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Assessments soar on commercial and industrial real estate

Post Time:Mar 20,2012Classify:Industry NewsView:221

 

Allegheny County's property reassessment increases may have reached a high watermark with ATI-Allegheny Ludlum's Brackenridge Works.

 

How does a 1,300 percent increase sound?

 

While that may be an extreme example, overall assessments on commercial and industrial real estate increased dramatically in each of the Valley's 19 communities in the county.

 

The biggest overall increase on such properties is in East Deer, where the reassessment resulted in a 156 percent jump in values.

 

The lowest, about 11 percent, is in Blawnox.

 

While the Allegheny Ludlum steel mill takes its name from Brackenridge, only a small piece is located there. Almost all of the mill property is in Harrison.

 

The property's stratospheric boost from the new reassessment probably is due, largely to the huge $1.1 billion hot strip mill project now under construction. It will modernize the facility, which is more than 100 years old.

 

Attempts to reach the Allegheny County property assessment department by phone and email were unsuccessful.

 

The steel mill, along the Allegheny River, is valued at more than $9.8 million. That assessment jumps next year to more than $138.4 million.

 

ATI's other Ludlum property near the river in Harrison is where the mill's former Natrona melt shop was located. More than a year ago, those activities were halted there and moved into a new melt shop on the main mill property.

 

Although a decline in a property's business activity often leads to a reduction in assessment, the melt shop property along Federal Street jumped 94 percent in value under the reassessment. It is valued at $2.9 million but is scheduled to increase to $5.6 million.

 

Dan Greenfield, spokesman for ATI-Allegheny Ludlum, had little to say about the gigantic assessment leap and reserved comment on a possible appeal.

 

"We're going to take a look at it," Greenfield said. "We'll make a decision."

 

Also, Allegheny Ludlum's research center along Pacific Avenue in Harrison's Natrona Heights neighborhood saw an increase in value. It went up by 56 percent from $3.75 million to $5.87 million.

 

East Deer's big jump

 

In East Deer, the overall rise in commercial-industrial property values likely was spurred by two of its prominent companies, Air Products and the Pittsburgh Glass Works, located in the township's Creighton section.

 

The PGW was hit with a 330 percent increase in the value of its manufacturing facility, the former PPG Industries plant. It's current value is more than $2.2 million but the reassessment boosted it to nearly $9.6 million.

 

The company did not respond to a call and email seeking comment on the increase.

 

While the reassessment for Air Products' four properties was not quite as staggering, it still is substantial. It boosted the current value of $1.53 million to slightly less than $3 million -- a 95 percent increase.

 

"We will analyze the reassessment to determine whether we believe it is reasonable and accurate," said George Noon, spokesman for Air Products. "We'll determine whether we appeal the reassessment based upon this analysis."

 

Pittsburgh Mills expects to appeal

 

"We are intending to file an appeal," said Joseph Anthony, executive vice president for Zamias Services Inc., owner of the Galleria Mall at Pittsburgh Mills in Frazer.

 

The mall's present value of $125 million will rise to $138 million under the county reassessment, a 10.5 percent hike.

 

Anthony seemed to take the $13 million assessment increase in stride.

 

"It's not shocking when you do thousands of value determinations on properties," he said. "Nothing shocks me when you have that much stuff to do.

 

"We're appealing, so we certainly don't agree with their assessment," Anthony said. "I'm not going to articulate what I think the value should be in an open forum."

 

Although the mall itself rose by 10.5 percent, two connected but separately owned properties did not fare as well.

 

Macy's Department Store and Sears Grand Central, two of the mall's anchor tenants, own their stores.

 

The Sears store's $8.75 million assessment and the $9.2 million assessment for Macy's both were raised by 91 percent.

 

Of all the properties mentioned, J. Keefe Ellis of Langholz Wilson Ellis, a Pittsburgh real- estate brokerage firm, said "I can promise you that all those will be appealed."

 

He said he doesn't think that all of the commercial and industrial reassessments will be appealed, however.

 

"Not all property types experienced increases that weren't warranted," Ellis said. "I think there may have been certain property types that might have been underassessed."

 

Millage should fall

 

Ellis said while everyone is focused on the reassessments now, people should be aware of the effect on millage rates, the vehicle for taxation, especially where malls and other commercial buildings are concerned.

 

"As much as the values are important, the millage rates are equally important," Ellis said.

 

Under state law, local taxing bodies cannot reap a large gain in revenue as a result of increased assessments. Municipalities and school districts are required to adjust their millage rates up or down to compensate for that.

 

"If you found that an increase in assessment is 50 percent, then obviously the millage rate has to drop by close to 50 percent.," he said. "What we are seeing here is, you've got to go through the appeal process before you can determine millage rates."

 

He said that makes it tough for municipal and school district officials.

 

"You hope that those values have gone through so that you don't set an artificially low millage number and then you get caught short," Ellis said. "It's all about 'what are the taxes you are going to pay?'"

 

He said whatever that amount is, the property owner will pass it on to his tenants, raising their cost of doing business, which is likely to be passed onto consumers in the price on goods and services.

Source: http://www.pittsburghlive.comAuthor: shangyi

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