How do you appraise a zombie subdivision?
How do you appraise a zombie?
This year, a large number of developments appealed their tax appraisals. Many of these projects were half-finished, or completed but totally vacant subdivisions. In general, the Board of Equalization (BOE) did not reduce the assessed values for almost all of these developments. More specifically, the Board did not reduce the per-lot valuation for Ironwood PUD, one of the case studies mentioned in our previous alert. Shoshoni Plains was a trickier matter however, because it is partially completed with bare, bulldozed land. The role of the BOE is to ensure that the value of all properties in Teton County are accurately and fairly assessed.
So the big question is: What is the value of incomplete infrastructure? No doubt, there are different degrees of completeness in each zombie subdivision. Some developments like Shoshoni Plains are actually connected to city sewer and water services, thus increasing their value. Others are bulldozed, but being marginally farmed as in the case of River Rim Ranch Division II. As for the real-world value of these parcels, that is difficult to ascertain when none of these half-built lots are being absorbed into the market.
The BOE recognized that they must come up with a system for pinning a value on these zombie lots because there are a huge number of them in Teton County, and they are likely to languish for many years. However, the board declined to do so in the case of Shoshoni Plains because they did not feel like the record contained substantial evidence upon which they could develop a system for evaluating incomplete infrastructure. Their logic was that the developer can appeal his assessment to the State Tax Appeals Board, and that Board can give guidance on how these zombie lots should be appraised.
For answers on what will happen to the back taxes owed on both Ironwood and Shoshoni Plains, here are the July 1, 2010 Board of Equalization Minutes