Equalization commission reduces the value of two commercial properties
On the only day it was scheduled to meet this year, the Cole County Equalization Board voted to compromise on the values of two commercial properties whose assessments had been disputed for 2022.
Although 2022 is not a reassessment year, the council, which hears disputes from owners who believe their assessments are not fair, meets annually. Officials from the county clerk’s office, which schedules council hearings, said the vast majority of hearings were for commercial properties and very few residential owners requested a hearing.
Business owners who appealed on Monday included the owners of The Shoppes in Jefferson on Missouri Boulevard, which had housed Best Buy.
Sam Spiegel of Florida-based SAJ Associates, LLC asked the board to put the building’s value at $4.3 million because it had lost revenue since leaving Best Buy last fall . Spiegel said he assumed Best Buy would renew its lease, but that’s not the case. Planet Fitness is still a tenant in the building, which SAJ purchased in February 2008 for $9.2 million.
Spiegel said he was able to convince Big Lots to agree to take on the Best Buy portion of the building in early 2022; he said work began last month on changes that needed to be made to the building. Spiegel didn’t say when the store would open, but told the board it took a long time to bring Big Lots. He said they had to agree to give Big Lots 33 months rent free as part of the deal, which he thought would mean his business would lose $720,000 in rent.
Tom Butler of the appraiser’s office said he spoke with Spiegel and other company representatives and then lowered his appraised value from $5.9 million to $4.9 million. Butler said that by state law, the value of the building had to be reviewed based on the value of the land the building sits on in January 2021.
The Equalization Board is composed of: three Cole County commissioners; two representatives of the Jefferson City government staff if the property is within the city limits; and two general administrator positions, which require someone familiar with real estate, building construction, banking, or land titles trading.
Cole County Clerk Steve Korsmeyer chairs the council, but he and Assessor Chris Estes are not voting members.
For the SAJ property, Alan Mudd, board member at large, offered a valuation of $4.6 million to show that they support the investment that had to be made to bring the company into the community. The final vote was 4-3 in favor of Mudd and fellow board member David Nunn voting in favor with Presiding Commissioner Sam Bushman and Eastern District Commissioner Jeff Hoelscher. Western District Commissioner Harry Otto voted against, along with Jefferson City Administrator Steve Crowell and Jefferson City Chief Financial Officer Shiela Pearre.
Dick Otke, owner of Jefferson Street Commerce Park, also appealed to the Equalization Board, which asked the board to value the office building his family owns in the 900 block of Weathered Rock Road at $1.5 million dollars instead of the appraiser’s figure of $2.1. million.
Otke said he and his family appealed because they couldn’t find a tenant for the building. It was once the home of Wipro Infocrossing, but they left in late 2020 and moved to the former Sears wing of Capital Mall. He told the board the departure was due to the city allowing the mall’s owners, Farmer Holding Company, in July 2019 to use bonds to help attract businesses to fill the space in the shopping center.
The city council unanimously approved the proposal to authorize a local council to issue bonds.
This came after the Jefferson City Industrial Development Authority approved a resolution authorizing the issuance of a tax increase and district special bonds for the project. The Capital Mall Community Improvement District Board also approved the resolution. The five-member board is made up of four representatives from Capital Mall JC, the mall’s owners, and Pearre, the city’s chief financial officer.
Otke said of the resolution: “I was in favor of it because I thought they were talking about bringing in businesses from outside the community. I didn’t think they would be used for that. a business already there moves from place to place.”
The Weathered Rock Road property was purchased as vacant land in 1993 for $140,000. Otke said he appraised the property not too long ago at over $3 million, but has since continued to drop the value.
Butler said his assessment was based on state law that the value of the building had to be reviewed based on the value of the land the building sits on in January 2021. He said he sympathized with Otke and agreed that he was probably considering liquidation status for the building at this time.
Butler added that they take into account that there will be a certain time during which an office building will have vacancies or be vacant, because no office building will be fully occupied between the time of its opening and the time of its its demolition. However, they would not include a one and a half year period like what happened on the Otke property.
Mudd brought a motion to set the property’s value at just over $1.8 million. He, Nunn, Otto, Bushman and Hoelscher all voted in favor. Crowell and Pearre voted against.