The city of Providence can’t take the ouch out of revaluations, but they at
least want to give property owners confidence in the process.
The 2003 revaluations, part of a state mandate to assess property values every three years, has been ongoing. And unlike the last round, city officials said it includes more communication and oversight of the process.
Observers in the business world are watching closely following the 2000 revaluations, which led to about 1,500 appeals and an outcry from residential and commercial property owners.
Rhode Island's Market Has Changed. Developers, Builders, Investors and Sellers Must Change With It.
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Added measures in the 2003 revaluation of the city’s nearly 44,000 parcels will hopefully close the value gap, said Daniel Baudouin, executive director of the Providence Foundation.
“It’s critical that the assessments reflect the accurate market value,” he said. “If it doesn’t, the economics of operating commercial property in the city, and economic development in general, suffers.”
City officials say this revaluation cycle will be based on national standards and special attention will be paid to communication with taxpayers. Also, a three-pronged monitoring process is in place to serve as a checks and balance system.
“We want the process to be as fair and accurate as possible, as open and transparent as possible,” said John C. Simmons, the city’s chief of administration. “This is the way it should be.”
The Cole-Layer-Trumble Co., the Dayton, Ohio-based firm used during the 2000 revaluations, is already in the field doing much of the assessing work. A set of initial valuations based on market values as of Dec. 31, 2003, will be in the mail to property owners by the end of February. At that time, informal challenges to the figure may be initiated.
Unlike in the 2000 revaluations, Simmons said, officials intend to respond to informal challenges in a timely manner, whether the values change or not.
He added that communication has been improved in the process; this includes two requests for input from businesses about income and expenses – including rent, vacancies and upkeep – incurred on their property. This has helped in determining the true value of the property, said James G. Hagan, president of the Greater Providence Chamber of Commerce.
The city said the response has been lower than in the 2000 revaluation.
A list of the initial set of revaluations will be placed on the city’s Web site and will be made available by hard copy. Also community meetings have been ongoing, as the city has been providing information about the revaluations.
The 2003 revaluation process includes a three-pronged monitoring system. Representatives from the International Association of Assessing Officers, the organization that established the revaluation standards internationally, will examine the process and procedures used by Cole-Layer-Trumble. They will also review the results. A set of assessors from Pawtucket, Newport and the state will review the work done by the Dayton consultants to make sure the results mesh with the market environment in Rhode Island.
The fee appraisal firm Andolfo Appraisal Associates Inc. of Providence will do the next level of monitoring.
“It’s very important that people have confidence in the revaluations,” said the city’s acting Assessor John Gelati. “A lot of people thought the last revaluation was not fair.”
Simmons added that property values in the city have increased as a result of low interest rates and a high demand for housing. He notes a National Association of Realtors report that said Providence was among the fastest-growing real estate markets in the nation. This fact doesn’t mean commercial buildings are fetching higher prices on the market.
“The value of a building is only what it will sell for,” Hagan said.
The Chamber recently settled an appeal of its property assessment. The 30 Exchange Terrance property was purchased for $2.8 million but was appraised at $5.1 million by the city. Hagan has since appealed and worked with the city to whittle the assessment to $3.5 million, which he says is still too much.
Joseph Paolino Jr., owner and partner of Providence-based real estate company Paolino Properties and former Providence mayor, said he expects the revaluations to go down.
“They have to come down. There’s no doubt about it,” he said. “Providence hasn’t been the real estate panacea people thought it would be. There hasn’t been anything new downtown in the past 10 years.”
The 2000 revaluation, however, put more stock into the worth of downtown, a notion that didn’t pan out. Paolino cites the “Superman” building as an example.
Among the three Fleet properties sold recently, the former Industrial National Bank building at 111 Westminster St. fetched $21.3 million from a Chicago investment firm. The city assessed the building at $38 million.
He added that the development picture downtown has been slim, with the exception of university and college expansions as well as hospital developments.
“I think the more students we have downtown the better off we will be,” said Paolino. He said he also recognizes recent developments in the housing industry and efforts to bring GTECH to the city, although he hasn’t seen “any shovels hit the ground yet.”
Paolino Properties has a couple of court cases pending on buildings owned by his company, Paolino said.
Baudouin said his organization has worked with the city to help assure the revaluations are in line with a building’s market value. Baudouin added that he thinks the city is much more prepared than it was in the last round.
He said he was also impressed by the tax assessor’s ability to wipe the slate clean of the appeals coming before its office. With exception to cases that have continued beyond the jurisdiction of the assessor’s office, all the appeals have been handled.
Peter Hayes, partner at real estate broker Hayes & Sherry in Providence, said a fair revaluation process is pertinent to business development in the city.
“It should be realistic,” he said. “The revaluations should not be a detriment to doing business in Providence. If it becomes tough, businesses will move into the suburbs.”
