Land Use
 

Assessor: Low assessment for Audubon Place isn’t the problem; other value is high

Responding to a report by The Lens that questioned the city’s tax assessment of Audubon Place — a private street Uptown valued at $2.63 per square foot — compared to Trianon Plaza — a private street in Fontainebleau valued at $13.94 per square foot — Orleans Parish Assessor Erroll Williams said the problem isn’t so much that Audubon Place is worth too little, but that Trianon Plaza is worth too much.

In a letter to The Lens, Williams criticized the story, saying it reflects “a fundamental misunderstanding of how the Orleans Parish Assessor’s Office operates.” He wrote that Trianon’s current value is “grossly over estimated and will be adjusted.”

The Lens asked Williams to comment on the methodology and conclusions two days before publication, but he did not respond.

The letter goes on to say that Williams’ office plans to develop a citywide policy on private streets’ property tax liability.

Audubon Place and Trianon Plaza — the streets themselves — are privately controlled property parcels owned by neighborhood associations. Since 2012, Audubon Place has been taxed at about $7,400 per year based on an assessed value of $500,000. Trianon Plaza has been exempt from taxation since the homeowners association purchased the street from the city in 2006. But Williams’ office may soon remove the exemption and tax the property. Its current value, $272,380, is more than half Audubon’s, even though Trianon is only about one-tenth Audubon’s size.

As The Lens reported, Trianon’s value per square foot, $13.94, is 93 percent of the per-square-foot values of surrounding residential parcels. Audubon’s value per square foot, $2.63, is only 5 percent of surrounding properties. If Audubon were valued at the same ratio as Trianon, it would be worth $8.85 million.

But in the letter, Williams said the reason that disparity exists is because Trianon’s value was improperly calculated based on a formula that normally applies to developable properties, not streets.

“When the Trianon Plaza area neighborhood was reassessed in 2013, our Computer Assisted Mass Appraisal (CAMA) system revalued the parcel’s land in the same manner as the neighboring properties, not as encumbered land (such as a road or restricted use servitude; this drastically limits value and use). Thus the value of the road is grossly over estimated and will be adjusted,” the letter says.

In a follow-up interview today, Williams spokesman Devin Johnson said the value of Audubon Place is a better example of assessing property that can’t be improved.

“The residences around there have higher valuation, but the value of a road is still just the value of a road,” Johnson said. “There are different philosophies about this. Erroll regards it as vacant land that can’t be developed.”

Asked how the error occurred, Johnson said, “It was a carryover from the previous assessor. Every day you find new anomalies from the previous assessors.”

He added that the improper valuation wasn’t discovered until The Lens brought it to the office’s attention because Trianon is an exempt property that produces no revenue.

“It’s not a No. 1 priority to have accurate valuations for exempt nonprofits,” he said.

Johnson said Trianon will be revalued for the next tax year but he could not say what the new value will be. He said the office does not plan to revalue Audubon Place.

Despite telling The Lens in an earlier report that Trianon will be taxed in the future, Johnson said today that the office has not yet determined whether Trianon will be taxable as a private property. That will become clear as the office completes work on a policy governing the taxation of the city’s private streets. Whether the streets can be taxed may depend on whether the city has performed maintenance on them and how accessible they are.

While Audubon Place is inaccessible to the public — a dead end with a gate and private security guard at its entrance — Trianon can be accessed on one side.

“The Assessor’s Office, with the advisement of legal counsel, will develop a policy that is consistent with Louisiana law with respect to the tax liability of gated private streets versus non-gated private streets. At issue are private streets which allow public access and, given their degree of infrastructure maintenance from the city, may be considered tacit public streets, in accordance to the city attorney’s opinion previously shared with the author,” the letter says.

After some initial research, Johnson said, the assessor’s office has found that, in other parishes, private streets are often entirely untaxed. He said Williams does not favor adopting that model.

“Even though there is nothing to indicate other parishes are taxing private streets, regardless of whether they are gated, the assessor wants to tax, at the very least, those private streets that are gated and have no public access,” he said.

Letter from Williams to The Lens, dated Feb. 25

Re: Assessments of two private streets in NO vary greatly/Audubon Place, one of New Orleans’ most exclusive streets, a property-tax bargain

Dear Editor:

The recent piece by Charles Maldonado “Assessments of two private streets in NO vary greatly” misinformed the public with its hypothetical analysis of property values and exhibits a fundamental misunderstanding of how the Orleans Parish Assessor’s Office operates.

The article insinuates that the Assessor’s Office is giving preferential treatment to what is widely regarded as the most exclusive gated community in the city: Audubon Place. This is offensive and untrue. As a matter of fact, prior to my election as the first parish-wide Assessor and for over 100 years previously, the private road named Audubon Place was never taxed. The Audubon Place Commission received their first tax bill in history under my tenure and has paid their fair share over the past three years.

In 2008 under the previous Assessor, Trianon Plaza was assessed with a building value, as opposed to our office’s current practice of assessing private streets as vacant land with restricted use. However, the Trianon Plaza Homeowner’s Association has never paid a tax bill because the property is currently exempt.

When the Trianon Plaza area neighborhood was reassessed in 2013, our Computer Assisted Mass Appraisal (CAMA) system revalued the parcel’s land in the same manner as the neighboring properties, not as encumbered land (such as a road or restricted use servitude; this drastically limits value and use). Thus the value of the road is grossly over estimated and will be adjusted. But at the end of the day, whether an exempt property is assessed at one dollar or one billion dollars, the tax liability is the same: zero.

After we conclude our research with respect to ownership and city maintenance of private streets, the Assessor’s Office, with the advisement of legal counsel, will develop a policy that is consistent with Louisiana law with respect to the tax liability of gated private streets versus non-gated private streets. At issue are private streets which allow public access and, given their degree of infrastructure maintenance from the city, may be considered tacit public streets, in accordance to the city attorney’s opinion previously shared with the author.

In the future, we can only hope that the author exercises more restraint and moves forward with an article only based on facts and timely, appropriate responses from public servants, rather than the speculative hyperbole of those with an ax to grind.

Erroll G. Williams

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  • Moses

    Every little bit counts. This is excellent investigative reporting. I see many more disparities even within my neighborhood. If homeowners would look at the tax assessor’s site and check out their neighborhood, they would beshocked at an unusual dips in property assessments – even taking into account senior tax abatements, homestead exemptions, etc. What the Assessor is saying, in the article, is that there is a lot more work to be done – meaning there are millions of dollars that the Assessor is leaving on the table. Perhaps they need to hire more people.

  • Keith Hardie

    Funny how the City Attorney, supposedly representing the City’s taxpayers, defends the residents of Newcomb Boulevard who want to keep the street closed without having to pay, and how the Assessor argues that the residents of Audubon Place shouldn’t be required to pay taxes consistent with the value of the surrounding lots. If, as the Assessor claims, private streets are worth so little, why are people so interested in getting them? Surely the laws of supply and demand support a higher valuation for private streets.

    Placing a low value on private streets will only encourage more closures and cul de sacs. Our grid pattern, which allows traffic to disperse evenly though out a neighborhood as opposed to channeling it down big highways like Veteran’s Boulevard, is the envy of urban planners all over the country. The Master Plan does not support gated communities, it recommends that we “advance projects that enhance connectivity, reduce barriers, and improve attractiveness of neighborhoods . . . while addressing transportation mobility.” Master Plan, Vol. 3, p 11.23.

    Consistent with these objectives, private streets should be valued at the same rate as the lots surrounding them.

  • NOLA_Darling

    At $2.63/SF, Audubon Place is grossly under-assessed when you consider the fact that all the adjacent lots on the street are assessed at $50/SF and the lots in my section of Broadmoor are assessed at $5/SF. When, I protested my assessment a few years ago, I learned just how bad Mr. Williams and his staff are after they assessed my lot at $15/SF while all my neighbors were assessed between $2 and $10. During my hearing, I had to explain to the person that there shouldn’t be much variation in the per SF land values on a block, and that any variation in total assessed values should come from the value of the “improvements” (i.e., the houses and other permanent structures).