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Client profile

Data center constructed for total cost of $220 million including equipment.

Challenge

County assessor attempted to increase the personal property tax assessment (equipment) for approximately $40 million. Personal property tax rate was 4.5% compared to the real estate tax rate of 1.2%, which would have resulted in a tax increase of $1.5 million in the initial year.

Additionally, the County increased the real estate assessment from $260 million to $330 million for a tax increase of $1.2 million. Property was assessed by the County using an income approach, capitalizing the net operating income of all of the data center’s operations.

Results

Altus demonstrated that subject property should be considered real estate and was being assessed as such and that the audit increase would have resulted in double taxation.

Based on an analysis of market commercial rents and a replacement cost analysis, Altus was able to successfully demonstrate a correlated value of $270,000, resulting in a $1 million tax reduction from the most recent assessment increase.

Ongoing annual savings are $2,500,000.

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Last updated on July 29th, 2019 at 04:43 pm

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