It’s Not A Dark Store IPT’s 40th Annual Property Tax Symposium It’s Not A Dark Store Brett A....
Transcript of It’s Not A Dark Store IPT’s 40th Annual Property Tax Symposium It’s Not A Dark Store Brett A....
2016 IPT’s 40th Annual Property Tax Symposium
It’s Not A Dark Store
Brett A. Harrington, CMI President
International Appraisal Company Upper Saddle River, NJ
John M. Schindler, CMI
Senior Manager Real Estate Tax Target Corporation
Minneapolis, MN [email protected]
Institute for Professionals in Taxation® 40th Annual Property Tax Symposium
Tucson, Arizona
Lou Newman, MRICS
Senior Manager Walmart Stores Bentonville, AR
Mark S. Hutcheson, CMI Partner
Popp Hutcheson, PLLC Austin TX
2016 IPT’s 40th Annual Property Tax Symposium
The BIG, Big Box Study
Brett A. Harrington, CMI President
International Appraisal Company Upper Saddle River, NJ
Institute for Professionals in Taxation® 40th Annual Property Tax Symposium
Tucson, Arizona
2016 IPT’s 40th Annual Property Tax Symposium
THE BIG, BIG BOX STUDY
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OVER 200 SALES ANALYZED
FEE SIMPLE V. LEASED FEE SUBSEQUENT USE
DEED RESTRICTIONS
2016 IPT’s 40th Annual Property Tax Symposium
THE DATASET
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$0.00
$50.00
$100.00
$150.00
$200.00
$250.00
$300.00
$350.00
$400.00
Jan-11 May-12 Sep-13 Feb-15 Jun-16
Leased Fee Fee Simple Linear (Leased Fee) Linear (Fee Simple)
2016 IPT’s 40th Annual Property Tax Symposium
LEASED FEE V. FEE SIMPLE
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$0.00$30.00$60.00$90.00
$120.00$150.00$180.00$210.00$240.00$270.00$300.00$330.00$360.00
Leased Fee Fee Simple
2016 IPT’s 40th Annual Property Tax Symposium
FEE SIMPLE SALES
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$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
Jan-11 Feb-12 Mar-13 Apr-14 May-15 Jun-16
MEDIAN PRICE: $26.08
AVERAGE SALE PRICE: $27.73
2016 IPT’s 40th Annual Property Tax Symposium
SALES BY CATEGORY
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$27.13
$28.60
$27.82
$28.22
$26.00 $26.50 $27.00 $27.50 $28.00 $28.50 $29.00
Big Box
Alternative
Multi-Tenant
Vacant
2016 IPT’s 40th Annual Property Tax Symposium
SALES BY CATEGORY
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Category # of Sales Average Sale Price
Big Box to Big Box 49 $27.13
Conversion to Multi-Tenant 19 $27.82
Conversion to Alternative Use 27 $28.60
Vacant 11 $28.22
VARIANCE AMONGST SUB-CATEGORIES: $1.47 (5%)
LARGEST VARIANCE FROM COMPLETE CATEGORY: $.087 (3%)
2016 IPT’s 40th Annual Property Tax Symposium
DEED RESTRICTED SALES
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$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
Jan-11 May-12 Sep-13 Feb-15 Jun-16
MEDIAN SALE PRICE: $25.17
AVERAGE SALE PRICE: $26.22
2016 IPT’s 40th Annual Property Tax Symposium
UNRESTRICTED SALES
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$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
Jan-11 May-12 Sep-13 Feb-15 Jun-16
MEDIAN SALE PRICE: $28.38
AVERAGE SALE PRICE: $28.84
2016 IPT’s 40th Annual Property Tax Symposium
RANDOM SAMPLE SIMULATION
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5000 SAMPLES OF 20 RANDOM SALES
AVERAGE SALE PRICE: $27.76
2016 IPT’s 40th Annual Property Tax Symposium
LEASED FEE SALES
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$40.00$60.00$80.00
$100.00$120.00$140.00$160.00$180.00$200.00$220.00$240.00$260.00$280.00$300.00$320.00$340.00$360.00$380.00
Jan-11 May-12 Sep-13 Feb-15 Jun-16
MEDIAN SALE PRICE: $104.58
AVERAGE SALE PRICE: $127.03
2016 IPT’s 40th Annual Property Tax Symposium
SUMMARY TABLE
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SALE TYPE AVERAGE SALE PRICE
FEE SIMPLE $27.73
RESTRICTED $26.22
UNRESTRICTED $28.84
LEASED FEE $127.03
2016 IPT’s 40th Annual Property Tax Symposium
Income Approach Pro’s and Con’s
John M. Schindler, CMI Senior Manager Real Estate Tax
Target Corporation Minneapolis, MN
Institute for Professionals in Taxation® 40th Annual Property Tax Symposium
Tucson, Arizona
2016 IPT’s 40th Annual Property Tax Symposium
Income Approach
Pro’s
and
Con’s
Institute for Professionals in Taxation® 40th Annual Property Tax Symposium
Tucson, Arizona
2016 IPT’s 40th Annual Property Tax Symposium
Income Approach Pro’s
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• It is not the Cost Approach
• Reflects actions of Market Participants
• Economic Cycles
2016 IPT’s 40th Annual Property Tax Symposium
Income Approach Con’s
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• Lack of Data
• Target, Walmart, Home Depot, Lowe’s, Costco are Owner/Operators • ~ 15% of locations are leased (many are ground leases)
• Quality of Data
• Build to suit leases (versus market lease)
• Investment Value versus Real Estate Value (cap rates)
2016 IPT’s 40th Annual Property Tax Symposium
Assessment Community’s Positions
Lou Newman, MRICS Senior Manager
Walmart Stores Bentonville, AR
Louis.Newman@walmart .com
Institute for Professionals in Taxation® 40th Annual Property Tax Symposium
Tucson, Arizona
2016 IPT’s 40th Annual Property Tax Symposium
IAAO Update
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Special Committee on Intangibles
• Completed Research
• Draft Report to the Executive Board
• Presentation at Annual Education Conference
• Exposure for Member Comment
• Member Comments Reviewed by Executive Board
• Adopted by Board as Official Position of IAAO
2016 IPT’s 40th Annual Property Tax Symposium
IAAO Update
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Special Committee on Big Box Valuation
• Research in Progress
• Status Updates to Executive Board
Pending • Draft Report to Executive Board
• Exposure for Member Comment
• Member Comments Reviewed by Executive Board
• Board to Vote to Adopt as Official Position of IAAO
2016 IPT’s 40th Annual Property Tax Symposium
Assessment Community’s Positions
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• Branding by Public Sector
• Value to a Particular User = Value in Exchange
• Market, Insurance, Federal Reporting Values
• Trends in Building Size
• Internet Sales
• Obsolescence
• Closed Stores Not Comparable to Open Stores
2016 IPT’s 40th Annual Property Tax Symposium
Assessment Community’s Positions
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• Deed Restrictions
• Assumption of Demand
• Highest and Best Use
• Market Segmentation
• Buyer Motivations
• Net Lease Sales
• Sale-Leasebacks
2016 IPT’s 40th Annual Property Tax Symposium
What’s Next
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• More Litigation • Formal Position on Big Box Valuation by IAAO • Implementation of Market Segmentation
• Prescriptive Legislation
• Branding by Private Sector
2016 IPT’s 40th Annual Property Tax Symposium
Selected Cases
Mark S. Hutcheson, CMI Partner
Popp Hutcheson, PLLC Austin, TX
Institute for Professionals in Taxation® 40th Annual Property Tax Symposium
Tucson, Arizona
2016 IPT’s 40th Annual Property Tax Symposium
Indiana
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• Stinson v. Trimas Fasterners, 923 N.E. 496, 498-99, Ind. Tax Ct. (2010)
• Meijer Stores, L.P., et al. v. Wayne County, 926 N.E.2d 1134, 1137, Ind. Tax Ct. (2010)
• Meijer Stores, L.P. v. Marion County Pet. Nos. 44-440-02-1-4-00573, et al., Ind. Bd. Of Tax Review (Dec. 1, 2014)
• Kohl’s Indiana L.P. v. Howard County, Pet. Nos. 34-002-10-1-4- 00350, et. al., Ind. Bd. of Tax Review (Dec. 31, 2014) • Howard County Assessor v. Kohl’s Indiana L.P., Cause No. 49T10-1502-TA-00004, Ind. Tax Court (Sept. 7, 2016)
2016 IPT’s 40th Annual Property Tax Symposium
Iowa
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• Soifer v. Floyd Cty. Bd. Of Review, 759 N.W.2d 775 (Iowa 2009) • Hy-Vee Food Stores, Inc., et. al., v. Carrol Cty. Bd. Of Rev., Case File
Nos. 3-546/12-1526, 2013 Iowa App., Lexis 1074 (Iowa Ct. App. Oct. 2, 2013)
• Hy-Vee, Inc. v. Dallas Cty. Bd. Of Rev., Case File No. 13-1377, 2014 Iowa App., Lexis 960 (Iowa Ct. App. Oct 1, 2014)
2016 IPT’s 40th Annual Property Tax Symposium
Kansas
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• In Re Prieb Properties, LLC, 275 P.3d 56 (Kansas Ct. of Appeals, March 16, 2012)
2016 IPT’s 40th Annual Property Tax Symposium
Michigan
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• Target Corp. v. City of Novi, Docket No. 345523 Michigan Tax Tribunal (September 23, 2010)
• Target Corp. v. City of Auburn Hills, Docket No. 361955 Michigan Tax Tribunal (April 24, 2012)
• Ikea Property Inc. v. Township of Canton, Docket No. 366639 (Michigan Tax Tribunal (July 18, 2012) • Kohl’s Department Stores, Inc. v. Township of Kochville, Docket No.
369840, Michigan Tax Tribunal (Feb. 22, 2013) • Kohl’s Department Stores, Inc. v. Township of Frenchtown, Docket
No. 369836, Michigan Tax Tribunal (Feb. 22, 2013)
2016 IPT’s 40th Annual Property Tax Symposium
Michigan
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• Lowe’s Home Centers, Inc. v. Township of Grandville, Docket No. 414842, Michigan Tax Tribunal (Aug.15, 2013)
• Lowe’s Home Centers, Inc. v. Township of Marquette AND Home
Depot, USA, Inc. v. Township of Breitung, Docket Nos. 314111 and 314301 (Mich. Ct. App. April 22, 2014)
• Lowe’s Home Centers, Inc. v. City of Grandville, Docket No. 317986, (Michigan Ct. App., Dec. 30, 2014)
• Menard, Inc. v. City of Escanaba, Docket No.325718, (Michigan Ct. App., May 26, 2016)
2016 IPT’s 40th Annual Property Tax Symposium
New York
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• In the Matter of Home Depot U.S.A., Inc. v. Assessor of Town Queensbury, 15 N.Y.S. 3d 364 (N.Y. Supreme Court, Appellate Div., 3rd Judicial Dept., June 25, 2015)
• In the Matter of Rite Aid Corp. v. Haywood, 15 N.Y.S.3d 523 (N.Y.
Supreme Court, Appellate Div., 4th Judicial Dept., July 10, 2015)
• In the Matter of Rite Aid Corp. v. Huseby, 13 N.Y.3d 753 (N.Y. Supreme Court, Appellate Div., 4th Judicial Dept., July 10, 2015)
2016 IPT’s 40th Annual Property Tax Symposium
Wisconsin
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• Walgreens v. City of Madison, 311 Wis.2d 158 (Wis. 2008) • Bonstores Realty One, LLC v. City of Wauwatosa, 351 Wis.2d 439
(Wis. Ct. App. 2013)
• Target Corporation v. City of Racine, Case No. 10 CV 1963, (Racine County Circuit Court, Dec. 3, 2015)
2016 IPT’s 40th Annual Property Tax Symposium
It’s Not A Dark Store
Brett A. Harrington, CMI President
International Appraisal Company Upper Saddle River, NJ
John M. Schindler, CMI
Senior Manager Real Estate Tax Target Corporation
Minneapolis, MN [email protected]
Institute for Professionals in Taxation® 40th Annual Property Tax Symposium
Tucson, Arizona
Lou Newman, MRICS
Senior Manager Walmart Stores Bentonville, AR
Mark S. Hutcheson, CMI Partner
Popp Hutcheson, PLLC Austin TX