Archive for category: General Information

As we start our hearings for the 2021 tax year, a question constantly arises from both taxpayers and county appraisers…

How has the pandemic affected the value of business personal property and real estate?

The answer is both simple and complicated. If business has suffered (think hotels, movie theatres and restaurants, to name just a few) due to the pandemic, is it the business value that has diminished or does it also include a decreased value in the business equipment as well as the “sticks and bricks”? County offices are constantly asking taxpayers to show market sales to support the claim the pandemic has had a detrimental effect on real estate. Business owners aren’t willing to sell their assets during this time, arguing the market is too depressed. If a sale does occur, is it truly a market value transaction? In other words, exposed to the market with neither party under duress to buy or sell?

In the cases we’ve had before the local Boards, another question invariably is asked…

Did the taxpayer receive PPP money?

I’m not sure how that relates to the value of real estate or business personal property. This money is primarily intended to support the payroll of a company, again, focusing on the business side of the equation and not the tangible asset side. However, the respective Boards believe if PPP money has been received, the businesses are surviving and therefore, the value of the equipment and the real estate remains unchanged.

I see the purpose of the argument. However, many types of commercial real estate (and the associated business personal property) are directly tied to the income it can produce. Investors look at types of real estate for the income potential. Office buildings, hotels, theaters, malls, multi-family… These are all in existence because of the rents they can collect from their tenants. If the tenants fail to make rent or worse, close due to a lack of business, the real estate becomes less valuable to an investor. Granted, the investor is not looking at a snapshot in time when purchasing real estate (the investor should be looking at stabilized income over the life of the property) but the role of the assessor’s office is to value the property as it sits on a specific valuation date. In most jurisdictions, this is January 1^st. As a result, we’re forced to look at the property at this “snapshot in time” and as of January 1, 2021, various sectors of the market were disproportionately disturbed.

Many counties have been proactive in their valuations.

Some have offered 20-30% reductions in value before the appeal process. However, this is not widespread, and those counties not proactively offering relief to the taxpayer can expect to see a surge in the number of appeals. Boards and State Courts or Commissions are already back logged due to the closure of the courts during the pandemic these past 15 months. Add the potential of new cases as a result of the pandemic; we may not have resolution for 2021 appeals in some jurisdictions until late 2022 or early 2023. The effects are long lasting and challenging for all sides.

We will keep representing the interests of taxpayers to ensure they’re paying their fair share.

If you have any comments or suggestions, please share by responding to the blog. You may also reach me directly at dswartz@swartzaai.com.

A belated Happy Earth Day to everyone. 🙂 I hope you’re doing your part to make the planet a safer place for us and future generations.

While we tend to get so busy wrapped up in our daily work activities, it’s good to take a moment and reflect on the “awesomeness” of our world. We cannot lose sight of how many things are “right” around us, even when we constantly see and hear the troubling issues immediately staring us down.

Speaking of “awesomeness”, I would like to share three examples of how staying connected and doing things the right way can benefit you years later.

Example #1

We recently signed a new client with a nice portfolio in central Iowa. There was nothing extraordinary about the deal itself, but how the situation played out reflects the value of relationships. We have a long-time client who is a single tenant on a property. While not the owner of the property, they’re responsible for the property tax liability.

My client gave me the name of the property owner and I reached out to the ownership group. The owners were interested in potentially having us review their portfolio in addition to the property I had inquired about. As I perused the email string, there was a contact name for someone I’d worked closely with while she was at another company whose portfolio we handled in 1994 (and still handle today!)

I have not been in touch with her for almost 10 years, but as soon as I recognized the name, we immediately touched base and it was if we had been working together throughout. She is the property manager for the new client’s portfolio. I’m convinced our prior relationship, and the positive results that began 25 years ago, had a positive effect on the decision to work with us.

Example #2

We have another long-time client who owns property managed by a property management firm. We’ve worked closely with the management firm for the past several years. But this year, the property management firm reached out to us independently to see if we would be interested in handling their own portfolio as well as other owners of property they manage.

Why? I believe it’s partly due to the relationships we’ve developed over the years with our clients and the property management company. Our results help seal the deal, but I’m convinced it’s the relationships we’ve maintained over time that created the opportunity for the consideration in the first place.

Example #3

Another property management firm reached out to me last week. The individual was also someone I’d worked with over 20 years ago with another company. He reached out to me and asked if we were interested in representing the portfolio he managed. He also wanted to know if we were taking on new clients. We have a call with the ownership group and the property management team this week. Hopefully we will secure the deal!

Bonus Example

We have another development on the Indurante side where an individual worked with us, but recently started a new position with another company. He has reached out to us in hopes we will be able to assist in the railcar property tax compliance component for his company beginning next year.

What does this all mean?

Never underestimate the power of relationships; the power of communication and the positive effects of staying in touch. While you may not see the tangible results in the short term, the long-term results may be incredibly rewarding. The situations described above represent an additional $100,000,000+ in property values to be reviewed in 2021.

Thank you so much for continuing to read about our journey. As always, if you have questions, comments or concerns, please reach me at the following… dswartz@swartzaai.com | dswartz@indurantetax.com

Stay safe, stay healthy and get vaccinated when the opportunity presents itself.

Happy belated Valentine’s Day as well as belated Happy Mardi Gras wishes. Between the Polar Vortex and the pandemic, it is hard to figure out what month we are in and what’s coming next. One thing remains consistent – business personal property tax filings are coming due, and counties are beginning to issue 2021 valuation notices.

County Valuation Notices

We will see reassessments in Iowa, Missouri and Colorado in 2021, and Johnson County, KS has just released the 2021 commercial/industrial values. It will be interesting to see how the various counties react to the effects of Covid in the real estate arena.

Johnson County has reduced properties with 20% decreases in value for hoteliers located on the southwest side of the greater Kansas City area, but is this reflective of the market?

Polk County, IA (Des Moines area) will be issuing valuation notices at the end of March. And we are hearing there may be significant decreases for hotels and restaurants. Again, how will this compare to each individual situation?

Retail, hotels, leisure activities and indoor centers have all been severely impacted by the virus, and some economists are indicating it could be several years before these sectors get back to pre-pandemic levels of activity.

Now is the time.

Now is the time to be proactive concerning your real estate valuations. We anticipate a tremendous amount of appeal activity in jurisdictions across the country. No geographical area is immune from this downturn, and it’s extremely important taxpayers know they are only paying their fair share on the true market value of the property.

Railcar valuations.

The railcar valuation side of the business will also be active as owners of railcars faced increased idle time due to less demand in oil, natural gas, sand, coal and other goods. In several instances, railcars have been placed in storage with very little mileage after March 31, 2020.

How soon before we see a sense of pre-pandemic activity in the rail industry? Estimates range from a few months to another year. All of this must be taken into consideration when determining the current market value of specific types of rail cars.

Speaking of railcars…

I am so pleased to announce Noelle Giacomino, Senior Analyst in our Indurante group, has been promoted to Director at Indurante. Now in her 13^th year with the company, Noelle has created strong relationships with our clients as well as governing officials at the county and state levels.

Her knowledge of the railcar industry and particularly the intricacies involved in the annual railcar declarations makes her a valuable asset to any private railcar owner. We are fortunate to have her share her wealth of knowledge with our clients.

Congratulations Noelle – we look forward to your continued growth within the company!

Property Tax Questions?

As we ramp up for what could be our busiest season since 2009-10, please know we are available to answer any questions you may have in the property tax world. We are here to help.

As always, you may reach me at the following – dswartz@swartzaai.com or dswartz@indurantetax.com.

Thank so much and we look forward to representing your interests.

This past week, my daughter and I embarked on a road trip not experienced since her college days where the two of us spent time getting her back to campus at Lafayette College in Easton, PA. If you’re a regular reader of my blog, you may remember our many unplanned stops; the world’s largest golf tee and wind chime come to mind, as well as several stops at various college campuses along the way. Her senior year trip included a stop off I-70 in a rest area to view the total eclipse (spectacular, if you remember.) Ah, those were the days! Unfortunately, college graduation came and the real world settled into place.

While the Covid pandemic has been stressful for all, an economic burden to most, health crisis to millions and a noticeable change in our social behavior, it did provide an opportunity for another Father-Daughter road trip. This time, we flew to the DC area, picked up her car (which had been in her underground parking lot since last spring) and drove back to Kansas City, as she will continue to work remotely until June. The drive did not disappoint as we spent two days through the mountains of western Maryland, West Virginia and Kentucky; the plowed fields of Indiana and Illinois and finally, listening to our beloved Chiefs as we trekked across I-70 in Missouri. (Not the most scenic for sure, so the Chiefs offered an excellent distraction 😊)

 

The Scenic Highway 68 through West Virginia put us within 2,000 feet of the Pennsylvania border and the views were terrific, even in December. We can only imagine what the scenery would be in the fall with the changing colors. Stops in Morgantown to see the University of West Virginia and in Lexington to visit the University of Kentucky were only modified by the aspect of not leaving the car, so we drove around the respective campuses. This was relatively easy since there were no students and effectively no traffic!

This was also an opportunity to connect with my daughter as a non-student.
No excitement or fear of the upcoming school year, just conversations about life; the boring (finances, car repairs, the future…) and not so boring (food, music and friends).  The two days passed quickly and I look forward to the next opportunity (but not if it is caused by another Pandemic!)

Thank You

As we wrap up another year, I again thank you for your friendship, loyalty and trust in me as well as my employees. I mentioned on a phone call to one of my clients that when all is said and done, we are service providers. We do not have a tangible product to touch, smell, see, hear or taste, but you do see our passion, concern and dedication to our clients. Hopefully that’s a differentiator for us. My goal is to insure we maintain this enthusiasm as we work together in 2021.

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.indurantetax.com.

Happy Holidays to everyone!

May 2021 bring good health, safety and joy to all.

 

Next week, I will be taking my first business trip out of town since the beginning of the pandemic. While Zoom and Microsoft Meetings have been incredibly useful, and being able to see others is an effective alternative to the usual conference call, there are simply things not easily replicated when we meet face to face. So, next week, I will be traveling back to Las Vegas to meet with my employees of Indurante (as well as Swartz + Associates, Inc. since David Sukenik has been in the office just over a year).

Year End Planning

We are set to have our year end planning meeting and it is important I see everyone and really get an idea of how they are doing. While the work has been seamless and our touches with clients have earned positive responses, not being with them on a monthly basis has had an impact on me. I want to be with them to experience what is going on. Is the Las Vegas office handling the pandemic the same way we are handling things in Kansas City? I will soon find out and looking forward to sharing time with them in settings lasting more than one hour.

However, things will be different – rather than staying at my favorite hotel on the Strip, we will be meeting in a VRBO I have secured for our time there. The planning meeting will take place at the rental unit with breakfast, lunch and dinner mixed in at the location. Our planning meeting will take on a second role as a “team building” meeting which may also include table tennis (or for the casual player, ping pong 😊); pool and outdoor grilling. Honestly, I am very excited about this trip and look forward to the responses I receive from everyone.

The New Indurante Website is Live!

Speaking of Las Vegas, our initial website for Indurante is now up and running! While it will remain a work in process as we continue to add features, we are heading in the right direction and the website will tie nicely to our software programming and database development. Please visit our Indurante website – www.indurantetax.com to learn more about our railcar expertise and our local employees.

Big things are on the horizon for Indurante and having our Swartz + Associates presence in Las Vegas will provide an avenue for those with locally assessed commercial/industrial properties to now have representation for property tax appeals. Taxpayers in Nevada, and particularly Clark County, will have options for our local office to review and analyze business personal property and real estate assessments. This is very rewarding for me and I believe we can have an immediate impact assisting owners of commercial/industrial properties.

Thank you for your continued interest in our companies – As always, please reach out to me with any questions or comments.  dswartz@swartzaai.com    OR    dswartz@indurantetax.com