The 1981 assessment of the Bradlee Towers apartments in Alexandria has been cut by more than $4 million to about $6.6 million as the result of a recent ruling by the Circuit Court. The court said the assessment was "out of line generally with appraisals of other neighborhood properties." The complex was sold last year for about $12.4 million and is being converted to condominiums.
Judge Donald H. Kent ruled in favor of the new owner, Fairmac Realty Corp., which had contested the assessment on the grounds that the sale price of the property was used as the basis of the appraisal but was not employed to increase the valuations of similar properties in the city's third planning district, said William B. Moore, an attorney for the owner. He said the case "was basically one of uniformity" and that the fair market value of the property was not contested.
"The city, of course, disputes the uniformity position," said Barbara P. Beach, an assistant city attorney. In addition, "the law says you can't divorce fair market value from uniformity," Beach said this week. The city is contemplating an appeal to the Virginia Supreme Court, she said.
An assessed value of more than $12 million was reduced by the city's Board of Equalization to about $10.7 million upon petition by the owner, Moore said, but the action was based on the sale price and financing terms and "didn't deal with the problem of uniformity." Not satisfied with the board's decision, Fairmac attorneys took the case to court.
The owner of the 300-unit, low-rise complex at Rte. 7 and I-395 contended that assessments of most similar properties had been maintained at 1980 levels, including per-unit valuations of Landmark Towers at $25,594, Brookville at $21,967 and Summit at $27,621. Bradlee's $12 million value jumped its per-unit assessment from $22,050 to about $40,000, Moore said.
While assessed values of some properties were raised due to construction in progress or conversion to condomimiums, Moore said, Fairmac had neither "commenced physical renovation nor filed a deed of declaration for condo conversion." In addition, Fairmac did not purchase the complex from its previous owner--an investment group that included Washington developer Albert Abramson--until Jan. 4, 1981, Moore said, noting that Jan. 1 is the date on which property values normally are established for tax purposes.
The firm had signed a contract in November 1980 establishing the sale price, said David Chitlik, the city's chief assessor. He said he based his assessment on the contract price to avoid "a $12 million sale recorded seven days after assessing the property at $6 million."
Although Virgina codes--calling for real estate assessments based on highest best-use and the recent growth of condomimium developments--have prompted Alexandria tax officials to view all apartments as potential condos, the assessors "singled-out Bradlee Towers," said Jack B. Conner, a real estate appraiser with Property Tax Appeals Inc. in Springfield.
At Fairmac's request, his firm prepared "an analysis of the assessments on other apartment projects in the area," Conner said. The findings confirmed the owner's contention that most assessments of comparable apartments in the area were left unchanged and were based on rental revenues rather than potential sale prices, he said, adding that "until the condo boom, we never had this problem."
In deciding in favor of Fairmac, Judge Kent found that "disparate methods were employed in the the appraisal process." He instructed that the Bradlee assessment be reduced to its 1980 value.