Claremont Wins Property Abatement Case
State Board Sides With City In Commons Tax Assessment
Claremont — The state Board of Tax and Land Appeals has rejected an appeal of the assessed value of the Claremont Commons, formerly known as the Claremont Arms, on Winter Street.
The owners of the 142, one-and -two bedroom apartments in six separate buildings on 16 acres and one vacant lot on .6 acres, argued that the roughly $4 million assessment by the city was “excessive and disproportional.” They sought a reduction to $2.65 million for the tax year 2009 and $2.22 million for 2010.
“Based on the evidence, the board finds the taxpayers failed to prove the property they own was disproportionally assessed,” the three-member panel wrote in its March decision.
In order to find in favor of the taxpayers, the board said the appeal had to be supported by a “preponderance of evidence” that the disproportionality showed the assessments, based on market value, were “higher than the general level of assessment in the municipality.”
The properties in question are split among different owners, though they are all in the same family. DLC Investments owns the vacant lot and 135 of the 142 units. DLC Claremont owns (4 units), Carl B. Thomas (2 units) and Carl B. and Betty Thomas (1 unit), are the other listed owners.
The city had initially listed the total value of the properties, including the vacant lot, at $5.1 million. In 2012, the city “abated” the value to slightly more than $4 million for tax years 2009 and 2010. Even with the reduction, an abatement was filed with the city and denied. The owners then appealed to the board, which heard the case last summer.
“I’m delighted we won,” City Manager Guy Santagate said yesterday. “It is nice to get support that the values are correct. It shows our methodology is more accurate and more fair.”
But Santagate said he is more focused on the abatement sought by owners of two of the renovated mill buildings on Water Street. That case was heard in Sullivan County Superior Court last September but the judge has rendered no decision.
In the Claremont Commons case, an income approach to establish market value was used — there were no sales within the Claremont Arms since 2006 — and resulted in the lower values of $2.6 and $2.2 million for the years under consideration, the owners argued. The taxpayers also said the roughly $300,000 needed to repair 15 “unrentable” units and address fire code violations should be deducted from any market value estimate. They further asked that the value of the vacant lot be lowered from $88,000 to $20,000.
In response, the city said the assessments were proper because of a revaluation done in 2009 followed by a reduction in the assessments in 2012 on the 142 units, based on additional information received by the city regarding vacancy rates and some damaged units owned by the taxpayers.
“The taxpayers’ estimate of market value, arrived at by an income approach, is based on historical information for just two years, not market-based rents and expenses which would provide a more credible reflection of value,” was another point made by the city.
The BTLA said it found several problems with the valuation method used by the taxpayers representative, Mark Lutter, who, it was noted is not a licensed appraiser.
The income approach listed years 2009 and 2010 but there was no analysis to establish if the financial performance was reflective of the market, the board said.
The board said an analysis is a critical step when developing the income approach because market rents are the basis for valuation for tax assessment purposes.
Had the city lost the case, the difference in assessed values for 2009 and 2010 would have resulted in a refund to the taxpayers of about $94,000 based on the tax rates for those two years.
There was no appeal in the ruling within the required 30 days but Santagate said the property owners are appealing their 2011 assessments.
Patrick O’Grady can be reached at firstname.lastname@example.org.