Property Reassessment

January 22, 2009

Building adjusted by $8.4M

Reassessment firm had valued former Citizens Bank Building, garage at $12.5 million.

By Jennifer Learn-Andes jandes@timesleader.com
Luzerne County Reporter
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A Luzerne County assessment appeal board has granted an $8.4 million assessment reduction to a downtown Wilkes-Barre property, making it one of the largest single adjustments to the reassessment company’s values.

The property – the former Citizens Bank Building and neighboring parking garage – was originally valued at $12.5 million by reassessment company 21st Century Appraisals Inc.

Owner Mendy Gold complained about the original value because his company – Citi Tower LLC – had purchased the West Market Street building and a parking garage for $3.8 million in April 2008.

Company representatives said this week that their lawyers are weighing options on future assessment appeals because the new value of $4.07 million is still higher than the purchase price.

Valuing a commercial property such as Citi Tower is different than a residential one, said 21st Century representative Tim Barr.

Residential values are typically based on the sales of similar properties in the same neighborhood, but an “income approach” is also used for commercial properties.

Evaluators estimate the rental income and then subtract overhead costs such as utilities and sewage to come up with a value. The condition, amenities and location of a building play a role in the rent.

To help ensure accuracy, 21st Century requested rental income and overhead costs from commercial properties, but Barr said the previous owner of the bank building and garage did not supply that information.

“A lot of people decide to provide the information during formal appeals because they realize it’s relevant,” Barr said.

The county had agreed to keep income/overhead information internal because it may be considered proprietary.

Barr also noted that the $3.8 million sale occurred after the value was set by his company. The reassessment values were based on sales from 2004 through 2007.

His computer records show that Citi Tower presented an appraisal during the formal appeal indicating that the property was worth $3.9 million.

County Assessment Appeals Board Chairman Andy Shiner said the Citi Tower reduction was one of the largest appeals board reductions.

Shiner estimated that 80 percent of 21st Century’s values were on the mark, and he said most of the ones that merited adjustments were “atypical” or changed as a result of new information provided by property owners.

Jennifer Learn-Andes, a Times Leader staff writer, may be reached at 831-7333.

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