A recent ruling by the Utah State Tax Commission concerning the assessment of pipelines could have major implications for pipeline companies statewide. In the case of Summit Water Distribution Company vs. the Summit County Board of Equalization, the Tax Commission ruled that pipelines are not personal property, and the company’s water pipeline should be assessed as real property. For property tax purposes, Utah pipelines have historically been assessed as personal property, which are depreciated over time. The ruling’s sweeping changes to the assessment of pipelines could open the door for Summit County, and other jurisdictions with pipelines, to recoup millions of dollars in uncollected property taxes due to personal property values being depreciated over the years.
As the Puget Sound/Seattle region has evolved into one of the nation’s leading markets for technology jobs, the office sector is reaping the benefits. Fifteen new office towers are currently under construction in the central business district (CBD) and rents are rapidly increasing. According to the recent Global Prime Office Occupancy Costs survey from commercial real estate services firm CBRE, downtown Seattle experienced the most significant annual change in occupancy costs, increasing by 17.3 percent. A third quarter report from commercial real estate services firm Kidder Mathews found that the city’s downtown vacancy rate has dropped to 8.8 percent, back to pre-recession levels and are trending downward. Rents for the CBD have increased almost 10 percent year-over-year, according to a report from commercial real estate services firm Colliers, pushing value-minded office tenants to look at class-B and class-C buildings.
The Cincinnati City Council approved new framework for awarding property tax breaks to developers doing projects in downtown and Over-the-Rhine. The number or years that developers can receive property tax abatements was increased, and the amount that downtown and OTR developers will kick in to the streetcar’s operations fund will likely triple. The changes were made in an effort to firm up the streetcar’s operations funding for its first 15 years in service and minimize the likelihood that the it will need to dip into the city's general property and earnings tax revenue generated by all residents.
CentraState Healthcare System, located in Freehold Township, is a private, not-for-profit health organization with 285 in-patient beds and 2,600 employees, making it one of western Monmouth County's biggest employers. Five of CentraState’s properties, ranging from the hospital to assisted-living facilities, are exempt from paying property taxes due to its nonprofit status. However, after a state Tax Court judge earlier this year ruled that Morristown Medical Center had so intermingled its nonprofit and for-profit services and finances that it could no longer qualify for a tax exemption under state law, many nonprofit New Jersey hospitals are concerned they will see similar fates. In this case, CentraState currently pays $1.7 million a year in property taxes, or about 43 percent of its maximum assessment, but could be on the hook for $2 million more.
Downtown Los Angeles is undergoing a surge of investment, with developers in the process of overhauling more than one million square feet of tired warehouses and old office buildings in at least seven projects, according to real-estate data firm CoStar Group Inc. All are aimed at creative companies in the technology, media and entertainment industries, and another one million square feet-plus of similar projects are planned in coming years. However, very few firms in those industries have actually moved to the area in recent years, raising concerns of oversupply.
Apartment vacancies in Manhattan have risen to the highest level in more than nine years, which may indicate that the post-recession run-up in rents may begin to cool. The vacancy rate in November was 2.87 percent, up from 2.31 percent a year earlier and the highest since August 2006, according to a report by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. There has also been a jump in lease sweeteners as landlords struggle to fill vacancies, another sign that rents may have reached their tipping point. Fourteen percent of newly sign leases came with concessions, such as a month’s free rent or the landlord’s payment of the broker fee -- the biggest share since March 2011.
Apple Inc. investing at least $13 million in the massive Elk Grove campus expansion is the latest sign that the Sacramento region is finally gaining traction with technology employers. While Bay Area office lease rates have skyrocketed over the past five years, Sacramento remained stagnant. However, Apple converting one of its warehouses into a logistics center and possibly adding several thousand jobs could indicate that Sacramento is beginning to experience the spillover benefits seen in past booms.
Despite the summer slowdown, investors can’t seem to stay away from the multifamily sector, and transaction activity is high once again. October was an especially busy month, as investors traded $19.6 billion in apartment properties in October, up 65 percent from the year before, according to Real Capital Analytics. While the $7.6-billion sale of Home Properties of Lone Star Funds accounted for 40 percent of the deal volume in that month, the volume of transactions still would have been slightly higher than the year before. So what continues to draw new buyers to the multifamily sector? Investors are attracted to the fundamental strength of the apartment business and high yields, at least compared to other investment options.
After officials unveiled a projected $1.87 billion surplus heading into the next legislative session, The Minnesota Chamber of Commerce and more than 70 other business groups began advocating for business tax cuts once again. Both the House and Senate saw landmark business tax relief proposals last year, and lawmakers are optimistic for new tax legislation moving forward in March. The Minnesota Chamber said tax cuts will be the top of its legislative priority in an effort to lighten businesses’ tax burden and ensure Minnesota’s competitiveness.
Thanks to a couple of massive mixed-used development on Irving's new rail line — the former 78-acre Texas Stadium site and the proposed 157-acre project surrounding Verizon's campus — the North Texas city is experiencing some big corporate interest once again. According to the Dallas Business Journal, that interest ranges from Irving-based Pioneer Natural Resources (which has been looking at real estate options for more than 600,000 square feet for months) to an undisclosed company from outside of Texas looking for 500,000 square feet of space. Irving’s growing urban center, with projects such as the Water Street mix-use development and a convention center hotel currently underway, and the large amount of space available for more projects is making the city even more attractive.
Today the Michigan House Tax Policy committee advanced legislation that would provide large tax breaks to cloud-computing data center companies. The tax exemptions were requested by Nevada-based company Switch, who announced it will convert the former Steelcase pyramid into a data center that will result in a $5 billion investment and 1,000 new jobs over the next 10 years if the series of bills are approved. Three competing bill packages have been introduced in the House and Senate, and each would exempt "data centers" from sales, use and personal property taxes. It also would exempt "co-located businesses," or clients of the data centers, from those taxes. Some of Switch's clients include companies like Amazon, eBay and Intel.
In a ruling on Albany school taxes, a California appeals court limited the amount of time taxpayers have to challenge their new property assessments to 60 days. Even if a local school board assesses a new property tax, and an identical measure in a nearby town is ruled illegal a few months later, you will not be able to challenge the tax. Legally enacted or not, if no one objects within 60 days, “the public is forever barred from contesting the validity of the agency’s action,” the First District Court of Appeal in San Francisco said Wednesday in a case from Alameda County.