Juneau property owners have lost every commercial property assessment appeal heard so far

The view of South Franklin Street from aboard a cruise ship on June 20, 2011. (Creative Commons photo by Jasperado) https://media.ktoo.org/wp-content/uploads/2021/11/18ASSESSMENTS-NPR-One. mp3

Volunteer panels in Juneau heard calls for 68 commercial property reviews this year. So far, the property owners have lost in any case. Another 111 cases have not been clarified.

The dispute mainly revolves around whether the city appraiser was legally entitled to add 50% to the Juneau commercial property earlier this year. These values ​​have a direct impact on property tax bills and the balance of who pays for city services. Many of the property owners are determined to take the dispute to court.

A Juneau attorney named Robert Spitzfaden represents many of the commercial property owners contesting the rise in their property values. He was very frustrated with the process, especially with the deadlines that the city’s appeal bodies set for each hearing.

At a hearing on October 21, a member of the panel tried to move the process forward when Spitzfaden ran out of time and Spitzfaden protested.

“That is a constitutional question! They interrupt us before we can give our full testimony, as you can clearly see, ”said Spitzfaden.

Many of Spitzfaden’s objections are specific to the nudes; in the future he will speak to a judge who will deal with the next appeal in a regional court.

At least twice during the trial, Spitzfaden went out of his way to insult the panels by calling them “a kangaroo dish”. He is essentially saying that these hearings are for show only and are impossible for him to win.

In at least one case, the appeal went particularly badly for him. An internal review revealed an error in the assessment. After it was fixed, Spitzfaden’s client owed nearly $ 18,000 more in taxes on that property this year than if he hadn’t appealed at all.

Part of Spitzfaden’s frustration is that the panels tell him that he has not produced enough evidence. His approach to these quasi-judicial hearings consists of interviewing experts, criticizing the staff at the appraisal office, and searching for “deadly” moments with questions relating to hundreds of pages of documentation. He said he did not have enough time to answer his questions to get this evidence.

In some hearings, lay owners who submitted their own appeals appeared to be more successful with hesitant, factual explanations of why they felt their properties were overvalued. At least one complainant was able to convince one of three panelists who heard his case to vote for him. The exchange of otherwise private real estate or business records and the highlighting of obvious differences between comparable properties in the vicinity seem to go down better with the panel members.

The city’s finance director, Jeff Rogers, has watched many appeal hearings that can last several hours each night.

“My big takeaway from the hearings is that the public does not have a good understanding of how a government evaluation process works,” said Rogers.

It is precisely this process that Spitzfaden wants to challenge. He would like to argue that the appraiser’s methodology, which led to the mass increase in commercial property values, was fundamentally flawed.

Prior to this, Spitzfaden and city officials discussed the possibility of holding some sort of group hearing for this argument. The city’s lawyers eventually ruled that this was inconsistent with city laws and that it would be unfair to other complainants to go through the regular process.

Rogers said it would create practical problems as well. The city’s appeal bodies are a subset of volunteers in what city and state law call an equalization committee.

“It’s technically complicated under the law,” said Rogers. “The BOE is therefore obliged to submit a decision and findings for each individually contested package. So the question for us on a mechanical basis was actually, if we had a consolidated hearing, how would the Compensation Committee decide with the findings on each individual package? “

Likewise, a group hearing would have messed up potential appeals to state courts.

City officials claim the appraiser’s methodology is solid, meets state and professional standards, and is backed by decades of Alaskan jurisprudence.

PeggyAnn McConnochie is a real estate professional and one of Spitzfaden’s first clients to lose a calling for a commercial property she owned last month. She is also a kind of spokeswoman for the community of owners, which Spitzfaden represents.

Property owners who lose these city-level cases have 30 days to appeal to the state court. Nobody had until Thursday. McConnochie’s deadline is imminent. She said, “Hell yes,” she’s going to court.

“There is no way I will allow the Compromise Committee to limit the complainant’s ability to come up with a sensible, deliberate case,” she said.

McConnochie’s additional taxes from this year’s tax hike could easily be dwarfed by legal fees.

“It is not the short term that we are looking at. It’s long term, ”she said.

City officials say this year’s increase in commercial property values ​​is the first step in correcting the years of “neglect” in commercial property values ​​in Juneau. In the next year, the appraisal office wants to catch up on values ​​for buildings and other improvements. For most commercial real estate, neither had changed in a decade or more.

However, the values ​​of other properties have risen during this time. Rogers said that this means, for example, that homeowners have paid more than their fair share of city taxes.

“I’m pissed off,” McConnochie said. “How many of us. It won’t be just a year-long struggle. It’s going to be a fight we’ll fight for two or three years. “

There is already an opportunity to complain to the state appraiser about the local appraiser’s procedure. This office has received no complaints about Juneau’s assessments this year.

Rogers said if all landowners hold appeal hearings on the unresolved cases, he expects the compensation committee to last through February. Some cases, 31 so far, are being resolved without a hearing.

Disclosure: Reporter Jeremy Hsieh worked for PeggyAnn McConnochie’s company in the summer of 2012.