Dartmouth College joins fight against Hanover property assessments

  • This dormitory at 19 Lebanon St. in Hanover, N.H., has been assessed at $4,444,800 by the town of Hanover. Dartmouth College, the property's owner, is asking for a tax reduction for several off-campus properties. (Valley News - Jennifer Hauck) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com. Valley News photographs — Jennifer Hauck

  • Graduate student housing at 4 North Park Street in Hanover, N.H., has been assessed at $15,061,400 by the town of Hanover. Dartmouth College, the property's owner, is asking for a tax reduction for several off-campus properties. (Valley News - Jennifer Hauck) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com. Valley News — Jennifer Hauck

  • A mixed-use multi-family property at 68 South Main Street in Hanover, N.H., has been assessed at $17,708,900 by the town of Hanover. Dartmouth College, the property's owner, is asking for a tax reduction for several off-campus properties. (Valley News - Jennifer Hauck) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

Valley News Business Writer
Published: 10/26/2019 9:25:40 PM
Modified: 10/26/2019 9:25:38 PM

HANOVER — An 800-pound gorilla has weighed in on Hanover’s property assessment controversy, providing new ammunition to critics who argue the town’s 2018 revaluation was riddled with faulty calculations that confusingly raised some homeowners’ property taxes while lowering others’.

Dartmouth College, the largest property owner in Hanover, is asking Grafton Superior Court to grant a tax refund that it estimates could reach $576,000 on 38 taxable properties the college owns in town, although the final figure could be a significantly lower, the town said.

The college filed the appeal after the town, which is burdened by hundreds of other abatement appeals and the need to prioritize the appeals of property owners, did not respond to Dartmouth’s initial applications for abatement by the statutory deadline earlier this summer. That technical decision amounted to a denial of the requests and moved the college to seek relief in the court.

Dartmouth said the properties, the majority of which are single- and multifamily rentals but also include some graduate student housing and commercial space, were assessed by the town under last year’s revaluation at a total of $86.8 million. The college told the court that, based on its own calculations, the value of the properties is $51.6 million.

Among the properties whose values are being appealed:

■ 4 N. Park St., a colony of graduate student housing units, which saw its assessment rise 40% from $10.7 million to $15 million.

■ 19 Lebanon St., the white, low-slung, aging student residence complex across from the Black Visual Arts Center, where the assessment jumped 118% from $1.8 million to $4.4 million.

■68 S. Main St., which encompasses much of the mixed-use stretch on South Street between South Main Street and Currier Place that includes the pizza eatery Ramunto’s and the cafe Umpleby’s and where the assessment increased nearly 10% from $16.1 million to $17.7 million.

Although Dartmouth has sought abatements following prior properties revaluations, the number in the current petition represents one-third of all 122 taxable properties the college owns in Hanover. The town assessing office’s grand list shows the college owning a total of 144 properties in Hanover registered by the Trustees of Dartmouth College in addition to seven properties under South Street Downtown Holdings Inc.

“The assessed valuation of the subject properties is in excess of the just and proportionate valuation of Dartmouth’s property in the town, resulting in (the college) having to bear a disproportionate share of the common tax burden,” Dartmouth said in its petition to the court.

The college currently pays about $8 million annually in real estate taxes to the town, according to Dartmouth spokeswoman Diana Lawrence.

That’s because, although Dartmouth College is a nonprofit educational institution, it is nonetheless required under New Hampshire state law to pay local property taxes on the locations of dorms, office and commercial buildings, and rental properties. Classroom buildings and public spaces such as the Hop, Black Family Visual Arts Center and the Hood Museum are exempt.

“This timing of the college’s appeal and this necessary filing to preserve (the college’s) rights is statute-driven and was anticipated by the town,” Lawrence said via email. “We continue to maintain our strong long-standing relationship with the town and its departments,” she said, adding that Dartmouth “continues to work with the Hanover tax assessor and is open to further discussions regarding the valuations in question.”

Beyond the college

Dartmouth’s petition comes as Hanover has been facing a backlash from residents and downtown merchants over the results of its 2018 revaluation in which numerous property assessments jumped more than 50% and in some cases nearly doubled over the last assessment five years prior.

In August, a group of 66 Hanover property owners filed a petition with the New Hampshire Board of Tax and Land Appeals to order the town to redo its 2018 real estate assessment, arguing that a faulty methodology was employed in the revaluation and that the town assessor engaged in the prohibited practice of “sales chasing” to arrive at the new values.

The town assessor, Dave McMullen, who was previously the chief assessor in Lebanon for many years before succeeding the longtime and late Hanover assessor Michael Ryan in 2016, has defended the revaluation and categorically rejected the charge of sales chasing, which uses the sale of a property to trigger a reappraisal of that property at or near the selling price.

Nonetheless, even though only about one-third of 3,400 real estate parcels saw their assessments increase, angry residents and a cascade of some 400 abatement requests has led the town to seek an independent consultant to review the process used to determine the 2018 revaluations.

In addition, Town Manager Julia Griffin said the town has begun looking into hiring an outside assessing firm to help with a “full measure and list revaluation” of real estate for the town before the next scheduled reassessment in 2023. But whether that will actually occur, she said, depends on several factors, such as cost and availability of a firm — which tend to be booked years in advance — to undertake the work.

“We just feel it’s the right thing to do,” Griffin said last week.

Both measures were urged by the Advisory Board of Assessors following a public meeting in September during which residents voiced their frustrations over the results of the revaluation.

“In other words, do the whole thing over again,” as Joanna Whitcomb, the Selectboard’s liaison with the Advisory Board of Assessors, explained to her colleagues at last week’s Selectboard meeting.

The advisory board’s recommendation to consider a full townwide property revaluation prior to 2023 was one of six proposals made to the Selectboard to redress grievances over the 2018 revaluation following the board of assessors’ public session with residents in September.

Those recommendations range from the town responding to a four-page list of questions and concerns over the 2018 revaluation to the town communicating more clearly about the upcoming tax bill, which is to be issued within the next couple of weeks. Another recommendation is for the assessor’s office to review its method for determining land values, a particular sore point among some property owners.

Whitcomb, who is also the director of campus planning for Dartmouth, reported that about 80% of the approximately 400 abatement requests the Advisory Board of Assessors reviewed were granted.

As a result of those requests — which don’t include the dozens of appeals for tax abatements filed in either Superior Court or with the state’s Board of Land and Tax Appeals — “our total tax valuation in town dropped between $15 to $20 million,” she said.

How much it would cost to hire a firm to undertake a townwide reassessment, which involves site visits to properties, is unknown, but Griffin said the “going rate is typically” between $50 to $100 per parcel.

“We’re guesstimating about $175,000 to $350,000 for a full measure and list revaluation,” she said.

Timing is everything

One question on the town’s radar comes from the state’s Department of Revenue Administration: whether a full townwide revaluation earlier than the scheduled 2023 revaluation will “reset the clock” in terms of the 10-year cycle when it has to complete its next revaluation or whether it will still have to complete it again within three years.

Hanover’s current imbroglio began with a “statistical assessment” conducted by the assessor’s office in 2018 at the five-year mark midway between the revaluation New Hampshire requires towns to conduct every 10 years.

The latest five-year revaluation, however, employed a computer-generated statistical model that heavily relied upon real estate sales data collected over a 27-month period to determine the new assessments. At the same time, the town was shifting vendors that managed its assessment database, which involved migrating property data to a new platform.

Both factors have been cited as possible causes behind what some property owners have viewed as an aberrant revaluation with wildly different assessments for properties that are alike in location and construction.

For example, the petition filed by Hanover homeowners in August cited 10 adjacent properties of comparable likeness, including:

■ 6 Conant Road and 8 Conant Road with an $89,000 difference in land value.

■ 32 Rayton Road and 34 Rayton Road with a $90,000 difference in land value.

■ 8 Hovey Lane and 6 Hovey Lane with a $260,000 difference in land value.

In its petition with the court, Dartmouth said the town’s revaluation that was based upon real estate sales data did not take into account a variety of factors that would more accurately reflect the value of the impacted properties. To support its claim, the college attached dozens of income and expense statements for individual rental properties that it contends more accurately reflects the “taxpayer’s opinion of market value.”

Griffin emphasized that, based on past abatement filings Dartmouth has filed with the court, the court has urged the parties to resolve the dispute in mediation, and she expects the same result with the current appeal.

“My experience with abatement cases is that the applicants always come in with very high numbers and that mediation always lowers them substantially. All roads will lead to seeing certified appraisals of all the properties. Until we have that data, it is impossible to determine how much, if any, abatements will be approved,” she said via email.

“The very wide gap between our assessments on their in-town rental properties and their ‘owner’s estimate’ (not an appraisal) tells me we will not land anywhere near their number,” she said.

In any case, the town is prepared in covering the loss of tax revenue stemming from abatements, said Peter Christie, chairman of the Hanover Selectboard.

“The shortfall in revenues from the abatements will be absorbed by the town in the undesignated fund balance and hopefully will not impact our ongoing budget process,” he told the Valley News.

Christie said the town generally targets an undesignated fund balance — meant for unforeseen expenses — set at 15% of the general fund.

Hanover voters at Town Meeting last spring approved almost $30 million in municipal spending, including a general fund budget just under $17 million.

John Lippman can be reached at jlippman@vnews.com.

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