Data Driven Values and the Assessors Who Ignore Them

Assessing property value is an art form. No one denies that. In theory, you start with market data, apply your experience and logic, and arrive at a fair assessment. But theory is not practice. Despite the job description to let data demonstrate the value, we have found the opposite happening.

Over and over again.

In court case after court case, we find that assessors cannot rationally explain the values they assigned properties. It seems as if they just look at who owns the property (for example, a big box retailer) and figure best to ask the most and forgive the lowest. For a while this probably wasn’t an issue – large corporations just forked over the money, and smaller businesses couldn’t afford the overhead of lawsuits. Can’t fight city hall, right?

WRONG.

Welcome to the computer age. We’ve got a not-so-secret weapon against these kinds of tactics: USAPTA’s Pinpoint Property Tax Finder. This software allows one to see how property values stack up against each other. And in case after case, this database reveals questionable behavior by people involved in the process, from Selectmen to Commissioners.

Here’s what happens: we review the data and find inconsistencies in valuations. We notify the county, but they don’t do anything. Once we take them to court and win, the retribution begins. Suddenly, nobody wants to even consider settling with us. So, we sue again, and in discovery, all manner of irrelevant information is requested.

The goal of all this mitigation is NOT to punish assessors or cause conflict. It’s to get a fair property assessment from the taxation body. Large corporations are just as important to local economies as small businesses, if not more so. They want a fair shake – it’s their right.

Robert Hill Law, Ltd uses the services of USAPTA as consultants and expert witnesses to identify true market value, and ultimately win for their clients. Read this supporting affidavit that makes the case.

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My property is worth what you will pay me for it. Nothing more, nothing less.

That’s the case being made on behalf of big box retailers across the country as they are forced to sue municipalities for tax refunds. In the latest case Robert Hill is seeking an over $3 million dollar valuation reduction in the City of Sheboygan (WI).

Listen to Bob’s radio interview on WORT 89.9, Madison WI community radio, and read about the case on their webpage.

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Introducing the Pinpoint Property Tax Finder

Revolutionary new software determines if you are getting a raw deal

By Michael Wedl

You know that feeling. The pit in your stomach each year when the tax assessments go out. How much is it going to be this time? Can we afford it? How do you know if what you pay is fair and equitable to what similar businesses, or even your commercial neighbors, pay? It’s a tough question to answer. There are a lot of variables involved with finding out and lots of data to really understand how your property compares to others.

How to get all that information though? The prospect of it can be discouraging. You’d need to sort through dozens of county records, compile spreadsheets, crunch numbers, probably a whole lot more. It’s a daunting task and maybe it’s supposed to be. USA Property Tax Associates hopes to change that with their revolutionary new software, Pinpoint Property Tax Finder.

This web-based software will be available in late 2017 and it promises to turn the tables on tax assessors. By compiling county records into a single database, users can see how other similar properties in their county, state, or even nationwide have been assessed. You can get the exact information you’re looking for with great features like the ability to filter results by size, average dollar per square foot, and many others, giving you everything you need to challenge the equitability of you assessment in court.

A sample graph produced by the Pinpoint Property Tax Finder.

Robert Hill Law, Ltd has already used this software to save clients’ money. In one successful challenge, Robert Hill was able to get an initial assessment of roughly $200 per square foot down to a much more reasonable $125 per square foot. During the Board of Review hearing, one of the commissioners actually held up a report generated by the Pinpoint Property Tax Finder and said that the proof was undeniable. It was all there in black and white. The property was “clearly being overvalued” compared to neighboring like kind properties.

For tax law professionals like Robert Hill, having this arrow in their quiver has been a game changer. The software is very user-friendly and simple to access. Once you are setup with your username and password, all you need to do is log in. From there, you can create and manage different cases. Simply choose a county or address, filter the results down by property type or property size and voila! Instantly see how your assessment stacks up to other properties in your area.

Sure, the county might say that they trust their assessors. They might even say that your property is the exception to the rule, and it’s so special that it deserves to be valued so high. Not anymore. With Pinpoint Property Tax Finder, you can easily debunk that notion. Once you have your case set up, you can compile all that data into an easy to manage chart and graph.

Technology is amazing. 30 years ago to find out all this information you’d have to spend hours going over paper records by hand, manually entering all the data. Now, with just a few simple clicks, you can arm yourself with an incredibly powerful tool. Don’t work harder. Work smarter, with Pinpoint Tax Finder from USA Property Tax Associates.

Michael Wedl is President & CEO of USA Property Tax Associates and a prominent Minnesota property tax professional. He has held senior positions at Paradigm Tax Group and Hart Property as well as assessment & valuation positions in county government. Considered a property tax subject-matter-expert, Mr. Wedl is often asked to speak at symposiums and participate in roundtable discussions across the Midwest.

To contact Mr. Wedl for speaking engagements please visit his LinkedIn profile.

Building for Sale

Buyers don’t care how much money sellers put into a property.

Buyers don’t care how much money sellers put into a property and neither should assessors. For that matter they don’t care (and should not) what the retail sales were either. That is the case Robert Hill is making in Winona County as he represents multiple companies arguing Winona County overvalued their properties.

Read all about it at the Winona Post.

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Gavel and Flag

Robert Hill teams-up to thwart use of Anti-SLAPP Law in denying due process

The Wednesday May 24th ruling by The Minnesota Supreme Court was a major victory for Robert Hill and his team including Eric Magnuson (Robins Kaplan) in Leiendecker v. Asian Women United of Minnesota.  Hill pointed out “the ruling was a victory for due process. Minnesota’s anti-SLAPP law placed an unconstitutional burden on plaintiffs.” Hill continued “you have to go to a judge and—without the benefit of discovery—demonstrate that you have clear and convincing evidence that the person you sued has committed a tort. It supplants the usual role of jury and forces the judge to make determinations based on what? Affidavits?”

Read the full story.

Robert Hill Law Wins for CVS – Dark Store “Theory” is a Faulty Theory

By Robert A. Hill, property tax attorney and president, Robert Hill Law, Ltd.

Robert Hill Law recently won a significant case for CVS Pharmacy in Appleton, Wisconsin.

The case represents another victory for uniformity in property taxation in Wisconsin.

The City promoted the specious theory known as the “Dark Store Loophole” to argue that retailers like CVS should be taxed based upon the investment value of the CVS store instead of the market value of the real estate housing CVS as the tenant.

I argued that it is only sales of real estate which matter and that the circuit court was required by Wisconsin law to “Tax it at its sale value.” I am pleased to report that the Wisconsin Court of Appeals agreed with the circuit court on December 28th, 2016. Read the State of Wisconsin Court of Appeals decision by clicking here.

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Author Bio:

Robert “Bob” Hill has, for over twenty five years, successfully represented major companies in property tax appeals through both negotiations with tax assessors and litigation. His dedication to his clients has helped businesses throughout the United States save tens of millions in property taxes. Mr. Hill has earned Martindale-Hubbell’s highest peer review rating of AV-Preeminent for his legal knowledge, communication skills, high ethical standards, and his representation of clients in significant property tax cases.

Robert Hill Law Wins for Menards by Proving that Comparable Sales Matter

By Robert A. Hill, property tax attorney and president, Robert Hill Law, Ltd.

For the past ten years, big box retail stores, national and regional alike, have suffered dramatically reduced sale prices for the real estate they leave behind when they decide – for whatever reason – to close a location. This decade-long shift in sale pricing for mega-warehouse retail property is, to a considerable degree, caused by today’s “click-and-ship-not-sticks-and-bricks” retail economy. This shift in consumer preference appears to have caused a market phenomenon negatively affecting the overall utility, and the transferability, of the mega-warehouse retail store: a phenomenon which has mutated traditional big box retail stores; (i.e., mega-warehouses with cash registers inside) into mega-warehouse stores with silent cash registers inside (i.e., warehouses with vast storage space).

Unlike traditional retail – which focuses on shopper convenience, customer service, and overall buyer experience – the function of a mega-warehouse store is to house products for sale. In a mega-warehouse store, it is the consumer who must wade through a bevy of options while browsing through the warehouse. Appealing to do-it-yourself consumers, this retail model works if the retailer’s costs can be kept to a minimum while providing maximum cost savings to the consumer.

Modern property assessment practices have not kept pace with ever-growing shopper fondness for the “click-and-ship” retail model. Cost per-square-foot assessment considerations are modeled after traditional retail models at $80-90 per-square-foot. Yet, since the warehouse and the retail space are the same for mega-warehouse stores, prices for this property type average $24-28 per square foot and the argument for fairness becomes apparent. To be sure, not every square foot of a mega-warehouse directly generates revenue; it behaves more like an industrial warehouse. Therefore, total square foot formulas – modeled after a singular (i.e., traditional) retail model – are short sighted. Moreover, they are unfair.

For the past twenty-five years, Robert Hill Law has been an unrelenting champion of “Sales Matter” when assessing mega-warehouse retail properties. Robert Hill Law’s primary motivation is rooted in substantial justice: we must not permit government’s self-serving inclination to consider the total sales volume (“value-in-use”) of a store owned and occupied by a national retailer to affect (inflate) its real property assessments. In plain terms, a retailer’s sales revenues are incidents of ownership, not measures of value inherent to the property itself. Property assessment must be based on “market value” of the subject property. By trying to use sales revenues as a surrogate to determine property value, government assessors are ignoring the relevant “market.” The relevant “market” is not the approximate success of a “going concern” in relation to other going concerns. Rather, the relevant market is the property at its highest and best use in relation to other comparable properties. Therefore, a retailer’s sales revenue is irrelevant to answering the market-driven question: “What will you pay me for my property that has a big box warehouse store on it?”

If uniformity is to be maintained – a big “if” in some states – assessors must come to accept the fact they are to determine the market value of the real estate and not simply establish a “pecking order” based on the occupant’s business profits. Assessors must adhere to the fundamental legal principle that requires government to “Tax it at its sale value” – An apt and sternly-worded admonition several state supreme courts have been forced to preach in unanimous opinions each time government assessors get greedy by taxing an occupant’s business instead of the real estate which houses the business.

With assessors conflating a property’s intrinsic value with its market value, one is left to wonder who will be next if we allow this type of tax discrimination to go on? Consider this hypothetical situation: Richie Cunningham’s family in Milwaukee generates $2.5 million dollars in a web-based business operated from their home. Their neighbor, Potsie Weber, sells his identical home across the street for $250,000.

The following year, the Milwaukee County Assessor raises the Cunningham family’s assessment from $250,000 to $2,500,000. When Richie Cunningham asks why his assessment is not based on the recent sale price of Potsie Weber’s identical home, the county assessor informs him that, unlike Potsie Weber’s assessment, the value of his real property is based on the sales generated in his home and not by what the home would sell for in the open market because the assessor claims the law gives him the “discretion” to choose which residential properties are governed by actual sales of real estate and which are not.

Allowing assessors to determine property tax assessments by different valuation methodologies undoubtedly will accomplish many things fiscally for county and city government. But the cost to the state comes in the form of tax discrimination against taxpayers already paying a disproportionate share of property taxes every year their national (or regional) retail stores remain open. And, as Richie Cunningham’s situation illustrates, maintaining any semblance of uniformity among taxpayers requires that real estate sales of the “sticks, bricks, and dirt” remain the sole measuring stick by which all valuation for property tax assessments are set.

“Tax it at its sale value” is the law in Wisconsin, and in most states, precisely because it is the only way to objectively determine what real estate sells for in the open market. National and regional retailers are often treated unfairly because they are not locally-based. Indeed, few local retailers deploy a mega-warehouse model, so cost-per-foot assessments are fair to them. But, their product inventories are managed differently and they are assessed based on actual sales of similarly used real estate, which results in a much lower price per-square-foot valuation for property tax assessment purposes than non-local retailers bear.

Robert Hill Law is centered on ensuring that property tax assessors throughout the Upper Midwest (and the U.S.) establish and deploy a uniform assessment model; one focused on a formula which respects, rather than attempts to undermine, the actual sale prices achieved by sellers in the overwhelming number of sales of this property type that have occurred nationally since 2005. Robert Hill’s mantra: “Assessed properties must be treated uniformly and you cannot do this if some are treated as real estate and others are treated as businesses who can afford to pay more than their competition, even though the buildings themselves are all-but-identical to the local retailer next door.”

To illustrate the point, the Minnesota Tax Court ruled in September of 2015 that a Menards store located in Moorhead Minnesota had been over-assessed by at least 4 million dollars for several years. Robert Hill Law, with Paradigm Tax Group, litigated a reduction of approximately $16 million on behalf of Menards. The Minnesota Tax Court and the Minnesota Supreme Court agreed these mega-warehouse retailers should be assessed based on the sale prices of comparable mega-warehouses as evidenced by sales of like property: Not by the value-in-use methodologies the county suggested as a ready substitute.

And in a case Robert Hill tried in late February of 2017; involving a Menard’s mega-warehouse in Cottage Grove, Minnesota; he introduced into evidence the comprehensive study done by Brett A. Harrington of International Appraisal Company.  Harrington’s study, entitled “Big Box Retail Properties Sales Transaction Analysis,”  marshals together an overwhelming number of market (sales) data to explain how and why mega-warehouse retailers should see assessed values closer to $30-40 per-square-foot (instead of the $80-90 per-square-foot used by value-in-use assessors).

As our economy gravitates more toward a “click-and-ship” retail future, which all-but-eliminates the need for mega-warehouses with cash registers, Robert Hill Law will remain dedicated to ensuring property tax assessments are uniform and fair to all taxpayers: big and small, locally based or not.

Follow our company profile on LinkedIn for related news and updates.

Author Bio:

Robert “Bob” Hill has, for over twenty five years, successfully represented major companies in property tax appeals through both negotiations with tax assessors and litigation. His dedication to his clients has helped businesses throughout the United States save tens of millions in property taxes. Mr. Hill has earned Martindale-Hubbell’s highest peer review rating of AV-Preeminent for his legal knowledge, communication skills, high ethical standards, and his representation of clients in significant property tax cases.

What are the Top Three Things to Look for in a Property Tax Attorney?

By Robert A. Hill, property tax attorney and president, Robert Hill Law, Ltd.

From my perspective, the answer is simple: Integrity, Perseverance and Knowledge. 

Integrity is key. Find a team that is “lean and mean” by design – but highly networked to be scalable to your specific needs. Here’s a classic example: Since property tax issues vary by state, your tax issues might need expertise beyond your home state. You need not vet and hire 50 attorneys, nor must you hire an expensive “Big-law” firm with one property tax expert per state. A firm with integrity would not have you paying for more than what your specific needs require. Simple as that.

Perseverance is critical; however, it should always be directly tied to integrity. Litigation is expensive and the tax attorney you choose should be first focused on a perseverance rooted in compromise – keeping your case out of the courts.

Knowledge is rooted in the efficient collection of the evidence to your situation, but also the reputation – and relationships – with those parties that can establish a compromise sooner than later. Be asking, “What percentage of your cases is solved in compromise as compared to full litigation?” And, “In those cases that are solved by compromise, what is the average number of months it takes to reach an acceptable compromise?”

Integrity is key. The team you choose should feel like a true ally, and a team of relentless advocates working for you.

Property Tax Reduction Case Studies:

  • Big Box Home Hardware Retailer – $9 million in savings over three years
  • Big Box Pharmacy Retailer – $2 million in savings over four years
  • Minnesota-based Food Retailer – $3.7 million in savings over three years
  • Well-known Food Brand – $250,000 in annual savings

Author Bio:

Robert “Bob” Hill has, for over three decades, successfully represented major companies in property tax appeals through both negotiations with tax assessors and litigation. His dedication to his clients has helped businesses throughout the United States save tens of millions in property taxes. Mr. Hill has earned Martindale-Hubbell’s highest peer review rating of AV-Preeminent for his legal knowledge, communication skills, high ethical standards, and his representation of clients in significant property tax cases.

The Property Tax “Aha!” Moment for Business Property Owners

By Robert A. Hill, property tax attorney and president, Robert Hill Law, Ltd.

You and your team pay attention to the sale of business properties near to or adjacent to your own properties. You easily find the sale price and likely will calculate the square foot price to compare to your own property’s market valuation.

It’s possible you may have even consider the tax assessor’s valuation of your property, but sat passively in frustration in the fact that the marketplace facts do not mesh with the assessed valuation.

The “Aha!” moment occurs when you hear marketplace stories of property owners or competitors that just saved $5 million in their property taxes. When one bears witness to peers having success that dramatically affects their bottom line year-after-year, curiosity is piqued.

I would suggest to you this: Pay attention to the market of similar properties. Watch for sales of those properties and watch closely those businesses geographically near to your property or very much like the market location of your property. When you see like-property sales that are less than your assessed value per foot, raise that red flag. Understand that good property tax attorneys exist that can quickly drive a compromise that directly affects your bottom line. I welcome your call/email to discuss your property tax red flags. We offer a software solution that simply and quickly can validate your concerns with tangible market facts.

Property Tax Reduction Case Studies:

  • Big Box Home Hardware Retailer – $9 million in savings over three years
  • Big Box Pharmacy Retailer – $2 million in savings over four years
  • Minnesota-based Food Retailer – $3.7 million in savings over three years
  • Well-known Food Brand – $250,000 in annual savings

Author Bio:

Robert “Bob” Hill has, for over three decades, successfully represented major companies in property tax appeals through both negotiations with tax assessors and litigation. His dedication to his clients has helped businesses throughout the United States save tens of millions in property taxes. Mr. Hill has earned Martindale-Hubbell’s highest peer review rating of AV-Preeminent for his legal knowledge, communication skills, high ethical standards, and his representation of clients in significant property tax cases.