In October 2015, a Dallas company acquired the 287-unit apartment complex near LSU’s North Gate, then called The Standard, for $108.5 million. At nearly $387,000 per unit, the deal was—and still is—the most expensive commercial transaction in Baton Rouge on record.
But as Business Report details in its new cover package, the student housing complex—since renamed University House—is currently assessed at just $3.3 million by the East Baton Rouge Parish Tax Assessor.
When you do the math, that means the assessor valued the property at $33.8 million—or only about one-third of what it sold for in 2015.
As a result, University House’s property tax bill is currently $416,867 per year, compared to the $1.3 million it would be if the assessment reflected the most recent sale price—which is not technically the same thing as its market value but is generally considered a strong indicator of it.
For cash-strapped East Baton Rouge Parish, the difference between what that one property could have been assessed at and what it actually was represents a potential loss of nearly $1 million in tax dollars in just a single year. And University House is hardly a unique example.
Business Report analyzed the assessments of more than a dozen of the largest commercial transactions in the parish between 2014 and 2016—deals that occurred several years ago and should have been updated by now on the tax rolls. On average, the properties are assessed at just 55%—slightly more than half—of their sale price, resulting in a potential loss to the parish of more than $2.3 million in just a single year.
See the 12 analyzed properties at the end of the story.
East Baton Rouge Parish Assessor Brian Wilson denies his office is under-assessing commercial properties. Yet, he concedes he is intentionally assessing some of them at well below their sale price.
The reason? Wilson simply doesn’t believe the sale price of many commercial properties on the tax rolls represents anything close to their market value. In fact, he argues, many commercial sales—particularly the highest priced ones-—are atypical of what this market will bear and, therefore, cannot be used as the basis for assessments.
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