Monday, July 28, 2008

REALLY GREEN ACRES: Property Tax Breaks Cost Boone County Big Bucks

By Mike Martin   (Links in bold)

Billionaire real estate developer Stan Kroenke must not have returned his certificate of value questionnaire to the Boone County assessor after purchasing 133 acres of prime Columbia real estate from George and Robert Benson back in 1998.

The enormous parcel, on the corner of Sinclair Road and Nifong, sits across from Kroenke's estate on one side and Mill Creek Elementary School on the other.

Kroenke paid over $1.9 million for the property ten years ago, according to a Deed of Trust on file with county recorder Bettie Johnson.

County assessor Tom Schauwecker currently has the parcel
appraised for $40,030.00, or $300.00/acre.

Though the land is presently zoned "agricultural," The Deed goes on for pages about a "General Development Plan" (pg. 7, section 17A-a) that includes "installation of streets, sewer lines, water lines...and subdivision of same into lots and sale of such lots." The vacant land shows no evidence of farm use from the street, but it does sport new gas, water, and sewer lines as well as a fire hydrant on the corner.

The land's assessed value -- by law, 12% of its appraised value -- is only $4,803.00, yielding a whopping $275.04 property tax bill for the Kroenkes in 2007.

That's $275.04 in property taxes on 133 acres of prime real estate in the city limits of Columbia purchased for over $1.9 million a decade ago with a written development plan.

Vast tracks of banked "agricultural" land are examples of why property usage counts. The way vacant land is valued is all about how it's used, not how it's zoned, which can lead to some pretty slippery tactics, like parking bales of hay and idle farm equipment to create faux farmland on subdivided residential lots visible from the street.

Alert assessors can and should monitor the use of land banked for development purposes. Preliminary plats and development plans attached to multimillion dollar farmland deals should provide a bright red flag for continuous scrutiny, especially given the critical nature of property taxes to our budget-strapped public schools.


All around Columbia and Boone County, prime parcels produce paltry property taxes.

On the corner of State Farm Parkway and Nifong Blvd, 0.6 acres owned by Crown Center Farms -- an operation of the Laurie family of Wal-Mart heirs -- produced just $2.51 in property taxes last year.

That's right -- two dollars and fifty one cents in property taxes on six-tenths of an acre. With the proposed Columbia Public Schools tax levy, that figure would have increased -- by eleven cents.

A Sapp-family owned 18.2 acres in Thornbrook with a completed cul-de-sac netted $50.86 in property taxes last year. Mr. Schauwecker's office has the parcel (in the upper right hand corner of this map near bottom of page) appraised at just $7,210.00 -- about $387.00/acre.

His office apparently calls the parcel agricultural. The City of Columbia calls it residential. Why the discrepancy exists is hard to say.

State Tax Commission law judge W.B. Tichenor told me that he can't decipher Schauwecker's shorthand for land use -- FV, FA, RV, RI, etc. He spent about five minutes in his Jefferson City office asking around -- I heard the discussion over the phone!

"No one in here has ever seen this," said Tichenor, which is kind of scary because Tichenor routinely heard tax appeals from Boone County until recently. "We don't know what it means."


A Kroenke-owned three-acre residential parcel on Walcox Drive in back of his Nifong estate netted schools, roads, and libraries just $21.76 in property taxes last year.

Compare this to 0.23 acre of vacant residential land in a central city Columbia neighborhood, which yielded nearly four times the taxes -- $89.38.

Another eight residential acres, also owned by Mr. Kroenke near his estate, brought in just $261.14.

Confronted with this situation at a Central Columbia Get Out the Vote Forum, Mr. Schauwecker told audience members that "laws on the books prevent larger plots of land from incurring higher value," according to a Missourian story. "It's not fair, but it's law," he said.

But we can't find any law that would justify such a huge difference in appraised valuations of land the assessor himself classifies the same way.


The law on how to appraise residential, commercial, and vacant or unused agricultural property is Section 137.115, RSMo, which "requires that property be assessed based upon its true value in money which is defined as the price a property would bring when offered for sale by one willing or desirous to sell and bought by one who is willing or desirous to purchase but who is not compelled to do so."

Appraising vacant land can be trickier because Missouri state law allows different valuation methodologies for active farm or agricultural land, presumably to give hard-working farmers a break. The law defines active as active farming or horticultural use.

The law does not define active agricultural land based on zoning. Just because land is zoned "agricultural" does not mean it is. It may be zoned agricultural, but unused, sitting vacant, or being developed. The active use has to be clearly substantiated and justified, and it's up to assessors to make sure the law is being followed. 

This Missouri State Tax Commission case illustrates.

For agricultural land that's not being actively farmed, RsMo 136.017 states that the true value in money shall be its fair market value.
Adding a common-sense element to figuring out the true value in money of vacant land is RsMo 137-016

"All real property which is vacant, unused, or held for future use...shall be classified according to its immediate most suitable economic use, which use shall be determined after consideration of:

(1) Immediate prior use, if any, of such property
(2) Location of such property
(3) Zoning classification of such property; except that, such zoning classification shall not be considered conclusive if, upon consideration of all factors, it is determined that such zoning classification does not reflect the immediate most suitable economic use of the property;
(4) Other legal restrictions on the use of such property
(5) Availability of water, electricity, gas, sewers, street lighting, and other public services for such property
(6) Size of such property
(7) Access of such property to public thoroughfares
(8) Any other factors relevant to a determination of the immediate most suitable economic use of such property. 

As the cul-de-sac on the 18-acre Sapp/Thornbrook parcel indicates, just because land is designated "agricultural" doesn't mean it is. And in the case of Kroenke's 133 Acres, it sure gives new meaning to the term Green Acres.

Green, as in the color of money.

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