Archive for category: General Information

Happy Thanksgiving everyone!

This 2020 year has been filled with highs and lows but one thing we can always count on – the 4^th Thursday of November will be a time to be with family as we reflect on what we are thankful for and blessings from the past year.

Although this year will be virtual for many (I don’t remember the last time I have not been with my parents and my brother’s family) this will not keep us from enjoying our time together. I do know one thing that is certain… clean up will be a lot easier than in previous years. 😊

Zoom fatigue is real, but I’m confident we will be able to host a “meeting” with the extended family, with football in the background and multiple conversations occurring simultaneously. In many respects, it will be just like being together only we have the comfort of begin able to end each evening by sleeping on our own beds!

If you’re a frequent reader of my blogs, you know I spend a little time talking about my family.

Well, our youngest turned 21 last month and it was nice to be able to celebrate with him. While I’m sure he would rather have been celebrating with friends a little closer to his age, we did manage to enjoy the day in fine fashion, sampling bourbon distilled in Springhill, KS.

This was quite a pleasant surprise and if you live in the area, I would suggest heading to Bull Creek Distillery to sample their spirits.  www.bullcreekdistillery.com.

Thank you to all for continuing to support both Swartz + Associates and Indurante & Associates.

We are truly thankful for the opportunity to represent your interests. 2021 will represent my 35^th year in the property tax industry and I believe we are well positioned to represent our clients for the next 35!

I am fortunate and thankful to be surrounded by family, friends, employees and clients who care about us and each other. I believe it’s the little things that make the difference, and I look forward to taking care of the little things for you as we move forward.

As always, I appreciate your feedback.

You may contact me via email, dswartz@swartzaai.com; dswartz@indurantetax.com or reply to this blog on my respective websites – www.swartzandassociates.com or www.inurantetax.com.

Last Friday, the employees of Swartz + Associates met to discuss the balance of the year and looking ahead to the 2021 property tax season. With articles being written about the future of commercial real estate; whether it relates to the hospitality industry, the retail sector, re-configuration of shopping centers or changing the use of office buildings, one thing is certain – change is coming!

Timing

The timing of the change is much harder to predict, but it is fair to assume the dynamics of commercial real estate over the next 3-5 years will be quite different than what we have traditionally experienced. The question is, how will the county jurisdictions react?

As I have stated in previous blogs and as you may already be aware, property taxes levied against a property primarily are used for local school district funding. Between 60%-75% of the total property tax liability is used for public, local schooling. With the changes due to the coronavirus and the increase in virtual learning, demands for newer technology and equipment are straining the current budgets. There will be significant pressure on the county assessor’s offices to maintain current values or risk a reduction in property tax dollars collected in 2021 and beyond. This represents a major challenge for everyone; taxpayers, county assessment officials, investors, school districts, community colleges, ambulatory services, libraries… you get the idea.

How will the respective assessor’s offices react?

Most states define “Market Value” as “Value in Exchange” rather than “Value in Use”. Current market conditions and sales are the driving factors in this determination rather than historical data, such as leases in place and/or sales dating back 2-3 years. Based upon the current environment, we are monitoring the marketplace to see if leases are being renegotiated, rents are being deferred and/or if concessions are being offered to reduce vacancies. All of these issues will affect the valuation of a property, particularly if a county is obligated to value a property as it sits on its valuation date (typically January 1^st).

In the Midwest: Iowa, Colorado and Missouri are all subject to re-valuation for the 2021 tax year, while, Kansas, Minnesota and Nebraska are subject to an annual assessment review. Many other states have caps in place as to how much the value can increase in a given year until there is a change in ownership. As you can see, it can be quite confusing. During our planning meeting we discussed these situations and how to best represent our clients in the jurisdictions they have property.

Next Steps

We will be working on expanding our presence in the Las Vegas market, as we believe changes in market value first appear in the Southwest (AZ, NV and CA) and the Southeast (FL and GA). With our Indurante office creating a presence in Las Vegas, this is a natural opportunity to grow the Swartz practice with existing clients and expanding our service to those with properties in Clark County.

The Indurante business will remain busy for 2021 as well. The pandemic has had an effect on many industries, and the railroads are certainly not immune. Railcars have had significant idle time and/or storage time due to decreased volume in the shipping of goods, products and materials. We have witnessed a steady decrease in rail activity throughout the year, but hopefully we will start to see an uptick. We are constantly reviewing the market to determine how these conditions are affecting the valuation of railcars and avenues we can review to insure “fair market value” is assessed to these assets.

As always, we appreciate the opportunity to represent your interests and thank you for thinking of us. If you should have any questions, please do not hesitate to reach out to me – dswartz@swartzaai.com.

By Donald Swartz, President and Principal of Swartz + Associates, Inc.

It was just over a year ago I wrote to everyone about an incident that changed my perspective about many things. As you may recall, on July 9^th, while heading to my Las Vegas office on a bright Tuesday morning, an individual ran through a red light, hitting the Uber I was riding. Eight broken ribs, a separated shoulder, a broken clavicle and four fractured vertebrae later, I am feeling pretty good and amazed how much has changed these past 12 months.

Now it’s my turn to help be supportive and be the cheerleader, as so many were for me.

Last Tuesday, my father had quintuple bypass surgery. Yes, no typo, five bypasses! The surgery went as well as anyone could have expected for a man turning 89 in November. What to do, what to do… In this Coronavirus environment, all one can do is offer emotional support for the family. There is no visitation at the hospital. No hugs, no holding hands, no “just being there”. Only phone calls, Zoom setups during the week and words of encouragement. The true providers are the nursing staff, who serve both the medical needs of the patient and the emotional needs during this pandemic. Truly unbelievable.

And yet, my father remains optimistic that he will be heading home soon. And why not? He has always been optimistic and pragmatic about everything – family, friends, and his working professional career. Never, did he display negativity. While I try to emulate that in my life, it can be very challenging, especially in today’s world. Talk about role models, he’s top of the list.

Now on to the working front.

Last month, I mentioned one our employees, Mark Phillips, discovered an error by a state for the valuation of railcars. His uncovering generated millions of dollars of tax savings for all owners of railcars who had situs in that state. We submitted an article to our clients in the industry. Here is a link to that PDF. Please take a look if this is of interest.

Slowly but surely, our cases appealed in 2019 and earlier that have been delayed, postponed and/or pushed back are getting their “day in court”. The results have been very positive as various county assessor’s are working with us to resolve outstanding appeals from 2018 and 2019. This is a very good idea, as the system will again be backlogged due to the current appeals and the projection of 2021 appeals looming on the horizon.

There is no question in my mind, property tax valuations (both real and business personal property) are going to decrease in 2021 – the big question is whether the counties will recognize the downward swing caused by COVID-19.

As always, if you have any questions or comments please reach out to me directly – dswartz@swartzaai.com.

Stay healthy, stay safe and for everyone’s sake, please wear a mask in public settings!

“As slow as March went, April sure flew by!”

This was a quote from a family member as we sat around the dinner table for the 50^th consecutive day. That comment could not have held more truth. As we spent the last two weeks of March figuring out what in the world was going on and re-acclimated ourselves to a full household (this time full of consenting adults and not teenage children dealing with the pressures of adolescence, middle school and high school), April was filled with the “new routine”.  April found three of us working our jobs remotely and the 4^th finishing up second semester of his sophomore year of college.

Phone calls, Zoom meetings, scheduled property tax appeal hearings (conducted via telephone, of course), class lectures and finals, staying out of each other’s way; the days rolled along and here we are – Mid May. More than sixty days of being together and the work continues to be completed. Touches with clients, valuation discussions, connecting with my accountants regarding the tax deadline extension and working with my bank to review the PPP application process/ funding and all the other regular joys of running a business! No wonder the days are moving so quickly.

With this activity, I am deeply aware of the effect the COVID-19 is having on many, if not all of my clients. Hoteliers, retailers, convenience store operators, owners of apartments and other commercial real estate properties – everyone has been touched negatively by this pandemic. These holdings will not just “bounce back” as quickly as things have fallen. I’ve listened to several economists representing most areas of the country and the market will return at a much slower pace. Some have projected a timeline of 3-4 years before GDP attains the percentage increase levels we were seeing at the start of 2020. While this may be one of the more conservative estimates, it certainly is a possibility the recovery period will take us well in 2021 and 2022.

The Real Estate Market

One question we don’t have an answer for at this point is what the real estate market will look like going forward. Will office space (and the need for office space) change in look, feel and desirability? Over recent years, we’ve seen the exponential increase in online sales as consumers order more goods from the Internet and have them delivered directly to their residence. With stay at home orders in place, more people have turned to this mode of shopping, not only out of convenience but necessity.

Have shopping habits shifted? Have work habits shifted? These are the areas we will be paying particular attention to and we will see if the real estate market reflects these changes over time. Construction of warehousing, cold storage and distribution centers will continue to increase, but how will the retail sector and office buildings adapt? More importantly, how will the counties recognize the changing landscape in the marketplace and what will their reaction be?

Big questions and no answers at this point…  but I promise you, it’s on our (and our client’s) radars.

States are showing signs of re-opening in various capacities and a general sense of anticipation is clearly in the air. I’m looking forward to dining out again and being with others. After all, in my almost 30 years of marriage, I’ve never had 60 consecutive dinners at home with my family. 😊 They are probably ready for a break from me!

Stay strong and stay healthy.

By Donald Swartz, President and Principal of Swartz + Associates, Inc.

Good News: Entrepreneurs’ Organization

I recently was accepted and joined the Entrepreneurs’ Organization (EO) Kansas City Chapter. This organization states, “as the world’s only peer-to-peer network exclusively for entrepreneurs, EO helps transform the lives of those who transform the world”. While my personal goal is not to help transform the world, per se, I was very much attracted to the idea of sharing ideas, stories, concerns and successes with a network of similarly minded business owners.

My group, or Forum, had our introductory training session and initial meeting last week. It was fascinating to be with a small group of business owners who tackle similar issues, both personal and business, in an open and non-judgmental environment. I am anticipating a close bond will quickly be formed as we meet on a monthly basis and truly get to know about each other’s lives.

EO currently has 196-chapter locations in 92 countries, with over 13,500 members. Many of my business contacts have familiarity (either as a member, former member or friends of a member) with EO and the initial comments have been overwhelmingly positive. I look forward to building this next step in my professional world and am excited about the opportunities EO will provide for my companies.

Bad News: Coronavirus

Like most of us, I have been watching the sweeping changes occurring in our lives over the past 10 days. What started as a potential nuisance has developed into a complete crisis. Whether you believe we, as a nation, have over-reacted or have not yet done enough to do our part, this is a generational event which demands calm and patience. We must listen to, and adhere to our governmental officials, both at the local and national levels.

My family plans for spring break were not unique as we were headed to the 1^st and 2^nd rounds of the NCAA basketball tournament in St. Louis. How many thousands were planning the same trips in their respective regions of the country? How many of us with college age children now face the reality of having them home for an extended period of time (at least the balance of the semester) while we watch their college tuition savings be significantly reduced by a turbulent and unpredictable market? While painful for everyone, we must trust the process and understand these steps are necessary (in my opinion) to create an environment of a “greater good”.

COVID-19 has had an impact on the property tax world as well.

Locally, counties have eliminated the “in person” hearings if a taxpayer has disputed his/her valuation on their property. Hearings will now be conducted via telephone only, and realistically, I see this remaining in place for several months. It will be very interesting to see how these initial rounds of appeals are treated and what the next level of appeal (State Tax Commission, Board of Tax Appeals, District Court or other State assessment boards) will look like in terms of scheduled hearing dates and the anticipated backlog of appeals.

As always, we will try to keep you posted on the latest property tax events and would be pleased to serve your interests. Please stay calm and look out for one another!