(Photo courtesy of the City and Borough of Juneau)

(Photo courtesy of the City and Borough of Juneau)

My Turn: Open letter to restore public trust — the Wells Fargo dilemma

Dear Sen. Kiehl, Rep. Hannan, CBJ Assembly members, city manager, city clerk and mayor:

It is amazing to me that the CBJ acts with impunity to deny they circumvented the property mil rate cap to skyrocket assessed values in previous years and now have the audacity to propose raising the mil rate along with assessed property value again.

It’s a small detail, but rather than focus on how much they want to get, may I suggest the buildings are a year older and depreciation and obsolescence should be part of the equation along with one other small detail:

The KeyBank building was sold for $1,250,000 and assessed for $2,500,000 for decades.

Juneau assessor has a problem: The Wells Fargo building is for sale at $1.8m and assessed at $3m. An investor will pay less than $1.8m for this property. Will the assessor label this market sale an outlier like he did with the Behrends Bank building market sale? Will assessed value be market value at $1.8m per AS 29.45.110? Will an investor be less likely to invest because the property taxes will exceed the full and true value? Is Juneau less affordable? Will an investor ask what is the funny business going on with property taxes and be less likely to invest here. Finally, will the assessor continue the charade that the mass appraisal scheme supports a value 50% higher than market value?

State Assessor Joseph Caissie says, “let’s say the assessor is crazy,” and sets full and true value “you know, 200% of market value,” well “they have this huge tax base that‘s way out of whack” and it is the job of “the Assembly to set the mill rate lower.” Well, the huge tax base that is out of whack is used as collateral for CBJ bonds and 200% of market value is not “full and true value,” and essentially destroys affordability in Juneau in the mask of uniformity.

The CBJ is a runaway train.

CBJ’s duty is to follow AS 29.45.110 and set assessed value at true and full value, not a uniformly high assessed value tethered to budget dreams. The IAAO states, “In an appeal, a complete defense does take on some elements of a single-property appraisal. Computer-assisted mass appraisal for all its strengths tends to retreat into the background during a protest. A protest, by nature of its focus on an individual property, often requires the skill of individual property appraisal.”

The assessor used an “Automated Valuation Model” (AVM) which is a software program dependent on the credibility of the data modeler. Michael Dahle’s work was not credible because he used building costs of $100-$200 per square foot to lower the cost of new building instead of actual building costs from $450 to $700 per square foot; his models lack scale, he curated sales, and he refused to use property owner’s income and expenses even when part of the record. The replacement cost new/sales ratio approach is an accepted practice by the IAAO who cautions it is misused when bad data is inputted. It can also be discriminatory when valuing older properties. Appraiser Charles Horan has cautioned bad data in, bad data out. Review the model and use actual Juneau building costs, and you will find as our MAI appraiser did that the replacement cost new technique does not work because it results in wildly high property values that are untenable to use.

On appeal, the mass appraisal system fades into the background.

The three standard methods of appraisal are to be used: the sales comparison approach, the income approach and the cost approach.

I sincerely hope the CBJ stops the ongoing “money grab,” and opens a transparent debate to set property value at full and true value rather than “uniformly” high property values.

With the flush CBJ coffers they must return the ill-gotten gains of the property tax scheme to citizens through a supplemental notice or decline in value process.

Let me repeat the public believes the CBJ went to any lengths to collect property taxes from over-assessed properties.

Let the healing began, admit your past mistakes so this wrongdoing doesn’t haunt you further.

• Greg Adler is a principal in the Goldstein Improvement Co. His family has owned property and conducted business in Juneau since the 1880s. Adler and his family also own a home on Pioneer Avenue in West Juneau.

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