By Domingos Santos, Managing Consultant, Phoenix
Brunswick County, North Carolina began the 2015 property revaluation process on Monday, holding a public hearing on the schedule of values the tax department will use to rate properties. However, attorney Elaine Jordan for The Coastal Companies voiced concerns to the county commissioners that the document is biased against property owners who may want to appeal their values and an executive with Ocean Ridge Plantation warned the board not to allow the revaluation to assess golf courses unfairly, according to the State Port Pilot.
By Brett Walker, Senior Managing Consultant, Dallas & Adrian Dekker, Senior Managing Consultant, Atlanta
For hoteliers, how you meet the travel needs of tourists and business professionals is a determinant of success. And as within any industry, the hospitality industry is subject to a number of uncontrollable variables that affect those involved in management or ownership of hotels, restaurants and other hospitality establishments. These uncontrollable factors include local and global economics, population shifts, and legal changes. It is crucial to be aware of these variables and monitor trends to ensure their impact on your business is a positive one.
The real estate market has significantly improved since the beginning of the Great Recession, as indicated by recent year-end reports, such as the ULI Emerging Trends 2013. As the U.S. continues to see modest gains in market fundamentals, the recovery will maintain throughout the year. Certain asset classes are seeing tremendous value increases, including the hospitality sector.
Property tax is not a fixed expense. It is manageable but often requires hiring someone experienced with these ad valorem taxes to assist. Hotel assets are very sophisticated investments that are typically left to those savvy investors that have specific knowledge of the operations. So the process of choosing a property tax consultant to represent you should entail as much sophistication and savvy as the buying process. The article discusses who the consultants are and the Pro's and Con's of each type; why hotel assets deserve more than just a local consultant; how to compensate the consultants; and how to evaluate their performance. Armed with all of this information, one should be ready to truly manage below the line.
A recent article in HotelNewsNow.com discusses the considerations for choosing, compensating and evaluating third-party consultants hired to manage hospitality property tax expenses.
For the first time in half a decade, golf in the United States is growing as the economic recovery strengthens. According to the Cape Cod Times, the number of rounds played on American courses has climbed for four straight months through February, and 2012 is expected to be the strongest since the recession. The $20 billion a year green fee business is beginning to get back to its peak and consumer confidence in general is growing.
Paradigm Tax Group recently sponsored and presented at the iGlobal Hospitality & Lodging Investment Summit 2011 in New York City. The one-day event provided a snapshot of the current health and future outlook for the global hospitality industry. Through a series of focused panel discussions, the event examined emerging trends and opportunities, along with the costs, benefits, risks and rewards of hospitality investments now and into the foreseeable future.
In Arizona, there are several classes of property (1 -9). Each class of property has its own ratio (the percentage applied to the Full Cash Value to arrive at the Assessed Value). For example: Class 1 (commercial property), 20%; Class 2 (vacant land), 16%; Class 4 (rental residential property), 10%; Class 9, 1%.
A recent hospitality client of Paradigm Tax Group presented itself as a very unique property. It is a large convention hotel built on State Land. This type of property is called an IPR (Improvements on (of) Possessory Rights). Since the improvements are not secured to the land (land not owned by the same entity as the owner of improvements), IPR's are considered Personal Property.
In reviewing the statutes, Paradigm Tax Group successfully determined that this property should qualify as Class 9 (1%), thereby lowering the ratio from Class 1 (20%) and effectively saving our client 95% on its property taxes. To become Class 9, the following criteria had to be met:
- The improvements had to be owned by our client.
- The land must be owned by a government entity.
- The improvements must be used primarily for Convention or recreational use.
- At the end of the lease, the improvements must be turned over to the government entity who owns the land.