Are Developer Property Tax Breaks Breaking Boone County?

Are Developer Property Tax Breaks Breaking Boone County?
The Columbia Business Times

Presenting what he called “the facts pertaining to property tax valuations” for the Columbia Business Times this month, Boone County assessor Tom Schauwecker (pictured) wrote about a “133-acre vacant tract of land located on the southeast corner of Nifong Boulevard and Sinclair Road, across from Mill Creek Elementary." He noted that the land was zoned “agricultural,” but left out several other important facts.

The owner, a prominent real estate developer, paid around $1.9 million for the property ten years ago. In a Deed of Trust on file with Boone County, a “General Development Plan” assigns a “Per Acre Release Payment” for subdivision purposes of $19,950/acre, valuing the tract in 1998 somewhere north of $2.5 million.

Today, power, water, sewer, cable, and gas lines stud the property and it has a fire hydrant on the corner. Though neighbors say the parcel hasn’t been farmed in years, the assessor says it’s farmland and so qualifies for low, low property taxes.

Under Missouri law (RSMo 137.016 and 137.119), working farmland is taxed far lower than commercial or residential land.

But the key word is “working” and zoning doesn't count. To qualify for the tax break, the law is clear: The land must be actively farmed, or its “highest and best use” must be agricultural. Land zoned “agricultural” that isn’t farmed and has a “higher and better” use doesn’t qualify, caveats affirmed many times, most recently in 2004, when developer Northtown Village challenged Jasper County Assessor Tom Davis before the Missouri State Tax Commission.

Nonetheless, the owner of that 133-acre parcel—who long ago decided that its highest and best use was development—paid less in property taxes on it last year than he donated to Mr. Schauwecker’s re-election campaign: $275.04.

Prime property, paltry taxes

All around Columbia and Boone County, in fact, prime development property produces paltry property taxes, zoned agricultural—or not.

An 18.2-acre residentially zoned tract in Thornbrook complete with cul-de-sac netted $50.86 in property taxes on an assessed value of $865.00 last year. A 12,600 square foot commercially-zoned lot on Bernadette Drive and Fairview Road netted local governments just $14.89 on an assessed value of $260.00. Eleven residentially zoned acres on Walcox Drive netted schools, roads, and libraries just $283.00.

Vacant land isn’t the only campaign donor/real estate developer-owned property that qualifies for such big breaks. Mr. Schauwecker appraised a four-bedroom, four-bath, 2,373 square foot duplex built in 1999 for just $739 last year.

That’s right: seven hundred and thirty nine dollars.

City v. County

As if Columbia and Boone County need something else to bicker about, the county assessor and city planners often conflict on land use and zoning, another factor driving low, low taxes on development land.

For instance, the assessor says that parcels in a subdivision off Scott Blvd. are farmland, while Columbia zoned them R-1 several years ago, for residential single-family homes. Individual lots in the subdivision—many with foundations—are on sale for $49,000.00 and up. But Mr. Schauwecker says they’re worth only $8,600 each.

At controversial Cross Creek, amidst neighbor-developer scuffles and City Council brouhahas, city planners zoned 28 acres "planned commercial," or CP. But Mr. Schauwecker insists that the acreage remains a bucolic farm, and taxed its owners accordingly: $40.57.

Cost to Schools

The owners of a prominent Columbia retail center have been advertising their last vacant tract For Sale, a planned commercial or CP-zoned 1.4 acres. “Suitable for retail, restaurant, or office” according to the ad, adjacent neighbors include some of the nation’s best-known eateries. The 1.4-acre tract’s list price: $1,228,392.

Using a phrase Mr. Schauwecker has repeated many times to the media—"Tell me how much you’d sell it for, and that’s what I’ll say it’s worth"—a wily buyer would write up an offer and attach the assessor’s appraisal: Mr. Schauwecker says the $1.2 million parcel is worth only $182,950—and that it’s “farmland,” of course.

For Boone County’s public schools, libraries, cities, and roads, the difference between the assessor’s appraisal and the developer’s price amounts to a property tax loss of $22,100.49, or the difference between what the developer now pays—$1,307.35 —and what he would pay if the parcel were valued closer to its list price: $23,407.84.

More Than Equal

Under the law, all landowners should be treated equally. But in Boone County, some landowners are clearly more equal than others.

Take a 0.23-acre vacant lot in a low-income central city Columbia neighborhood that yielded $89.38 in property taxes last year, while 77.2 acres along I-70—335 times more land—brought in $83.35. Mathematically, that works out to a property tax rate 1,480 times higher for the central city parcel.

A prominent developer owns the I-70 tract and I own the central city lot. Though I didn't donate to his re-election campaign, whatever explanation, whatever spin Mr. Schauwecker puts on the law cannot explain, morally, ethically, legally, or in any other way, why he taxes my land nearly 1,500 times greater than the developer’s land.

Nor can he adequately explain a $739 duplex; farmland in the middle of a strip mall; or a $275 tax bill on choice acreage that’s probably worth $10 million today.

Dickens famously said, “The law is a ass.” But it’s not that much of an ass, despite our assessor’s assessments.

-- Mike Martin for the Columbia Business Times

RELATED:

Campaign finance reports: Tom Schauwecker

http://www.mec.mo.gov/CampaignFinanceReports/CFFilerPDFs/FullRepor/FullReport.aspx?CDRCP_id=11788&MyYear=2008
http://www.mec.mo.gov/Scanned/PDF/2008/57908.pdf
http://www.mec.mo.gov/Scanned/PDF/2008/58306.pdf
http://www.mec.mo.gov/Scanned/PDF/2008/58258.pdf

The facts pertaining to property tax valuations in Boone County
by Tom Schauwecker for the Columbia Business Times