Karen and Perry Holland, at their Bridge Road home, review the supporting evidence they collected for an assessment appeal they launched for another property they own in the Quaker Neck subdivision. Suffolk's Board of Equalization had 140 appeals in 2012, proportionally much more than elsewhere in Hampton Roads.

Archived Story

Arm’s-length or fair-market?

Published 9:17pm Saturday, February 2, 2013

Suffolk assessments draw more appeals than in any other Hampton Roads city

Perry and Karen Holland did their research before standing before a Board of Equalization hearing to contest the city’s assessment of their North Suffolk property.

They had bought the foreclosure in the Quaker Neck subdivision for $77,000 in November 2011. About three months later, the city assessor’s office had assessed it at more than $187,000.

Single-click on graphic for a larger version.

“We went through and looked at each (nearby) property and how much it sold for,” Karen Holland said of their preparation for the 15-minute board hearing in a City Hall conference room.

The Hollands weren’t the only ones last year to appeal their assessment to the independent panel of three court-appointed citizens. Far from it, in fact. Suffolk’s Board of Equalization handled 140 cases during a three-month span ending last July — far more in proportion to the number of taxable parcels than anywhere else in Hampton Roads, according to city records.

Suffolk had 3.68 board appeals per 1,000 taxable parcels, almost twice as many as in the Hampton Roads city with the second most — Norfolk — and 36 times more than in Chesapeake, with the region’s fewest.

Meanwhile, city records would seem to confirm what the Hollands and others have said about Suffolk’s assessments: Many Suffolk properties are substantially over-assessed.

Billy Chorey, who served as last year’s chairman of the Board of Equalization in Suffolk, would not speak on behalf of that board for this story. But as a longtime Realtor with a wealth of experience in the Suffolk market, he has a personal and professional opinion on the matter.

“It is my strong conviction that a majority of real estate assessments in the city of Suffolk are higher than their actual current fair market values,” he said recently. “That has been the case since the downturn of real estate values in 2009, and I see it every day in my business of selling and appraising properties here in Suffolk.”

John Harry and Mills Staylor, the board’s other two members, would not comment.

Central to Suffolk’s assessment problem is a dearth of qualified, or arm’s length, sales.

The city’s seven appraisers — eight including City Assessor Jean Jackson, who signs off on their assessments — prefer to rely only on qualified sales when determining “fair market value” — what a property will yield when the seller is not forced to sell and the buyer is not forced to buy.

Unqualified sales, on the other hand, include those like bank foreclosures, underwater sales in which the seller owes more than the house is worth, and builder liquidations in which the seller cannot afford to complete the construction.

According to city records, Suffolk in 2011 had only 664 qualified sales against almost twice as many, 1,174, that were unqualified. And while the average assessment for qualified sales was 108.95 percent of the sales price, it rose to 183.64 percent for unqualified sales.

Chorey is among those who believe that where unqualified sales are highly concentrated — like in Pitchkettle Farms off Route 58 and Quaker Neck in the Sleepy Hole borough, where the Holland family bought, and Governors Pointe off Route 17, where the city is facing an assessment lawsuit — such sales should be counted when assessments are done.

The argument goes that once a neighborhood reaches a certain proportion of unqualified sales, the true market value of all homes gets dragged down.

“What I personally believe is that if an area has a disproportionate number of unqualified sales, then that needs to be considered stronger with the valuations in that specific neighborhood,” Chorey said.

Perry Holland said he was left in “disbelief” by the city’s assessment on their Green Spring Drive property.

“I didn’t expect to buy something for $77,000 and for the city to assess it for $187,000,” he said.

The Hollands pursued an appeal to the board, each of whose three members has an equal vote, after an unsuccessful conference at the assessor’s office, the initial level of appeal.

“Most of them were from Quaker Neck … and the city wanted to call them builder liquidations,” Perry Holland said of the sales they presented to bolster their case. “None of the sales in the neighborhood were qualified.”

The board dropped the Hollands’ assessment to $107,700. “I still don’t think it’s fair,” Perry Holland said. “I would still say we’d have a problem getting $107,000 if we sold it.”

He believes the city intentionally keeps assessments high in order to raise more money in taxes.

“The more they’re worth, the more the city collects in taxes,” he said. “It’s the same thing with everything in life: money.”

Of Suffolk’s 140 board appeals, assessments were decreased for 99 parcels and increased for one, lowering the original combined assessments for the adjusted parcels by 15 percent, to $44.06 million.

Chorey believes that if the city needs to increase revenue to cover expenditures, it should increase the tax rate, currently set at 97 cents per $100 of assessed value, rather than inflate assessments.

“If the assessments come down to where I believe they should be, then the city may say, ‘We need more money.’ Well, then the city needs to raise the mill rate, not inflate real estate assessments,” he said.

During two interviews at City Hall, City Assessor Jean Jackson said she has been “picking up the pieces” of a department that was in disarray when she was officially named to her role in August 2011. She invited those upset with their assessment to contact her office.

“If we determine from sales that the land value needs to be adjusted, it’s going to be adjusted, whether it be down or up,” she said.

But Jackson also denied that Suffolk properties are over-assessed. “All sales are given their due-diligence weight in determining what are qualified or unqualified sales” for assessment comparisons, she said. State guidelines do not permit direct comparisons of non-arm’s-length sales for assessments, she added.

But then Jackson gave one indication that the city’s policy might shift. After leaving the conference room momentarily to consult in private with city Chief of Staff Debbie George, who sat in on both interviews, she returned and said there are “certain subdivisions” where “certain circumstances” will come into play.

New assessments are due to be mailed out this month.

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  • KNRMCO

    OK, I have a question….we have 2 lots, 1 is 16 acres & the other is 11, and they are side by side. 7/2207 our lots were assessed at $186000k & $175300k respectfully.
    In 7/2008 thjose sme 2 lots were assessed at $128400k & $126500K RESPECTFULLY. THAT WAS THE YEAR THAT THERE WAS A HUGE UPROAR ABT THE ASSESSEMENTS & THE ASSESSOR resigned….anyone remember that? no adjustments to the taxpayer was mad but the city scored BIG on our benefit….

    Suggest Removal

  • chief601

    I guess the question is: What are we going to do about it?

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    • Roger Leonard

      As I stated below, a “Class-Action Suit” is the best recourse to insure a reasonable hearing of the facts and drive change. To count on anything else, as others have stated will not be productive… Roger…

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  • Mr. Developer

    What do you expect when you hire someone with no management experience and no real working knowledge of real estate appraising? I have asked around and virtually no one in the assessment or appraisal fields have ever heard of her.

    I have it on good word from a friend on the political side that there are some serious issues similar to what happened in the IT department brewing in the Assessor’s Office.

    This just proves council and the CM are incapable of finding good people and rely on staffing with people from the good old boy network. I guess when they move on to the next person they will just find someone else that is friendly with the Mayor.

    Suggest Removal

  • Roger Leonard

    I have challenged assessments in the past and it is a real hurdle to get over, if you want and can prove anything over the smallest changes.

    I do not blame the assessor or her office, never have never will… I understand the pressure is coming from the City manager and council to keep up the funding levels. How else could a rational person describe how it works? I feel that perhaps it may be time to band together and file a class-actions suit on the subject and see how it falls. There have been such cases in other jurisdictions and they have succeeded. It is apparent that the statutes of the Commonwealth are being violated. It just takes the will for the people to go to court and demand protections of their rights…

    What will you do?

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  • SouthernLady

    City of Suffolk leaders never change. Keep it up leaders and you’ll find that folks would rather buy homes elsewhere that put up with the crud you are dishing out! I wouldn’t live in Suffolk again if my life depended on it. Suffolk, Virginia must think it is on the financial level as Suffolk County, New York and it most certainly is not.

    Suggest Removal

  • Norseman

    As long as we alow the city leaders to spend as they see fit we deserve what we get. Fire the gang and get some new leaders with some fiscal resolve. Just as our country is going, as a city we are reaching the tipping point(maby there) where our spending is unsustainable.

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  • Norseman

    Again, when did we sell our land cars etc. to the city? This type of tax has no business in our system. We fought to get away from this type of taxation. We dont own anything anymore if the city or state can take it away if you dont pay your rental payments.

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  • Mills Staylor

    I always hate it when it says someone did not comment. In this article, I did comment, I just did not comment on the value side of the issue. My comments were that the Board of Equilization looks at the information that is provided by the Assessor’s Office, and the information that is provided by the citizen. Based on that information the board makes its determination of the value, condidering all pertinent information provided.
    The board is three citizens of Suffolk, appointed by the Court, to see that the citizens are given a fair opportunity of seeing that their property is assessed fairly. We have no tie to the city, the assessor’s office or City Council, other than we are Suffolk citizens.

    Suggest Removal

  • suff2011

    It is a shame to see how the city management operates. They keep misleading and cheating the citizens of Suffolk. How many times have we heard the council preach transparency?? The roads will be better if we can control the funds instead of VDOT. (That has not happened)

    The city manager is free to do anything she wants without any oversight from her bosses (City Council/Citizens). She is allowed to create new and redundant positions and fill them without even advertising the position. We have a Capital Projects Department that is charged with overseeing large projects that include new buildings. We now have added a high-paying position to oversee the building of the municipal building. That was done so Mrs. George could become Chief of Staff and Mrs. Hunt would be moved to Special Projects.

    Why has it taken so long to hire a new fire chief? The media release on March 2, 2012 stated that a search would start immediately for a replacement. Are they waiting for somebody from Richmond??

    The managers letter to council ,included in the adopted budget, states that all postions that become vacant will not be filled for a period of 90 days to save money and help fund the Comp Plan. A major in the police department retired at the end of November and a captain in January. These positions have already been filled and were not held for 90 days!! Another example of the city management doing whatever they want without following the policies they created.

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  • thekytikat

    Of course the city would over-inflate the assessments. They can’t raise taxes, it would cause all kinds of holy hell to rain down upon them, and they need to rake in that dough to afford the $702,000.00 in raises they just handed out to several of the city’s top people, including Ms Cuffe-glenn & Ms Debbie George.

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