This meeting is a continuance of the Lake County Value Adjustment Board for 1999. The Board met in regular session on Thursday, September 30, 1999, at 3:00 p.m., in the Board of County Commissioner's Meeting Room, Lake County Administration Building, Tavares, Florida. Commissioners present at the meeting were: Welton G. Cadwell, Chairman; and Catherine C. Hanson. Commr. Robert A. Pool was not present, due to another commitment. School Board members present were: Mary Fletcher and Phyllis Patten. Others present were: Sanford (Sandy) A. Minkoff, County Attorney; Ed Havill, Property Appraiser; Frank Royce, Chief Deputy, Property Appraiser's Office; Robbie Ross, Tangible Personal Property and Agricultural Operations Director, Property Appraiser's Office; and Sandra Carter, Deputy Clerk.

The Chairman opened the meeting.

It was noted that the Value Adjustment Board could not meet until 3:00 p.m., due to the fact that the Lake County School Board had called an emergency meeting and all school board members were asked to be present. School Board Members Mary Fletcher and Phyllis Patten apologized for the delay.

PETITION NO. 1999-183 - CECELIA BONIFAY, ESQUIRE

AKERMAN, SENTERFITT & EIDSON, P.A.

Ms. Cecelia Bonifay, Attorney, Akerman Senterfitt & Eidson, addressed the Board stating that she was present representing Mr. and Mrs. Chester Lemon, who were contesting the assessed value of their single family residential home, located on Lake Dalhousie, East of Umatilla. She stated that they had been out of the country, however, had submitted documentation to the Property Appraiser's Office by September 24, 1999, as required. She stated that Mr. Lemon had additional documentation to submit this date.

Mr. Ed Havill, Property Appraiser, informed the Board that his office requested information from Mr. Lemon on several occasions, however, never received anything in writing, until they received the information before the Board this date.

Ms. Bonifay stated that she felt the basis of Mr. Lemon's case was what it cost to construct his house and what their opportunities might be, if they were to put the house on the market, given its location. She stated that Mr. Lemon felt, based on evidence that he would present this date, the value of his house, assessed at $1,725,388.00, was too high.

Mr. Chester Lemon, Applicant, addressed the Board stating that he and his wife were shocked when they received the appraisal of their house in Umatilla, from the Property

Appraiser's Office. He stated that they have a house of comparable size in Heathrow, in Seminole County, and felt the assessment might be a little less on their house in Umatilla than their house in Heathrow, because their house in Heathrow was larger than their house in Umatilla.. He stated that the assessment on their house in Umatilla was almost double the assessment of their house in Heathrow and he was concerned about the taxes that he will have to pay on it. He stated that he was in the hospital for approximately 5 to 6 weeks, suffering from an illness, and was unable to furnish the Property Appraiser's Office with the information they had requested. He stated that he was not aware of the fact that he had to furnish said information within a certain period of time. He stated that the agreement he had with his builder was that he was going to build his house for $1 million, which he noted is how much the house is currently insured for. He stated that the builder was to make $100,000.00 on the house, to build it, and he had a $50,000.00 contingency within the agreement. He stated that he was shocked when he saw the house was assessed at $1.7 million. He noted that he paid $175,000.00 for the property that the house is built on.

Commr. Hanson stated that Mr. Lemon had the house insured for a little over $1 million and paid $175,000.00 for the land, for a total of $1,210,000.00, therefore, questioned whether he would be comfortable with the assessment being that amount.

Mr. Lemon stated that he felt that would be a fair assessment.

Commr. Cadwell interjected that, if one considered the cost of building the house and the cost of the land, it would be closer to $1.4 million.

Mr. Frank Royce, Chief Deputy, Property Appraiser's Office, discussed how the property was assessed, noting that they tried to obtain the cost of building the house, the amount of insurance, the amount of the mortgage, and the appraisal from the petitioner, however, never received said information. He stated that the information that was presented with the petition stated that Mr. Lemon's house in Heathrow, in Seminole County, was assessed at $801.000.00; however, he had a copy of the listing of that house, which was $1,675,000.00. He stated that his office could not use an assessment from another county, because they did not know how that county assessed property, but, his point was that it showed that Mr. Lemon's property was assessed at 50% of its cost, which he felt was way out of line. He stated that another problem his office had was that the house in Seminole County was listed at 13,500 square feet and, after physically measuring the house in Umatilla, they found it contained over 18,000 square feet. He stated that the house in Umatilla had more amenities than the house in Heathrow, as well.

Mr. Royce distributed, for the Board's perusal, a handout indicating how Marshall & Swift would price this particular type of property, making adjustments for Florida, which showed that the typical cost of such a residence would be approximately $1,750,000.00. He stated that a statement was made that the house was overbuilt for the area, but he felt it might be overbuilt for the subdivision, but not overbuilt for the Lake Dalhousie area, even though it was the largest house in the subdivision. He stated that it would have helped if his office had had an appraisal and a cost sheet to look at, but they did not.

Mr. Havill informed the Board that he would be willing to lower Mr. Lemon's assessment by $200,000.00 this year, just as a flat knock-off, with a condition that his office receive the information they needed from Mr. Lemon, so that next year they could make a correct assessment. He stated that his office was dealing with some unknowns this year.

On a motion by Commr. Hanson, seconded by Ms. Patten and carried unanimously, by a 4-0 vote, the Board upheld the Property Appraiser's reduced assessment of $1,525,388.00, due to findings of fact and the Property Appraiser's willingness to reduce the assessment for this year.

Commr. Pool was not present at this meeting.

PETITION NO. 1999-164 - NATALIE PAUSCH FOR ALEXANDRA ANDREJCZUK

Ms. Natalie Pausch, representing her mother, Ms. Alexandra Andrejczuk, Applicant, addressed the Board stating that her mother was a snowbird who resides in Michigan and was only in Florida during the winter months. She stated that her father took care of all the paperwork, however, he had passed away approximately two years ago. She stated that her mother was unaware of the fact that her house was missed and not put on the tax roll. She stated that the house was built in 1986. She stated that her mother had received a tax bill for not only this year, but for the three previous years, as well. She stated that her mother does not have a problem with paying her tax bills; however, in looking at some of the data for the house, was concerned about a quality adjustment that was made on her mother's house, as well as the fact that most of the houses on her mother's street were all depreciated at the same rate, except for one, which was depreciated at 8%. She stated that all the other houses were depreciated at 3%. She stated that it did not matter whether the houses were ten years old, or three years old. She stated that she had a friend who was an appraiser, who advised her that it appeared the house should be valued closer to $50.00 per square foot, for land and improvements, which she noted fell in line with what the other houses on the street had been selling for.

Mr. Ed Havill, Property Appraiser, informed the Board that, if one were to build two identical houses ten years ago next door to each other, however, one of the houses was kept up and the other was not, ten years later the value of the one house would be more than the value of the other one, even though they were identical in construction.

Mr. Frank Royce, Chief Deputy, Property Appraiser's Office, stated that his office looks at property not only for effective age, but for the condition and quality of the house. He stated that the condition of the applicant's house was much better than the house next door, that was also built by her mother and father in the same year that they constructed their own house. He stated that he felt the reason the applicant's house escaped taxation for 11 years was because the building permits were set to the other lot, rather than their own. He stated that the house would be going on the tax roll for the first time this year and the quality of the house represented what they felt it was assessed at. He stated that his office was scheduled to reappraise the whole area where the applicant lives. He stated that the value of some of the houses was too low and would be raised next year, no matter what. He stated that all the lots in the subdivision were valued at $18,000.00 and the applicant's house was assessed at $60,244.00. He stated that this particular assessment would be based on three prior years of assessments

It was noted that, even though the house had not been taxed for 11 years, the most the Property Appraiser's Office could assess would be three back years of taxes, plus this year's taxes.

On a motion by Commr. Hanson, seconded by Ms. Fletcher and carried unanimously, by a 4-0 vote, the Board upheld the Property Appraiser's assessment of $80,187.00 for 1999 and $62,187.00, for the structure only, for each of the years 1996, 1997, and 1998, due to findings of fact and lack of sufficient evidence to reduce the assessment.

Commr. Pool was not present at this meeting.

PETITION NO. 1999-127 - DARRIN L. MITCHELL, FLORIDA PROPERTY TAX PROFESSIONALS

Mr. Darrin Mitchell, Florida Property Tax Professionals, Applicant, addressed the Board, stating that he was present representing the Simon Property Group, for the Lake Square Mall property. He stated that his client wanted to present information to the Property Appraiser's Office and discuss the parameters of an income approach to value, which they had discovered might not be given quite the credibility that they wanted across the State. He stated that he had prepared an income analysis, as well as a cost analysis, which was provided to the Property Appraiser's Office, however, in discussions with said office, got the impression that the majority of the weight of their value was placed on a cost approach. He stated that he felt any investor buying property across the country would put most of the weight on an income approach to value, therefore, he hoped to work with the Property Appraiser's Office and come up with a good income approach. He noted that his firm had just taken over the property in question, for the Simon Property Group, and wanted to come up with methodologies that both his firm and the Property Appraiser's Office could agree on, for the income approach, because they felt it was the most important approach for an investor.

Mr. Ed Havill, Property Appraiser, informed the Board that the Florida Statutes state that his office has to consider all three approaches - market, cost, and income, but the Property Appraiser decides which approach to use.

Mr. Mitchell reviewed an analysis that he had prepared for the Property Appraiser's Office, using the income approach to value, noting that he had provided to the Property Appraiser's Office income and expense information, as well as their rent roll, looking at what they felt were the most recent market rents on the different types of property within the mall. He stated that the gross rent total they came up with was $6,024,920.00, noting that it was approximately $13.00 per foot, on the average, across the mall, for each of the different types of spaces. He discussed leasing commissions, as well, noting that he came up with almost $2 million per year that was paid out in leasing commissions, which he noted was a direct expense off the gross income that was received from the leases. He discussed operating expense recovery, which amounted to approximately $1.3 million; some miscellaneous income of approximately $33,000.00; the occupancy level, which was 85% as of January 1, 1999; the rentable area, which was approximately 459,795 square feet; expenses, which amounted to approximately $2 million; and the cap rate, which was approximately 12. He stated that the figure they came up with, using the income approach, was $18,855,000.00, which he noted was quite a bit less than the current assessment of $25,197,800.00. He stated that that was a rather large discrepancy in the income approach and the reason why he felt the parameters should be taken into consideration. He stated that he did a cost analysis on the property, as well, however, it came out to approximately $20 million - again, substantially less than the current assessment of $25 million.

Mr. Frank Royce, Chief Deputy, Property Appraiser's Office, informed the Board

that the property in question sold last year for $28,990,000.00; however, his office had everything that Simon Property Group owned from that sale at $27,700,000.00. He stated that, as far as assessing the mall, his office used the cost approach. He stated that income was presented from the applicant; however, he was not too sure of some of the figures, which he elaborated on. He stated that Mr. Mitchell used a cap rate of 12.072, which alluded to the fact that the mall is located in the City of Leesburg, which it is not, it is located in the County. He stated that a 10% cap range would be more reasonable. He stated that his office was using figures from Marshall Swift, which shows a replacement cost for a new mall at $33,500,000.00. He stated that his office discounted 6% for local, 18% for depreciation, and 15% for obsoleteness, for a total of $21,900,000.00, and adding land improvements at $6,500.000.00 and miscellaneous improvements at $2 million, came up with an overall value of $30 million. He stated that they took 85% of that figure and came up with a market value of $25,800,000.00, however, their assessment was $25,197,800.00. He stated that he could justify all his figures and was comfortable that the assessed value was correct.

On a motion by Ms. Patten, seconded by Ms. Fletcher and carried unanimously, by a 4-0 vote, the Board upheld the Property Appraiser's assessment of $25,197,800.00, due to findings of fact and lack of sufficient evidence to reduce the assessment.

Commr. Pool was not present at this meeting.

There being no further business to be brought to the attention of the Board, the meeting was recessed at 4:00 p.m., until 10:00 a.m., Friday, October 1, 1999.

__________________________________ WELTON G. CADWELL, CHAIRMAN

ATTEST:

_________________________________

JAMES C. WATKINS, CLERK

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