AVTI SUCCESS STORIES
Real Estate, Personal Property & Direct Assessment Appeals
BIOTECH FACILITY—$1.25 MILLION FIRST YEAR SAVINGS WITH ON-GOING ANNUAL SAVING OF $300,000
A major plant expansion of a biotech company's operations resulted in numerous large escape and supplemental property tax assessments. AVTI was retained to review these assessments and develop an appeal strategy to mitigate the assessments. AVTI's thorough research discovered incidents of double assessment and significant obsolescence issues. Through the filing of protective appeals and participating in strategic negotiations with the assessor, AVTI overturned these assessments and generated refunds and credits in excess of $1,250,000 for the client. In addition, future years' savings were estimated at around $300,000 per annum.
UNSECURED CREDITORS RECEIVE $8.0 MILLION IN SAVINGS
Through representation of a national retailer undergoing liquidation, AVTI negotiated Lower interest charges and eliminated penalties to reduce secured property tax claims that resulted in savings in excess of $8.0 million.
TELEVISION NETWORK—$380,000 IN REFUNDS AND $105,000 ON-GOING ANNUAL SAVINGS
AVTI was retained by a major television network to review the personal property tax compliance postures of two television stations in the western part of the United States. By exposing double assessments and identifying and quantifying functional obsolescence due to emerging new technology, AVTI saved $265,000 for one station and $115,000 for another, plus $105,000 in estimated continued annual savings.
TELECOMMUNICATION MANUFACTURER—$2.0 MILLION IN SAVINGS
A Midwestern telecommunications manufacturer approached AVTI for assistance on an on-gong personal property tax audit. Several emerging audit issues were proactively addressed, particularly the denial of inventory reserves related to excess and obsolete inventory and the depreciation schedule that was used to value certain test equipment. AVTI worked with plant personnel, the Tax Department and the General Counsel's Office to document the propriety of the reserves and to develop an aging analysis using disposal records and asset write offs. Settlement of the audit generated over $2.0 million in refunds.
BANK CREDIT CARD FACILITY—$358,000 FIRST YEAR REFUNDS WITH $225,000 IN ANNUAL TAX SAVINGS DUE TO NEWLY IMPLEMENTED COMPLIANCE PROCEDURES
AVTI was engaged by a large national bank to review the property tax compliance postures for one of their regional credit card processing facilities in the southwest. By identifying and quantifying obsolescence of data processing equipment and other personalty, followed by negotiations with the assessor, savings and refunds in excess of $358,000 were obtained along with on-going benefits of approximately $225,000 per year due to the revised filing procedures that were implemented by AVTI and accepted by the assessor.
NON-PROFIT ORGANIZATION—$165,000 IN INCREASE IN ENDOWMENT
A Midwestern charity approached AVTI for tax advice of the cost benefit of satisfying an outstanding tax lien of $3,000 or abandon the property to tax sale rather than seeking a qualify buyer for the property. AVTI reviewed the property and prepared a valuation memorandum demonstrating the property had considerable value and thusly advised the charity to satisfy the tax lien. The charitable endowment increased by $165,000 when the charity satisfied the lien and subsequently sold the property.
AVTI CORRECTS INAPPROPRIATE ABATEMENT FILING RESULTING IN $115,000 HIGHER TAX ABATEMENT
A manufacturer, utilizing another property tax consulting firm, filed and received several property tax abatements. AVTI was subsequently requested to review all tax abatements and subsequently discovered more advantageous abatement parameters existed. Working with state and local authorities, revisions were made, submitted and approved which resulted in $115,000 of additional annual tax abatements.
MAJOR NATIONAL RETAILER RECEIVES $600,000 IN CORRECTED DIRECT ASSESSMENTS
A national retailer asked AVTI to review its non-ad valorem direct assessments on its stores in Southern California. These assessments are based on criteria other than value, but are assessed and collected via the property tax bill. AVTI reviewed the direct assessment criteria and classifications, and found numerous errors. The errors were corrected and in many cases were implemented retroactively for the preceding three years. The client received in excess of $600,000 in refunds and saved approximately $180,000 in lower direct assessments in subsequent years.
HOTEL APPEAL RESULTS IN A $250,000 PROPERTY TAX REFUND
A northeastern hotel operator completely renovated and refurbished an old office building into a full service luxury hotel. AVTI was requested to review the new assessment and provide recommendations. The assessor assessed the total acquisition, demolition and construction costs rather than utilizing the costs of a comparable newly built hotel. Upon appeal, AVTI presented analysis and pro-forma income & expense models reflective of the local market to the appeal board, which ruled in the operator's favor. The operator received $250,000 in refunds.
APARTMENT COMPLEX REALIZES $265,000 SAVINGS IN CORRECTED DIRECT ASSESSMENTS
AVTI was engaged by an apartment management company to review the sanitation charges on a complex in California. The AVTI investigation discovered that the direct assessment charges for the entire development was erroneously applied to each building in the project. The erroneous assessments were then corrected and the client received a refund of $250,000, plus $80,000 in reduced future direct assessments.
AVTI MINIMIZES EFFECT OF NATIONAL SALE-LEASEBACK OF MOTEL PROPERTIES
A large motel chain entered into a sale leaseback transaction involving a significant number of their motel properties. Deed transfers reflecting allocations were recorded throughout the U.S. AVTI was engaged to monitor and respond to assessor inquiries and review any revised assessments based on the price allocations reflected on the deeds. AVTI responded to every assessor inquiry surrounding the transaction and reconciled every re-assessment to local market conditions to overcome the presumption of value based on the allocated price. AVTI proactively demonstrated the non-arms-length nature of the deals, and increased assessments based on these allocations were mitigated. Tax savings were in excess of $3.0 million.
CALIFORNIA PROP 13 REVALUATION OF OVER 3,000 COMMERCIAL PROPERTIES
Engaged to ensure fair and reasonable Prop 13 revaluations of 1,200 commercial properties due to a merger, AVTI recommended a proactive system and strategy to the client. Many of these properties never experienced a Prop 13 revaluation and assessments were based on the original base year value when Prop 13 was enacted. AVTI requested that the assessors hold in abeyance, their revaluations for a reasonable time until AVTI could complete and submit appraisals to their office with all supporting data and information. Nearly all complied.
AVTI developed a proprietary software system to organize all assessments, subject property data, improved comp and land comp data, construction cost data, and produce in-house, client and assessment reports. A written limited scope appraisal with documented supporting data was then submitted to all assessment jurisdictions. Differences in opinions of value were negotiated. If negotiations didn't produce fair and reasonable assessments, the revaluation was appealed to the local Assessment Appeals Boards.
Due to AVTI's experience and successful track record with the previously mentioned engagement, two subsequent mergers between four companies of the same type resulted in the AVTI's handling of an additional 2,000 similar commercial properties. In all, AVTI inspected, appraised, and negotiated the new base year assessments for approximately 3,200 commercial properties in prime locations throughout California in three years. Nearly 11,000 land comparables and 2,000 improved commercial comparables were inspected and analyzed. The financial impact of a California Prop 13 revaluation was minimized for three major corporations.