The printing industry has taken a hit in recent years and this particular printing company, located in Fremont, California, had seen both advertising and subscription numbers falling consistently year over year. As a result, the equipment as well as the building as a whole located, was being underutilized due to a lack of demand for printed materials. The building was built in 2009 specifically for 4 large printing presses that were no longer being used on a regular basis. Our experts determined that both the Real Property and the Personal Property were over-assessed.
Both personal and real property assessments were an issue for this client as their business had taken a downturn after losing a key printing contract. At that time they had appealed their assessment on their own with no success and so decided to bring in our experts to assist them in another attempt.
Altus experts were brought in after the client’s 2013 appeals didn’t realize savings. We made sure the client was aware of the opportunity to appeal both personal property assessments and real property assessments concurrently. Altus’s approach was to look at it as an integrated / holistic issue as one type of property is directly related to the other.
Real Property Tax:
When business dropped off the client ended up not utilizing a large portion of the building for their daily business operations. Additionally, at the time of construction, the structure was overbuilt to accommodate specific printing equipment. Altus concluded that if the building were to be sold now a buyer wouldn’t pay more for the additional structural elements.
Personal Property Tax:
While the printers may have cost millions at the time of purchase, the decline in the printing industry has greatly diminished the amount of money potential buyers are willing to pay for the machinery. Altus was able to reset the expectations of the assessment office for the value of the equipment and demonstrate that the market value was considerably lower.
Altus was able to negotiate directly with the assessors, thus avoiding the burden of costly litigation.
Using a multi-pronged strategy centered on economic and functional obsolescence, Altus Group successfully reduced the combined real and personal property assessed value by almost $50M for the 2015 tax year.
In addition to the open appeal year, Altus Group relied on their experience with the California audit cycle to retroactively challenge three more years of business personal property assessments. In total, the client realized savings dating back to 2012, amounting to approximately $1,310,000.
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