Tax Assessments Undervalue High-end Homes
By David Collins
Sept. 9. 2007, Santa Fe New Mexican
Who or what caused thousands of properties to be undervalued on Santa Fe County tax rolls might remain a topic of debate long after a new computer system allows the assessor to more efficiently value property.
Where undervalued properties are located is an easier question to answer.
Santa Fe County does not maintain a computer database of past property values. Assessment changes are still logged by hand on paper records for each property.
Computerized county records do, however, include tax-bill amounts for the past 10 years. In 2005, The New Mexican began collecting and analyzing those tax records.
When the list of annual tax-bill amounts was reviewed alongside historic tax rates, details of properties' assessment histories could be analyzed. A picture emerged of which properties have not been visited by assessors during the 12 years for which The New Mexican has now analyzed assessed values.
Between 1996 and 2005, about 4,000 properties were assessed for no significant change in value. Plotted on a map, a majority of those properties are concentrated in Santa Fe's older northeast neighborhoods, including some of the wealthiest areas of town, with prestigious addresses such as Mansion and Summit Drive.
By May, when Domingo Martinez sent more than 73,000 Santa Fe County property owners their 2007 notices of valuation, the list of residential properties not recently reassessed was down to fewer than 2,000 addresses. A check of more detailed records in the Assessor's Office revealed a surge of assessment increases in the past two years, under both former Assessor Benito Martinez and the newly elected assessor.
Though assessors in the past two years revisited hundreds of properties that had not been reassessed in 10 years, they didn't change any values on Bishops Lodge Road. The New Mexican identified 190 properties along Bishops Lodge Road that were valued the same in 2007 as in 2005.
The median assessed value of those Bishops Lodge homes in May was about $310,000. The median price of rural Santa Fe County homes sold through the Santa Fe Association of Realtors Multiple Listing Service in the second quarter of 2007 was $519,500.
Along Avenida de la Casas, the exclusive gated street west of the Santa Fe Opera, none of 19 homes was reassessed in the past two years. During those years, the median price of homes sold throughout the city and county of Santa Fe climbed 16 percent.
Among those Bishops Lodge and Avenida de la Casas homes not reassessed in the past two years were several that have not been significantly reassessed since 1996. Some are multimillion-dollar properties listed for sale at prices several times higher than the value the Santa Fe County assessor attributes those homes for tax purposes.
The following are typical examples selected from hundreds of valuable properties Santa Fe County has not reassessed in more than 10 years:
* With an assessed value of $5,961,703, Ponce de Leon, a 640 Alta Vista St. apartment complex for senior citizens, is the highest- valued residential property on county tax rolls that has not been assessed any increased value since 1996. Several calls to Brookdale Senior Living Inc., the publicly traded Chicago company that operates the complex, eventually reached vice president of finance George Hicks.
"We are certainly not in the business of not adding value, but I can't state anything about this particular property," Hicks said.
According to Monster.com, Brookdale is the largest provider of senior services in the United States.
Hicks said Brookdale properties nationwide typically have business value greater than their residential value. The company tries to keep tax assessments related to residential value, the way Ponce de Leon is assessed. At the commercial tax rate, the company would pay about 35 percent more -- $13,500 more a year, at the current assessed value. State law says properties used as both businesses and residences are to be assessed according to their primary use.
Hicks said it's not the owner's job to be sure their property is assessed at full value. "That's sort of the tax assessor's responsibility to be sure the properties are assessed fairly," he said.
Several other owners whose properties have not gained value on the tax rolls echoed that sentiment.
* A spokeswoman for Lanny Cornell, the third-generation owner of 208 W. San Francisco St., said she was unaware that property on a bustling downtown thoroughfare had not been reassessed in 12 years. "He's always paid the taxes, and they keep going up," Holly Henderson said.
Downstairs, the Cornell building is home to Uli's Boutique and the Collected Works bookstore. Apartments occupy the second floor. The building is taxed as a residential property, and the assessed value has not changed since 1996. The two retail locations and apartments in the heart one of the nation's most popular tourist districts have been valued for tax purposes at $968,480 since 1996.
* A 4,857-square-foot custom adobe built in 1991 on 16.5 acres with a 920-square-foot guest house, 57 Polmood Road is listed for sale at $3,485,000. The property is assessed on Santa Fe County tax rolls at $1,001,968. Tax records show the same assessed value for the property since 1996.
* Tax bills at 1401 N. Point Road have climbed since 1998, but the property owner says the value of his home has remained flat. Owners John and Bev Gossen thought their house was being reassessed at a higher value because they kept getting higher bills. It has not been reassessed.
Since 1996, the house has been assessed at $1,514,446. What changed was annual mil rates, which result in a higher tax bill for the same assessed value. Mil rates increased in part because state laws spread tax burdens among all taxpayers when assessors failed to attribute increased worth to valuable properties.
* Around the corner, a hilltop residence at 1208 N. Summit sits behind an ornate iron gate. Summit Drive is one of the best kept streets in Santa Fe. A fresh coat of jet-black sealant on the curbed street overlooking the Santa Fe National Forest attests to homeowners' ongoing investment in their exclusive community.
At the top of a long driveway, the rounded lines of an unusual contemporary design set this house apart. The house is valued for tax purposes at $1,201,654. As are hundreds of others that have not been reassessed since 1996, in inflation-adjusted dollars this home is worth less on county tax rolls than it was 12 years ago.
* Complete with a crenelated turret and stunning views of the Jemez and Sangre de Cristo Mountains, 14 Tano Point Lane is listed for sale at $3,400,000. Behind double-adobe walls, the home has hosted political figures, including members of the British Parliament, according to an online real-estate listing. The property includes four bedrooms, four-and-a-half baths, a five-car garage and five acres. Assessed for tax purposes at $1,140,943, Santa Fe County has attributed only $6,000 in new value -- less than 1 percent -- to the property since 1996.