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HomeMy WebLinkAbout2022-09-27 Minutes TAX BOARD OF REVIEW MEETING MINUTES APPEAL HEARINGS Tuesday, September 27, 2022 Aupuni Center | Aupuni Center Conference Room 101 Pauahi Street, Hilo, Hawaii CALL TO ORDER Chairperson Nelson Harano called the meeting to order at 9:00 a.m. Present: Board Members Nelson Harano, Diane Blancett-Maddock, Michael Okumoto, Deputy Corporation Counsel Sinclair Salas-Ferguson, Real Property Tax Assistant Administrator Keita Jo, Appraisal Supervisor Dionne Costa, Real Property Tax Administrator filling in for Board Clerk Lisa Miura Dale Tokuuke was excused. STATEMENTS FROM THE PUBLIC There were no statements from the public. APPROVAL OF MINUTES Mr. Harano noted that the agenda states August 13, 2022 and August 14, 2022 however those were already approved and the minutes up for approval is September 13, 2022; September 14, 2022; September 20, 2022 and September 21, 2022 September 13, 2022 – Mr. Harano pointed out the last sentence on the first page has his name spelled incorrectly as it is noted as Mr. Harono. September 14, 2022 September 20, 2022 September 21, 2022 Ms. Blancett-Maddock moved to approve the minutes from September 13, 2002; September 14, 2022; September 20, 2022 and September 21, 2022 with the amendment noted by the Chair for September 13, 2022 minutes. Mr. Okumoto seconded the motion. Chair called for discussion to the motion. Motion passed Vote 3:0. TAX APPEAL CASE HEARINGS Note: Prior to the start of the case hearings, Deputy Corporation Counsel Sinclair Salas- Ferguson announced the general procedures of the appeal hearing and advised all Appellants and the Department of the procedure the Board would be following for the rendering of their decision and the Appellants’ further right to appeal to the Tax Appeal Court located in Honolulu within 30 days from the date of the decision letter that the appellant will be receiving via certified mail. For each appeal case, the appraiser submitted a packet of information to the Board, unless there had been a prior settlement with the Appellant or withdrawal. If the Appellant was not present, any information sent in by the Appellant was presented to the Board along with the appraisers’ packet. AGENDA AMENDMENT Appraiser supervisor, Dionne Costa requested an amendment to today’s agenda as the appellant is in Nashville and is available by telephone today. Chairman Harano motioned to move Case #44328 scheduled for Wednesday September 28, 2022 to this morning’s session at 9:00am, Tuesday September 27, 2022. Ms. Blancett- Maddock seconded the motion. Call of discussion. Motion passed Vote 3:0 CASE # 44594 – DOE, THOMAS H/ KAY K TMK 4-4-0-021-0002 The parcel is on the Hamakua coast just past mile marker 40, approximately 1.3 miles mauka. It is a 2.51acre CPR’d lot participating in the non dedicated agricultural use program and is claiming a homeowners exemption. It has a 876 square foot, grade 3- dwelling that was built in 1999 with other buildings and yard improvements. The building value is under appeal. Appellants Mr. and Mrs. Doe were present for the hearing. Appellants requested building value be lowered to $203,900. Appealing the main dwelling value and the red steel barn building as the County assessed building at 300 square feet, actual size of this structure is 600 square feet. Comparative market analysis was presented by the appellants. County recommended lowering the building value of the improvements to $219,900. Board members reviewed the information. Board asked questions of both appellants and the county. Mr. Harano asked if there were no further questions, can we entertain a motion at this time. Mr. Okumoto moved to sustain the County’s building value at $219,900 as the assessment methods used were not illegal or unconstitutional and there was no lack of uniformity or inequality resulting from the use of illegal assessment methods or an error in the application of the methods. Ms. Blancett-Maddock seconded the motion. Mr. Harano called for discussion. Mr. Okumoto stated both presented good arguments. This was difficult as there were many structures to consider but the County centered their comparables on properties within the area so it gave a little more credence to their values. I didn’t think the parcel class affected the building value. I think the main thing was the search was too wide. You (to appellants) started out really wide with sale dates and started narrowing it down. I think you did a pretty thorough job. County’s method was more focused. Ms. Blancett-Maddock stated even though the market trend increase 31% between 2020 to - 2021, the County recommended reducing the assessed value. Mr. Harano agreed with Mr. Okumoto on the search area. Every district has it’s own unique features and I would not compare with properties for example of similar size on the West side on the island as its totally comparing apples to oranges therefore I agree with Mike, the search was too wide The search should have been tighter in terms of area. Mr. Harano called for further discussion. Motion passed by a vote of 3:0 to sustain the building value of $219,900. Ms. Doe questioned what $219,900 is valuing as not all buildings were there at the end of the year. Appraiser offered to speak to them outside. CASE #44561 – FURUTANI, REID Y/LYNNE E TMK 2-2-035-069-0000 The building is comprised of an office, warehouse and service areas totaling 4,926 square feet. The property is located on Kanoelehua Avenue. The 2022 building value is under appeal. The appellant, Mr. Furutani, was present for the hearing and stated he is here to keep his overhead low requesting a building value of $359,500. Documentation from the appellant was provided to the Board. Appraiser presented the County’s case and stated she understands where Mr. Furutani is coming from but explained Real Property is required to follow the code and be at market value. County recommended sustaining the building value of $526,700. Board members reviewed the information. Mr. Harano asked if there were any questions from the Board to the County or appellant? Seeing none he asked for a motion for discussion purposes. Ms. Blancett-Maddock moved to sustain the county’s building value of $526,700 as the appellant did not show there was a lack of uniformity or inequality resulting from the use of illegal assessment methods or an error in the application of the methods. Mr. Okumoto seconded the motion. Mr. Harano asked for discussion. Mr. Okumoto stated the appellant’s main objection is the large percentage increase, unfortunately that is the market today. There were many appellants before you that voiced that same objection, but this reflects what’s happening in the economy today and unfortunately the county has to assess at the market. Appellant stated if this keeps happening, somethings gotta give. Something is going to bust. Something gotta give. Mr. Okumoto stated this is happening all over. Appellant stated you don’t see BOOM here. I don’t know why its like that. Mr. Harano stated looking at your property looking at the pictures as compared to the comps that were used, I understand your point and know where you are coming from. Looking at these other properties, they were subject to deferred maintenance, your property seems like it’s in a lot better condition than these other two that sold for more than what you might deem as fair market value. Everything is in a bubble world wide. Something does have to give. Mr. Harano called for further discussion. Seeing none he called for the vote to sustain the county building value of $526,700 as the land value is not under appeal. Motion passed by a vote of 3:0. CASE #44645 – HIATT, JERRY M; HIGASHI, TOKISUKE; HIGASHI, TADAICHI TMK 4-6-008-079-0000 The appellant Jerry Hiatt was present at the hearing. Present for the County was appraiser, Jennifer Long. The parcel is a 5.541 acre lot in Ahualoa Homesteads on the Waimea side of Puaono Road. There is no ag use and no improvements. The land value is under appeal. The appellant presented his appeal requesting a land value of $225,000. The county presented their case and reasons for recommending sustaining the land value at $315,500. Board members reviewed the information. Board asked questions of both appellants and the county. Mr. Harano asked if there were any questions from the Board to the appellant or the county. If there is none, can we entertain a motion for discussion. Mr. Okumoto asked for a few minutes to look through the packets. Reminder from Sinclair that whatever Mr. Hiatt intends to do with the property is not considered. Mr. Hiatt to echo that at the time of the assessment the property was covered in forest and agrees that is the relevant time to judge. Ms. Blancett-Maddock moved to sustain the county value as the taxpayer did not show the assessed value of the property exceeds by more than 20% the ratio of assessment to market value, did not show lack of uniformity or inequality resulting from the use of illegal assessment methods or an error in the application of the methods and the taxpayer did not show the assessment methods used were illegal or unconstitutional. Mr. Okumoto seconded the motion. Mr. Harano asked for discussion. Ms. Blancett-Maddock stated the 2020 purchase was less that the assessment value for the last two years and it was not an arms length transaction by county standards. Mr. Okumoto stated the County made an attempt to address Mr. Hiatt’s objections and the two comparables used have no water service. $200k for tree removal, I think you could cut it and the cost would be to haul it away. Appellant stated it was half half. Mr. Harano – thoughts were to assess the land value at $275,000 similar to what was done in 2021 without the non dedicated ag exemption. Based on what Mr. Hiatt mentioned about the cost of the tree removal with the understanding that there will be replanting that will be taking place as part of the requirement of the non dedicated ag exemption, I know it was not applied for and was not available for in 2021. Mr. Hiatt to Mr. Harano I can live with that. Here out of frustration and sense this doesn’t feel right to me. That sense of frustration, if we could come to some compromise and then I feel like I would have a say. Mr. Hiatt asked about the $275,000. May I say one or two other things? I am speaking to the motion. Jenn stated point of order. Mr. Harano said not at this time to Mr. Hiatt. Mr. Harano asked if the Board was ready to entertain a vote. Motion currently is to sustain the county position of land value at $315,500. Motion does not pass by a vote of 2:1. Mr. Harano voted nay. Sinclair stated a new motion could be called. Mr. Harano made a motion to decrease the land value to $275,000 as opposed to sustaining the County’s land value at $315,500. Call for second to the motion. None given. Motion dies. Mr. Harano asked if there was any other motions at this time. No other motions. Mr. Harano stated to the appellant, Mr. Hiatt unfortunately the Board is deadlocked in terms of the decision. In this situation, it defaults to the County’s valuation of $315,500. Mr. Hiatt thanked the Board. He asked if there was some record that comes back with the deadlock that it defaulted to the County’s position? Sinclair stated it will be in the minutes, you will get a written decision. Mr. Hiatt will request a copy of the minutes of this Board hearing. Sinclair advised he can do a records request for the minutes. Mr. Harano called for a recess at 11:18 am. Mr. Harano restarted the meeting at 11:37 am. CASE #44328 – LILIUOKALANI TRUST ESTATE TMK 7-4-020-012-0000 The appellant’s representative Chet Yancey was present via telephone. Present for the County was appraiser supervisor, Dionne Costa. Note: Prior to the start of this case, Deputy Corporation Counsel Sinclair Salas- Ferguson announced the general procedures of the appeal hearing and advised Mr. Yancey tof the procedure as he was not on the phone at the start of the hearings. The Board would be following for the rendering of their decision and the Appellants’ further right to appeal to the Tax Appeal Court located in Honolulu within 30 days from the date of the decision letter that the appellant will be receiving via certified mail. The property is the Regal Cinemas at Makalapua Center in Kona. The building value is under appeal. Appellant presented his case by phone. Shared the income approach utilizing the past 3 years for a market rental rate compared to what is currently being paid. NOI of $184,204 with a 9% CAP, estimated value is over $2,000,000. This is 20% of land value. The greatest a best use of the property is vacant land as the theatre cannot sustain the annual lease. County stated the appellant’s did provide sufficient information to warrant a discount. County recommends reducing the building value to $4,298,600 and although they did not appeal the land value, the County recommends reducing the land value to $8,223,600. Board members reviewed the information. Board asked questions of both appellants and the county. Mr. Harano asked the Board if there were any more questions for the County or appellants. Asked for a motion for discussion. Mr. Harano moved to keep the market land value at $8,565,000 plus building value of $100 same as year 2021 for a total taxable 8,565,500. Ms. Blancett-Maddock seconded the motion for discussion. Mr. Harano stated he made the motion to keep the land and assessed building value the same as 2021 as the entertainment facility and not taking into account the economic and current conditions of the United States, the theatre is struggling. I propose to keep the same 2021 value. Ms. Blancett-Maddock referred to the appeal form and that the land value is not under appeal. The appellant maintained it should remain at $10,279,500. Appellant only asked to decrease the building value to $100. I would agree to their appeal documentation. Mr. Okumoto stated his motion is different than both of theirs. Mr. Harano called for the vote to keep the valuation the same as 2021. Motion did not pass with a vote: 2:1. Mr. Okumoto being the nay vote. Mr. Harano asked for a new motion Mr. Okumoto made a motion to sustain the County recommended building values of $4,298,600 and land of $8,223,600. No second to the motion. Motion fails Mr. Okumoto renewed the motion for discussion. Mr. Harano seconded the motion for discussion. Mr. Okumoto stated for consistency the County recognized the decrease in revenue and just wanted to have consistency with their methodology. Recognizing that whatever values that has been put forth still probably would not sustain the market as it is now. Mr. Harano to Mr. Okumoto can you please clarify your last sentence for everyone. Mr. Okumoto stated the theatre business is operating at a loss, unless you can say that we are going to assess at zero then whatever number we put forth, an income below zero is not going to sustain any value. Mr. Harano stated based on the per forma, he had an increase in attendance on page #13 of the packet of 44,627, I feel the increase of the valuation of $2 million increase, it would make Regal say we are going to close up due to the increase in the tax burden as the theatre is a social outlet for residents in the community. Ms. Blancett-Maddock recalled this case from last year, we agreed to the assessed value due to the same circumstances, attendance and revenues were down. Giving them another year to get up to speed might sustain this theatre for the community. Seeing no further discussion, Mr. Okumoto withdrew his motion. Ms. Blancett-Maddock moved return to the assessed land value of 2021 $8,565,500 and raise the assessed building value to $500. Mr. Harano seconded the motion. Ms. Blancett-Maddock stated her comments are the community needs to keep the theatre, with a small increase in revenue with better attendance will do better this next year. Mr. Harano stated he firmly believes the cinema does add tremendous value to the community as a social benefit to families. Understand COVID is still present, believes the Center for Disease Control has taken COVID off the list and no 6’ distance and hopefully it keeps the family unit together and keeps people out of trouble. Mr. Okumoto stated the discussion is getting beyond real property tax valuation and getting into community benefit and gets beyond the scope of this committee. Reminded Kona Board members that there is another theatre in Kona. Not sure any kind of reduction benefits in the long run. Instead of putting forth different numbers. Ms. Blancett-Maddock stated going back to 2021 figure for the land and raising the assessed building value that was voted on in 2021 and increasing to $500 which is a fair assessment. The community interest based comments were not the basis of my motion. Mr. Harano to Mr. Okumoto – would you be opposed or in favor of modifying the values. Mr. Okumoto stated he needs to know the basis for the modification. Appraiser Supervisor asked for clarification from Sinclair, if the Board deadlocks, what the value would be the current assessment as of 1/1/2022 OR the County’s recommendation. She thought it would be the county’s recommended value. Assistant Administrator stated no decision means the County higher assessment stands which is higher than the County’s recommendation. Sinclair thought if the Board could not agree, then County’s recommendation stands. County Assistant Real Property Tax Administrator, Real Property Tax Administrator and Appraiser Supervisor disagreed by stating if the Board does not agree on a motion, then the County is bound to the March 2022 assessment which is higher than the recommended value. Appellant stated that he understands the land value of $10,279,500 as the land is the only thing worth anything. As a theatre, the property is only worth approximately $2 million. An appraisal principal value would be as vacant land. The value of the theatre will never get up to what the land value is. Mr Okumoto asked him to repeat that. Mr. Yancey is recommending a land value of $10,279,500 and improvements at $100. Ms. Blancett-Maddock withdrew her motion. Mr. Okumoto made a motion to change the assessments so that it is the same as last year. $8,565,400 and $100 for a total assessment of $8,565,500. As this is the same motion Mr. Harano made earlier, Sinclair stated this motion was made earlier and his motion would need a modification. Mr. Okumoto restated the motion with the building value $200. Ms. Blancett-Maddock seconded the motion. Mr. Harano restated the motion to keeping the assessed land value the same as 2021 at $8,565,400 and increase the building value of $200 for a total assessed value of $8,565,600. Motion passed with a Vote 3:0. AGENDA AMMENDMENT Mr. Harano made a motion to recall the CASE #44486 so that we can correct the Boards recommendation that was incorrect from the $7,083,000 to the correct $7,083,900. Ms. Blancett-Maddock seconded the motion. Mr. Harano called for discussion. None. All in favor of amending the agenda. Vote 3:0 Ms. Blancett-Maddock moved to sustain the county value at $7,083,900 due to the typo on the paperwork that was received. Mr. Harano seconded the motion. Mr. Harano asked for discussion? Ms. Blancett-Maddock stated at the time of the hearing they relied on the recommendation on the text on the bottom rather than what was noted on top of the form. Mr. Harano noted there was no further discussion. Motion passed Vote: 3:0. ANNOUNCEMENTS The next meeting will be on Wednesday September 28, 2022 at 9:00 a.m. in the Aupuni Center in Hilo. ADJOURNEMENT Meeting was adjourned at 12:35 p.m. Respectfully Submitted, Lisa Miura Real Property Tax Administrator (filling in as Tax Board Clerk)