Before Charleston Town Center owners and Kanawha County commissioners can agree over property tax assessment, the two sides have to decide how that figure is calculated, says Assessor’s Office Commercial Supervisor Steve Duffield.
The commission has invited a representative from Town Center owner Hull Group to appear Thursday at a regularly scheduled 5 p.m. meeting. Commission President Kent Carper wants the two sides to agree on facts, establish procedures and give him an idea on how long an 11 a.m. Tuesday meeting might take. Both meetings are scheduled in commission chambers at the Kanawha County Courthouse.
Commissioners are sitting this month as the Board of Assessment and Appeals, hearing from property taxpayers who disagree with their property’s valuations. Tuesday falls in that category. Carper actually posted 8 a.m. as the meeting time, in case other petitioners show up beforehand.
Hull, meanwhile, is expected to argue the property is not worth more than the $7.5 million it paid for it in May.
“That position won’t be a viable solution to them at this time,” Duffield said, “that the property is worth only what they paid for it. You’ve got to take the rules in, the methodology, the code in place for the state of West Virginia’s ad valorem taxes.”
Duffield said there are three approaches to calculating a property’s value — income, cost and market. Income takes a business’ net operating income and divides it by return on investment. Cost is based on what it took to construct a building. A sales or market approach, perhaps familiar to anyone who has looked at “comps” in their neighborhood when buying a house, is based on what comparable properties are selling for. All three approaches are used in concert, Duffield said.
Hull claims its taxes should only be based on an assessment between $8 and $10 million. If that number were dropped to the purchase price of $7.5 million, the mall’s property taxes would drop to $114,000, Duffield said earlier this week, from nearly $1 million.
“The value is not represented by just one approach,” Duffield said.
The Assessor’s Office decision in these matters usually rules the day but commissioners do possess the latitude to overrule.
According to a Gazette-Mail story last year, with the mall valued at $51 million, tax money directed to the Kanawha County Board of Education would drop from $325,000 to $238,000 for this tax year — a nearly $90,000 difference.
In 2012, the mall’s value increased to $69.8 million, generating more than $2.9 million in new tax revenue for the state, Kanawha County, the City of Charleston and the Kanawha Board of Education.
The mall’s value remained slightly less than $70 million from 2012 to 2019, which sent more than $33,000 of tax revenue to the state, $1.9 million to Kanawha County, $2.6 million to the school board and $1.2 million to Charleston.
The mall generated $9.5 million in total tax revenue during those eight years.
County commissioners sit as the Board of Equalization and Review each February, to accomplish the same basic task it does now with the new board. Business leaders successfully lobbied for a second entity, Assessment Appeals. A taxpayer must choose which body he or she wants to lobby before.
Carper said the Kanawha commission fought the second level of appeals, fearing that backroom deals could be made with politicians’ cronies in a less established setting.
Carper said he has vowed to hold all Assessment and Appeals in a public setting, particularly the mall matter, owing to the amount of publicity new owners have attracted.