[B]URLINGTON – A group of landlords are challenging the city’s recent assessment of their property values, arguing that the selective reassessment earlier this year violated state and federal law.
Attorneys representing eight major property owners in the city say that 31 of their properties were gerrymandered into two newly created commercial tax districts that collectively encompass 2,000 units of housing. Not all property owners in the new districts are challenging the reassessment.
The districts are “irregularly shaped,” covering individual streets that extend “like tentacles” from their boundaries, according to a document submitted by the landlords’ attorneys. In some cases the districts include only odd-numbered properties on a street. By only reassessing the value of properties with four or more units, the reassessment doesn’t meet the legal standards for selectively reassessing properties, they argue.
The case went before the city’s Board of Tax Appeals Tuesday night. Michael Furlong, with the firm Sheehey, Furlong and Behm, told members of the volunteer citizen board that the city was treating his clients’ properties unfairly in order to increase revenues.
City officials reject that notion, saying the affected properties were previously undervalued, and the reassessment restores equity across properties.
City Assessor John Vickery said the new tax districts are not random; they were created based on “geographical housing markets” identified by reviewing data collected by the city. He plans to reassess two- and three-unit properties next year, Vickery said.
“It’s important for cities to update and maintain their grand lists to ensure that the property tax burden is shared fairly among property owners,” said Mayor Miro Weinberger in a statement Wednesday. “It is my understanding that these properties were significantly under-assessed prior to this action.” The grand list is the city’s record of assessed values for properties.
The State Department of Taxes tracks assessed property values versus the market rates for property. When the gap between those values reaches a certain threshold, the state directs cities and towns to reassess their commercial property.
The last citywide assessment in Burlington was in 2005, but city officials do periodic “list maintenance” assessments to address problems that arise in between those complete reassessments, Vickery said.
In this case, the reassessment runs counter to the city’s goal of increasing the affordability and availability of housing, Furlong told the board. It will result in an average property tax increase of 30 percent for affected properties. That, in turn, will cause the landlords to raise rents. It will also “deter additional investment” in housing development, Furlong said.
Several of the landlords attended the meeting at City Hall, including Bill Bissonnette of Bissonette Properties, Erik Hoekstra of Redstone Group, Steven Offenhartz of Offenhartz Inc., and Michael Shea, a property owner and founder of Lake Champlain Shoreline Cruises.
Members of the Board of Tax Appeals questioned their jurisdiction to address the legal questions raised by the landlords’ challenge. Assistant City Attorney Richard Haesler said their role is to determine if an assessment is based on fair market value.
Furlong acknowledged that his clients aren’t challenging the new property values that resulted from the reassessment, but he suggested the board could restore the landlords’ previous assessed values because comparable properties, in some cases on the same street, weren’t reassessed.
Board members did not make a ruling Tuesday night, but they’re likely to follow their attorney’s advice and say the challenge is out of their jurisdiction. Furlong said bringing their challenge before the board was a necessary first step to bringing suit in Superior Court, a move his clients are “strongly considering.”
Previous challenges to selective reassessments have gone all the way to the Vermont Supreme Court.
Correction: Assistant City Attorney Richard Haesler’s name was misspelled in an earlier version of this story.
