The Future of Property Taxes: Panelists Discuss Assessments and Changes in Tax Legislation

BusinessDen readers took to online Thursday morning for The Future of Real Estate Taxes, a roundtable on property taxes that comes as Colorado county assessors send out notices of new assessments.

Below are some key quotes from the discussion:

Neil Oberfeld, shareholder of Greenberg Traurig and expert in property tax law

“There are two great options (if you get your rating and think it’s too high). First, do it yourself, and second, call a lawyer. If you want to do it yourself, you have the option to sit down with an assessor and discuss the assessment. They want information and statements, and you have to be careful not to give the reviewer information that could harm you and end up with a higher rating. If not, you can call someone who has experience.

“(Following the repeal of the Gallagher Amendment last November), it’s now an environment where residential assessment rates no longer drop each year, and this will give commercial property owners a well-deserved break . But that almost guarantees that homeowners will pay higher taxes. These two factors will have an impact on the taxes borne by owners of residential buildings, and this will affect the electorate in the years to come.

“An interesting dynamic is that the owners of commercial buildings do not vote in the county. Homeowners are voters. So you see in the past the burden on business owners because elected officials are smart enough to know who is voting for them.

Andrew Feinstein, CEO and Managing Partner of the EXDO Group

The EXDO Group is a major land owner in RiNo, where it also co-develops projects. The company also owns the EXDO Event Center.

“At RiNo, it’s a double-edged sword – no one feels bad for us because the value of our land has skyrocketed, in large part because of 38th and Blake, the train station in our area, the densification of RiNo accelerated the value of the land. The appraiser has almost universally assessed our property on comparative value – not our income. If you are in the hospitality industry, it is quite difficult to budget when property taxes are rising dramatically.

“Due to the high valuations, appraisers almost force long-time homeowners to make the decision to redevelop their property. It’s soared so high that it’s penalizing mom and pop businesses in RiNo’s arts district. Displaced artists, displaced small businesses – and the customer pays the tax, not the owner. “

“A lot of independent owners, I mean not institutional owners, not Hines or Crescents or McWhinneys, just mom and dad, they own a one-story building with their business and they have to sell a lot sooner than expected. Sure, they do well with a sale, but relocating a business isn’t easy. Their one-story warehouse is taxed like an eight- or 16-story building across the street. .

Lisa Glynn, partner with Advanced Storage

Advanced Storage has built over 25 self-storage facilities and currently has 10 storage facilities in the Denver area. The firm regularly appeals its real estate appraisals.

“I won almost every call in one way or another. Sometimes it was a negotiation, it was not going as low as we had hoped. But we have reduced our valuation enough to significantly affect our taxes, and I would call that a victory. “

“We expect increases in valuations. I haven’t seen each county’s assessment notices yet, but I’ve seen Jefferson’s and they’ve increased. Some will increase significantly, some were minor value increases. And we are absolutely going to appeal.

“Organizations need to present a clear presentation: page numbers, neat in sequence, stapled together, produced in a way that is personal to your business and your property. But exposed in a professional manner that can be followed with your logic. Gather information on income, expenses and hardship – because pandemic hardship tells a story as of June 30. The key is to be organized when having this discussion.

Doug Wulf, Office Broker at Cushman & Wakefield

Wulf markets Denver’s newest high-rise office tower, Block 162 at 675 15th St.

“A big abuse of language is that developers can afford more property taxes because they are well off. What people don’t realize is that property taxes are passed on to tenants. Commercial tenants in difficulty, office users, they pay taxes.

“In general, tenants are well informed and fully aware of the tax burdens of different properties and how they are valued. New buildings have an artificially low tax assessment as they are built. Then when finished it has one of the tallest you’ll see, compared to a 40-year-old building. Sometimes 25 to 50% more tax is imposed on a brand new building.

“Property taxes and operating expenses tend to be around $ 25 per square foot. This is compared to an occupancy rent of $ 60 per square foot. Of that $ 25, $ 13 to $ 16 are taxes. It is among the highest in the country. It’s as high as San Francisco, Chicago, New York. But the difference is that they have much higher rents – rents of $ 60 to $ 80. “

Bill Owens, former Governor of Colorado, currently with Greenberg Traurig

Owens was governor from 1999 to 2007, and state treasurer before that.

“What we sometimes don’t understand, those of us who vote as citizens, is that Colorado is heavily dependent on state-level property taxes. The State is a relatively moderate tax, we are in the average of the States in terms of taxes. But in terms of property taxes, we are very, very high. It has a real impact on business.

“With Gallagher’s repeal, when these taxes are affected, it will be very important. Property taxes are starting to become more and more topical. There is a property tax reduction proposal for the November ballot. I don’t do a lot of politics anymore, but I remain a fiscal conservative and I monitor these things. There will be a proposal on the ballot to reduce property taxes at all levels by 9.5%. “

“The residential sector has been largely immune to property tax increases for the past 25 years, and Gallagher’s withdrawal will see these voters – we vote from our homes, not our offices – you will see the taxes land tenure become almost a lightning rod problem in the future because of this change. We’ve seen it in California and other states. Here, because the burden is disproportionately on businesses and businesses can’t vote, voters didn’t worry about the property tax increase because they were sheltered by Gallagher. It’s over, so if governments keep raising property taxes, you will see an effect, I think, as early as November. It will make property taxes more political.

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