Archive for category: General Information

We recently celebrated Father’s Day weekend and Juneteenth! I feel like Jimmy Kimmel and Steven Colbert as I write yet another blog from my home. The more things change, the more things remain the same……

Celebrating our 6th Anniversary

We celebrated the 6^th anniversary of Swartz + Associates, Inc. on June 1^st without much (in fact, without any) fanfare. Just another day of dealing with frustrating circumstances. Hearings held virtually or via telephone only; little interaction with respective appraisers’ offices; almost no interaction with county Boards and worrying about our clients and their abilities to remain upbeat and run functioning businesses.

There are some positive things occurring as well. In the past week, we have been working with Jackson County on our outstanding commercial real estate appeals. While we still have many properties to discuss, we were able to discuss and resolve 10 properties. At this rate, it will take quite a while to complete the 2019 hearings, but we know the county is working with us to resolve outstanding appeals and remain cautiously optimistic the number of cases to be reviewed by the county will only increase.

Another positive is the comfort level our staff has felt in working remotely. While the office is technically open, I have encouraged everyone to work in an environment that best suits their needs. If they want to come into the office, it is available to them (minus the break room).  This has worked out well as a few of us come in a few hours each week. This past Thursday, we had 4 in the office at the same time and it was nice to have some work oriented interactions.

Conversely, working remotely has not slowed us down at all and I believe has helped in our efficiency. As a group, we are meeting off site next week to discuss the past 3 months and making plans for the rest of the year. What will work look like? What is the importance of being in the office? Are we taking care of our clients? How will proper social distancing affect our abilities to have an “off site” half day meeting? These are issues l look forward to discussing with our group and receiving their input.

On the Las Vegas front, Indurante & Associates continues to charge along.

We recently completed the majority of 2020 property tax filings and now are reviewing assessment notices to ensure accuracy and correct methodology. We will be filing obsolescence appeals in those states which allow this argument and we recently discovered a calculation error by a State which assesses property tax on railcars. Alerting the State of this error caused the State to reissue assessment notices for all taxpayers (regardless of whether they were our clients), creating a combined tax savings of well over $500,000.

We did this at no extra charge to our clients, further cementing our reputation as the leading provider of railcar property tax services in the country. I will be talking more about this in a future post and announcement. I am very proud of our group, and would like to recognize Mark Phillips, senior analyst, for discovering the error and working with the state to make the corrections, ultimately benefiting all taxpayers.

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

One month has passed since I last posted my blog. To say these last 31 days have been interesting, would not do justice to any sort of definition of “interesting”. Unique, unprecedented, unparalleled…. All terms researched that could easily take its place.

I know this has dominated the airwaves and it’s hard to focus on anything else. How does a company effectively continue to operate while living in a new world of social distancing? I believe we are all learning as we go; trial and error with a healthy dose of common sense as our guide.

Virtual Roundtable

Today, I participated in virtual roundtable discussion sponsored by the Greater Kansas City Chamber of Commerce.  This one hour conference via Zoom, consisted of 68 small business owners (or high level decision makers within their respective companies).

The concept was to share ideas and concerns with other businesses in the community having the similar issues; relief funding, PPP applications, working with your banker; employee morale and many others. The idea was to share challenges and what employers are doing to overcome them as well as offering successes and ways to encourage employees to get away from the “groundhog day” concept, which many are falling victim and can easily become a pattern to slip into day after day. Conversation was lively and the “chat room” was filled with questions and suggestions for us to implement.

Zoom is a fascinating tool I am using on a regular basis.

While I had heard of this before the pandemic, it was something I would “look into” when I had the time to research. Well, things can change in an instant, and I am a believer now. The ability to see and communicate with each employee is much more powerful than a phone call.  Weekly meetings with the Kansas City office on Mondays and the Las Vegas office on Thursdays has provided much needed energy.

Additionally, it allows each of us to see the emotional aspect of working remotely, where a phone call may not.

I have been a user of Zoom for both business and social aspects and the results have been extremely positive for my personal well-being. Seeing your employees maintaining a positive outlook while working from their personal residences is a very powerful picture for an owner. Connecting with clients and friends for a virtual lunch, dinner or “happy hour” is equally important for my social well being and I plan to have several more in the upcoming weeks.

Many of our clients are hurting right now and these next several months will be very challenging for them. My goal is to stay connected not only on a professional level, but a personal level, if warranted. We should not feel we are simply property tax consultants but we are friends with, and in many cases, long histories of working together. We know each other’s stories and celebrate successes. I want my clients to know we are still there for them, looking out for their bests interests while remaining compassionate. This is where relationships are cemented and we plan to be here, assisting where and when possible.

Stay Strong and stay healthy.

Last week, there was an article I read (as well as several others) concerning the repurposing of empty retail box stores. In particular, the conversation turned to the aspect of shopping center owners such as Simon Properties, General Growth and Macerich acquiring some of these vacant stores. The reasoning behind these acquisitions is to create an alternative use in order to keep foot traffic at the mall, thereby supporting the other in-line retail stores. The repurposing of the stores is varied, but it appears the recent trend is to design shared office space.

This article also mentions an estimated 200 million square feet of retail space that has closed or anticipates closing since the beginning of 2017. Some of these retail stores have been closed for up to 4 years. It will be extremely interesting to see what happens to the 150+ planned Macy’s store closings based on last week’s announcements.

Potential Impact

This may have a significant impact in the property tax world as assessors and appraisers struggle to determine the fair market value of these types of properties.

Do appraisers look at the sales of vacant retail properties to determine the value? Or should they look at the current use of the property? This argument has been building in several states over the past few years. In Kansas, it is likely this argument will be decided by the Kansas Supreme Court, possibly in the 2020 calendar year.

Mall owners are finding they must continue to come up with ways to support their malls as they cannot afford to have anchor tenants sitting vacant. It’s worth the potentially hundreds of thousands of dollars in improvements and reconfigurations in order to maintain mall traffic.

How does this affect the value of a property?  That’s the $64,000 question (or more likely the $300,000 question!)

Johnson County Commercial Values Issued

Speaking of Kansas, Johnson County issued their commercial values to taxpayers last week with an appeal deadline of March 11^th. Residential notices will be issued before March 1^st and taxpayers will have until the end of March to file appeals if they are unhappy with the valuation placed upon their residence.

As I’ve included in previous years, the deadlines in the surrounding states which occur in the upcoming months are listed below:

Kansas – Personal Property: March 15 | Real Estate: March 11 – (commercial) Johnson County
March 31 – remaining KS Counties

Missouri – Personal Property: March 1 | Real Estate: 3^rd Monday in June

Oklahoma – Personal Property: March 15 | Real Estate: Generally in June

Iowa – Personal Property: Not applicable – Exempt | Real Estate: April 30

Colorado – Personal Property: April 15 – Real Estate: May 31

Nebraska – Personal Property: May 1 | Real Estate: June 30

Arkansas – Personal Property: May 1 | Real Estate: Varies

Even though this is an “off year” in Missouri, Colorado and Iowa, appeals can still be filed based upon a valuation date of January 1, 2019. For those taxpayers in Jackson County who did not file appeals on the property, but were hit with the significant valuation increases, the opportunity exists to attempt relief for the 2020 tax year. (I will discuss Jackson County more in the April and May blogs.)

As always, if you have any questions surrounding your property valuations, please do not hesitate to reach out to me or any of the staff at Swartz + Associates. Now entering our 34^th year in property tax valuation reviews (personal property, residential and commercial), we have the knowledge and relationships to professionally handle your needs anywhere in the country.

Please visit our website www.swartzandassociates.com to learn more about our experience and results.

As we bid good-bye to 2019, I wanted to identify a few of the major events of the year and goals for the 2020 year.

Jackson County, MO Reassessment

This year, taxpayers saw valuations on their residential and commercial real estate values increase between 20% and 400%. Truly amazing as the county received over 25,000 protests to their increased valuations. Currently, we have only heard a handful of appeals (mostly residential) and have hundreds of commercial appeals awaiting hearings before the Board of Equalization.

It is estimated the hearings will take place sometime between January and June of 2020. Taxpayers who are granted any reductions in value achieved after December 31, 2019 will receive a refund of their taxes based upon the reduced amount. Additionally, if you missed the opportunity to appeal your valuation in 2019, you may appeal the 2020 valuation in the spring of 2020.  We will keep everyone updated as hearings progress.

Sale – Leaseback transactions

Many of the properties we review for commercial real estate are situations where we represent the lessee of a property where they are the sole tenant. We have found the counties are extremely interested in the long term leases in place without regard to the credit worthiness of the tenant. Outside investors are interested in the “name” of the tenant fulfilling the lease and the rate of return an investor receives varies based upon the tenant in place.

Most states assess real estate as “fee simple” (market rates) and not “leased fee” or the lease currently in place. This creates the potential for properties being over stated by the counties as the lease reviewed is more than a value of the real estate but reflects a valuation associated with the business currently leasing the property.  This continues to be a major point of contention in several states and we have many appeals outstanding where this is an issue.

Valuation of Corporate Headquarters

We continue to represent properties which are owner occupied and are considered to be corporate headquarters for companies. In many situations, the taxpayer has either constructed new headquarters or remodeled/refurbished existing property for the benefit of their employees. The increase in open space; a movement away from “traditional” office space, where individual offices and doors are no longer necessary; shared space among employees and art designs within a building are creating potential issues of functional obsolescence in older buildings and higher replacement cost calculations which do not necessarily equate to higher market values.

Additionally, we have clients that have relocated corporate headquarters to a new jurisdiction, leaving the former HQ vacant (or having minimal employees are the old location) and difficulty selling the property or leasing the space to another business due to issues described above. We are awaiting decisions from State Court in multiple states on these issues and anticipate the appeals will not be resolved until 2020 or 2021.

And most importantly – THANK YOU!

As I continue recover from the accident earlier this summer, I cannot thank you enough for the continued love and support received from family, friends, clients and especially, my staff.

This has been the most challenging year of my professional life and in many ways, the most successful. Success is truly not measured only by monetary gain. The ability to keep both companies running throughout the second half of the year is a complete credit to the staff that make things happen. This is how I choose to measure success and will continue to guide me as we move forward in 2020. I thank you for your patience and understanding. Physically, I am almost back to the level of pre-accident activity and mentally, I am prepared for all challenges in front of us.

Happy Holidays to all and I look forward to being there for you next year and beyond!

Over the past two weeks I have implemented planning meetings for both companies; Indurante & Associates and Swartz + Associates. Each meeting was a full day and, in both situations, we went “off campus”, leaving the usual work place for a different environment. Away from the company phones, away from the usual distractions and an opportunity to clear the mind.

I believe both meetings were very successful as the dialogue from all employees was pointed, thoughtful and most importantly, respectful.

Technology and Branding were the major take aways from both meetings.

Swartz + Associates

As we are well into our 5^th year at Swartz + Associates, questions circled around the fact that although successful, are we now content? Where do we want to go from here? We have been very focused on maintaining our client base from the purchase 5 years ago, but now it is time to spread our wings and show other companies of our success. Success not only monetarily, but success in the types of appeals we are securing.

It is time to promote our successes to others and let taxpayers know we are able to handle their property tax valuation review, regardless of the type of property.

Indurante & Associates

On the Indurante side, we are already recognized as the leader in railcar industry in the preparation, review and filing of property tax statements to the respective jurisdictions. The question of this group centered around the use of technology.

How can we take advantage of technology to assist not only us, but our clients? Website, Indurante owned software and database development are extremely important to our future and we are investing significant time and resources to ensure this occurs during the 2020 tax season and beyond. Once in place, these powerful tools will allow us to have even more interaction with our clients and ease the transfer of information.

The opportunity for the two companies to work together is very exciting.

While the companies focus on different areas of the property tax arena, they are very complimentary. Companies who own railcars, undoubtedly have ownership interests in commercial/industrial real estate as well as machinery and equipment. The key is to now educate Indurante employees about Swartz products and how Swartz reviews assessments. Likewise, Swartz employees are learning what it looks like to handle several thousand property tax annual filings and the payment of thousands of annual tax bills on behalf of Indurante’s clients.

It is truly an exciting time for both companies, and I’m looking forward to sharing our results with everyone.

As always, if you need answers regarding your property tax assessments, please reach out and contact me with any questions.  If railcars are your thing, we can help out there as well!