Important Connecticut Property Tax Developments 2004 -2005

Important Connecticut Property Tax Developments – 2004 -2005 Elliott B. Pollack, Esq. Pullman & Comley, LLC 90 State House Square Hartford, Connecticut 06103 Telephone: (860) 424 -4340 Facsimile: (860) 424 -4370 ebpollack@pullcom. com ©PULLMAN & COMLEY, LLC

I. Change in real property revaluation cycle • • • Public Act 04 -2 Formerly four years Revaluations scheduled for October 1, 2003, 2004 or 2005: delays permitted until October 1, 2006 ©PULLMAN & COMLEY, LLC

II. Notable decisions • Challenge to land while accepting building value, or vice versa. Aspetuck Valley Country Club, Inc. v. Town of Weston - Country club challenges value of golf course - Does not assert overvaluation of clubhouse or other improvements - Town can assert higher value for the improvements thereby potentially justifying overall assessment - Caveat tax appealer! ©PULLMAN & COMLEY, LLC

II. Notable decisions (continued) • Valuation of subsidized housing project – Lack of clear legal guidance in Connecticut – Cases tend to be very fact specific – Judicially approved (trial court) method for valuing Section 8 low income elderly housing complex • Actual income, less • Actual expenses (including real estate taxes), then Capitalize at market rate. • Saranor Apartments Limited Partnership v. City of Milford ©PULLMAN & COMLEY, LLC

II. Notable decisions (continued) • Impact of land use restrictions on value – State farm land preservation law – “Assessor improperly disregarded the restrictions on the development rights to the farmland. ” – Importance of title/land record research in valuation cases • Ceccarelli v. Town of North Branford ©PULLMAN & COMLEY, LLC

II. Notable decisions (continued) • Valuation of corporate headquarters – “Highest and best use. ” – Use of income capitalization approach to value owner/occupied HQ -- ? ? ? – Lack of sales transactions – Lack of rental comparables – Judicial preference for the cost approach: 30 year old building? ? ? – Principle of substitution? How satisfied here? – Advisability of challenging tax assessments of owner/occupied HQ buildings in the future? • General Electric Company v. Town of Fairfield ©PULLMAN & COMLEY, LLC

II. Notable decisions (continued) • Impact of government aid programs on property value – – – Condemnation case Environmental contamination Remediation costs Availability of state economic development grant funds Reasonable probability Inequitable to consider contamination without availability of grant funds also on the table • Northeast Connecticut Economic Alliance, Inc. v. ATC Partnership ©PULLMAN & COMLEY, LLC

III. Study of the Connecticut Ad Valorem Tax System – – Hearings/meetings underway Lack of uniform tax burden Great variability of “effective” tax rates Will we ever get out of this morass? ©PULLMAN & COMLEY, LLC