2015 ROUTT COUNTY BOARD OF EQUALIZATION Hearing Date: July 28 th, 2015

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1 205 ROUTT COUNTY BOARD OF EQUALIZATION Hearing Date: July 28 th, 205 Account#: R87255, R872553, R872556, R PIN#: , , , Owner of Record: ADAMO FAMILY PARTNERSHIP, FAIR & SQUARE CONSTRUCTION Legal Desc: LOTS 3, 5, 8, & WILLOW POINT SUBD Appraisal Date: June 30, 204 Assessment Date: January, 205 Sales Collection Period: 24 months from July, 202 thru June 30, 204 Definition of Market Value: The most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other precisely revealed terms for which the specified property rights should sell after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, and for self-interest, and assuming that neither is under undue duress. The Appraisal of Real Estate, 2 th ed., 200, page Original Assessor Value: $2,500 Adjusted Denied at Assessor-level appeal. Property Type: Vacant Land Appeal Summary: Petitioner states that a negative road influence, a power line bisecting it and a smell from the treatment plant affects lot 5 which borders County Road 29. Lot 3 is also affected by the County Road noise and odor. All lots are not selling because of low water flow and lenders don t want to lend on them. These lots are also not typical 5-acre lots because they are configured so that the building sites are stacked together with the rest of the parcel being unusable. There is an extra tax burden with these lots from the Water & Sanitation District. Discussion: Willow Point Subdivision is a replatted subdivision from Steamboat Lake unbuildable parcels. There are 5 lots each approximately 5 acres and two Outlots that buffer the residential lots from the County Road and provide open space between Willow Point and the Steamboat Lake subdivision filing 3. The original developers are the major landowners still. Willow Point is currently valued using raw land value which decreases the value from $48,500 to $2,500 in 205. The petitioner states that this value is not reduced enough and that the subdivider discount should further assist the developer to hold these parcels. The subdivider discount is a tool that developers use to discount their carrying costs so they are able to systematically sell their lot inventory without flooding the market which would drive prices downward. CRS (4)(b) The assessing officers shall give appropriate consideration to the cost approach, market approach, and income approach to appraisal as required by the provisions of section 3 of article X of the state constitution in determining the actual value of vacant land. When using the market approach to appraisal in determining the actual value of vacant land as of the assessment date, assessing officers shall take into account, but need not limit their consideration to, the following factors: The anticipated market absorption rate, the size and location of such land, the direct costs of Routt County Assessor s Office Page

2 development, any amenities, any site improvements, access, and use. When using anticipated market absorption rates, the assessing officers shall use appropriate discount factors in determining the present worth of vacant land until eighty percent of the lots within an approved plat have been sold and shall include all vacant land in the approved plat. For purposes of such discounting, direct costs of development shall be taken into account. The use of present worth shall reflect the anticipated market absorption rate for the lots within such plat, but such time period shall not generally exceed thirty years. For purposes of this paragraph (b), no indirect costs of development, including, but not limited to, costs relating to marketing, overhead, or profit, shall be considered or taken into account. However, the subdivider discount cannot fall below raw land value: The Colorado Supreme Court ruled that the Division s present worth valuation procedure is an appropriate interpretation of the statutes controlling the valuation of vacant land, El Paso County Board of Equalization v. Craddock, 850 P.2d 702 (Colo. 993). The concept of raw land value being a market value threshold below which present worth values may not decline was referenced in footnote 4, p. 707, of the case. Assessor s Reference Library page 4. Even though the subdivider discount calculated to $70,400, the raw land calculation is $25,000 which the subdivider discount cannot fall below. This raw land value was adjusted a little more for the higher lots at $30,000 to reflect the better view higher in elevation, the middle lots were given the median value of $25,000 and the lower lots were valued at $2,500. See Exhibit A for a map showing the location of the sales used to calculate a raw land value. There were four sales of five acre replats within the time period within Steamboat Lake Subdivision. These four sales all have infrastructure so a 0% reduction (a typical percent over the sale price to create infrastructure derived from questionnaires sent to land developers in Routt County) to the sale price was calculated. The median price per five acres was calculated and is the raw land value. Raw Land Calculation Sale # Schedule # Parcel # Acres SP $ SP/Acre 5 acres <0% SP/Acre 5 acres R $30,000 $7,000 $2,992 $09,962 2 R $50,000 $35,000 $26,946 $34,73 3 R $39,900 $25,90 $24,982 $24,9 4 R $50,000 $35,000 $26,946 $34,73 MEDIAN $44,950 $30,455 $25,964 $29,82 RAW LAND VALUE = $25,000 (AGGRESSIVELY ROUNDED DOWN) If the Willow Point lots were not valued using a raw land calculation, they would be valued similarly to the Steamboat Lake replat lots which are valued at $35,000 for 205. The developers have held on to most of these parcels since the subdivision was created in There have been five transfers since 2008; only one of those transactions was an arms-length sale which occurred in The other four transactions were transfers between the developers or their affiliates. Routt County Assessor s Office Page 2

3 PARCEL A 4 6 C PT OF PT OF 2 A PT OF 0 PT OF 0 PARCEL B MYRTLE COURT PT OF 6 PT OF 3 6 ") 29 5 PT OF E OLIVE STREET A 3 2 E FRISCO PLACE B 305 B Feet This map is for planning purposes only. It was prepared from publicly available information. Any other use or recompilation of the information is sole responsibility of the user. This map should not be used to establish legal title, boundary lines, locations of improvements or utilities, or relied upon in any flight activity. Routt County expressly disclaims all liability reguarding accuracy or completeness of this map. µ PT OF 2 E OUTLOT A Source: Esri, DigitalGlobe, GeoEye, i-cubed, USDA, USGS, AEX, Getmapping, Aerogrid, IGN, IGP, swisstopo, and the GIS User Community D

4 The petitioner mentions in his protest that there is a negative influence to the two lower parcels from the proximity to the County Road and the treatment plant. Satellite imagery measures the distance to the buildings sites ranging from a low of,00ft to as much,500ft to the treatment plant. As for the distance from CR-29, the range is 280ft to 450ft, including an elevation gain of >40ft to as much as 30ft. In addition, the developers created two Outlot parcels that mitigates or buffers these building sites from traffic view & noise. This buffer zone is a fairly steep slope that significantly impairs the view of passer-by s. The pictures below show the view across CR-29 looking towards Willow Point Subd: Routt County Assessor s Office Page 4

5 The established buffer zone created by the Outlots provide substantially more space between traffic and the Willow Point building sites than is typically available in the Steamboat Lake subdivisions to the north which sit immediately adjacent to the CR-29 rightof-way. The Petitioner claims that the smell from the water treatment facility affects the lower lots values. This could not be substantiated while on a site visit to the lots in question. It is my opinion the sheer distance is substantial,00ft is the closest and as much as,500ft for the north-end of Lot 5. Furthermore, there has not been a sale of one of these lower lots to show market evidence of a compromised sale price due to proximity to this treatment facility. In the future, if these parcels sell with a recognizable decrease in the sale price compared to other lower parcels within the subdivision, an adjustment could be made at that time. The same can be said for the petitioner s claim of the overhead power line influence also mentioned in the protest regarding Lot 5: illustrated in the photo below. Routt County Assessor s Office Page 5

6 Appraiser s Conclusion & Recommendation: The subject lots are valued using the raw land calculation. Raw land does not have improvements and so does not factor in any influences such as the existence of a well or the well flow, the building sites being stacked or an extra tax burden from a Water and Sewer District. These adjustments could be applied when these lots are no longer valued as raw land. Additionally, the stacked building sites are countered by their increased view, privacy in the subdivision and lessened noise from CR-29. The petitioner requests a subdivider discount that cannot be given per Colorado case law and requests a reduction in value that is not applied to raw land values or cannot be substantiated. Recommend denial of the petitioner s estimate of value while maintaining the current value of $2,500 on each of the four lots. Sarah Hagenbuch Colorado Licensed Appraiser: AL Routt County Assessor s Office Routt County Assessor s Office Page 6

7 Steamboat Lake ") 209 ")209A ") 29 ")62 ") 62 ") 23 ") 64 Elk River ") 23