Property Tax and Valuation Topics - Winter 2019

by Pullman & Comley, LLC

March 12, 2019

In this Winter 2019 Issue:

  • Proposed casino’s and actual tornado’s impact on property value reviewed
  • Big box success story in the internet age
  • The risk of “hybrid” appraisals
  • Impact of Wayfair case discussed
  • Perspective on GE’s departure
  • Hotel owner assessment discrimination claim rejected
  • “Inequitable” New York City property tax system challenged
  • View from the Bench – Practical tips for Property Tax and Valuation Practitioners
  • 2018 ABA Property Tax Deskbook

In an ad valorem appeal of the value of an office/retail building and its associated parking lot in Springfield, the Massachusetts Appellate Tax Board (ATB) addressed the property owner’s contention that a proposal to establish an MGM casino in that community had a negative effect on value as a result of preconstruction activities. The owner also asserted that MGM’s map of the proposed development released to the media “mistakenly portrayed the subject properties as within the casino development . . . and thus slated for demolition.” The owner maintained that it was unable to rent the property because potential tenants assumed that it was going to be demolished.

The owner could not overcome a critical problem: on the relevant valuation date of January 1, 2014, the casino was still on the drawing boards. In fact, construction did not commence, there were no road closures in the area and the allegedly toxic map showing that its sites were slated for demolition may have well been released after the relevant date of value.

There was also an interesting highest and best use (HBU) component of the ATB’s decision. The property had been damaged by a tornado (however so rare that may be in Massachusetts!) in 2011 and as of the January 1, 2014 valuation date, the property still had not been completely repaired. Testimony from the City’s expert was that the HBU of the property was no longer an improved parcel and associated parking but rather vacant land to be held for future development. This was the final blow to the owner’s case.

Your editors are not aware of any litigation in which a tornado improved the value of a property involved in a tax appeal!

Briarwood 13, LLC v. Springfield, Massachusetts Appellate Tax Board, 2018 WL 5822598 (October 24, 2018)


Susan Berfield and Matthew Boyle wrote in the July 23 issue of Bloomberg Businessweek that Best Buy Stores has become “an improbable survivor” and is the last national electronic chain standing against the internet onslaught. Hubert Joly, who took over the company in 2012 without any retail experience, has repositioned the company’s business model from getting people into its stores to getting its people in customers’ homes where they can do their Geek Squad repairs, installations and personally market new products. Best Buy now leverages its hundreds of stores as showcases – not showrooms – with the brands it sells including products manufactured by Apple and Amazon. Many other changes were also instituted. The bottom line here is that dynamic and creative management appears to have a fighting chance to succeed in a bricks and mortar environment against internet giants. The degree to which this progress will impact retail property values, of course, remains to be seen.

Peter T. Cristensen writes in the Q3 2018 issue of Valuation, a publication of the Appraisal Institute, that liability risks may lie below the surface of hybrid appraisal reports. What is a hybrid? Mr. Cristensen defines it as a report in which an appraiser does not inspect the property and rather “provide(s) an opinion of value utilizing a third-party property condition inspection.” One way the author suggests to minimize liability concerns is to include disclaimer language in the appraisal in which the intended user is told that “the appraiser has no liability or other responsibility for any matter relating to the condition of the property or other matters reported by any third party.”


In our Fall 2018 edition, we alerted readers to the U.S. Supreme Court’s decision in the Wayfair case which eliminated the exemption hitherto available to an online retailer selling merchandise into a state in which it does not have a physical presence. The Wayfair decision promises significant sale tax receipts to states starved for revenue.  In fact, an online article in Governing magazine by Liz Farmer on November 21, 2018, estimates that new sales taxes available to states as a result of Wayfair range from $8 billion to $23 billion annually!

“The next month and a half,” Ms. Farmer writes, “will also be a crucial technological test of whether state websites can handle the increased traffic from sales tax collection reports.” However, at the same time, she notes that many states have not adopted legislation requiring sales tax collections by out of state sellers. For example, California, Florida, New York and Texas “have yet to enact a rule or law doing so.”

Not only would it seem that a lot of money is being left on the table by some of the country’s most populous states; it also appears far too early to be able to determine  Wayfair's impact on the retail real estate sector.

“We were all so upset when GE left the state,” said James Loree, CEO of Stanley Black & Decker, Inc. at a business function in Farmington, Connecticut on October 2. “It turned out they made a lot of bad decisions. That’s just one of them.” Loree offered.

At the same time, he decried Connecticut’s “precarious financial footing” citing astronomical debt and “unfunded liability issues” that “require moving off of the status quo and crafting constructive solutions.”

Stanley Black & Decker opened an advanced manufacturing training and research center in downtown Hartford in August. The move was intended to extend the company’s support of startups that research and develop 3D printing while also promoting Hartford as a place to do business.

“We could have put this center anywhere in the world, but we chose the unlikely option of locating it right here,” Loree said. “We felt strongly that one of the critical steps we can take as a company as part of our effort to help the state succeed was to pitch in.”

The owner of a Hartford hotel brought suit in the United States District Court against the City claiming assessment discrimination. It asserted that virtually every hotel in downtown Hartford enjoyed some sort of deferral or tax abatement deal except it, and as a result, its taxes were much higher than those of its competitors thereby inhibiting its ability to be profitable.

Without getting into the merits of the case, U.S. District Court Judge Robert N. Chatigny ruled that the hotel owner had an adequate remedy in Connecticut state courts and that the federal courts did not have jurisdiction.

While the District Court did not reach the merits of the hotelier’s claim, the issue the case raises is important. As more and more developers of new projects obtain tax and assessment breaks from cities before putting a shovel in the ground, existing properties developed years earlier are likely to suffer competitively. Whether there is a remedy for this problem in a Connecticut assessment lawsuit remains to be seen. At last check, the owner was not proceeding further with its claim.

50 Morgan Hospitality Group, LLC v. City of Hartford; US District Court, District of New Haven, Docket No. 3:16-CV-00788-RNC.


An association of New York City landlords called Tax Equity Now NY LLC (TENNY) filed an action in the New York Supreme (trial) Court against the City. TENNY’s members assert that New York City’s property tax system is grossly inequitable by virtue of huge assessment disparities between similar properties and by favoring condominiums and cooperatives. In part, TENNY argues that the assessment system violates New York constitutional provisions which require equalization of assessments for taxation as exemplified by the testimony of a New York City official before a legislative committee that “similar properties will face widely different tax burdens depending on where they are located in . . .the City.” TENNY also argues that depending on the use of the property and the legal form in which it is held, the City’s “tax system creates radically different tax treatment of equally valuable properties . . . .”

Equalization of assessments is an objective also imposed by statute on Connecticut municipal assessors; significant value differences between similar properties may afford affected owners legal relief, although the result of the TENNY lawsuit against the City should be awaited to determine its relevance, if any, to Connecticut law and practice.


Pullman's Property Tax and Valuation Department presented a webinar on October 25, 2018 entitled the “View from the Bench – Practical Tips for Property Tax and Valuation Practitioners.” What made this webinar special was that Pullman & Comley LLC partners and retired Superior Court Judges Robert L. Holzberg and Lynda B. Munro offered their insights as to effective participation in pretrial mediations when the value of property for ad valorem assessment or eminent domain purposes is on the table.

Additional information on Pullman & Comley's Alternative Dispute Resolution practice can be found here.

The Property Tax and Valuation Department of Pullman & Comley LLC is delighted to inform its readers that the Department has updated the American Bar Association’s Property Tax Deskbook’s 23rd Edition. Pullman & Comley has prepared the Connecticut Chapter of the Deskbook since the inception of this publication and is proud to be able to keep members of the Bar, clients and property tax professionals advised as to Connecticut law and tax practice. Additional information regarding The Property Tax Deskbook can be found here.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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