Questionable Baton Rouge property assessments under review by state tax commission

    University House  740 W. Chimes St. Sold for: $108.5 million, October 2015 Assessment: $3.3 million Implied market value*: $33.8 million Assessed value/sale price: 31.2% Potential tax bill**: $1.3 million Actual tax bill: $416,867 Lost parish tax revenue**: $920,319

    The Louisiana Tax Commission is reviewing the tax assessments of more than a dozen commercial properties in East Baton Rouge Parish that are assessed significantly below their most recently recorded sale price, resulting in a potential loss of millions of dollars to the cash-strapped parish government.
    Louisiana Tax Commission Chairman Lawrence E. Chehardy declines to discuss details of the review but stops short of calling it a “reassessment” or “reappraisal.” Rather, he says, LTC staff appraisers are simply “reviewing the properties cited in the story.”
    Chehardy says it’s the first time he’s aware of and certainly the first time during his tenure on the commission that the LTC has conducted such a review.
    In a July cover story, 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 analysis found 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.
    East Baton Rouge Parish Assessor Brian Wilson has denied his office is under-assessing commercial properties, though he concedes he has intentionally assessed some large properties at well below their sale price because he doesn’t believe the sale price of many commercial properties on the tax rolls represents anything close to their market value.
    Chehardy says in the review, staff will use valuation data—average lease, occupancy and cap rates, for instance—from January 2015, rather than current data, because the tax rolls for 2016-2019 were set using 2015 data. He says using historical data is the most effective way to uniformly review the properties in question.
    The LTC is a statewide agency charged with assessing public utilities, hearing the appeals of aggrieved taxpayers over-assessments, and doing ratio studies to determine whether parishes are assessing fairly.
    Chehardy says he doesn’t want to speculate about what the LTC staff review might find nor is he prepared to say what the agency would do if it discovered a consistent pattern of under-assessments in East Baton Rouge Parish.
    “I don’t know what the procedure would be,” he says. “We’ll address the results once we see what they are.”