A recent reassessment of commercial property in the City and Borough of Juneau has left some people crying foul.<\/p>\n
After a decade of relatively flat assessments, commercial property owners received an unwelcome surprise this spring — news from the assessor that their property’s assessed valuation has increased for tax purposes.<\/p>\n
This week, a group of local commercial property owners claimed that the city’s reassessment is unfair, lacks transparency and that the city refuses to communicate with them.<\/p>\n
In a statement emailed to the Empire local realtor, PeggyAnn McConnochie said that the city “undertook a mass assessment of commercial land values resulting in an increase of assessed values of 150%. Despite repeated requests from various taxpayers, the city has failed to provide the data and a concise explanation of how the assessments were determined.”<\/p>\n
Jeff Rogers, CBJ finance director, disagrees on all counts, though he said he understands why commercial property owners may find the process frustrating.<\/p>\n
Finding the value<\/p>\n
In a phone interview this week, Rogers said the city uses a mass appraisal model to determine the right assessment level. The model looks at available selling prices and compares them to assessed value.<\/p>\n
“In the aggregate, we know that commercial properties sell for more than we have assessed them,’ he said. “I think everyone has recognized that commercial property is worth more now than it was 10 years ago.”<\/p>\n
Rogers acknowledges that the assessor works with “very limited data” because, until November of 2020, property sales information disclosure was voluntary. But, he said, the addition of experienced appraisers with expertise in statistical analysis gave the assessor the confidence to review commercial real estate values after about a decade of flat assessments.<\/p>\n
“We see clearly that commercial properties are selling higher,” he said. “Now, we have a new crop of appraisers who can apply that increase to other properties.”<\/p>\n
Rogers said that Michael Dahle, deputy assessor, is the primary city employee involved with the commercial property assessments and that he holds the highest level of credential available to government assessors.<\/p>\n
“We finally had the confidence in the statistical analysis to correct a decade of no change in assessment,” Rogers said.<\/p>\n
Rogers said that the property assessment process is far from secret and has been explained in several public meetings, including a Greater Juneau Chamber of Commerce lunch meeting. Rogers said he attended a small group meeting at a local restaurant along with McConnochie earlier this year.<\/p>\n
Wrestling with a taxing issue: Increased value of commercial properties could reduce property taxes<\/a><\/ins><\/p>\n Not so fast<\/p>\n McConnochie said she rejects the validity of the mass assessment approach for several reasons, but chiefly because it does not consider the way different sections of town are valued.<\/p>\n “You need to do an assessment based on each location. When you compare equally something that’s on the waterfront vs. something on the dump, it’s not fair. They’ve got the smoke and mirrors thing going and it’s just not right,” she said. “Historically, the mass assessment process was not done on one community mass. It was done in different areas.”<\/p>\n She described the areas of Juneau as “strings on a pearl” and said that each pearl requires independent valuation because conditions have changed over time. She noted this is an important step in residential property appraisal.<\/p>\n “Some property is less valuable than it was five years ago,” she said. “Some of the buildings around there have to deal with a new negative. There are different things in different neighborhoods. You need to go pearl by pearl and say what’s happening in this neighborhood. Is it getting better or worse? How is traffic, etc.? You have to look at all those things.”<\/p>\n In addition, McConnochie said that the dearth of sales data stems from a lack of sales, not a lack of price disclosure from former and new property owners.<\/p>\n “I’m sorry but there aren’t any sales. There’s no proof that the market has increased,” she said.<\/p>\n McConnochie said that some of the sales that did take place, such as the waterfront purchase from Norweigan Cruise Line, were “anomalies’’ and should not be counted as sales for assessment purposes.<\/p>\n