Spates Block sale spurs Newport City reappraisal
copyright the Chronicle January 8, 2014
by Joseph Gresser
NEWPORT — The $2.85-million sale of the Spates Block will change the face of downtown Newport. It will also require the city to revalue all property on its Grand List.
According to a memo from City Assessor Spencer Potter, the sale, along with the $1.1-million sale of the properties on which the new Maplefields gas station is to be built, will bring a call from the state for mandatory reappraisal.
City Manager John Ward urged the aldermen to act quickly on the matter at the city council’s meeting Monday night. They heeded his advice and unanimously agreed to proceed with a full reappraisal of Newport.
Mr. Ward said it is quite possible that new sales will drop the city’s Common Level of Appraisal (CLA) enough that the state will raise education tax rates to compensate. The CLA is a measure the state uses to ensure fairness in the statewide tax by making sure appraisals in all towns generally match the results of actual sales.
According to Mr. Potter, Newport’s CLA has hovered around 85 percent over the past few years. Prices have not increased because people are waiting to see what happens with large scale projects in the city that are to be funded by the sale of EB-5 visas.
The visas, which grant permanent residency status to foreigners who invest $500,000 in a project that will create, directly or indirectly, ten permanent jobs, are expected to fund the rebuilding of the Spates Block, a biotechnology plant on the site of the former Bogner plant, and a hotel and conference center where Waterfront Plaza now stands.
Should the CLA drop to 60 percent due to the new sales, city residents might see their state education taxes go up by 40 percent as a result of state efforts to make assessments roughly comparable between towns.
The city will try to have all properties assessed within two years, Mr. Ward said, although he acknowledged it will be difficult to accomplish the reappraisal within that time. The city has a fund of $167,000 to pay for the job, he said.
Once the job is done, homeowners should see some tax relief, Mr. Ward predicted. With a higher Grand List the city’s tax rate should come down, he said. In addition, the reappraisal will not have an equal effect on all categories of property.
Prices for residential property have basically stayed stable over the ten years since the last appraisal, Mr. Ward said. He said he does not expect to see big changes in that category.
A rolling reappraisal of the city was considered and rejected, Mr. Ward said. Those whose assessments are raised before assessors reach the rest of the city are likely to sue, he said. Even if Newport prevailed in any litigation, Mr. Ward said he did not want to have to pay potentially significant legal fees.
In his memo, Mr. Potter mentioned only some of the properties bought by GSI of Dade County, a company based in Miami, Florida, and controlled by Ariel Quiros, co-owner, with Bill Stenger, of Jay Peak Resorts. The buildings, 151, 153, 167, 177, 181 and 189 Main Street, and 32, 35 and 47 Central Street, were sold by Spates Family, LLC, for a total of $2.85-million.
Two other parcels that will be included in the $50-million plan to build what is being called the Renaissance Block, were sold by Spates Family LLC to GSI. Those are 35 and 47 Second Street.
Mr. Potter said the listed value of the properties on Main and Central streets was only 53 percent of the sales price — $1.51-million. Without the buildings, which are scheduled for demolition in May, the property is listed at $477,200, 16 percent of the sale price Mr. Potter said.
Similarly, the properties sold to RL Vallee Inc., the owners of Maplefields, fetched prices far above their listed values.
Spates Family, LLC, sold 273 and 267 Main Street for $600,000 and James and Daniel Roy sold 283 Main Street, where the Newport One-Stop now stands, for $550,000. The listed value of the properties is $516,400, about 45 percent of the purchase price. Without the buildings the land is valued at $167,300, only 15 percent of the price paid by Maplefields.
Mr. Potter said another measure, the “coefficient of dispersion,” which measures the amount individual assessments differ from the median is likely to attract attention from the state soon. The limit set by the state is 20 percent, he wrote, a mark exceeded by Newport for several years. The new sales are likely to widen that gap.
Mr. Ward told the aldermen that he had already expected the state to insist on a total reappraisal, but the retirement of the person who would have made that call seems to have given Newport some breathing room.
contact Joseph Gresser at [email protected]