Low assessment for Audubon Place isn’t the problem; other value is high
10th March 2014 · 0 Comments
By Charles Maldonado
Responding to a report by The Lens that questioned the city’s tax assessment of Audubon Place — a private street Uptown valued at $2.63 per square foot — compared to Trianon Plaza — a private street in Fontainebleau valued at $13.94 per square foot — Orleans Parish Assessor Erroll Williams said the problem isn’t so much that Audubon Place is worth too little, but that Trianon Plaza is worth too much.
In a letter to The Lens, Williams criticized the story, saying it reflects “a fundamental misunderstanding of how the Orleans Parish Assessor’s Office operates.” He wrote that Trianon’s current value is “grossly over estimated and will be adjusted.”
The Lens asked Williams to comment on the methodology and conclusions two days before publication, but he did not respond.
The letter goes on to say that Williams’ office plans to develop a citywide policy on private streets’ property tax liability.
Audubon Place and Trianon Plaza — the streets themselves — are privately controlled property parcels owned by neighborhood associations. Since 2012, Audubon Place has been taxed at about $7,400 per year based on an assessed value of $500,000. Trianon Plaza has been exempt from taxation since the homeowners association purchased the street from the city in 2006. But Williams’ office may soon remove the exemption and tax the property. Its current value, $272,380, is more than half Audubon’s, even though Trianon is only about one-tenth Audubon’s size.
As The Lens reported, Trianon’s value per square foot, $13.94, is 93 percent of the per-square-foot values of surrounding residential parcels. Audubon’s value per square foot, $2.63, is only 5 percent of surrounding properties. If Audubon were valued at the same ratio as Trianon, it would be worth $8.85 million.
But in the letter, Williams said the reason that disparity exists is because Trianon’s value was improperly calculated based on a formula that normally applies to developable properties, not streets.
“When the Trianon Plaza area neighborhood was reassessed in 2013, our Computer Assisted Mass Appraisal (CAMA) system revalued the parcel’s land in the same manner as the neighboring properties, not as encumbered land (such as a road or restricted use servitude; this drastically limits value and use). Thus the value of the road is grossly over estimated and will be adjusted,” the letter says.
In a follow-up interview today, Williams spokesman Devin Johnson said the value of Audubon Place is a better example of assessing property that can’t be improved.
“The residences around there have higher valuation, but the value of a road is still just the value of a road,” Johnson said. “There are different philosophies about this. Erroll regards it as vacant land that can’t be developed.”
Asked how the error occurred, Johnson said, “It was a carryover from the previous assessor. Every day you find new anomalies from the previous assessors.”
He added that the improper valuation wasn’t discovered until The Lens brought it to the office’s attention because Trianon is an exempt property that produces no revenue.
“It’s not a No. 1 priority to have accurate valuations for exempt nonprofits,” he said.
Johnson said Trianon will be revalued for the next tax year but he could not say what the new value will be. He said the office does not plan to revalue Audubon Place.
Despite telling The Lens in an earlier report that Trianon will be taxed in the future, Johnson said today that the office has not yet determined whether Trianon will be taxable as a private property. That will become clear as the office completes work on a policy governing the taxation of the city’s private streets. Whether the streets can be taxed may depend on whether the city has performed maintenance on them and how accessible they are.
While Audubon Place is inaccessible to the public — a dead end with a gate and private security guard at its entrance — Trianon can be accessed on one side.
“The Assessor’s Office, with the advisement of legal counsel, will develop a policy that is consistent with Louisiana law with respect to the tax liability of gated private streets versus non-gated private streets. At issue are private streets which allow public access and, given their degree of infrastructure maintenance from the city, may be considered tacit public streets, in accordance to the city attorney’s opinion previously shared with the author,” the letter says.
After some initial research, Johnson said, the assessor’s office has found that, in other parishes, private streets are often entirely untaxed. He said Williams does not favor adopting that model.
“Even though there is nothing to indicate other parishes are taxing private streets, regardless of whether they are gated, the assessor wants to tax, at the very least, those private streets that are gated and have no public access,” he said.
This story was originally published by The Lens (thelensnola.org), an independent, non-profit newsroom serving New Orleans. The Louisiana Weekly enjoys a partnership with The Lens.
This article originally published in the March 10, 2014 print edition of The Louisiana Weekly newspaper.