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Department of
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Community
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7865
Investment
Memorandum
December 12, 2013
TO: South Bend Redevelopment Commission
FROM: David Relos, Economic Resources
SUBJECT: Hotel La Salle Property Tax Appeal and Professional Services Agreement
R.E. Pitts & Associates Property Tax Appeal Appraisal
This staff report is for approval to move forward with a property tax appeal for the Hotel
La Salle. Though the Hotel does not currently pay taxes because of its government
ownership, it does have a current assessed value (AV) of $807,100 ($33,400 land +
$773,700 improvements).
In 2005, when the Hotel was taken through the disposition process, the average
appraised value was $400,500. Lowering the AV to be more in line with its market
value will assist the proposed developer in their property tax abatement, since the
abatement is based on the property's current AV.
Additionally, similar to the process we followed for the Hall of Fame tax appeal, Rick
Pitts, a MAI Certified Indiana Appraiser, has provided a Professional Services
Agreement to provide a Value In Use appraisal for the Hotel. This type of appraisal will
be needed for the property tax appeal if our initial request to lower the AV is denied.
Also included is a per hour charge to prepare for and appear before the Appeals Board.
This proposal will be utilized only if needed.
Value In Use is defined by the Real Property Assessment Manual as:
"The value of property for a specified use. The concept holds value to be
inherent in property itself, that is, the value is based on the ability of the asset to
produce revenue or utility through ownership. The value a specific property has
for a specific use."
Since the appeal would be for the 2013 pay 2014 taxes, the appraisal will value the
property as of its March 1, 2013 assessment date.
Staff requests approval to move forward with this tax appeal, and if necessary, to utilize
this Professional Services Agreement in the amount of $4,300 for the appraisal, and
$165 / hour to prepare and appear before the Appeals Board.
227 W. JEFFERSON BLVD. SOUTH BEND, IN 46601 1 P: 574 - 235 -93/1 1 FAX: b/4- 2.30 -`JU21 I ouuinocivum.uuv
eR +� TAXPAYER'S NOTICE TO INITIATE AN APPEAL FORM 130 -SHORT
Sl� State Form 53958 (R2 / 7 -12) Assessment year under appeal
Prescribed by the Department of Local Government Finance
MARCH 1, 20 13
Hsu
• The purpose of this form is to aid taxpayers in the filing of an appeal on an assessment.
• This form is not required to be used to file an appeal. IC 6- 1.1 -15 -1 states that a taxpayer must file notice in writing with the Township or County Assessor.
A handwritten letter would be acceptable as long as it contained the name of the taxpayer, the address and parcel number or key number of the property,
and the address and telephone number of the taxpayer.
• The appeal of an assessment requires evidence relevant to the true tax value of the taxpayer's property as of the assessment date. This evidence is not
required to be provided at the time of filing the appeal; however, it could expedite the process if provided when available. Examples of evidence could
include an appraisal, construction costs, sales information for the subject property or comparable properties, or any other information compiled according
to generally accepted appraisal principles.
NOTE: Indiana law does not require a taxpayer to submit an appraisal in order to appeal an assessment.
r.hPnk tvne of nronertv under appeal (check only one): ❑✓ Real F Personal
REQUIRED INFORMATION:
SECTION I: PROPERTY & PETITIONER INFORMATION
County
Township
Parcel or key number (for real property only)
St. Joseph
Portage
018 - 1002 -0040
Address of property being appealed (number and street, city state, and ZIP code)
237 N. Michigan St., South Bend IN 46601
Legal description on Form 11 or Property Record card (for real property), or business name (for personal property)
Lot 1 of original Plat of South Bend
Name of property owner
Telephone number of property owner
City of South Bend Department of Redevelopment
( 574 ) 235 -5836
Mailing address of property owner (number and street, city state, and ZIP code)
Ste. 1400, 227 W. Jefferson Blvd., South Bend IN 46601
OPTIONAL INFORMATION NOT REQUIRED AT THE TIME OF FILING:
SECTION II: REASON FOR APPEAL
Land
Improvements
Personal Property
The property described in Section I is currently assessed at:
33,400.00
773,700.00
0.00
The petitioner contends that the property should be assessed at:
108,355.00
115,434.00
0.00
List attached evidence or give reasons for requested change:
Property has been for sale since 2005 (eight years)_ Only offers have been for a nominal amount because of the considerable investment
necessary to make the building habitable. - City of South Bend's Department of Community Investment is negotiating the sale of this
property for $1, with the developer pledging an investment of approximately-$9,000,000 - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
The attached appraisals, summary, and analysis support the above requested change in assessed value._ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Name of authorized representative (if different from owner)
Telephone number of authorized representative
Mailing address of authorized representative (number and street. city, state, and ZIP code)
Signature of petitioner, taxpayer, or duly authorized officer
Date of signature (month,day, year)
Printed or typed name of petitioner, taxpayer, or duly authorized officer
Page 1 of 2
PROCEDURE FOR APPEAL OF ASSESSMENT
Part of State Form 53958 (R2 / 7 -12)
Taxpayer has right to appeal assessment.
1. PTABOA =
a) Form 11 Notice (must file appeal within 45 days)
County Property Tax Assessment Board of Appeals
b) Form 113 Notice (must file appeal within 45 days)
• Each county must have PTABOA comprised of individuals "knowledgeable
c) Tax Bill (notice required but not issued, must file appeal within 45 days)
in the valuation of property."
d) May 10 Filing (notice not required)
• The County Commissioners may determine whether to have a 3 or 5
IC 6- 1.1- 15- 1(a) -(d)
member PTABOA. The County Assessor is a non - voting member of the
PTABOA regardless of the number of members.
Taxpayer files a property tax appeal with assessing official.
With the assessing official, the taxpayer files an appeal containing the taxpayer's name,
• Three - Member PTABOA:
- The fiscal bod y appoints 1 individual who must be a certified Level II or
address and parcel /key number of the property, and taxpayer's address and telephone
III assessor - appraiser.
number.
-The Board of Commissioners appoints 2 freehold members so that not
(Form 130 may be used but is not required.)
more than 2 of the members may be of the same political party and so
that at least 2 are residents of the county. At least 1 of the Board's
IC 6- 1.1- 15 -1(f)
appointees must be a certified Level II or III assessor - appraiser. The
Board, however, may waive that requirement.
Filing of the appeal:
1) initiates a review; and
2) constitutes a request by the taxpayer for a preliminary informal meeting with the
assessing official.
IC 6- 1.1- 15 -1(g)
Assessing official must forward appeal to PTABOA and attempt to hold the
preliminary informal meeting with the taxpayer to resolve as many issues as possible.
Not later than 10 days after the meeting, the assessing official must forward results
of the preliminary meeting to Auditor and PTABOA' using Form 134.
If PTABOA receives Form 134
that indicates an agreement was
reached before the PTABOA hearing:
PTABOA cancels hearing,
assessing official gives notice of the
agreed to assessment to PTABOA,
Auditor and Assessor (if not same as
assessing official); and
• PTABOA may change
assessment.
If no agreement is reached or PTABOA
does not receive Form 134 within 120
days of appeal, PTABOA must hold
hearing within 180 days of filing of
appeal. PTABOA must give taxpayer
and official at least 30 days notice of
the hearing date.`
IC 6- 1.1- 15 -1(k)
During the PTABOA hearing, taxpayer
may present his /her evidence for
disagreement. The assessing official
must present the basis for the
assessment decision and refute the
taxpayer's evidence. No appraisal is
required by taxpayer.3
IC 6- 1.1- 15- 1(I) -(m)
2. IBTR = Indiana Board of Tax Review
• IBTR is a state agency with 3 commissioners appointed by the Governor.
• 2 members of IBTR must be members of one major political party, and 1 member must be
a member of the other major political party.
• IBTR may appoint administrative law judges to conduct appeal hearing.
IC 6- 1.5 -2 -1, IC 6- 1.5 -3 -3
3. For a proceeding pending or commenced after June 30, 2012, to accurately determine
market - value -in -use, a taxpayer or official may (in a proceeding concerning residential property)
introduce evidence of the assessment of comparable properties in the same taxing district
or within 2 miles of the taxing district, but (in a proceeding regarding non - residential property)
taxpayer may indtroduce evidence of any comparable property but preference is given to
comparable property in taxing district or within 2 miles of taxing district.
Assessor Burden of Proof: If the assessment for which a notice of review is filed increased
the assessed value of the property by more than five percent (5 %) over the assessed value
finally determined for the immediately preceding assessment date, the county assessor or
township assessor making the assessment has the burden of proving that the assessment
is correct.
IC 6- 1.1- 15 -1(p)
Department of Local Government Finance
August 1, 2012
Page 2 of 2
Five- Member PTABOA:
The Board of Commissioners appoints 3 freehold members and the
county fiscal body appoints 2 members.
- At least 1 of the members appointed by the county fiscal body must be
a certified Level II or III assessor - appraiser.
- The Board of the county shall appoint 3 freehold members so that not
more than 3 of the 5 members may be of the same political party and so
that at least 3 of the 5 members are residents of the county. At least 1
of the members appointed by the Board must be a certified Level II or III
assessor - appraiser. The Board, however, may waive the requirements
that one of their appointments be a Level II or III assessor - appraiser.
IC 6- 1.1 -28 -1
' Taxpayer may request continuance at least 20 days before hearing.
PTABOA must rule on continuance within 10 days of the request. Taxpayer
may request action without his presence or withdraw a petition at least
8 days before the hearing. A PENALTY OF $50 will be assessed against
the taxpayer or representative for an unexcused failure to appear at the
hearing.
If the PTABOA refuses to hold a timely hearing within 180
days of filing of appeal or give notice of decision within
120 days after hearing, taxpayer may appeal to IBTR 2.
Taxpayer initiates an appeal with IBTR
Taxpayer may appeal PTABOA's action to IBTR with
respect to (1) assessment of taxpayer's real or personal
property, (2) exemption of taxpayer's real or personal
property or (3) property tax deductions. The taxpayer must
file the Form 131 with the IBTR within 45 days when
PTABOA's order is given to parties and must mail a copy
of the petition to the other party, i.e. the assessing official.
No appraisal is required by taxpayer'3
IC 6 -1
IBTR holds hearing within 9 months after appeal petition
is filed (unless general reassessment year). IBTR must
issue decision within 90 days after hearing (unless
extension ordered or general reassessment year). Party
may request a rehearing within 15 days of IBTR final
determination. May appeal to Tax Court.
IC 6- 1.1- 15- 4(e) -(h)
IC 6- 1.1- 15 -5(a)
Taxpayer initiates appeal with Tax Court
A taxpayer must file a petition with the Indiana Tax Court
within 45 days of IBTR final determination or at any time
after the maximum time elapses for the IBTR to make
a final determination. May appeal Tax Court determination
to Supreme Court.
IC 6- 1.1- 15 -5(b), (c), (g)
Taxpayer initiates appeal with Indiana Supreme Court
Review by the Supreme Court is discretionary.
Tax Appeal For:
Hotel La Salle
237 N. Michigan St
Key #: 018 -1002 -0040
In 2004, the Department of Community & Economic Development (now the Department
of Community Investment, or DCI) took the Hotel La Salle property through its
disposition process. This process requires two appraisals be completed, with the
property's value being the average of the two.
The Hotel La Salle site contains three parcels, Lots 1, 2, and 3 of the original Plat of the
Town, now City of South Bend. The DCI is currently in process of selling the Hotel La
Salle for $1 to a private developer, who proposes to spend approximately $9,000,000 on
its rehabilitation.
The Hotel building sets on Lot 1 only, with the parking area being Lots 2 and 3. Only
Lot 1 will be sold to the private developer, with DCI retaining ownership of Lots 2 and 3.
The March 1, 2013 assessment of Lot 1 (parcel # 018 - 1002 -0040) is $33,400 land value
and $773,700 improvements, for a total assessed value of $807,100.
All three of these lots were included in the 2004 appraisals, with an average appraised
value of $440,500. Average appraised land value per square foot (sf) was $9.95 / sf.
The parking area (Lots 2 and 3) contain 21,780 sf, multiplied by a value of $9.95 / sf
equates to a land value for these two lots of $216,711.
Lot 1 contains 10,890 sf, or a land value of $108,355 (10,890 X $9.95).
Deducting the land value of Lots 2 and 3 from the average appraised value of $440,500
equals a Lot 1 value of $223,789.
$223,789 value of Lot 1 minus the land value for Lot 1 of $108,355, equals an
improvement value of $115,434 (see attached analysis).
The DCI therefore respectfully files a Notice To Initiate Appeal for Lot 1 with the
following values:
$108,355 land value
$115,434 improvement value
$223,789 total value.
Hotel La Salle Tax Appeal / Appraisal Analysis
Average Appraised Value (Lots 1 - 3)
440,000 Pitts
441,000 Michaels
440,500 Average
Land Value Per Square Foot (Lots 1 - 3)
9.75 Michaels
10.15 Pitts
9.95 Average
Square Footage of Parking Lot (Lots 2 - 3)
21,780 sf X $9.95 = $216,711
Value of Lot # 1 only (site of Hotel building)
$440,500 average appraised value Lots 1 - 3
($216,711) land value Lots 2 - 3 (parking lot)
$223,789 value Lot # 1 only
Land Value Per Square Foot Lot 1 only
10,890 sf X $9.95 = $108,355
Value Improvements Lot # 1 only
$223,789 total value - land value = $115,434 improvements
PLOT PLAN
LaSalle Street
165
Lot 1 OP South Bend
Key # 18 -1002 -0040
(Building Site)
Lot 2 & N 33.45 Lot 3 OP
Key # 18- 1002 -0041
(Paved Parking Lot)
S. 32.55 Lot 3 OP
Key # 18 -1002 -0042
(Paved Parking Lot)
Calculations:
Lot 1 OP
Key # 18 -1002 -0040
66 x 165 =
Lot 2 & N 33.45 Lot 3 OP
Key # 18- 1002 -0041
99 x 165 =
S. 32.55 Lot 3 OP
Key # 18- 1002 -0042
33x165=
Total
11
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10,890 Sq. Ft.
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16,335 Sq. Ft.
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5,445 Sq. Ft. 1"
32,670 Sq. Ft.
Name and Address of property owner
* * * * * * * * * * * * * * * * * * * * *SNGLP 00685
CITY OF SOUTH BEND DEPT OF REDEVELOPMENT
1200 COUNTY CITY BLDG
SOUTH BEND, IN 46601
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`� NOTICE OF ASSESSMENT OF LAND AND IMPROVEMENTS
State Form 21366 (R12 / 2 -13) FORM FORM
State Form 45650 (R11 / 2 -13) 11 R/A 11 C/I
Prescribed by Department of Local Government Finance
Legal Description
LOT 1 O P SO BEND
Parcel or Identification number
71- 08 -12- 107 - 005.000 -026 / 018 - 1002 -0040
Property address (number and street, city state and ZIP code)
237 MICHIGAN, SOUTH BEND, IN 46601
This notice indicates the assessed value of your property. Information on the valuation of your property and a copy of the property record card can be
obtained from the Assessing Official at the telephone number and addresses below.
Notice to the taxpayer of the Opportunity to Appeal (IC 6- 1.1- 15 -1):
If a taxpayer does not agree with the action of the assessing official giving this notice, the County Property Tax Assessment Board of Appeals will review
that action if you file a notice in writing with the Township Assessor (if any) or the County Assessor within forty -five (45) days of the mailing of this notice.
This written notice should include the name of the taxpayer, the address of the property, the key number or the parcel number of the property, the address
of the taxpayer (if different from the property address), and the telephone number of the taxpayer. An appeal of this assessed value requires evidence
relevant to the value of the taxpayer's property as of the assessment date.
PREVIOUS ASSESSMENT
ROSEMARY MANDRICI
ax
St. Joseph County Assessor
$33,400.00
227 W. Jefferson Blvd., Rm 307
.,
South Bend, IN 46601
Name and Address of property owner
* * * * * * * * * * * * * * * * * * * * *SNGLP 00685
CITY OF SOUTH BEND DEPT OF REDEVELOPMENT
1200 COUNTY CITY BLDG
SOUTH BEND, IN 46601
' ��I���I��I�1�1�111111��11I�IIIIIIIIIIIIIIIIIII III Jill
`� NOTICE OF ASSESSMENT OF LAND AND IMPROVEMENTS
State Form 21366 (R12 / 2 -13) FORM FORM
State Form 45650 (R11 / 2 -13) 11 R/A 11 C/I
Prescribed by Department of Local Government Finance
Legal Description
LOT 1 O P SO BEND
Parcel or Identification number
71- 08 -12- 107 - 005.000 -026 / 018 - 1002 -0040
Property address (number and street, city state and ZIP code)
237 MICHIGAN, SOUTH BEND, IN 46601
This notice indicates the assessed value of your property. Information on the valuation of your property and a copy of the property record card can be
obtained from the Assessing Official at the telephone number and addresses below.
Notice to the taxpayer of the Opportunity to Appeal (IC 6- 1.1- 15 -1):
If a taxpayer does not agree with the action of the assessing official giving this notice, the County Property Tax Assessment Board of Appeals will review
that action if you file a notice in writing with the Township Assessor (if any) or the County Assessor within forty -five (45) days of the mailing of this notice.
This written notice should include the name of the taxpayer, the address of the property, the key number or the parcel number of the property, the address
of the taxpayer (if different from the property address), and the telephone number of the taxpayer. An appeal of this assessed value requires evidence
relevant to the value of the taxpayer's property as of the assessment date.
PREVIOUS ASSESSMENT
NEW ASSESSMENT EFFECTIVE
MARCH 1 2013
LAND
$33,400.00
LAND
$33,400.00
IMPROVEMENTS
$771,400.00
IMPROVEMENTS
$773,700.00
TOTAL
$804,800.00
TOTAL
$807,100.00
Reason for revision of assessment:
19- ANNUAL ADJUSTMENT
2013 Annual Adjustment
THIS IS NOT A BILL (RETAIN FOR YOUR RECORDS)
• Your property record card (PRC) is available @ www.stjosephcountyindiana.com, departments,
County Assessor, St. Joseph Assessor's Online Database.
• If you believe this assessment is not accurate, you have 45 days from the date on this notice to
file an appeal with your assessor.
• The Deadline to file an appeal is December 20th, 2013.
• In the event that your assessment has been corrected by an appeal, your previous assessment
total value above may or may not reflect corrected value.
• For additional information you can call (574) 235 -9557 or (574) 235 -9523
If the change in assessment is due to a new home, you should be aware that there are many property tax benefits or deductions available. Please see INDIANA
PROPERTY TAX BENEFITS (State Form 51781) available on the DLGF website, www.]N.gov /dlgf. If the real property is reassessed because it has been
rehabilitated, you may be eligible for rehabilitation deductions - see Form 322A or Form 322/RE. If the non - residential real property is reassessed because it has
been rehabilitated, you may be eligible for rehabilitation deductions - see Form 322A. Other non - residential construction may be eligible for deductions see
Forms 322/RE & Form 322NBD.
County
Township
Date of Notice (month, day, year)
ST JOSEPH COUNTY
026 - SOUTH BEND (PORTAGE)
11/05/2013
Assessing Official
Telephone Number
ROSEMARY MANDRICI
(574) 235 -9523
Address (number and street, city, state ZIP code)
227 WEST JEFFERSON BLVD, SOUTH BEND, IN 46601