wtf? Fran Barrett beat Cincyopolis, fair and square

Yesterday morning I put on a little eyeliner with one of the most professional dresses hanging in my closet and wandered up to the Board of Revision on Court St.  Last March I’d filed a complaint on the valuation of parcel 084-0003-0142-00, the 25 unit luxury apartment building owned by Western & Southern on E. Fourth.  The Hamilton County Auditor showed a value of $2,527,080 and I asked for a revision to $6,500,000.

It didn’t take long for the three person board representing Hamilton County Auditor, Dusty Rhodes, County Commissioner, Greg Hartmann, and Hamilton County Treasurer, Robert A. Goering to turn me down flat, ruling to leave the value unchanged.

Now when I say “Fran Barrett beat Cincyopolis, fair and square” in all honesty I’m exercising a significant dollop of poetic licence.  Because Mr. Barrett didn’t fight.  He didn’t have to. After the conclusion of Western & Southern’s successful reduction on another one of their properties on Glenway Ave, I heard the Board chair ask him if he intended to stay for “whatever this next one is.”

Not a good sign.

One of the most consistently talented lawyers I’ve ever seen in action, Fran Barrett knew I didn’t have a snowball’s chance in hell of winning before we even entered the room.  I thought I could sway the Board with common sense.  But he knew that this hearing was a legal proceeding with the burden of proof on the complainant.  The Board is restricted to consideration of very specific forms of evidence:  expensive professional appraisals that include comparable sales, highest and best usage, and income models.  Apples with apples kind of stuff. They had to turn me down, even though I had worked very, very hard on all my sad little charts and spreadsheets.

So it was really a very generous gesture on Mr. Barrett’s part, one of the most powerful men in Cincinnati, to stay quietly seated, looking down at the desk top without ever saying a word.  Eagle Realty even sent a small contingent of other suit-and-tie experts to sit in on the hearing.  I would have been so disappointed if they hadn’t taken me seriously enough to even put on any semblance of a show.

I did succeed in eliciting at least one animated response from Fran Barrett during the proceedings.  It was when I mentioned that the $6,500,000 I had requested was based on information from a Western & Southern employee as to the value used on the company’s internal books.  “You have to tell me who told you that,” he repeated more than once in a tone of voice that clearly had no patience for amateur sleuthing or amateur anything else.  The Board chair eventually had to step in and clarify that it wasn’t necessary for me to surrender the information as it was quite clear by that time that there was no danger of a ruling in my favor.

The good news about my twenty minutes of attention from the Board of Revision is that every single person who attended the hearing treated my concerns with respect and tried their best in the time allotted to explain the limitations of the valuation system and how these decisions are made.  Susan Silver, Chief Administrator of the Auditor’s Department, even asked Terry Munz, an experienced veteran who heads valuations, to sit in and take notes.

Unfortunately, though the information they shared was extremely helpful, nothing they said did anything to change my mind that there is a systemic undervaluation of commercial real estate in the Central Business District, including this building.  Once the value on a property is successfully lowered, unless there is an arms-length sale, there is no mechanism within the system to reconsider that valuation outside regular triennial and sexennial appraisals.  This is primarily a batch-function subcontracted to outside professionals that involves every property in Hamilton County and precludes in-depth analysis of single properties.  The reality is that it will be decades before the market conditions that attract so many out-of-state investors to our real estate market are reflected in any meaningful way in the Auditor’s valuations.  And even if I could somehow find the money to pay for professional appraisals and the services of top-notch legal representation, I wouldn’t bet against Fran Barrett, would you?  If by some miracle the Board adjusted the value upwards, he would have to take the decision to the Court of Appeals where a value would most likely be determined in a closed-door session with a magistrate.

Am I discouraged?  A little. Having identified what I consider to be a serious problem, I was hoping citizens could take a more active role in drawing attention to undervalued properties. Alas, that is not to be.

But there was at least one consolation prize.  After everything was over the team from Western & Southern  lingered in the reception area to chat with Cincyopolis, all of them faithful readers of my blog. One of them remembered a post where I had apparently called Mr. Barrett “boring” – and I sheepishly admitted that I might possibly have used such an adjective. For the first time ever, even though we’ve both attended a wide variety of hearings together, that was the one and only time I’ve actually seen Fran Barrett smile.

13 thoughts on “wtf? Fran Barrett beat Cincyopolis, fair and square

    1. executivedreamer Post author

      I was in sales for 23 years and if there’s anything I learned it’s that if you try 100 ideas one of them will work. You just have to keep trying until you figure out which one.

  1. Mary Lambert

    Property valuation is a chimera under the best of circumstances from what I can actually learn about it. That would make it ripe pickings if corruption or plain old deal making on behalf of the good of the City (ideology trumping active democracy) was a motive. I’ve had realtors laugh when I say “gee I only got $XX for my mother’s house and it’s tax valuation is much higher” and yet my nice high tax valuation will not accrue to my home’s value as it relates to low ball offers and pressures from developers who have approached my neighbors already. So, I concur that the process needs to be totally transparent – not sure how we get there. There’s a lot of beer to be drunk and ball games to attend, and fests and restaurants etc. All the bread and circuses those in power could hope for to keep people out of the counting house. I applaud your efforts.

  2. Bill Collins

    Hang in there, Kathy. The system is fixed, and they know it. Calling attention to this fix, as you are doing — and the media here never calls attention to these kinds of things — is the way to start the “un-fixing” of the system.

    As more and more people, like you, shine the spotlight on this corruption, eventually the commercial media will start the pay attention. And, then, that’s when the system will be reformed. So, in the meantime, we all owe you a debt of gratitude for exposing this systemic corruption that benefits the rich, and leaves the rest of us without the benefit of having our taxes cut in this manner.

    1. executivedreamer Post author

      Amazingly enough a fellow blogger from San Francisco (Granola Shotgun) showed up out of nowhere, sat through the hearing, and then took me for a coffee. I’d never met Johnny before in person. Isn’t that amazing? Next time, I’ll let you know. Good to know there are folks who care.

  3. jzavon

    To all your readers who work within the property valuation system:
    Can you please outline the process, variables, and data sources used in your valuation of this property? Without it, your method remains a mystery. Cincyopolis has touched a nerve that raises public indignation. Crisis management specialists would tell you this is the moment for you to begin public outreach, before that public indignation ripens into loss of confidence in local governance or worse.

    1. executivedreamer Post author

      I’ll do a post tomorrow that shows my logic. It was a per square foot comparison with the condo building across the street. That was labeled “apples to oranges” – even though it was a 6:1 ratio. The land value – cut in half since 2003 – well, to be honest, I didn’t understand anything about the rather vague land usage references. As I say – the Auditor’s professional appraiser only had limited time to testify and everybody was fairly well annoyed by my bringing the complaint – only the second one by a non-property owner in 3 years.

  4. Zachary Schunn

    I know I’m late with comments… just stumbled upon this.

    The Board of Revisions seems to have shifted from an understanding that their valuations are over-valued (as was the case during the downturn) to an understanding that their valuations are under-valued (as is now the case in an improving market).

    Unfortunately, there are still property owners out there who didn’t contest their valuations during the downturn, and now they’re left paying as much as 50-100% more in taxes than they should. The Board, which used to be more lenient with evidence, is now as you said forcing professional appraisals as proof (apparently there’s a back story regarding Ohio law there), so I’m not surprised you hit that hurdle.

    And in any flawed system, with flawed valuations, there are of course other loopholes to prevent re-valuation. You mentioned the lack of sales which would cause re-valuation. Downtown, some of the sales that HAVE occurred have been asset swaps, LLC transfers, or other “off-market” means to prevent a sale from ever showing on public record. I know Eagle Realty has employed this multiple times. (I’m told they sold 114 W. 6th for around $5 million via LLC transfer… that’s still valued around $3 million and still listed as Eagle Realty’s property. And of course, when they sold the stake in Great American Tower is never showed up as a “sale” because of the complicated ownership structure there.)

    1. executivedreamer Post author

      How did I miss this insightful, knowledgeable comment? As always, your perspective very, very helpful. We have to figure out how to improve this system or else we have to eliminate property taxes altogether.

    1. executivedreamer Post author

      Thanks, John Green. I hadn’t seen your particular link – but there’s probably a page dedicated to valuation reduction services at every big law firm. It’s become quite a revenue producer. Not illegal or unethical by any means. Clients pay law firms to aggressively represent their interests. But we’ve got a very broken system and we have to do better. Right now it is two-tiered property-tax with one effective rate for those who can afford to pay for top-level representation and the regular rate for middle-class homeowners.


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