A big boost in commercial assessments has led some local Republican leaders to say DeKalb County officials are targeting Dunwoody businesses unfairly. But the county tax assessor says Dunwoody’s properties are simply much more valuable in the current thriving real estate market and noted many commercial properties have not been assessed in as much as a decade.
The fever pitch of allegations that DeKalb County discriminated against Dunwoody even led state Rep. Mike Wilensky, a freshman Democrat from Dunwoody, to usher through a bill this session to change the assessment method.
“We went to other commissioners and chiefs of staffs and no one else in the county was getting these kinds of calls [about higher taxes],”Mike Davis, former Dunwoody mayor and current chief of staff to DeKalb County Commissioner Nancy Jester, said at the Dunwoody Homeowners Association March 10 meeting. Jester, who lives in Dunwoody, represents District 1, which includes Dunwoody, Chamblee and Doraville.
“Not that I am a conspiracy nut, but I am paranoid,” Davis added.
Robert A. Burroughs, chair of the DeKalb County Board of Assessors, said the income approach was used throughout the county, not just in Dunwoody. Taxes went up for many businesses, but perhaps not as much as they did in Dunwoody, which likely has the most lucrative real estate market in the county. “At no time did we unfairly target Dunwoody,” Burroughs said. “We used the same standards across the county.”
Bruce Levell is the owner of Dunwoody Diamonds and former executive director of Trump’s National Diversity Coalition during the 2016 campaign. He also ran for the 6th Congressional District seat during the 2017 special election.
He said at the DHA meeting that when he moved his business into the Ashford Place shopping center a decade ago, rents were low, taxes were low and there were many vacancies. This year, though, he said he got hit with an $8,000 tax bill.
“Guys, this is real serious,” he said.
Jester and Davis said they believe the DeKalb County tax assessor used what they perceived as a loophole in legislation passed in the General Assembly last year to assess Dunwoody businesses at much higher rates than in the past.
Appraisers use computer models and three criteria when determining commercial property taxes: income, as determined from available public data; cost, based on the property’s replacement value; and sales comparables, based on how much surrounding properties are selling for.
House Bill 196, passed in GOP majority legislature, changed the language on how assessors appraise income-producing property. Specifically, the language was changed to say an assessor “shall utilize” the income model rather than “shall consider” the income model when appraising income-producing property, such as shopping centers.
The law also stated that actual income and expense data could be used by commercial property owners as part of their valuations. This includes information such as how much rent business tenants pay in a shopping center, how much they pay for maintenance costs as well if there are any vacancies. Previously, property owners did not necessarily want that information provided to tax assessors because it could increase their property values and bring higher assessments, according to Calvin Hicks, Chief Appraiser of the DeKalb County Board of Tax Assessors
Jester said she and Davis learned the law was intended to help Chatham County commercial property owners keep their tax assessments low. The bill’s sponsors, state Rep. Matt Dollar (R-Marietta) did not return a request for comment.
“If that was the goal, to lower taxes, [HB 196] was a big swing and a miss,” Jester said in an interview.
Jester and Davis contacted Wilensky, who sponsored this year House Bill 507, which literally changes the language back to stating an assessor “shall consider” income rather than “shall utilize” when it comes to income producing property. The bill passed March 22 and now heads to the governor’s desk.
“I think there needs to be an investigation into what was done throughout the county,” Wilensky said, noting businesses from neighboring Doraville were not complaining about tax increases.
DeKalb Commissioner Jeff Rader, presiding officer of the DeKalb Commission, said he and other commissioners did not hear from business owners about significant tax increases. He also noted that Dunwoody may be a place where property values are “escalating rapidly.”
“Obviously we don’t want the state law applied inappropriately or incorrectly,” he said. “But so much of what we do is determined by what the state Legislature decides. And their decisions are arcane and obtuse sometimes.”
Daniel Jones, a former member of the Fulton County Board of Assessors, is now the managing director of Fair Assessments, a company that specializes in reducing property taxes. He said blaming HB 196 for tax increases in Dunwoody is not realistic.
“Personally, I think this is crazy,” he said. “If they are blaming the bill … they are missing the point.”
The increases this year in DeKalb are similar to what has been happening in neighboring Fulton County, he said, where residents saw sharp increases in their property taxes.
When assessors fell behind and had to play “catch-up” in determining fair market values, residents were shocked when they got their tax bills, he said.
“That’s basically what happened here” in DeKalb, Jones said.
Bill Baker, general manager of Perimeter Mall, said the mall’s property assessment went up 92 percent in 2018. DeKalb tax records show 2017’s assessment was just under $64 million and the current assessment is more than $122 million. Perimeter Mall is currently appealing the assessment, Baker said.
“It’s been awhile since properties were reassessed in DeKalb County, but we were not expecting 92 percent,” he said.
Hicks said while all properties throughout the county are reviewed every year, the last time Perimeter Mall was reappraised was in 2010.
The Ashford Place shopping center was last reappraised was in 2009, Hicks said. The Dunwoody Village shopping center on Dunwoody Village Parkway was last reappraised in 2014; the Shops of Dunwoody on Chamblee-Dunwoody Road was last reappraised in 2014.