The CentrePointe block is empty of buildings, but officials say the land in downtown Lexington is much more valuable now than when buildings were there.
This year’s assessment is a hefty five times greater than last year’s.
“Prior to demolition, that entire block was on the tax rolls for slightly more than $4 million,” said David O’Neill, Property Valuation Administrator. With the tax rate right around 1 percent, that put the property taxes at around $40,000.
The new assessment puts a value on the land at $20 million, which raised the property taxes to $200,000 this year.
Approximately 75 percent of the parcels on the CentrePointe block are owned by businessman Joe Rosenberg or members of his family, according to the PVA’s office. The remainder are owned by CentrePointe LLC.
The owners are appealing the higher assessments.
The parcels that make up the block were assessed on the basis of recent sales, O’Neill said.
“Several of those parcels have sold over the course of the last two years and we reassessed it based on those sale prices,” he said.
The last property sold was Triple Crown Lounge (which used to be at 119 and 121 South Limestone) and Sam’s Hot Dog Stand (117 South Limestone). The parcels sold together for $1,505,000. That sale price worked out in excess of $800 a square foot.
The PVA’s office decided not to consider the Triple Crown Lounge and Sam’s Hot Dog sale price in placing a value on the block.
“It was a high price, a final holdout, so we threw that out,” O’Neill said.
For the next most recent parcels that sold — at 109 and 111 South Limestone — the price was $164,000 and $165,000 respectively. “Those were in excess of $300 per square foot,” O’Neill said. The PVA’s office typically assesses on sale price, but not always. “We do unless there are extenuating circumstances,” O’Neill said. By the time current assessments were completed, buildings on the CentrePointe block were demolished and the site readied for construction. “We reassessed it and used $300 per square foot as a starting point,” O’Neill said.
That figure was eventually lowered because of a lack of other sales in the area to back it up. “We thought it was a little high. It would have put the value of the land somewhere around $24 million,” he said.
“We lowered the assessment to $250 per square foot and applied that across all the property, the whole 80,000 square feet.”
O’Neill’s office took into account that this is a two-acre site, an entire city block of commercial land, ready for development, in the middle of the central business district. “It’s kind of a unique situation,” he said.
“As a sanity check, when we reviewed the proposed development costs published by CentrePointe LLC on their Web site, we believed they could have already spent $20 million of the overall cost of the project,” O’Neill said. “We got comfortable with the number we arrived at, which was $250 per square foot.”
O’Neill’s office mailed notices of new valuations to thousands of residential and commercial property owners on April 17. His staff assesses about one-fourth of the county’s properties each year.
Taxpayers may challenge the value the PVA has placed on their property. The period for challenging ends on Monday.
Rosenberg has met twice with the PVA, O’Neill said, to try to reach agreement on the assessed value. Those efforts were unsuccessful.
Rosenberg plans to appeal the reassessment, according to his lawyer John Brice. “I can’t tell you what we believe the value is since we haven’t finalized the documents,” Brice said. “But we believe it is less than the current reassessment.”
CentrePointe LLC has filed an appeal, saying it values the property it owns at $65.92 per square foot.
Calls to Woodford Webb, one of the CentrePointe developers, were not returned.
Appeals can be filed with the local tax board that begins meeting June 15. “They defend their declared value, and we will defend ours,” O’Neill said.
If parties are not satisfied with the local tax board’s decision, they can go to the state tax board.