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Case 5 – The Case of the Skyrocketing Value


Situation:

A 2,200 acre land fill in Allegheny County, Pa. underwent a countywide revaluation. One week before the administrative appeal deadline the reassessment notice worked it's way to the corporate controller's desk. His computation of the impact on the annual real estate tax was alarming. Something needed to be done. The question was what.

Problem:
The proposed assessment increased from $900,000 to in excess of $13,000,000. The Controller projected the annual tax bill would increase from $105,000 to over $1,500,000 a 1,300% increase. Over the years the taxpayer had worked with several property tax professionals including E&A who was the only firm willing to work on the problem on a fee basis acceptable to the taxpayer.

Solution:
E&A was hired to appeal the assessment. E&A's first action was to call the revaluation company to find out if the reassessment was a mistake. We were assured that it was not and that it was based on solid market data. Two E&A tax reps were immediately assigned to the project. Travel arrangements were made to inspect the property and attend the administrative hearing. The history of the property was reviewed. Market data was gathered and an intense effort to secure physical information on the property was launched. During the review, E&A discovered several key points that would prove critical in appealing the assessments. First was a court decision, from several years earlier, that was still on point and which affected approximately 2/3 of the subject property. Second, the long term leases, comparable market data and environmental factors we compiled. These factors all supported a lower value and were presented to the County's revaluation team. On review the Revaluation firm agreed to significantly reduce its proposed assessment, relying on the Court decision for the majority of the property and on the income, market and environmental information to reduce the value on the balance of the assemblage.

Results:
The taxpayer won all around. First, because the proposed 1,300% increase never materialized and second because they insisted on an hourly consulting fee. Because the matter was resolved at the first administrative level and not dragged out for years in the courts their expense to resolve the problem proved minimal in light of the potential tax increase. The assessment was reduced by the Revaluation Team to a more reasonable level. It went from $13,000,000 to less than $1,700,000. The annual tax savings were in excess of $1,400,000 and there was a multi year benefit of $5,600,000 over the remainder of the revaluation cycle.


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