Downtown assessments unchanged

January 05, 1995|By Kevin L. McQuaid | Kevin L. McQuaid,Sun Staff Writer

In recognition that Baltimore's downtown office market has yet to recover from the industry's collapse, the latest state assessments of downtown office buildings have remained unchanged from previous, downwardly adjusted levels.

State officials, who mailed the triennial assessment notices to property owners late last week, expect the latest round of valuations to be less vulnerable to significant reductions through appeals. This time, they said, the current assessments accurately reflect the status of the local commercial real estate market.

"We've basically rolled over many of the prior values for this cycle," said Owen C. Charles, a state Department of Assessments and Taxation supervisor for Baltimore. "We've observed how values have gone down, and we think now we've brought these properties in line with the market."

Most of the current assessments were based on levels obtained by property owners after they successfully appealed the assessments placed on their buildings during the previous state review in 1992.

During the subsequent three years, the state's valuation of downtown office towers fell an average of 13 percent, and in some cases, as much as 65 percent, through appeals.

The 26-story Signet Tower, for example, reduced its 1992 assessment of $65.4 million to $38.47 million last year, representing a 41 percent decline. Like the assessments for nearly every downtown office tower, the most recent assessment of the building, at 7 St. Paul St., remained at that reduced level.

Because of the many successful appeals, the city has had to issue millions in refunds since 1992. Downtown properties, while a small percentage of the city's total size, account for about 10 percent of the city's total property tax revenues.

Many property owners said they were satisfied with the recent assessments, after three years of battling the state for reductions based on decreasing rental incomes and increased expenses.

"We received a substantial reduction last time around, so we don't plan on appealing," said David W. Kornblatt, chairman of the Kornblatt Co., owner of the 28-story St. Paul Plaza at 200 St. Paul Place, which dropped from roughly $42 million in 1992 to its present assessment of $28 million. "We're satisfied with the current valuation."

The only major property in the city's business core to experience an increase was the 28-story 100 E. Pratt St. project, which rose just 4.7 percent for the 1995 through 1998 assessment period to $84.8 million, state records showed.

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