Client Profile

Data center acquired for $11 million with subsequent improvements of $7 million

The Challenge

County assessed the real estate at $22 million for the year following the improvements.

The Results

Cost approach analysis determined that appropriate breakdown of subsequent improvements was $4.5 million in equipment and $2.5 million in building improvements. Equipment investment was reclassified to personal property for tax purposes and real estate assessment was reduced from $12 million based on sales and assessments of comparable real estate.

Savings were $137,000, 150,000 and $165,000 for years 1, 2 and 3, respectively as a result of the reduced real estate assessment and the acceleration of depreciation for property tax purposes as a result of the reclassification of costs from real to personal property.