control over the property while remediation is taking place and will reject any proposal it believes may interfere with selected remedial action, or that would lack public support.

Despite overwhelming evidence that USEPA regulations would prohibit any development, that the zoning didn't allow residential construction, and that the public opposed the site's redevelopment, the town was undeterred. Its leaders argued that high-density housing could have been developed on the property with a rezoning, justifying its revaluation as residential rather than industrial real estate.

The frequent use of hypothetical scenarios encourages assessors to fly far from the reality of the marketplace to justify otherwise unsupportable assessments and increased tax burdens. Finding comfort in this hypothetical world, the town appealed to the perceived taxing-authority bias of the New Jersey Tax Court.

To create their hypothetical world in court, the town redefined key words in the USEPA regulations to establish results that were completely inappropriate for a rational reading of the rules. They stretched logic and applied to the subject property actions that USEPA had taken at other Superfund Sites. In doing so, they assumed that all contaminated sites can be treated the same, and that the case workers at this site will make decisions based on events at other remote Superfund sites, rather than basing decisions on the facts related to the subject property.

The town contrived its self-serving arguments to satisfy an outrageous assessment. It is all too often that the hypothetical nature of the court's standards and the theatrical nature of appraisal theory invite the clear distortion of marketplace reality.

The only saving grace in the system is that the courts assigned to decide these cases are trusted to end the nonsense and craft a decision based on fact and actual dealings. That does not always happen, but here, it did. In a detailed and thorough decision, the court summarized the overwhelming data that proved the taxpayer's case.

The court concluded that the entirety of 1,211 acres was development-prohibited, due to its status as an active Superfund Site and USEPA's ongoing institutional controls. The USEPA's oversite documents, which are legally enforceable and filed with the county clerk, restrict any development at the property unless the USEPA approves, or the site is partially or fully delisted as a Superfund site.

Reality finally hit home for the municipality when it was compelled to refund the taxpayer over $18 million.

These types of rulings in taxpayers' favor are rare. Nonetheless, taxpayers must continue to press courts to recognize market reality. It is not the courts' job to protect the municipal tax base.

Brian A. Fowler, Esq.
Philip Giannuario, Esq.
Philip Giannuario and Brian A. Fowler are partners at the Montclair, New Jersey, law firm Garippa Lotz & Giannuario, the New Jersey and Eastern Pennsylvania member of American Property Tax Counsel, the national affiliation of property tax attorneys.
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Minimize Taxation of Medical Office Buildings

Nuances of ownership and operations can reduce or eliminate ad valorem liability for property owners.

How municipalities and counties tax medical real estate can vary by modes of ownership, location and how a property affects the local economy. Much, however, depends on each taxing entity's goals and its degree of interest in attracting hospitals, creating medical hubs, enlarging commercial areas or encouraging excellent health care locally.

A typical approach to achieving some or all of these goals is for local government to control the property. This can be through outright ownership, where the facilities are leased out. Governments can also create an economic zone and issue bonds to finance the area's development. Each of these methods poses property tax issues.

In a direct ownership scenario, the government owner is exempt from taxation. The operating and management company that leases the property has tax liability for its going concern, however. That going concern has untaxed intangible value, but also will have onsite assets such as medical equipment that can be taxed under standard code approaches at fair market value. They can also be taxed under a modified fair market value, which is a common incentive designed to entice investment by medical businesses.

If the local government chooses a development-bond approach, it will create a development district entity to issue bonds, with proceeds from bond sales paying for construction of the hospital or other facility. A private entity would lease the facilities under the cost of the bonds, with lease payments going toward retiring the bonds. Lease provisions would set out agreed-upon valuations for property tax purposes. These valuations can be flat or adjusted over time. Once the bonds are paid off, the terms of the lease can be extended or modified.

After using one of these favorable property tax techniques to establish a footprint for a healthcare district, development or zone, the governmental body may widen its impact by offering lower taxes within the area. These adjustments would favor medical facilities that support hospitals or medical practices nearby.

For example, a community could use tax breaks to encourage construction of medical office buildings. If the economic district includes other buildings that would be useful to the healthcare industry, it can offer similar tax incentives to encourage development and use of those facilities. Likewise, such incentives can be used for standalone facilities within the economic district.

For governments that do not envision a medical district but want to foster broader access to healthcare providers, tax policy can create special tax methods without uniformity restrictions. This would encourage small medical investments throughout the community. Examples would include free-standing treatment facilities such as "doc in a box" walk-in clinics, urgent care facilities and small medical office buildings.

Strategies for tax exemption

In Georgia, hospitals can be owned in a couple of ways to avoid taxation. First, the government can own the hospital and lease it to a non-profit manager or operator. So long as the lessee remains a non-profit, the real property is tax exempt. If the leasehold transfers to a for-profit entity, the tax exemption disappears and the management or operational entity becomes responsible for the property tax.

Second, the local government can create an economic development zone using bonds. Within any leaseholds created by the bond issuer, property tax responsibility can be addressed by contract. This can range from zero liability to points on a sliding scale, and will usually correlate to the gradual elimination of the bonds.

Another scenario involves an exempt property that is then acquired by a for-profit operator. In Michigan and Georgia, such a transfer will void the tax exemption, subjecting the facility to full taxation at fair market value. A question remains about a retransfer of the operations to a non-profit, which may or may not restore the tax exemption. In Minnesota and Kansas, the ownership is through the government but the facility must be operated as a non-profit.

In some jurisdictions hospitals can be a taxing authority. In Texas and Iowa, rural hospital districts can levy a component of the property tax millage rate. The hospital district then uses that portion of the millage rate to pay part of its operating expense. This allows rural hospitals to maintain their operations by spreading costs throughout the community, rather than to the users of the system. In recent years states have tended to reduce property taxes overall, which has squeezed revenue for rural health systems in states that allow hospitals to participate in taxation.

Personal property, which is movable property such as medical equipment, can be treated in different ways. If the operation is a non-profit, the personal taxes are exempt. Liability is more complicated if the owner of the personal property is a for-profit entity operating within an exempt property; in such instances the personal tax rates apply.

On the other hand, a non-profit may operate within a taxable medical office building, in which case the personal property is still exempt. In fact, a building may have multiple tenants, some of which are non-profits and some of which are for-profit. In such a scenario, each business would have to be examined to determine whether personal tax exemptions apply.

Brian J. Morrissey is a partner in the Atlanta law firm of Ragsdale Beals Seigler Patterson & Gray LLP, the Georgia member of American Property Tax Counsel, the national affiliation of property tax attorneys.
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2022 Annual APTC Client Seminar

The American Property Tax Counsel is proud to announce that Chicago, Illinois will be the site of an in-person meeting for the 2022 Annual APTC Client Seminar.

Save the Dates! October 19-21, 2022 - Fairmont Chicago, Millennium Park - Chicago, Illinois

THEME - Managing the Future in a Changing World

APTC seminars provide an exclusive forum where invited guests can collaborate with nationally known presenters and experienced property tax attorneys to develop strategies to successfully reduce and manage property taxes.

Event Information

This year's seminar will address recent developments and current trends in the areas of property taxation and real estate. We will bring together nationally-known economic, technological, appraisal, and legal experts to provide valuable insight on managing the future of property taxation in a system that continues to change based on economics and other influences.

See the Featured Speakers appearing at the 2022 Seminar.

Featured Speakers

Anthony Barna 

Anthony Barna is Managing Director and consulting appraiser for Integra Realty Resources-Pittsburgh. He has been actively engaged in valuation and consulting since 1991 and his practice specializes in complex assignments for litigation support, eminent domain, tax assessment and financing.

Mr. Barna us a certified general real estate appraiser in Pennsylvania and holds the MAI and SRA professional designations from the Appraisal Institute and the CRE designation from the Counselors of Real Estate. He has been qualified to provide expert witness testimony before courts throughout the Commonwealth of Pennsylvania, as well as in Virginia, West Virginia and Connecticut. Mr. Barna was trained as a biomedical engineer at Boston University (B.S. 1984) and has a graduate degree in finance from Duquesne University (MBA 1988).

Economist and Futurist Kiernan "KC" Conway, CCIM, CRE, MAI is the mind trust behind Red Shoe Economics, LLC, an independent economic forecasting and consulting firm furthering KC's mission as The Red Shoe Economist by providing organic research initiatives, reporting and insights on the impact of Economics within the commercial real estate industry. KC is a nationally recognized industry thought leader and Subject Matter Expert with expertise in Macro Economics, Valuations, Ports & Logistics, Banking Regulation, Real Estate Finance, MSA level market monitoring, Environmental Risk Management, Housing Economics and Tax Appeals.

A proud graduate of Emory University with more than 30 years' experience as a lender, credit officer, appraiser, instructor, and economist; KC is recognized for accurately forecasting real estate trends and ever-changing influences on markets all across the United States. With credentials from the CCIM Institute, Counselors of Real Estate and the Appraisal Institute, KC currently serves as Chief Economist of the CCIM Institute and as an Independent Director for Monmouth REIT MNR.

He is a gifted and prolific speaker having made more than 850 presentations to industry, regulatory and academic organizations in the last decade, and has been published in many national and regional newspapers and journals with frequent contributions to radio and television programming.

KC Conway, MAI, CRE 

William R. Emmons, PhD

Bill Emmons is Lead Economist in Supervision at the Federal Reserve Bank of St. Louis and President of the St. Louis Gateway Chapter of the National Association for Business Economics (NABE). He conducts research and speaks frequently on topics including the economy, housing and mortgage markets, banking, financial markets, financial regulation, and household financial conditions.

Mr. Emmons received a PhD degree in Finance from the Kellogg School of Management at Northwestern University. He received bachelor's and master's degrees from the University of Illinois at Urbana-Champaign. Mr. Emmons is married with three children.

Pam is the Associate Presiding Judge for the Arizona Superior Court in Maricopa County, which is the fourth largest trial court system in the country. Prior to her appointment as the Associate Presiding Judge, Pam served as the Presiding Civil Judge, the Associate Criminal Presiding Judge, and the Associate Presiding Judge (Downtown) for Family Court. She chairs Arizona's Task Force on Jury Data Collection, Policies, and Procedures and the Statewide Jury Selection Workgroup. She also co-chaired the Maricopa County Superior Court's committee tasked with improving access to justice and reforming the Court's resource center. Her committee work also includes the Advisory Committee on the Rules of Evidence, the Steering Committee on Arizona Case Processing Standards, the Task Force on the Arizona Rules of Criminal Procedure, the Committee on Superior Courts, the Committee on Time Periods for Electronic Display of Superior Court Case Records, Data Quality Standards Committee, Our Courts Arizona, Arizona Task Force to Supplement Keeping of the Record by Electronic Means, National State Court Remote Jury Pilot Group, the Superior Court Records Retention Schedule Revision Committee, and the Civil Practice and Procedure Committee. Pam also serves on the Maricopa County Superior Court Jury Committee and chairs the Court's Data Integrity Committee. She was awarded the Chief Justice Outstanding Contributions to Arizona Courts Award in 2022, Judge of the Year by Phoenix Chapter of the American Board of Trial Advocates (2021) and the Maricopa County Bar Association (2018), and the Mark Santana Award for exceptional contributions in law-related education (2008). Prior to becoming a judge, Pam worked as a partner at Bryan Cave LLP.

Pamela S. Gates

David Lennhoff, MAI, SRA, AI-GRS

David is a principal with Lennhoff Real Estate Consulting, LLC, which is officed in Gaithersburg, Maryland. His practice centers on litigation valuation and expert testimony relating to appraisal methodology, USPAP, and allocating assets of a going concern. He has taught nationally and internationally for the Appraisal Institute. International presentations have been in Tokyo, Japan; Beijing and Shanghai, China; Berlin, Germany; Seoul, South Korea; and Mexico City, Mexico. He has been a development team member for numerous Appraisal Institute courses and seminars and was editor of its Capitalization Theory and Techniques Study Guide, 3rd ed. He was the lead developer for the Institute's asset allocation course, Fundamentals of Separating Real and Personal Property from Intangible Business Assets, and edited the two accompanying business enterprise value anthologies. He also authored the Small Hotel/Motel Valuation seminar. David is a principal member of the Real Estate Counseling Group of America, a national organization of analysts and academicians founded by the late William N. Kinnard, Jr., PhD. He is a past editor-in-chief of and frequent contributor to The Appraisal Journal, and a past recipient of the Journal's Armstrong/Kahn Award and Swango Award.

Kevin Reilly serves as a Managing Partner for evcValuation LLC. In this capacity, he provides direction, technical support, and oversight on the valuation of complex income-producing properties.

Mr. Reilly has valuation experience in property tax valuation, purchase price allocation, insurance, pre-deal buy/sell, end-of-lease, pretrial and litigation support, and appraisal reviews. Properties he has appraised include power plants, utility property, oil refineries, petrochemical plants, pipelines, refined product terminals, telecommunications networks, cement plants, and general manufacturing and support facilities.

Mr. Reilly joined the appraisal industry in 2002 as an associate appraiser with American Appraisal Associates. From 2006 until 2009, he was a Vice President with Duff & Phelps working as a property tax consultant. In 2009, he rejoined American Appraisal and led an independent property tax valuation practice focused on energy-related properties. In 2015, Mr. Reilly founded evcValuation, which is focused on providing independent, unbiased appraisals of complex income-producing properties.

Kevin S. Reilly, ASA

Member Speakers

Jay W. Dobson, Esq.

Jay W. Dobson is a partner with the law firm of Elias, Books, Brown & Nelson, P.C. in Oklahoma City. His practice is focused primarily on property tax, oil and gas law, commercial litigation, and real property law. Jay has a diverse property tax practice including wind and solar, natural gas power plants, mining facilities, pipeline systems, agriculture, commercial and retail properties, hotels, and apartments. Along with Bill Elias, Jay won the first wind farm ad valorem trial in the State of Oklahoma.

Jay received a B.S. in Business Administration and a M.B.A. from Oklahoma State University and a J.D. from Oklahoma City University. He is a member of the Oklahoma County Bar Association, the Oklahoma City Mineral Lawyers Society, and the Tax, Mineral, and Real Property Law Sections of the Oklahoma Bar Association.

Mr. Fowler's practice includes representation of taxpayers in Pennsylvania, New York and New Jersey with respect to a wide variety of property types and valuation issues.

Brian has pursued appeals on Class A regional malls, Breweries, complex industrial, petroleum tank farms, corporate headquarters, apartments, hotel, cell sites, aviation hangers and properties affected by environmental contamination.

He has appeared before the New Jersey Tax Court, Pennsylvania Court of Common Pleas and the Supreme Court of New York. In addition to assessment appeal cases, Brian has also represented numerous clients in property tax matters involving exemptions, abatements, and farmland assessments. He frequently counsels clients with respect to property tax issues relating to the purchase and sale of real estate, and assisting clients with property tax projections for budgetary purposes.

Prior to joining GLG, he gained valuable experience clerking for Judge Peter D. Pizzuto J.T.C of the New Jersey Tax Court. Brian received his Juris Doctor from Widener University (1999), and a Bachelor of Science, cum laude, from Temple University (1996).

Brian Fowler, Esq.

Gilbert C. "Gib" Laite, III, Esq.

Gib Laite is an attorney at Williams Mullen who has practiced in the real estate, construction and commercial dispute areas for 38 years. He frequently assists clients with the negotiation and litigation of cases involving real and personal property taxes and the assessment of tax-exempt properties.

Gib graduated from the University of Southern Maine with a degree in Business Administration. After working in his family's real estate business, he attended Wake Forest University School of Law where he graduated cum laude. Upon graduation he clerked for the United States District Court before entering private practice where he started out trying condemnation cases and railroad title disputes. Over time his real estate and construction litigation experience led him to the property tax arena where he has for the past decade enjoyed success working on a variety of matters. Representative cases included but are not limited to industrial facilities, shopping malls, big box stores, apartment complexes, and office buildings. Gib is recognized by Best Lawyers of America in eight categories involving real estate, construction and litigation.

Paul Moore is a commercial litigator who practices primarily in valuation-related matters, including contract disputes, and state and local tax controversies. He has handled a wide variety of valuation matters, representing clients in business disputes, and property, transaction privilege and use tax disputes before state and local taxing authorities, the Arizona Tax Court, and the Arizona Court of Appeals and Supreme Courts. He is licensed in Arizona and Colorado.

He represents taxpayers owning state-assessed properties such as pipelines, telecommunications companies, electric generation facilities and airlines, and all types of locally-assessed real and personal property including hotels, shopping malls, department stores, high-rise office buildings and campuses, apartment complexes, theaters, residential subdivisions, commercial greenhouses, land and hospitals.
Paul is rated AV Preeminent by Martindale-Hubbell, and enjoys an excellent reputation with his peers and the bench. As one judge noted, "Mr. Moore is a very experienced tax attorney. He is always prepared and professional in the courtroom. I recommend him very strongly."

Paul is originally from Manchester, England. He holds doctorate and undergraduate degrees in chemistry. He came "stateside" to Texas in 1986 for a year of teaching undergraduate chemistry, but while there he met his future wife Janet and the rest, as they say, is history. Paul became a US citizen in 1997. In his life before the law, he worked for 6 years as an environmental/analytical chemist for a Fortune 500 Company.

Paul Moore, Esq.

Cris K. O'Neall, Esq.

Cris K. O'Neall focuses his practice on ad valorem property tax and assessment counseling and litigation (appeal hearings and trials). For over 30 years he has represented a variety of California taxpayers in proceedings before county assessment appeals boards, the State Board of Equalization, the Superior Court, the California Court of Appeal, and the California Supreme Court. Cris received his J.D. from the University of California at Los Angeles in 1986 and a B.A., summa cum laude, from Claremont McKenna College in 1982. He has represented property taxpayers in over a dozen California appellate court cases that resulted in published opinions, including DFS Group LP v. County of San Mateo (Court of Appeal, 1st Dist., 2019), Elk Hills Power LLC v. Board of Equalization (Calif. Supreme Court, 2013), and SHC Half Moon Bay LLC v. County of San Mateo (Court of Appeal, 1st Dist., 2014). Cris is active in the following professional property tax organizations: California Taxpayers Association (CalTax), Member, Board of Directors; California Alliance of Taxpayer Advocates (CATA), Chair, Board of Directors; and American Property Tax Counsel (APTC), Treasurer and California Member. In 2018, he received the "Advocate of the Year" Award from CATA for his leadership in amending several of California's Property Tax Rules, and in 2021 he received the "Lifetime Achievement" Award from CATA. Cris has co-authored the California Chapter of the American Bar Association's Property Tax Deskbook for over 20 years and he has published numerous articles on property tax matters. He is also the Co-Editor of the treatise Taxing California Property (4th Edition). Finally, over the past 30 years Cris has taught and spoken before many audiences on property tax-related topics.

Molly is a partner in the Chicago Office of Siegel Jennings, a national property tax law firm. She is a third-generation property tax attorney from Chicago. As a litigator and trusted advisor, she collaborates with Owners, Asset Managers, Acquisition teams and Tax Departments to identify, create and execute property tax reduction strategies. She becomes a member of her clients' management team. Her goal is to maximize and protect the full potential of real estate assets, minimize related tax liabilities, and resolve disputes with tax authorities and government entities.

Molly's client experience ranges from family owned 1031 portfolios to national commercial investment funds, including special use properties such as hospital campuses to multi-million-dollar manufacturing facilities.

Her comprehensive understanding of the commercial real estate market was developed in part through her time as a real estate broker in the Chicago area prior to starting her legal career. Molly regularly represents clients in hearings before review boards, local assessors' offices, the Illinois Property Tax Appeal Board, and the circuit courts.

Molly Phelan, Esq.

Steven P. Schneider, Esq.

Steve Schneider is an ad valorem property tax counselor and litigator. He has obtained several landmark decisions for property taxpayers through trials lasting as long as 130 days and as short as 1 day. His clients have received more than $100 million of property tax savings throughout the country. Steve works extensively with industrial, commercial, telecommunications, and energy taxpayers where thorough knowledge of the changing regulatory and business environments is essential for a proper presentation of a taxpayer's valuation case.

Lisa Stuckey is a partner in the law firm of Ragsdale, Beals, Seigler, Patterson & Gray, LLP, and is Chair of the Property Tax Group of the firm, as well as their Designated Representative in the American Property Tax Counsel. She has practiced in the area of property taxation for over 35 years, and for the past 23 years, her practice has been devoted exclusively to representing local, national, and international commercial and industrial taxpayers, on real and personal property tax issues, appearing for hearings, arbitrations, mediations, trials, and arguments in administrative tribunals, the Georgia Tax Tribunal, the Superior Courts throughout Georgia, and the Georgia appellate courts.

Ms. Stuckey frequently speaks on the topic of property taxation to attorneys for legal education seminars, and to industry groups. She also frequently writes property tax articles appearing in such publications as the National Real Estate Investor, and Southeast Real Estate Business, as well as the quarterly publication of the American Property Tax Counsel Newsletter.

Lisa Stuckey, Esq.

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American Property Tax Counsel

Recent Published Property Tax Articles

Defending Against Tax Jurisdictions’ Attacks on Market Value

Michigan's Menards case offers valuable lessons to help taxpayers get fair property taxation.

While taxpayers typically pay property taxes based upon their property's market value, assessors frequently misapply evidence or even redefine market value to rake in excessive taxes.

The recently resolved Michigan Tax Tribunal case of Menard Inc. vs...

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How Operators Can Reduce Hotel Property Tax Bills

When the early pandemic sent hotel occupancies plummeting and uncertainty soaring, it also created clear opportunities for many hotel operators to reduce property tax bills by appealing their assessments.

Today, however, it can be difficult to know whether appealing an assessment still makes sense. Record selling prices are being reported...

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The Sanctity of Fair and Square Property Taxation

Assessors often need reminding that property owners are entitled to equal, uniform treatment, notes Stephen Grant of Popp Hutcheson PLLC.

Across the country, state constitutions require that property taxes be equally and uniformly assessed. And thank goodness for that.

Without such constitutional guarantees, local taxing authorities would have the unfettered ability to...

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