Cole County Equalization Board reduces value on two commercial properties

On the only day it was scheduled to meet this year, the Cole County Board of Equalization voted to make compromises on the values of two commercial properties whose assessments had been challenged for 2022.

While 2022 is not a reassessment year, the board, which hears disputes from property owners who believe their assessments are not fair, meets every year. Officials with the county clerk's office, which schedules hearings for the board, said the vast majority of hearings are for commercial properties with very few residential property owners asking for a hearing.

The commercial property owners making appeals Monday included the owners of The Shoppes at Jefferson on Missouri Boulevard, which had housed Best Buy.

Sam Spiegel of SAJ Associates, LLC, which is based out of Florida, asked the board to place the value of the building at $4.3 million since he had lost income from the departure of Best Buy last fall. Spiegel said he assumed Best Buy would renew its lease, but it didn't. Planet Fitness is still a tenant in the building, which SAJ purchased in February 2008 for $9.2 million.

Spiegel said they were able to get Big Lots to agree to take the Best Buy portion of the building at the beginning of 2022; he said work began last month on changes that needed to be made to the building. Spiegel didn't say when the store would open, but told the board it took quite a bit to bring Big Lots in. He said they had to agree to give Big Lots 33 months rent-free as part of the deal, which he figured would mean his company would lose $720,000 in rent.

Tom Butler with the assessor's office said he had talked with Spiegel and other company representatives and then lowered his appraised value down from $5.9 million to $4.9 million. Butler said by state statute the value of the building had to be looked at based on the value of the land the building sits on as of January 2021.

The Board of Equalization is comprised of: three Cole County commissioners; two representatives from Jefferson City government staff if the property is in the city limits; and two at-large positions, which require someone familiar with real estate, building construction, the banking industry or land title business.

Cole County Clerk Steve Korsmeyer chairs the board, but he and Assessor Chris Estes are not voting members.

For the SAJ property, at-large board member Alan Mudd made the motion to go with an assessment of $4.6 million as a way to show they support the investment that had to be made to bring in the business to the community. The final vote was 4-3 in favor with Mudd and fellow at-large board member David Nunn voting in favor along with Presiding Commissioner Sam Bushman and Eastern District Commissioner Jeff Hoelscher. Western District Commissioner Harry Otto voted against along with Jefferson City Administrator Steve Crowell and Jefferson City Finance Director Shiela Pearre.

Also making an appeal before the Board of Equalization was Dick Otke, owner of Jefferson Street Commerce Park, which asked the board to assess the office building his family owns in the 900 block of Weathered Rock Road at $1.5 million instead of the assessor's figure of $2.1 million.

Otke said he and his family appealed because they can't find a tenant for the building. It had formerly been the home of Wipro Infocrossing, but they left at the end of 2020 and went to the former Sears wing of Capital Mall. He told the board the departure was due to the city allowing the owners of the mall, Farmer Holding Company, in July 2019, to use bonds to help attract businesses to fill space in the mall.

The City Council unanimously approved the proposal to allow a local board to issue bonds.

This came after the Jefferson City Industrial Development Authority approved a resolution authorizing the issuance of tax increment and special district revenue bonds for the project. The Capital Mall Community Improvement District Board also approved the resolution. The five-member board is comprised of four representatives of Capital Mall JC, the owners of the mall, and Pearre, the city's finance director.

Otke said of the resolution: "I was in support of that because I thought they were talking about bringing businesses in from outside the community. I didn't think they would be used for a business already here to move from one location to another."

The Weathered Rock Road property was purchased as a vacant lot in 1993 for $140,000. Otke said he had valued the property not long ago at more than $3 million, but has since continued to lower the value.

Butler said his assessment was based on the state statute that the value of the building had to be looked at based on the value of the land the building sits on as of January 2021. He said he sympathized with Otke and agreed he's probably looking at a liquidation status for the building right now.

Butler did add they do take into account there will be some time that an office building will have vacancies or be vacant as no office building will be fully occupied from the time it's opened to the time it's demolished. However, they would not include a year-and-a-half span like what's happened at the Otke property.

Mudd made a motion to set the value of the property at a little over $1.8 million. He, Nunn, Otto, Bushman and Hoelscher all voted in favor. Crowell and Pearre voted against.