Taxing Times

by Heather Miller

This year's reassessment marked a huge rise in the values of commercial properties downtown, while Lafayette Parish is now home to fewer farmers.'

This year's reassessment marked a huge rise in the values of commercial properties downtown, while Lafayette Parish is now home to fewer farmers.'

The vast majority of commercial buildings downtown saw a notable increase in property values during the 2012 reassessment period, mostly due to years of low valuations of real estate in the city's central business district.

Lafayette Parish Tax Assessor Conrad Comeaux says "a lot of effort" went into reassessing properties in downtown, with employees at the assessor's office measuring buildings and capturing more characteristics that affect valuation for commercial properties.

When reassessment occurs every four years as mandated by state law, the assessor's office has three methods to choose from when valuing property in Lafayette Parish: the income approach, based on income derived from that property; cost approach, what would it cost to replace the building; and market approach, based upon the sale and lease prices of buildings.

As IND Monthly noted in its Feb. 22 cover story, "Downtown Development," several commercial buildings in and around Jefferson Street were found to have seemingly low values listed at the assessor's office, subsequently paying less than what they would normally in taxes that fund schools, city-parish government, fire protection, waterways and other critical services.

Antler's on Jefferson Street and Agave on Vermilion Street were among the buildings and land that appeared to be the most undervalued. The thriving Mexican cantina Agave was listed as an office building with a fair market value of $31,966. For the past four years, Agave's property tax bill stood at roughly $410. Antler's, a long-standing downtown bar and grill, had a market value of $63,766 (both businesses lease their respective properties from the landowners).

The latest figures from the assessor's office show that the fair market value for Antler's has increased to $200,707, while Agave is now listed as a full-service restaurant valued at more than $323,000.

Worth noting: One of the most drastic increases can be found at the IberiaBank headquarters at the corner of West Congress and Buchanan streets. With a 2011 market value listed at $1.9 million, the tower's 2012 actual market value has jumped to $9.1 million, a $7.2 million increase.

"Most of the large buildings downtown went up significantly," Comeaux says.

Residential property reassessment was a "mixed bag" this year, the assessor says. While the parish experienced a slight decline in both residential and commercial sales, total taxable property in Lafayette Parish rose to an assessed value of roughly $1.73 billion, up from approximately $1.64 billion last year. That's a 5.27 percent increase, according to Comeaux.

"It's not like you can say this specific or that specific area in the parish saw increases and decreases," Comeaux says. "It was very spread out."

But the latest reassessment did end with a big drop in the number of "farmers" calling Lafayette Parish home, as Comeaux notes that 5,700 acres in Lafayette Parish were stripped of their agricultural status. According to state law, "bona fide" agricultural, horticultural, marsh and timber property is assessed under the land's use value rather than fair market value, or the process used to assess commercial property. Commercial property is billed at 10 percent of the commercial land's fair market value, while ag land is assessed at a rate that in urban areas can be less than half of 1 percent of its market value.

IND Monthly's 2011 "Fair Share" series highlighted what appeared to be countless landowners taking advantage of a loophole in the law, which allows wealthy landowners to hoard valuable commercial property while paying next to nothing in property taxes by simply asserting that there is some type of farming activity taking place on the land - e.g., one bale of hay.

The paper has identified numerous tracts of land throughout the parish that benefit from the exemption yet have no agricultural activity whatsoever taking place on them. Several of the properties identified by IND Monthly have lost their agricultural status due to the investigative series. Among them are the 11 acres of forested land at 3100 Ambassador Caffery owned mostly by the Arnould family and local attorney Greg Logan's 8 acres of undeveloped land at 200 Alleman Drive that houses a residential structure and uses city services at the property.

Comeaux says a thorough review of all ag property within the parish found that there were 5,700 acres of property that should not have been listed as agricultural property. Because much of the land was identified in rural parts of the parish, most of it was converted to other uses besides commercial, which shoulders a higher tax burden than other identified land use. Although the 5,700 acres opened up more than $15 million in fair market value parishwide, or $1.5 million in assessed value, the total increase in taxes paid by owners of former farmland was only $125,250.

Now that the 2012 reassessment process is nearing its end, Comeaux says he plans to meet with Lafayette Parish School System Superintendent Pat Cooper, City-Parish President Joey Durel and other elected officials on how to proceed with a parishwide property reassessment as recommended by Cooper when he initially presented his six-year turnaround plan for Lafayette Parish schools.

When Cooper began presenting his turnaround plan to the public, he suggested that the community establish a commission to reassess every property in Lafayette Parish as one potential solution for funding issues that could slow the progress of his plan.

"If we don't have that fair tax assessment, and the dollars that go along with it, we're losing money," Cooper said during an April speech given at David Thibodaux Technical High School. Some people are paying very small taxes, and some people are paying a lot. All I'm saying is let's help the tax assessor do this. Let's bring fairness to everything. Then you don't have to change tax rates, but everybody's paying their fair share. That's one idea."

Comeaux says the price tag for a parishwide property assessment is somewhere between $4 million and $5 million, "but we can space it out over four or five years so it's not a big hit in one year." He also points out that when Orleans Parish took on the task of reassessing every property in the parish, the cost was about $12 million.

Only two public agencies that have opted to "roll back" their millage rates and remain revenue neutral on their property tax collections, the Lafayette Economic Development Authority and the Teche-Vermilion Freshwater District, Comeaux says. State law requires municipalities to lower millages when property values rise so the resulting tax revenue doesn't exceed the prior year. However, a super majority on a legislative panel can vote to keep the millages at their current level, thereby ensuring that government revenue keeps up with inflation. In an Aug. 21 vote by the City-Parish Council, councilmen Don Bertrand, Kenneth Boudreaux, Jay Castille, Kevin Naquin, Keith Patin and Brandon Shelvin voted to keep the city and parish property millages at their current level; the usual suspects - Jared Bellard, Andy Naquin and William Theriot - voted against.

The official public inspection period for property owners looking to review their reassessments at the assessor's office ends Sept. 15, at which time no further adjustments can be made to the tax rolls, according to Comeaux.

[Editor's Note: The only buildings listed below that are owner-occupied are IberiaBank, Home Bank and Chase Tower. The owner of a building is ultimately responsible for paying property taxes; however, the taxes may be paid by the tenant as part of the lease agreement.]