When developer Oliver T. Carr purchased the old Hecht's department-store buildings recently for $47.6 million, he paid nearly four times more than a city review board said they were worth.

The Board of Equalization and Review, after hearing an appeal from the May Co., Hecht's owner, ruled that the city government's assessment of $45.806 million was too high and reduced the tax year 1985 value of the group of 10 buildings making up the historic store at 7th and F streets NW to $12.1 million.

The decision cost the city $684,000 in tax revenue, according to Robert L. King, associate director of the city's tax assessment office.

The Carr firm and The May Co., the owner of Hecht's, never believed the store and land were worth as little as $12 million. The two companies reached an agreement several years ago under which the Carr company guaranteed it would buy the property for at least $18 million, a figure "everyone knew was . . . relatively low," said Tom Bourke, Carr's project manager. "We would love to have bought it for that."

Carr's guarantee was part of a deal to convince The May Co. to "become a part of Metro Center . . . ," a Carr development project in the area of 12th and G streets NW, and "to give them the confidence to proceed with their new store," Bourke said.

Equalization board Chairman R. Donahue Peebles said that when the board heard Hecht's appeal for a lower assessment, "there was no evidence . . . there were any ongoing negotiations" for sale of the property and that Hecht's representatives "submitted a great deal of evidence" to back up their plea for a reduction. Peebles, a professional appraiser, said he was not among the group of board members who heard the Hecht's appeal, but added, "I have spoken with some of them" who made the decision.

The board has since approved the city assessor's proposed assessment of $45.8 million for the old Hecht's property for the 1986 tax year, Peebles said.

Although the gap is wider in the Hecht's case, big differences between the city's assessment, or the one set by the equalization board, and the subsequent sale price of the properties have occurred in several other transactions in recent years. By law, D.C. properties are required to be assessed at 100 percent of fair market value.

The S. S. Kresge Co. property across the street from the old Hecht's store was valued at $1.785 million by District assessors for the 1986 tax year that ends on July 31. The owner, K mart Corp., asked for a reduction to $925,000 and the equalization board lowered the assessment to $1 million, according to Department of Finance and Revenue records. The property subsequently was sold last October for $2 million, the records show.

An office building at 20 Massachusetts Ave. NW, leased to the Defense Department, was assessed at $21 million for the 1986 tax year and the equalization board upheld the assessor's appraisal.

A group of investors recently purchased the building for $40 million, the fourth-largest price paid for a single commercial building in the District. Assessments on the property have been appealed every year since 1977, and were the subject of a lawsuit filed in D.C. Superior Court, according to a Department of Finance and Revenue official. The case was settled in 1982 when the city and the owners agreed on an assessment of $17 million, he said.

Another office building with federal government tenants, at 425 I St. NW, was assessed at $19.7 million for 1985, but the owners won a reduced valuation of $16 million from the equalization board. The property was sold for $37.5 million early last year.

Owners of a Dupont Circle office building located at 1346 Connecticut Ave. sold the structure for $19.9 million in December, considerably higher than the assessment of $12.6 million for tax years 1985 and 1986, which was proposed by city assessors and sustained by the equalization board.

Finance and Revenue Department officials also provided a list of 10 other transactions in the last two years in which the purchase price exceeded the assessed value by several million dollars, often after the equalization board lowered the proposed assessment set by the city.

Peebles said board members often believe that the city assessor's office has not presented enough evidence to support its proposed assessments and thus decides to lower them.

George Altoft, senior assessor in the Department of Finance and Revenue's office of standards and review, said the board often disposes of appeals within 15 minutes and does not consider as much data as assessors have, information that the board could review if it took the time.

"One of the big concerns of assessors is equalization," Altoft said. "We have a massive amount of data, sales, income, costs and so forth. We have to equalize these." Assessors must compare office buildings of the same size, features and location and reach a decision on the proper assessment, he said.

Altoft said the marketplace often is inexact, and "we try to reach a mid-range in assessments" among similar buildings. He said this is why assessments are sometimes lower than actual sales prices. In addition, he said buyers, for one reason or another, often want a property badly enough to pay well more than what assessors have determined it is worth.

The disparity between the equalization board's revised assessments and the actual sales prices has touched off criticism of the board and the lawyers and tax consultants who represent property owners in appeals. The board is an independent body composed of 15 members who work in the real estate industry as sales agents, brokers and appraisers.

Lawyers and consultants, who represent commercial property owners in return for a fee contingent on the tax savings they win for their clients, often are able to overwhelm the board with several hundred appeals every year, critics said.

Appraisers' professional associations have ruled the practice of accepting contingency fees based on tax savings for clients to be unethical, according to a memo prepared by the District Corporation Counsel's Office in March 1984. In the memo, the city urged the equalization board to "give little or no weight to testimony from appraisers, or attorneys or others acting as appraisers" whose fees will be a percentage of the tax savings they win for their clients. The memo said "it is unethical for an appraiser, or someone acting as an appraiser" to be paid on a contingency basis.

"Attorneys often are acting as appraisers, not attorneys, because they come in to appeal assessment decisions with a value" they have placed on the property, and have the facts and figures to support it, Altoft said.

Richard Aguglia, chief of the financial section in the Corporation Counsel's Office, said the equalization board must decide when a lawyer "has really changed roles . . . and is acting as an appraiser" when he represents a client in an appeal. If an attorney presented the same information that an expert witness, such as an appraiser, provides, "I would find it hard to believe that the attorney was not acting as an appraiser," but that is up to the equalization board to decide, Aguglia said.

Equalization board Chairman Peebles diagreed, saying that "an attorney is an advocate of the property owner, and the basis for his compensation should not be considered." Board members question appraisers who testify before the board, but have not seen "any evidence of them being compensated on a percentage basis," he said.

Attorney Stanley J. Fineman, whose law firm, Wilkes Artis Hedrick & Lane, reviews several hundred tax assessments for commercial property owners every year, said, "of course it's not unethical" for attorneys to work on a contingency basis in tax appeals. "This is the arrangement our clients prefer."

Of the assessments it reviews, the firm agrees to represent only about half of the owners, Fineman said. "Typically we get reductions" in about three-fourths of the appeals, and when it loses, the firm often takes its case to D.C. Superior Court, he said.

Tennenbaum-Hill Associates Inc., a consulting firm that represents property owners in tax appeals, charges its clients one-third of the tax savings they win. From its fee, the company pays all legal and other fees, such as those for appraisers, according to Steven A. Glorioso, manager of Tennenbaum-Hill's Washington office.

"We recognize the charge [that contingency fees are unethical] can be made. While we don't agree," the company often hires outside attorneys and appraisers, paid on an hourly basis or with pre-arranged fees, when it takes cases to court, Glorioso said. CAPTION: Pictures 1 through 3, The Hecht Co.'s old department store building at 7th and P streets N.W.; The Dupont Circle Building at 1346 Connecticut Ave. NW.; The assessment for this S.S. Kresge Co. property downtown was lowered from $1.785 million to $1 million. Washington Post photos