Ann Arbor City Council and developers have debated over a 51-home subdivision for years. The original proposal called for the removal of 200 old growth oak trees, but was unanimously rejected by City Council in 2017. But now, a new alternative called “The Canopy” would preserve most of the old forest fragment at 2857 Packard Road, while erecting a 2-story apartment or condo building loaded with green features.
This week I want to highlight the upcoming tax appeal season.
Generally in the first weeks of February (sometimes later in Macomb County), property owners will receive a Notice of Assessment in the mail. If you have not received a Notice of Assessment when you expect it, you should immediately contact the assessor’s office in the municipality in which the property is located. Not receiving your Notice of Assessment does not extend any deadlines. It is the property owner’s responsibility to receive the Notice of Assessment.
Once the Notice of Assessment is received, it should be reviewed to confirm it is: (a) accurate; and (b) appropriate. I have an easy guide to reviewing your Notice of Assessment on my tax appeal blog, which can be accessed here.
Most property owners do not understand that, although the Taxable Value is what is used to calculate the tax bill, the Assessed Value/State Equalized Value is what is actually appealed in a tax appeal. In order to reduce an owner’s tax bill, the owner must demonstrate that the Assessed Value should be reduced to an amount less than the Taxable Value. Only then will the tax bill be reduced. The easy “back of the napkin” method for analyzing a tax appeal is to determine whether the property’s market value is less than twice the Taxable Value. In other words, if the Taxable Value is $100,000, the tax bill will only be reduced if an owner can demonstrate the market value is less than $200,000.
Notably, the date of value for a tax appeal is December 31, 2020. This may impact an appeal’s validity, as the impact of the COVID-19 pandemic may not be fully felt until later in 2021. Last year, I wrote a blog post about the impact of COVID-19 on tax appeals, which can be found here.
There are also deadlines that apply to tax appeals. First, for property classified as residential or agricultural, the owner must first appear before the March Board of Review. This is a mandatory requirement to pursue a tax appeal. After receiving the determination of the Board of Review, the owner must then file a Petition before the Michigan Tax Tribunal by July 31.
For property classified as commercial or industrial, the owner is not required to appear before the March Board of Review, although the owner is permitted to appear. The deadline for filing a Petition before the Michigan Tax Tribunal for these properties is May 31.
My law firm is happy to review properties to determine whether a tax appeal is appropriate. If you are interested in such a review, please email me at dnykanen@fnrplc.com.
The forthcoming flood of retail closures is starting. Godiva is closing 128 storefronts and cafes across North America by the end of March. Their chocolate will continue to be available online and in partnering retail and grocery stores. With the bulk of profits stemming from tourism, special occasion and impulse buying, the decrease for in-person shopping is to blame for the company’s shift. Chocolate sales have risen by 5% during the pandemic. In-store operations will continue in Europe, the Middle East and Greater China.
When compared to the 20 bankruptcies that were filed per month over the last year, the 11 companies who filed for bankruptcy over the past month could point to a slow down. Cheap money/capital have helped troubled companies stay afloat, slowing the bankruptcy filings.
However, the retail, office, and hotel sectors are particularly vulnerable. The impact of the pandemic is trickling down as the government intervention to prop up the economy starts to slow.
Farmington Hills-based City Club Apartments, LLC, has a $95 million vision for its Midtown development. The Detroit Planning Commission will consider a rezoning request for a 2.3 acre chunk of land at a February 4 hearing. The development will include a 16 story tower with 273 apartments, a complementary building with 77 apartments and 12,500 square feet of street level retail space. A one-story building with 32,000 square feet will house a national general merchandise retailer; retailer specifics are presently unknown. Construction begins this summer on the southeast corner of Woodward and Mack.
Viktor Gjonaj, former head of the Troy-based Imperium Group, LLC, has been charged with bilking at least two dozen investors of $26.4 million to fuel his Michigan lottery habit. Gjonaj promised investors that he would buy, develop, and resell real estate for a profit, but did not promise a specific rate of return. Of the 66 real estate deals presented, none came to fruition. Instead, he used the funds to support his $1 million a week Daily 3 and Daily 4 gambling habit. The state’s $5,000 daily limit on lottery terminals, installed in 2018 in response to Gjonaj’s lottery activities, did not slow his habit. Gjonaj’s current location is unknown.
Michigan’s DNR purchased 67 miles, with a price tag of $985,969, in an effort to secure permanent trail easements and improve existing trail connectivity. The purchase spans Dickinson, Gogebic, Houghton, Iron and Ontonagon counties in the Upper Peninsula. The purchases were funded, in part, by the Michigan Permanent Snowmobile Easement Fund. The bulk of the purchase is for snowmobile trail use, but multi-use trail opportunities may be in the future.
In the past four months of 2020, the number of homes sold exceeded the number of homes listed, demonstrating the continuing residential real estate boom, and showing that the residential market continues to be very seller-friendly.
As we observe the impact of COVID-19 on the residential, office, and retail sectors, there is a much longer-term factor that I am also observing. The impact of electric and/or autonomous vehicles on real estate.
First, electric vehicles. As the percentage of electric vehicles increases, there will inevitably be an impact on petroleum retailers. These gas stations are generally found in “prime” corner locations. If there is an economic impact on gas stations that causes a contraction of the number of locations, this will open up these locations to alternative developments. However, given the simultaneous decline of bricks and mortar retail, the users of these prime locations remain to be seen.
Second, autonomous vehicles. There are two potential impacts of autonomous vehicles that I want to highlight. As an initial matter, if one is able to “call” a car to pick you up when you are shopping or working, the need for close parking locations may decrease. This could have an impact on the requirement of zoning ordinances to provide on-site parking. If zoning ordinance requirements change, the impact on land use could be substantial. Second, if the shift to autonomous vehicles leads consumers away from vehicle ownership, and towards “on-demand” vehicles, this could have significant impacts both in our infrastructure needs and, in Detroit specifically, in the economy. If vehicles are rented on demand rather than owned by individuals, the sales volume could substantially decrease, as consumers could make more efficient use of available vehicles. Imagine if your car, parked in your office parking lot, was instead able to be used throughout the day by others. If sales volumes decrease, the economy in Michigan could be detrimentally impacted.
Again, these are all long term issues. But a smart investor, owner, or consumer, will monitor the trends.
The Cincinnati/Northern Kentucky International Airport, also known as CVG, has 15,000 fewer arrivals and departures since the start of the pandemic. That doesn’t mean their runways are clear. Their air cargo business is booming. Amazon Air is completing a 798,000 square-foot sorting center, a seven-level parking structure, and acres of concrete to accommodate 20 aircraft. The new facility is scheduled to open in the fall. This boom in logistics is impacting industrial development around the country.
