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Look Who Bargained Down Their Taxes
by Melissa Bailey | Oct 16, 2012 1:30 pm
Posted to: City Hall
$13.8 million? Too high, Carter Winstanley told the city’s private appraisers. He bargained them down by $1.7 million, avoiding what could have been a costly court appeal.
Winstanley was talking about the new assessed value of his gun factory-turned-office building at 344 Winchester Ave. during New Haven’s most recent citywide property revaluation. Vision Appraisal, the private firm hired to conduct the revaluation, agreed to knock 12.6 percent off of its original proposal after Winstanley’s firm objected, according to data released by the city in response to an Independent Freedom of Information request.
The city OK’d the change, as it did with hundreds of privately adjusted assessments.
Winstanley’s building, a former US Repeating Arms factory building now reborn as office space for Yale, was one of the top 15 properties whose owners successfully bargained down Vision Appraisal as part of last year’s revaluation of all city property.
The negotiations were part of an unusually disparate revaluation that socked some parts of town and sent relief to others.
The data give a behind-the-scenes look at a important step in the difficult process of deciding a new value for 27,000 real properties across town.
As part of the revaluation, the city released a preliminary grand list of all taxable properties last Dec. 7. Then it gave property owners a chance to contest their new assessments in a series of informal hearings with Vision Appraisal. The data show which property owners got their values changed through this informal method—before the grand list was approved on Jan. 31, and before a public appeals process began.
Vision Appraisal granted reductions on 492 city properties, and agreed to increase values on 57 properties, through informal hearings, the data show. In all, the adjustments took $14.8 million off the grand list. The average reduction was 10.7 percent.
Fifteen properties won $1 million-plus reductions through this process, according to the data. The top 30 markdowns, by the total amount of reduction, are marked in red on the map at the top of the story; other reductions are marked in blue. The increases—which could be helpful in cases where a homeowner is looking to sell—are marked in green.
Taxpayers can’t always make their case directly to Vision. They can do so only during a revaluation, which now happens ever five years, according to Alex Pullen, the city’s acting tax assessor.
Pullen said the informal hearings with Vision aim to give taxpayers a chance to address factual errors in their assessments before the grand list gets finalized. Taxpayers may also plead their cases to the Board of Assessment Appeals (BAA): That civilian board granted reductions to 306 of 1,036 real estate property owners earlier this year.
The list of properties shows some major players in New Haven winning relief through the informal hearings. In some cases, they avoided costly court cases; in others, they still weren’t satisfied and pursued the matter further, before the BAA and in state Superior Court.
Read on for a sample of those on the list.
Vision knocked down the assessed value of Winstanley’s property at 344 Winchester (pictured) from a proposed $13,765,500 to $12,032,860. Winstanley said his firm, Winstanley Enterprises, handled the negotiation; he said he was not directly involved. The land is owned by Science Park Development Corporation; Winstanley owns the building and rents it out to Yale.
Winstanley said the assessment wasn’t anything out of the ordinary. “We go in on behalf of our tenants to manage the assessment on our properties” at a tenant’s request, he said. “We do it in every community.”
Further down Winchester, David Silverstone, head of the Science Park Development Corporation, said his group took issue with Vision’s assessment of two buildings, 395 and 375 Winchester. The appraisers got the square footage wrong, he said. Vision knocked down the assessments by 9.9 and 12.6 percent respectively, to $5.9 and $2.4 million.
The Chase Family won a $3 million reduction on 157 Church St., bringing the assessment to $48.2 million. Cheryl Chase declined comment for the story.
Northland Investment Corporation, acting as Church Street New Haven LLC, bargained down the assessment at the Church Street South housing complex by 22 percent, down to $10.1 million.
Not everyone was happy with Vision’s final decision.
Vision originally assessed the “Gold Building” (pictured) at 234 Church St. at $6.4 million.
Of all the properties Vision assessed, “There were some that we felt were on the mark. That was one that we felt was not on the mark,” said Michael Schaffer, secretary and co-owner of C.A. White, a family business that owns the Gold Building through a limited liability corporation. Michael’s brother Tony Schaffer made the case for a reduction in a meeting with Vision Appraisal.
“The numbers are way too high,” Tony Schaffer said. The appraisers marked down the assessment to $5.6 million, which he said was still beyond the Schaffer’s own estimate.
The Schaffers turned to the next avenue for relief: They filed an appeal with the BAA. The BAA denied the appeal, as it typically does for properties assessed over $1 million, allowing the appellant to pursue the case in state Superior Court. That’s where the Gold Building case now sits.
Carabetta Management, which owns the Bella Vista private senior housing complex, also ended up in court after winning some initial relief from Vision in informal hearings. Vision knocked off $11 million from four properties originally assessed at $75.8 million.
Yale University bargained down the value of 175 Whitney Ave., 200 Prospect St., 150 York St, and 310 Elm St. The first one is tax-exempt. At 310 Elm St., Vision decreased the portion of taxable property and increased the portion of tax-exempt property.
Tony Schaffer said meeting with Vision is a routine part of the revaluation process, to see if a property owner can settle a dispute without going to court.
Acting Assessor Pullen said each time Vision makes a change to the preliminary grand list, his office checks the math. There is “no set process” for doing so, he said—officials from Vision call his office, send emails, or visit in person to discuss changes. The main point people at Vision who work with the city are J. Michael Tarello and Gary Fields. Pullen said he couldn’t recall if his office rejected any proposed changes the company wanted to make—the process took place nearly a year ago, he noted.
In the end, Pullen said, the assessor’s office is responsible for any changes.
“Vision Appraisal doesn’t have to go to court to defend the values—we do,” he said.
Pullen said the informal hearings give Vision a chance to explain the rationale behind a given assessment.
The hearings also aim to address “factual errors” in the assessments, such as the number of bathrooms or the square footage in a home. With 27,000 properties, there are bound to be some mistakes, Pullen said.
“If it’s your property, you’re going to be looking at it with a more meticulous eye,” Pullen said. “It’s just the nature of mass appraisal.”
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Whats the punch line for this story? The dataset is interesting but nothing about it really jumps out at me. The percentages are a fairly smooth range and geographically speaking the changes seem to be spread out pretty evenly through the city (accounting for the slightly higher density in East Rock because they got hammered in the revel and were naturally going to appeal more than the average).
BTW NHI, nice effort but this kind of thing could be more clearly illustrated with a heatmap or peak map showing scale of change. The Google map only serves to illustrate quantity, not quality.
It looks as if Vision Appraisal has acted as the City’s new Property Tax Review Board?
If that is true, two questions:
1). Did the City have any input at all into the corrections, or were they completely independent.
2). Are these cases part of the public record?
I’m not at all against handling these situations in this matter, but this seems like a departure from past practices. Is this something that has been done elsewhere, in other municipalities?
The informal hearing process with Vision is not new or unique to New Haven. The informal hearings were an opportunity for property owners to address factual errors in their values. Vision staffed the hearings, but any proposed changes were reviewed by the Assessor’s Office before an adjustment was made. Property owners also had an opportunity to appeal their value to the Board of Assessment Appeals. If unsatisfied by a Board of Assessment Appeals decision, homeowners may challenge their value in court. I hope this helps.
Assuming this is the same ElizabethBenton who works for the city’s PR dept. Seems you are quite familiar with the issue, given you were one of the lucky few to receive a reduction through the informal process (according to the spreadsheet). Is the data correct that you received a 12.5% reduction?
Robn, perhaps the punchline, though not explicitly stated, is that there is some political dimension to the reductions. I’m sure no one is surprised to hear this, though I commend the NHI for shedding light on the issue with an unbiased perspective and real data. I hope there will be follow up with more analysis of the data.
A few questions: You note 492 are settled informally ($14.9 million from the data). What % of people who seek an informal settlement receive one, and then how many are settled through BAA and superior court and what do these formal reduction figures look like? would be interesting to know how the 3 compare and what it takes to be one of the luck 1.8% to receive an informal reduction.
posted by: Doug Hausladen on October 18, 2012 2:17pm
I think the punchline for me is that (when removing the Yale University properties quickly) in a rough back of the envelope calculation, we just lost out on $2.3million in revenue due to the decrease in property assessed value. That equates to a roughly 1% decrease in our revenue projections on the budget for this year (http://www.cityofnewhaven.com/Finance/pdfs/FY 2012-2013 BOA APPROVED BUDGET.pdf), or consequently that 1% needs to be made up in every other property’s tax.
The appeals process is supposed to correct for inaccuracies. If the assessments were inaccurate then there was no revenue in the first place, just a mistaken redistribution of tax burden.
posted by: Doug Hausladen on October 18, 2012 3:41pm
you’re definitely correct - if the assessments were inaccurate, then they should be reduced. the punchline again is that the mill rate budget is based off of one number, and another lower number is now the denominator. with under $1million in unrestricted reserve fund, it’s a potential problem in this year’s budget if we used a larger than appropriate net-assessed grand list and have now $2.3million less of possible real property tax revenue.
there is no set process for how properties are brought down - it’s an ad hoc process which seems to be partially due to staffing and, as the assessor puts it, the externality of a mass assessment.
additionally, as one commenter mentioned, the list is an interesting list.
I wrote that the list was interesting but what I meant is that its interesting in what it could be, not in what it is, which is just a lot of uncorrelated data with no observable or infamous patterns which might scream newsworthy.
Does this seem like unnecessary public shaming to anyone else?
It’s not unnecessary if there is something to be ashamed of, and if there isn’t, then it’s still informative. Shedding light on how our government operates is one of the media’s most critical roles, especially in a one-party city like ours, where other checks on power are absent.
Anderson Scooper asked some good questions, and Elizabeth Benton answered most of them, but I’m still not sure about this one:
Are the informal hearings part of the public record?
If not, why not? Apparently more properties get reductions by this process (492) than by the formal one (306). If the informal process really is about clearly up factual errors, it seems like it would be easy enough to keep a record of that—especially since some of these cases involve reductions of over a million dollars. The Board of Assessment Appeals won’t look at cases that big, but somehow it’s okay to handle it informally? Is it really just Vision Appraisal who is making these adjustments?
Don’t know about records but I do know that VA doesn’t base judgement upon sympathy; they base it upon factual errors that may be in the assessment. Their criteria is very tight and basically focuses upon these things:
1) Are the quantities in the assessment correct? (square footage, number of rooms, closed porches, etc.)
2) Are the qualities in the assessment correct? (quality of construction and physical depreciation)
3) Are the comparables correct?