City of Alexandria, Virginia
________________
MEMORANDUM
DATE: FEBRUARY 6, 2013
TO: THE HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
FROM: RASHAD M. YOUNG, CITY MANAGER /s/
DOCKET TITLE:
TITLE
Consideration of Calendar Year 2013 Real Property Assessment.
BODY
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ISSUE: Results of calendar year 2013 Real Property assessments.
RECOMMENDATION: That City Council receive the report.
BACKGROUND: Included in the attached report are the annual changes in real property assessments from CY 2012 to CY 2013 and historical statistics related to assessment appreciation/depreciation, new construction, and residential sales activities. For valuation purposes, annual assessments have an effective date of January 1. The assessments were mailed to the property owners on February 8.
DISCUSSION:
OVERALL CHANGE IN CY 2013 REAL PROPERTY TAX BASE
This year, the City's overall real property tax base increased 2.79% from the original January 1, 2012 assessment to January 1, 2013, or $973.52 million from $33.78 billion in CY 2012 to $34.72 billion in CY 2013 (Attachment 1, Page 2, Line 74, Column 5).
The equalized assessment represents the year ending 2012 assessments (as of December 31, 2012), and reflects changes that occurred throughout 2012, including administrative reviews, appeals, decisions of the Board of Equalization, supplemental assessments, subdivisions, consolidations and demolitions. Attachment 2 shows the change in the tax base from a starting point of the equalized assessments. The increase in the tax base from the equalized 2012 assessments at year-end to January 1, 2013, is 3.03% from $33.7 billion in 2012 to $34.72 billion in 2013 (Attachment 2, Page 3, Line 66, Column 5). This increase marks the third year of slight increases (2012 increase of 4.05%, the 2011 increase of 3.1%) and signifies a reversal from the previous two years (CY 2009 and CY 2010) when the tax base decreased 6.32% and 2.10%, respectively. This increase also reflects a general improvement in most sectors of the real estate market, particularly in residential and rental apartment properties. The assessment value has not yet recovered to the 2008 value of $35.1 billion.
Points of Interest Relating to CY 2013 Assessment Changes:
- Locally assessed real property assessments increased 3.7% (which consists of both new construction and appreciation in value of existing property), or $1.22 billion, from $32.87 billion in 2012 to $34.09 billion in 2013 (Attachment 2, Page 2, Line 42, Column 5).
- Residential property increased 3.06%, or $572.82 million, from $18.81 billion in 2012 to $19.38 billion in 2013 (Attachment 2, Page 1, Line 18, Column 5). Residential property was at its highest level of $20.3 billion in 2006.
- The commercial property tax base increased by 4.55%, or $640.75 million, from $14.06 billion in 2012 to $14.71 billion in 2013 (Attachment 2, Page 2, Line 40, Column 5).
- State-assessed public service corporation property assessments decreased 23.43%, or $194.13 million, from $828.41 million in 2012 to $634.29 million in 2013 (Attachment 2, Page 3, Line 64, Column 5). The majority of the decrease (76.27%) was attributable to the October 2012 shutdown of GenOn which resulted in an assessment loss of $148.06 million. The property is currently assessed as land only.
- The 2013 state-assessed P.S.C. assessment is the value effective January 1, 2012. These values are certified by the State Corporation Commission (SCC) and the Virginia Department of Taxation (VDoT) in late September of the effective year of the valuation. The City bills all non-locally assessed properties on a fiscal year basis in order to accurately reflect these assessment changes.
- Tax exempt real property assessments decreased 7.41%, or $422.98 million, from $5.71 billion in 2012 to $5.28 billion in 2013 (Attachment 2, Page 4, Line 85, Column 5). The property value decrease of $430.14 million was partially offset by $7.16 million of new growth, driven by new ARHA construction in Old Town Commons. Decreases were primarily associated with the standard revaluation of land parcels zoned for public open space uses, which have very limited development potential.
- Taxable new construction activity added $121.3 million for CY 2013. Residential construction accounted for $63.71 million of the new growth, while the commercial sector which includes multifamily rental, accounted for $57.58 million. In CY 2012, $160.71 million in new residential and commercial growth was added to the City's tax base. Overall, $408.05 million in new construction has been added to the tax base over the last three years. This equates to approximately 1.18% of the CY 2013 total taxable base.
- On-going new construction and redevelopment projects include: the continued build-out of conventional townhouses and urban loft condominiums within Land Bays H and I of Potomac Yard; the continued build-out of conventional townhouses, urban loft condominiums and ARHA multifamily apartment rental units in Old Town Commons; and the mixed-use Printer's Row which is 22-unit residential townhouse condominium development. Safeway at 3526 King Street will redevelop the property with a new 61,949 square-foot Lifestyle Grocery store. In Old Town a developer is redeveloping the Sheet Metal Workers Building into a high-end residential multifamily condominium project (The Oronoco) containing 60 units. Another redevelopment project is the Calvert Apartments which will consist of 332 multifamily rental apartments and a large first floor retail component. Assessment growth at Potomac Yard will be set aside to fund the Potomac Yard Metro Station.
- New construction includes a number of multifamily projects throughout the City that that developers put on hold until market conditions improve including: Braddock Metro (164 multifamily units); Braddock Gateway I - Phase 1 (270 multi-family units); Landmark Gateway (492 multifamily units); and several mid-rise projects in Potomac Yard. Refer to Attachment 3 for a complete list of the more substantial developments, proposed and on-going, within the City of Alexandria.
- Distribution of Real Property Assessments
- Real property classified as residential for assessment purposes for CY 2013 represents 55.82% of the total real property taxable base, while property classified as commercial and public service corporations represents 44.18% of the base. If multifamily housing is excluded, commercial comprises 27.69% of the base. A historical distribution of the City's real property tax base allocated between classifications of real property for assessment purposes is detailed in Attachment 4.
- Attachment 5 shows the distribution of the 2013 assessments in terms of actual dollars and percentages by land use. Land uses include: residential single-family; residential condominium; residential vacant land; commercial multifamily rental; commercial office, retail and service; commercial and industrial vacant land; and public service corporations.
- Land Values
- Unimproved land remains a scarce commodity in the City of Alexandria. There has been some activity in apartment land with several significant land sales recently. Of particular interest are a number of multifamily land transfers this year, and a few in-fill residential lot sales (Attachment 6).
Specific details regarding residential assessment changes for CY 2013 can be found in Attachment 7, detailed analysis of the commercial market can be found in Attachment 8, and an overview of the assessment process is presented in Attachment 9.
ATTACHMENTS:
Attachment 1: CY 2013 Real Property Assessment Land Book
Attachment 2: CY 2013 Real Property Assessment Summary Including Appreciation and Growth
Attachment 3: New Construction Activity
Attachment 4: Real Estate Tax Base Distribution (CY 2001 to CY 2013)
Attachment 5: Distribution of 2012 Assessments by Land Use
Attachment 6: Residential Infill Lot Sales
Attachment 7: Points of Interest - CY 2013 Residential Assessment Changes
Attachment 8: Analysis of the Commercial Market
Attachment 9: Overview of the Assessment Process
STAFF: Department of Real Estate Assessments
William Bryan Page, Acting Director
Jeffrey Bandy, Appraiser Supervisor
Tim Francis, Appraiser Supervisor
Ryan Davies, Appraiser Supervisor
Clare Knauss, Senior Appraiser
Stephanie Branizor, Senior Appraiser
George Byrne, Senior Appraiser
Annwyn Milnes, Senior Appraiser
Eileen Oviatt, Management Analyst II
Roxanne Vanderford, Real Estate Records Manager
Marilyn Brugueras, Account Clerk III