Solution

Our presentation to the PTAB documented the property’s fair market value. Evidence was presented showing the market value using comparable sales and showing lack of uniformity in assessments by analyzing the assessments of similar office-research-industrial facilities in comparison with the assessment on the client’s property.

Our presentation to the PTAB also responded to the county’s argument that the $18 million sales price should be used as the basis for determining the property’s fair market value for property tax purposes. Evidence was presented documenting that the purpose of the lease/financing plan was to generate additional cash to pay down debt and that the effect of the transaction was to provide the client with additional capital flexibility.

 

Result

A valuation for assessment purposes representing the market value as presented on behalf of the client of $10 million. Relative to the sale-leaseback, the PTAB agreed that the transaction should be viewed as a financing arrangement and not as a $18 million sale transaction indicative of value for property tax purposes. Instead of an increase due to the sale-leaseback transaction, the client instead achieved a 33% reduction in assessment and property taxes from the $15.5 million market value as previously applied by the taxing authorities to the property.

 

For more information on sale/lease transactions contact James Regan