Arlington County will review the big jump in commercial real estate assessments in Clarendon first reported by ARLnow.com last week.
The county said Friday evening that it will take a look at “all commercial real property assessments with a 50% or greater increase from calendar year 2013.”
There are nearly 90 such properties, including Rien Tong restaurant (3131 Wilson Blvd), which saw its assessment increase 197 percent, and Spider Kelly’s (3171 Wilson Blvd), which saw its property valuation increase 83 percent.
The assessments are updated annually and used to calculate county property taxes.
“A small number of commercial property owners did see substantially increased assessments, and this review is meant to correct any mistakes that may have been made,” said county finance director Michelle Cowan, in a press release, below.
Arlington County has begun a review of all commercial real property assessments with a 50% or greater increase from calendar year 2013, including several parcels in the Clarendon area that saw significant increases.
The review will affect fewer than 90 properties, of approximately 3,300 total commercial parcels. Both the original assessments, and the underlying data for each of the affected properties, will be re-examined to determine whether the assessment should be sustained or changed.
“A small number of commercial property owners did see substantially increased assessments, and this review is meant to correct any mistakes that may have been made,” said Dept. of Management and Finance Director Michelle Cowan. “We want to ensure fair and equitable assessments for all property owners.”
Arlington’s Real Estate Assessment office is mailing letters to property owners of all properties whose assessments increased 50% or more. Upon conclusion of the administrative review by the County, property owners will still have the ability to appeal their assessment through the Board of Equalization. It is anticipated that the County’s administrative review will take 30-45 days.
Overall, commercial assessments, which include office buildings, apartments, hotels and retail, grew 5.4 percent over CY 2013, primarily fueled by new construction and strength in apartment properties due to rising rents. The specific parcels that were questioned in the Clarendon area fall into the general commercial category class, which includes retail and other types of properties, excluding office buildings and apartments. The general commercial assessment category increased by 12.4 percent over CY 2013.
Assessments for most commercial properties are based on an income approach and evaluate how much income a property would produce if it were rented as an apartment, store, factory, etc. This approach considers operating expenses, taxes, insurance, maintenance costs, and the profits most people would expect from the rental. The net income after operational costs, plus a capitalization rate, determines the assessment value. It is not based on the profitability of a particular business; rather the assessment value is based on the rents and expenses of the property and building in which the business is located.