Client: Producer of Paper Products
Challenge: Defend "No Value" Appraisal in Front of Tax Tribunal
AccuVal was asked to value an industrial building in Michigan containing more than 760,000 square feet on a 36-acre site for the purposes of obtaining a loan. Our analysis indicated that the property had a value of $0 or "no value." We based our zero value finding on the poor functionality of the property's floor plan and the limited market demand for properties of this type. AccuVal's zero value conclusion proved to be of interest to the company's tax attorney. This well-known manufacturer of paper products decided to appeal its tax assessment based on our value conclusion. Despite an initial concern that a Tax Tribunal would not find a zero value to be credible, AccuVal's ability to convincingly present the data supporting its value conclusion prompted the company and their counsel to proceed with the aggressive goal confident that our value conclusion had a very solid foundation.
Everyone's initial reaction was disbelief; how can this large building on such a substantial site have "no value?" AccuVal's answer was laid out clearly and was meticulously documented. Despite the building's modern facade, the floor plan was useless to other users due to an abundance of design characteristics that rendered the building functionally obsolete. Any remotely relevant local and regional market data was investigated and, when logically presented, clearly showed that even well located industrial buildings with efficient floor plans were of little demand. In addition to presenting compelling evidence to the Michigan Tax Tribunal supporting its position, AccuVal's review of the opposition's appraisal highlighted a host of unsupported assertions and inaccuracies, including relying on comparables which were not, in fact, comparable. After hearing AccuVal's testimony supporting our value conclusion and our indictment of their evidence, the assessor's counsel motioned for recess and moved for a quick settlement. Once the "no value" conclusion had been validated, our client opted to be the ideal corporate citizen and to pay taxes based on a minimal assessment.
The tax assessment was reduced by approximately 90 percent, more than $13 million, because our appraisal effectively communicated the location, market and floor plan characteristics that made the property completely obsolete. The dispute was won by providing strong evidence in terms everyone understood and identifying the erroneous suppositions and flawed "facts" relied upon by the opposition.
The ability to support value conclusions with solid documentation. The vision to find the flaws in well-packaged appraisal conclusions of our opposition. Clear, concise communication. That's The AccuVal AdVantage™ at work.