Since starting at The Augusta Press as business editor in the early months of 2021, I’ve learned so much about how a city works; how a business concept makes its way from planning and zoning to brick and mortar; how many people there are involved with our local non-profits; how expensive it is to get things done.
The toughest subjects for me to grasp have been with real estate and finances. It’s a whole new realm for me, and this past week, I spoke to Augusta’s chief tax appraiser, Scott Rountree, to learn more about the tax assessment process.
I first wanted to know how it’s determined what property types the tax assessor’s office will be taking a closer look at each year.
Rountree said his office takes cues from the market and the state.
“The process is informed by the regulations of the Department of Revenue, regulated by the state,” Rountree said. “We are mass appraisers, assessing in groups or neighborhoods. The goal is fair market value. The law states we should be valuing all classes of property at 100% of fair market value.”
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Rountree said his office is guided to reevaluate a class of properties, businesses or neighborhoods if the properties are varying from that market value. Then, the tax assessors compare market sales or regional sales from around the area to see how far apart those two groups are.
“Once it starts drifting near or beyond 10% where similar properties are actually selling, we begin a review to see if we need to re-assess,” Rountree said.
He went on to say that the market drives the activity of the tax assessor’s office.
“It’s all driven by the study of sales to tax value and determining if we are getting out of range of what’s considered compliant by the Department of Revenue.”
The tax assessor’s office is not the only party that can assess the value of a property, however. Independent assessors can also conduct their own appraisal and in cases where a property owner is appealing the valuation by the tax assessor’s office, that independent appraisal can be brought as a sort of negotiating factor.
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“During an appeal, we can review and even accept appraisals that private property owners have had done by an outside appraiser,” Rountree said. “We’d first make sure it is compliant with regulations that Revenue has for accepting an appraisal and also make sure it’s a valid assessment for mass appraisal purposes.”
When it comes to larger projects that can affect property values (the new James Brown Arena proposal comes to mind), Rountree said that impacts to the community are always monitored.
“What we’re doing when we’re reevaluating a group of properties is looking at what the market has already done. When we’re studying an area like the one around the proposed arena, if that project is developed and changing area values, we always watch where growth is occurring,” Rountree said.
Pulling numbers from the county GIS, certain property types seemed to experience, from my perspective, an abnormally large jump over the past few years.
In 2019 to 2020, it was hotels. For example, The Augusta Marriott at 2 10th St. went from a $16.5 million evaluation in 2019 to a $22.2 million evaluation in 2020. The Holiday Inn Express at 1073 Stevens Creek Rd. jumped from $5.6 million in 2019 to $8.2 million in 2020.
In 2020, self-storage businesses experienced a stark increase. Simply Self Storage at 2134 Gordon Hwy. had a valuation at $2.2 million in 2020 and $5.1 million in 2021. Gate 5 Self Storage at 2740 Tobacco Rd. went from a 2020 valuation of $976,000 to a 2021 valuation of $2.6 million.
Mobile home parks were also up. Castle Pines Mobile Home Park was valued at $1 million in 2020. In 2021, the park was bumped up to $6.2 million. Rocky Creek Mobile Home Park saw an increase from $685,000 in 2020 to $2.4 million in 2021.
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Rountree said that a few years ago, his department noticed that they were very behind in their valuations of several types of properties. He mentioned the ones above, as well as apartments and shopping centers.
“The common thread was that these categories of properties that would trade on the market based on the income that they are receiving,” he said. “The vast majority of the properties on our books, however, were valued more on a cost approach to value. So, the value of record that we had was not reflective of fair market value, which is what we are charged to bring property value to.”
The chief assessor said that a research project was conducted by his commercial property team in 2018, and all the categories I brought to him had tax assessments far below the fair market sales.
“There were several years between the most recent set of reevaluations and the previous ones, as well,” Rountree said. “For example, it was probably 2008 or 2009 when apartments and the markets around apartments had their last in-depth review, so the information utilized in those reevaluations was ancient history at this point.”
I asked Rountree if enacting this shift from evaluating properties on an income approach as opposed to a cost approach is designed to curb the amount of large increases year over year.
“That’s correct, as long as the market doesn’t go crazy up or crazy down,” he said. “With stability in the market, there should be a comparable stability in tax evaluations.”
In terms of what property types might be under the microscope in 2022, Rountree could offer no insight.
“We will have to see what the market is telling us, and we’ll do a deep check in the next month or two,” Rountree said. “However, everything that is currently based on the income approach is likely to come under review every year using updated information.”
Tyler Strong is the Business Editor for The Augusta Press. Reach him at tyler@theaugustapress.com
