{"id":5413,"date":"2021-03-18T14:26:01","date_gmt":"2021-03-18T19:26:01","guid":{"rendered":"https:\/\/www.teanecktoday.com\/blog\/?p=5413"},"modified":"2021-03-19T15:31:28","modified_gmt":"2021-03-19T20:31:28","slug":"glenpointe-tax-appeal-in-the-rear-view-mirror","status":"publish","type":"post","link":"https:\/\/www.teanecktoday.com\/blog\/development\/glenpointe-tax-appeal-in-the-rear-view-mirror\/","title":{"rendered":"Glenpointe Tax Appeal in the Rear-view Mirror"},"content":{"rendered":"

What is the Glenpointe Tax Appeal?<\/h1>\n

The Glenpointe complex, consisting of Hotels<\/a>, Offices<\/a>, Atriums<\/a>, parking<\/a> lots and more<\/a> appealed the assessment of their taxes for the years 2007 through 20101<\/sup>.<\/p>\n

Had the Glenpointe prevailed, the Township would have been responsible for refunding over $15 million dollars.<\/span><\/p>\n[Note: $15M figure does not take into account tax appeals for years 2011 through 2018<\/strong>, which are included in the settlement agreed to by the parties<\/a>]<\/strong><\/p>\n

After the Superior Court found mostly for the Town, the appeals were ultimately settled for $8,083,000<\/span> (including interest).<\/p>\n

From Judge Andresini:
\n(all quotes are fully explained below with relevant links to the opinion)<\/em><\/p>\n

[T]he court rejects Plaintiff\u2019s expert\u2019s determination of stabilized revenue.<\/span><\/span> Given that\u00a0<\/span>the Township\u2019s expert\u2019s<\/span><\/span>\u00a0stabilized ADR figures<\/span> are in line with the actual ADR of the subject Hotel<\/span><\/span> for the relevant tax years,\u00a0<\/span>did not overstate the effect of the economic downturn\u00a0on those years, and are supported by the comparable data sets<\/span><\/span> contained in the PKF trends he used,\u00a0<\/span>the court finds his stabilization of the subject Hotel\u2019s revenues to be reliable and will adopt his conclusions of revenues\u00a0accordingly<\/span><\/span>.<\/span><\/p><\/blockquote>\n

<\/p>\n

Plaintiff\u2019s expert\u2019s stabilization resulted in figures significantly higher than the subject Hotel\u2019s actual expense rates<\/span><\/span>. For the same reasons as above,<\/span>\u00a0the court rejects Plaintiff\u2019s expert\u2019s stabilization of undistributed operating expenses<\/span><\/span>\u00a0and\u00a0<\/span>accepts the Township\u2019s expert\u2019s stabilization as valid and credible.<\/span><\/span><\/p><\/blockquote>\n

 <\/p>\n

[T]he court again cannot adopt Plaintiff\u2019s expert\u2019s figures due to the flawed data set he utilized<\/span><\/span>.\u00a0Given that <\/span>the court has held that the Township\u2019s expert\u2019s<\/span><\/span> Upper-Upscale market<\/span> data is more representative<\/span><\/span> of the subject Hotel, and his determination is based on those sets, <\/span>the court will adopt his insurance fee rate of 0.5% for each tax year<\/span><\/span>.<\/span><\/p><\/blockquote>\n

 <\/p>\n

For the reasons stated above <\/span>regarding\u00a0the credibility of Plaintiff\u2019s valuation determinations, the court cannot accept Plaintiff\u2019s expert\u2019s conclusion<\/span><\/span>\u00a0of structural reserves.\u00a0Given <\/span>the testimony that the Township\u2019s expert\u2019s conclusion was based on his assessment of the quality and condition of the Hotel and his proper classification of the subject Hotel<\/span><\/span> as Upper-Upscale, the court accepts his conclusion of 2% reserves <\/span>as credible and will utilize his figures\u00a0in its own valuation determination<\/span><\/span>.<\/span><\/p><\/blockquote>\n

 <\/p>\n

For the same reasons of<\/span>\u00a0lack of credibility as to the data sets utilized by Plaintiff\u2019s expert\u00a0<\/span><\/span>with regard to his valuation conclusions for the subject Hotel, <\/span>the court declines to accept his figures<\/span><\/span>. As\u00a0<\/span>the court finds that the Township\u2019s expert\u2019s conclusion more credible, it will utilize his concluded Return On FF&E<\/span><\/span> of $560,625 for each year.<\/span><\/p><\/blockquote>\n

 <\/p>\n

Thus,\u00a0<\/span>the court finds the Township\u2019s expert\u2019s opinion<\/span><\/span>\u00a0as to the Return Of FF&E of 2.5%, or a total of $679,002 for tax years 2007 to 2009 and $615,628 for tax year 2010,\u00a0<\/span>to be credible and will adopt the same\u00a0in its own valuation determination<\/span><\/span>.<\/span><\/p><\/blockquote>\n

 <\/p>\n

Plaintiff\u2019s reliance on both the incorrect classification of the subject Hotel as well as an unpersuasive and unsubstantiated theory of risk renders his OARs\u00a0untenable<\/span><\/span>. <\/span>The court agrees with the Township\u2019s expert\u2019s assertions<\/span><\/span>… <\/span>however… the court cannot accept the Township\u2019s expert\u2019s capitalization rate determination and will use its own judgment<\/span><\/span> in concluding the appropriate rates.<\/span><\/p><\/blockquote>\n

\n

What was the issue and why has it taken so long to resolve?<\/h2>\n

As discussed further below in the section on revaluation, our system of property tax relies on each property being assessed accurately.\u00a0 Each owner of land in Teaneck pays a portion of County, Local, Library, and Board of Education budgets.\u00a0 The amount of that portion is equal to the ratio between how much their land is valued vs the entire budget amount.\u00a0 Someone in a home worth $250,000 will pay half the property tax as someone in a home worth $500,000.<\/p>\n

For businesses, the valuation also involves revenue projections and other metrics, but at the end of the day, the valuation amount determines the proportion of the tax those entities are required to pay.<\/p>\n

Incorrect Valuations<\/h3>\n

Anyone can appeal the valuation placed on their property if they believe it is inaccurate2<\/sup>.\u00a0 In the case of Glenpointe, they filed appeals in 1988 – 1990 and another set in 2007-2010.\u00a0 This settlement deals with the 2007-10 appeals.<\/p>\n

Residential vs Commercial<\/h5>\n

The valuation for homes is fairly straightforward.\u00a0 The valuation for something the size of Glenpointe is far more complicated.\u00a0 The resulting case has been in the Courts for nearly 14 years as a result of that complexity.<\/p>\n

The Findings of Fact and Procedural History<\/a> were made by the Superior Court on August 11th, 2020.
\n(the full Findings of Fact are appended to the end of this post as well)<\/p>\n

What is the Glenpointe?<\/h2>\n

The subject property is comprised of two office buildings, a two-story atrium, a four-story parking garage, a 345-room hotel, and various parcels of vacant land located in Teaneck encompassing approximately 24.272 acres. (page 1<\/a>)<\/p>\n

The breakdown for the hotel is as follows:<\/p>\n