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From YouTube: Board of Equalization Hearing - July 28, 2020
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A
B
Okay
good
morning,
thank
you
for
your
time.
This
is
virginia
square.
It's
a
high-rise
apartment
located
at
901,
north
nelson
street,
in
boston,
virginia
square
submarket,
there's
231
units
and
there's
also
7150
square
feet
of
commercial
space
that
we're
not
contesting
the
property,
is
18
years
old
and
would
be
considered
a
second
tier
property.
B
The
assessed
value
increased
four
percent
and
is
currently
at
105
million
527
200,
which
is
439
999
per
unit.
If
you
turn
to
page
six
in
our
in
our
presentation
a
lot,
I
know
you
guys
have
talked
about
the
equity
residential
and
how
they
used
to
submit
their
ine
surveys
and
they
captured
the
property
expenses.
B
So
I
won't
go
into
detail
there,
but
the
main
differences
in
our
in
our
analysis
is
the
expense
category
and
the
expenses
for
the
past
three
years
have
been
46,
36
and
27,
and
the
county's
using
23
percent
we're
using
the
actuals
at
9
644
unit,
which
actually
falls
within
the
range
that's
listed
in
the
2020
county
guidelines,
and
our
requested
change
to
the
assessed
value
is
99
million
541
000..
B
I
also
included
on
page
five.
We
provided
two
charts.
One
of
the
sales
that
occurred
in
2018
and
2019.,
with
an
average
price
per
unit
being
at
377
000
the
subject's
being
assessed
closer
to
a
class,
a
property
at
over
400
000.
A
unit
virginia
square,
like
I
said,
is
a
second
tier
property.
It
was
built
18
years
ago.
The
second
chart
shows
all
of
the
assessed
values
for
classify
properties
built
after
2010.
C
Good
morning
board
members
good
morning,
ms
ross,
I
would
agree
this
case
is
fairly
succinct
in
the
sense
that
we've
seen
year-over-year
growth.
In
fact,
three
years
in
a
row,
growth
of
gross
potential
income
2018
and
2019
increased
by
over
three
percent
apartment
revenue
alone-
increased
three
percent
in
2019.
C
C
2019's
increase
at
approximately
4.5
percent
operating
expenses
are
actually
down
three
years
in
a
row
and
again
as
in
conjunction
with
that,
the
net
operating
income
is
up
two
years
in
a
row
and
in
fact,
2019's
increase
was
18.3
percent.
C
C
We
under
projected
effective
gross
income
by
over
470
000,
and
we
did
in
fact
under
project
operating
expenses
by
386
000,
but
that's
also
led
to
an
under
projection
of
net
operating
income
by
over
85
000.
C
Due
to
these
under
projections,
you
can
see
if
one
were
to
make
a
correction
and
increase
the
operating
expenses
through
use
of
code
virginia
58.13295.1.
The
board
isn't
enabled
and
is
empowered
to
consider
the
actual
vacancy
and
actual
effective
gross
due
to
that
vacancy.
C
So
we
do
believe
if
there
was
a
inclination
to
increase
the
operating
expenses
of
the
property,
we
would
hope
that
you'd
also
make
adjustments
to
the
gross
potential
and
effective
gross.
Given
the
under
projections
made
by
the
county,
we
do
believe
that
the
assessment
should
be
confirmed
at
105
million
527
thousand
two
hundred.
Thank
you.
A
Okay,
thank
you.
Questions
from
board
members.
D
For
the
department,
what
first
of
two
questions
you
you
talked
about,
the
injured
projections
did
you
run
and
there
seems
to
be
several
of
them
or
you
report
several
of
them.
So
did
you
run
an
informal
test
and
found
that
the
the
new
indicated
total
value
would
be
somewhat
more
than
105
million?
And
therefore
that's
why
you
didn't
present
it
to
us.
C
No,
I
think
miss
matson
we've
talked
about
this
before
it's
essentially
a
bit
intuitive
on
the
part
of
the
department
and
looking
at
the
difference,
in
other
words,
that
we're
so
far
below
effective
gross
based
on
the
stabilized
six
percent,
whereas
the
properties,
even
under
three
percent-
that
if
we
were
to
adjust
that
up
and
then
again
make
a
similar
adjustment
to
correspond
with
the
27
or
so
operating
expense
of
the
property.
If
anything,
our
net
operating
income
would
go
up.
D
D
D
Page
three
of
the
handout
page
three
of
101.:
it's
income
and
expense
summary
sheet;
and
it's
in
yellow
and
blue
and
some
other
color
peuce
or
something.
D
So
there's
there's
a
matrix
here:
columns
a
through
f
and
d1
and
d2
independently
assess
the
income,
the
expenses
and
then
the
eventual
indicated
total
values
of
the
apartment
and
separately,
the
retail
components
of
your
building,
and
then
I'm
adam
up
at
the
bottom.
D
You
did
all
of
that
for
the
apartments,
but
then
just
added
in
the
indicated,
total
value
for
the
retail
after
the
net
operating
expenses
for
the
apartments
were
determined
through
applying
a
cap
rate,
because
why
didn't
you
also
apply
the
cap
rate
to
the
nry
in
retail?
Go
ahead.
B
D
B
C
It's
not
actually
uncommon
there.
We
have
multiple
components
of
a
mixed-use
property
where
sometimes
the
agents
don't
appeal
one
component.
So
in
this
case
they
essentially
agreed
with
the
county
appeal,
just
the
apartments
and
just.
E
I
only
have
one
for
the
appellant
miss
ross.
If
you
want
the
actual
expenses
to
be
considered,
why
wouldn't
you
consider
also
the
actual
vacancy.
B
Good
point:
I
think
we
were
agreeing
with
stabilized
vacancy.
A
three
percent
is
awfully
low.
F
E
G
Okay,
because
I
can
only
see
four
people
I
don't
know,
is
that
true
of
everyone
else
or
just
just
my
computer,
I
see.
G
No,
I
was
just
curious
because
I
can't
see
anyone.
A
Yeah,
when
you
talk
you'll
come
up
on
the
screen.
Mr
yates,
any
questions.
H
Yes
to
the
appellate,
the
one
number
that
I
see
really
is
varying
with
some
inconsistencies:
the
maintenance
and
expense
in
the
expenses.
Can
the
appellant
explain
what
that
variance
is.
I
know
historically,
they've
made
some
adjustments,
but
you're
still
running
higher
than
you
had
previously,
and
that's
the
number
that
I
see
is
actually
causing
some
of
the
fluctuation
in
the
expenses.
H
B
Yes-
and
I
think
you
guys
have
had
this
discussion
with
jeremy
in
the
past-
some
of
it-
I
we
do
believe-
is
probably
capital
improvements,
but
we're
trying
to
get
them.
Chris
sent
a
really
long
email
asking
the
owners
to
try
and
put
categories
on
their
income
and
expense
survey,
which
we
have
relayed
so
hopefully
in
the
future.
We
won't
have
these
issues.
C
Yes,
ma'am
again
to
be
succinct.
We
underprojected
across
the
board
over
240
000
gross
potential
over
470
000,
effective
growths
in
line
with
that.
We
did
underproject
operating
expenses
by
almost
390
000,
but
that
still
led
to
an
under
projection
of
the
noi
of
85
949.
C
Of
23.6
percent
2018
and
an
18.3
increase
in
2019.
with
that
being
said,
we
do
believe
that
board
should
confirm
the
january
1st
assessment
at
105
million
527
thousand
two
hundred.
Thank
you.
B
Think
that
this
property,
it's
18
years
old
and
is
not
really
a
class
a
property
and
is
being
assessed
as
such
one
of
the
things
you
can
do.
If
you
go
on
to
co-star,
you
can
look
at
the
average
rents
and
if
you
look
at
average
rents
of
class,
a
properties
and
this
property,
they
really
are
different.
Their
class
a's
are
more
around
near
3
million
3
000
per
unit
per
month,
where
this
property
is
more
around
2
000,
but
it's
being
assessed
of
over
400
000
a
unit.
A
Okay,
all
right,
then
it
is
just
among
the
board.
A
I
I
Yeah
sure
I
mean
the
one
thing
I
think
we
looked
at
this
case,
or
maybe
we
looked
at
the
other
one
last
year
and
always
jumps
out
as
the
best
comp
is
to
look
at
and
make
sure
from
an
equalization
standpoint.
I
The
latitude
which
is
right
across
the
street
and
is
a
new
building,
is
you
know,
going
to
be
assessed
a
little
bit
higher
just
due
to
its
age,
but
probably
in
the
same
market
class
as
far
as
what
they
can
charge
for
rent-
and
you
know
the
latitude's
10
above
this
one
on
a
per
unit
basis.
I
So
I
think
from
an
equalization
standpoint,
it
kind
of
falls
into
where
it
should
that's.
Assuming
that
the
latitude
is,
you
know
not
grossly
over
assessed,
but
I
don't
see
that
either
it's
about
500
000,
a
unit.
E
Well
I'll
go
mary,
I
mean
I
think
in
this
like
I
was
asking
you
know
if
we
use
the
actual
vacancy
in
this
just
looking
at
the
noi.
From
that
actual
column,
the
assessment
would
be
much
higher
overall
107
million,
and
I
also
did
an
average
on
the
expenses
for
the
past
few
years
comes
to
about
3.4,
and
if
we
use
that
number
it
still
comes
up
almost
109
million
dollars.
So
you
know,
based
on
all
that,
I'm
okay,
the
with
the
assessment,
the
way
it
is.
A
H
H
A
A
A
B
Okay,
this
is
this:
is
1800
oak
apartments,
it's
a
314
unit,
high-rise
apartment
in
the
rosslyn
submarket.
The
property
was
built
in
2003.,
there's
also
3385
square
feet
of
commercial
space
being
leased
to
the
gallery
market
and
cafe
and
hair
gallery
the
assessed
value
on
this.
One
went
up.
Six
percent
to
132
million
672,
700
and
again
is
assessed
at
422
524
a
unit.
B
If
you
turn
to
page
six,
our
differences
again,
because
this
is
equity
residential
is
our
expense
category.
The
actual
expenses
were
21
percent
in
2017,
50
percent
and
44
percent.
The
county
is
using
21.
B
One
of
the
things
I
did
notice
was
in
the
county's
test.
There
was
38
units
which
were
affordable
housing,
which
would
be
21
percent
of
the
total
property.
If
you
use
the
county's
original
review
and
adjusted
the
cap
rate
with
12
percent
being
going
towards
the
six
percent
cap
and
88
percent
of
that
going
towards
the
5.25
percent
cap,
the
adjusted
assessment
for
the
residential
portion
would
be
128
million
838
576..
B
Additionally,
in
the
test,
the
retail
portion
is
almost
exactly
what
we
requested.
It's
it's
at
1
million
425
800
versus
the
1
million
six,
so
this
would
establish
a
total
assessment
of
130
million
264.
380.
B
A
A
Okay,
thank
you,
mr
chicas.
C
Yes,
ma'am
again
a
bit
of
a
similar
situation
with
1800
oaks,
the
gross
potential
increased
at
the
property
three
years
in
a
row.
2018's
increase
was
over
5
much
of
that.
C
Due
to
the
apartment
revenue
increasing
by
approximately
4.7
alone,
effective
gross
increased
in
2018
and
2019
2019's
increase
was
4.7
this
one
we
had
a
bit
more
consternation
in
regards
to
the
to
the
operating
expenses
that
were
listed
not
to
put
words
in
mr
yates's
mouth,
but
this
is
essentially
more
what
we
were
wondering
about
with
this
property,
as
opposed
to
last
property.
C
In
regards
to
the
to
the
large
number
listed
for
maintenance
repair,
we
did
reach
out
to
ms
ross,
as
noted
on
page
47
of
the
boe
package,
emailed
specifically
in
regards
to
approximately
two
million
dollars
in
common
area,
exterior
miscellaneous
repairs
that
the
county
issued
questionnaire,
income
and
expense
questionnaire.
As
for
details,
explanation
of
the
specifics
of
what
was
spent
on
common
area
exterior
and
miscellaneous
repairs
that
I
need
field
was
left
blank.
C
C
I
have
eight
minutes
man,
oh
I'm,
sorry,
europe,
it's
the
2018,
I
e
listed
2.4
million
dollars
in
common
area
and
exterior
repairs,
but
we
noted
that
that
was
actually
associated
with
permits
that
were
taken
out
for
interior
alterations
to
the
lobby
and
fitness
center.
C
We
talked
ad
nauseum
about
the
difference
between
an
annual
operating
expense
for
upkeep
of
the
property
and
capital
improvement,
and
this
sort
of
is
exemplifies
what
we
mean.
They
spent
that
money
on
common
area,
repairs
which
again
were
actually
capital
improvements
of
fitness
center
and
common
area
lobby
and
then
saw
an
increase
in
rent
revenue
of
4.6
percent.
C
That
being
said,
we
still
under
projected
again
across
the
board
423
000
under
projection
of
gross
potential
income,
587
000
under
projection
of
effective
gross.
Again,
this
is
a
property,
that's
approximately
four
percent
3.8,
true
vacancy
and
then
again,
depending
on
which
column
you
choose
to
associate
the
capital
exp
and
the
operating
expenses
with
we
either
under
projected
by
2.3
million
or
318
000,
and
that
again
led
to
neither
an
over
projection
of
net
operating
income
or
an
under
projection.
C
C
Given
the
lack
of
answers
in
regards
to
the
questions
that
posed
to
the
owners
in
regards
to
what
these
two
million
dollars
or
so
was
spent
on,
we
do
believe
that
the
county
should
be
confirmed
at
132
672
600..
Thank
you.
B
G
I
think
it
is
my
recollection
correct
that
at
least
at
one
time
we
were
suggesting.
Maybe
it
ought
to
be
split
with
part
of
it
mid-rise,
but
the
county
doesn't,
if
it's
all,
if
part
of
its
high-rise,
the
county
considers
all
of
it
high
rise.
G
G
Stories,
tall,
okay
and
then
second
question
renovation
of
a
lobby.
C
No,
so
to
be
clear,
the
the
what
I'm
referring
to
last
year
in
2018,
they
reported
2.4
million
and
come
there
and
exterior.
But
again
we
noted
permits
for
alterations
the
lobby
and
fitness
center.
So.
C
Yes,
ma'am
again,
we
underprojected
across
the
board
highly
on
gross
potential
over
400
000
gross
potential,
almost
600
000,
on
effective
gross.
We
had
questions
regarding
the
near
two
million
dollars
in
common
area
and
miscellaneous
repairs.
The
ie
was
left
blank
in
regards
to
explanation
and
the
owners
did
not
respond
to
questions
posed.
C
So
we
did
create
this
column
f.
To
show
what
the
difference
would
be
either
way
it's
an
increase
of
17
17.4
percent.
If
you
include
those
questionable
repairs,
operating
expenses
and
then
almost
62,
if
you
do
not
either
way,
we
do
believe
that
the
board
should
confirm
the
county's
assessment
of
132
million
672
600..
Thank
you.
B
E
Well,
I
think
ken
wanted
to
speak.
You
can
go
ahead
and
I'll
go
I'll,
follow
up
either
way.
Thank
you.
D
Thank
you.
I
it
just
occurs
to
me
that
the
last
the
last
the
second
last
comment
miss
ross
made
about.
How
do
you
determine
what's
capital
improvement?
What's
true,
maintenance
is
a
good
one,
except
that
it,
according
to
the
department,
the
appellant
didn't,
provide
that
information,
and
given
the
our
structure
and
reasonable
structure
that
the
the
the
county
is
presumed
to
be
correct
unless
proven.
Otherwise,
we
have
no
proof
that
it's
otherwise,
so
I
I'm
I'm
sticking
with
what
the
department
has
recommended.
E
Again,
like
the
previous
case,
I'm
okay
with
the
assessment.
The
way
it
is,
even
though
you
know
they
committed
affordable,
were
not
considered
separately,
but
you
know
overall
the
whole
value
I
think
it's
in
line,
otherwise
it
would
be
higher.
E
On
page
three,
the
value
ends
in
600
132
million
672
600,
and
if
we
add
up
all
the
values
that
are
listed
on
page
one,
it
adds
up
with
700
instead
of
600.
Now
it's
not
a
big
big
difference,
but
it
does
make
a
difference
with
we
signed
orders.
So
I
wanted
to
make
a
correction
on.
E
Zero
rpc16034001,
which
is
the
first
one,
with
the
building
to
adjust
the
value
to
105
million
four
nineteen.
Two
hundred
so
it
add
it
adds
up
to
the
full
value
which
was
requested
by
the
county
at
132
million
672.
A
No
okay,
mr
panorana,
do
you
want
to
make
a
motion.
E
A
A
A
A
Okay,
moving
along
to
the
third
case,
rpc35005034
1401,
south
joyce
street
ms
ross,
you
can
start
with
your
eight
minutes
and
tell
us
about
this
property.
B
B
B
C
Yes,
ma'am
similar
nature
to
the
last
two
cases
we've
seen,
the
property
is
doing
quite
well.
Its
revenue
is
up
three
years
in
a
row.
2019's
apartment
revenue
is
up
2.8
percent
alone.
Gross
potential
income
is
up
three
years
in
a
row.
2019's
gross
potential
is
up,
2.4
percent.
True
vacancy
is
down
three
years
in
a
row.
C
C
As
a
result
of
this
stabilization,
the
effect
of
growth
has
been
up
three
years
in
a
row.
2019
increased
over
three
percent
and
again
in
conjunction
with
that,
the
net
operating
income
increased
by
four
percent
in
2019.
C
As
with
the
last
two
cases,
unfortunately,
county
underprojected
across
the
board,
almost
56
000
under
projection
of
gross
potential
income,
approximately
300
000
under
projection
of
effective
gross
income.
We
did
under
project
operating
expenses
of
approximately
286
thousand
and
that
led
to
an
under
projection
of
net
operating
income
of
approximately
fourteen
thousand
eight
hundred.
C
Given
that
we
were
within
point
two
percent
of
what
was
achieved
at
the
property
in
2019,
fairly
spot-on,
and
that
again
was
an
increase
of
over
four
percent
year-over-year
itself
at
the
property.
So
we
do
believe
that
the
county
should
be
confirmed
at
143
million.
100.
Excuse
me
28
900..
Thank
you.
G
This
is
for
the
applicant
you
mentioned.
This
is
not
a
good
location,
explain
justification
for
that.
G
B
Additionally,
the
property
isn't
a
class
a
and
I
did
provide
those
charts
to
show.
If
you
go
on
to
co-star
and
look
at
the
rents,
they
don't
get
the
rents
that
class
a
properties
are
getting.
I
just,
I
do
not
believe
it's
worth
the
same
as
a
class,
a
property,
but
if
you
do,
if
you
use
the
same
cat
rate
that
the
county
used,
the
value
is
134
million,
790
370.
G
Okay,
I
was
just
asking
about
the
location.
Why?
Why
why
this
is
considered
less
worthy,
I
mean.
Is
it
the
schools
comparables,
you
know
what
what
what's
the
what's
the
basis
of
the
claim
that
this
is
not
as
good
a
location
as
say,
clarendon.
I
Just
a
pretty
basic
one
for
mr
chicas
we
had
the
cap
rate
was
5.29.
Is
that
the
build
up
with
the
bid?
So
it's
like
5.25
plus
0.04
for
the
bid
rate?
Okay,
thanks.
H
A
D
A
All
right,
thank
you,
then,
mr
chicas,
if
you
take
a
minute
to
wrap
up,
please.
C
Yes,
ma'am,
given
the
performance,
increasing
performance
of
the
property,
given
the
stabilization
of
the
operating
expenses,
given
the
other
projections
across
the
board
by
the
county
and
sort
of
follow.
Along
with
mr
lawson's
note,
I
did
a
quick
google
map
and
it's
0.3
miles
away
from
the
pentagon,
city,
metro
and,
of
course,
adjacent
to
pentagon
city
itself,
so
we
do
believe
the
location
plays
into
the
cap
rate
that
was
applied.
C
All
these
things
being
said,
we
do
believe
the
county
should
be
confirmed
at
143
million
28
900..
Thank
you.
B
A
All
right,
thank
you,
okay,
it
is
just
among
the
board
members
now.
A
I
mean
I'll
start,
I
mean
I
think,
out
of
the
three.
This
is
the
most
stable.
I
mean
when
I
look
at
the
noise
for
the
past
three
years.
The
assessment
couldn't
be
more
spot.
On
I
mean
I
look
at
especially
when
you
get
the
2019
information
you
know,
so
I
I'm
somewhat
struggling
to
see
any
correction
here
and
I
think,
from
a
standpoint
of
location.
E
G
Yeah,
this
is
part
of
the
pentagon
city
master
site
plan,
and
you
know
I've
been
doing
real
estate
for
many
years
and
as
far
as
I
can
tell
from
representing
clients,
this
part
of
south
arlington
is
not
considered
any
worse
than
anywhere
else
in
the
county.
You
know
that's
based
on
the
experience
that
I
have
in
working
with
different
developers.
G
This
was
done
by
ketler,
and
I
mean
it
was
a
tremendous
success.
When
ketler
did
it,
it's
going
to
be
really
interesting
next
year,
because
we're
going
to
have
conflicting
impacts
on
the
market,
you're
going
to
have
amazon
on
one
hand,
pushing
up
and
then
you're
going
to
have
the
covet
pushing
down
so
next
year
will
be
interesting,
but
I
think
you
know
I
kind
of
agree
with
everyone
else.
E
Yeah,
I
have
to
agree,
I
mean
I
I
don't
think
we
have
has
seen
something
more
stable
than
this,
that
even
averaging
the
expenses
it's
even
lower
than
what
the
county
has
and
as
far
as
the
location,
I
think,
like
everybody
else
said
you
know,
the
rents
are
showing
that
the
demand
is
there.
I
don't
think
it
compares
to
dc.
You
know
in
dc.
E
You
can
go
on
south
capitol
street
from
one
side
to
the
other,
there's
going
to
be
difference
in
rents,
so
but
I
don't
think
it's
the
same
market
as
you
know
washington,
so
I'm,
okay
with
the
assessment.
The
way
it
is.
A
A
Okay
motion
a
second
to
confirm
the
county.
All
in
favor
opposed
okay,
the
county.
It's
unanimous,
it's
counties
confirmed
at
143
million,
oh
28
900..
Thank
you.
Miss
russ.
A
A
J
Great
thank
you
good
morning,
board
members
and
good
morning.
Mr
chicas.
Can
everyone
hear
me?
Okay,
sir,
all
right?
Subject:
property
here
is
now
known
as
the
hotel
pentagon.
This
used
to
be
the
best
western
pentagon
over
there
on
glebe
road
in
2019.
J
It
lost
its
flag
and
it's
now
an
unflagged
hotel
using
hotel
pentagon
2019.
The
performance
of
this
hotel
did
drop
off.
They
saw
an
11
drop
in
room
revenues,
reduced
occupancy
rate
adr
and
so
we're
placing
primary
emphasis
in
our
analysis
on
the
performance
of
the
subject
from
calendar
year
2019.
J
We
feel
that
the
operating
performance
from
prior
years
when
it
was
operating
as
a
best
western
with
that
flag
in
the
market,
acceptance
and
trust
that
comes
with
it,
should
not
be
given
as
much
weight
anymore
and
that
primary
emphasis
should
be
placed
on
how
a
buyer
would
look
at
this
as
an
unflagged
hotel,
the
hotel
pentagon.
As
of
the
data
value
here
by
the
end
of
19.,
so
the
noi
before
ffe
for
calendar
year,
2019.
J
Even
the
department
is
stable,
is
capitalizing
stabilizing
the
property
at
about
a
million
150,
so
almost
a
25
higher
assumption
for
what
this
property
can
achieve
for
noi
before
furniture
fixtures
and
equipment
and
then
capitalizing
that
noi
at
a
cap
rate
that
is
still
used
for
other
flagged
hotels
like
the
next
property
that
we're
going
to
see
here
that
that
it
would
have
formerly
used
for
this
property
as
a
best
western
which,
which
we
also
feel
is,
is
too
aggressive.
J
So
we
adjusted,
we
placed
primary
emphasis
on
the
performance
from
2019
capitalizing
that
income
and
then
also
adjusted
the
cap
rate
upwards,
based
on
a
look
at
some
market
data,
which
we
include
in
the
pages
following
our
pro
forma,
indicating
that
market
cap
rates
for
suburban
hotel
assets
like
this
in
the
greater
dc
market
for
for
a
limited
service,
hotel
are
gonna,
be
around
eight
and
a
half
or
nine
percent
before
loading
the
tax
rate.
J
J
We
understand
that
the
department
in
the
board
may
be
of
the
opinion
that
that's
something
that
took
place
after
the
data
value
and
should
be
taken
into
account
for
next
year's
valuation,
and
we
can
understand
that,
but
we
do
feel
like
it.
It
does
at
least
warrant
some
consideration
and
that
the
virginia
code
does
have
certain
provisions
and
has
expressed
at
least
in
spirit
taking
that
that
it's
acceptable
and
warranted
assessment
practice
to
take
into
account
drastic
damage
to
properties
like
this
and
conditions
like
this
that
are
affecting
this
property.
J
You
know
for
a
property
like
this,
their
real
estate
tax
bills
for
for
for
the
current
year
for
for
2020
threatened
to
put
them
under,
I
mean
they're,
really
their
their
business
and
levels
of
income
have
just
completely
been
decimated,
and
we
feel
like
that
does
at
least
warrant
some
consideration
for
our
conversation
today
when
we're
considering
what
types
of
adjustments
to
make
for
an
owner
like
this,
so
that
they
don't
go
out
of
business
I'll,
stop
there.
A
Okay,
thank
you,
sir
mr
chicas.
C
Good
morning
board
members
good
morning,
mr
mitchell,
so
yes
in
regards
to
hotel
pentagon,
I
think
the
best
way
to
look
at
this
is
is
the
same
way
the
county
did
and
that's
through
the
spreadsheet
that
was
provided.
I
believe
it's
page
three
of
the
packet
looking
at
years,
2016
through
2019.
C
This
is
a
unusual
property
in
that
you
can
see
just
looking
at
total
revenue
alone.
You
know
it
had
a
downturn
in
17
and
then
again
back
up
in
18
and
then
back
down
again
and
19..
I
think
with
out
a
trend,
clear
trend,
one
way
or
the
other.
The
best
way
to
look
at
this
is
to
stabilize
that
property.
C
The
board's
probably
familiar
with
how
I've
done
that
in
the
past,
but
essentially
looking
at
a
three
year
average
2017
through
to
2019
the
average
room
revenue
is
approximately
in
fact,
was
four
million
three
hundred
forty
seven
thousand
and
thirteen
dollars.
C
If
we
just
isolate
the
last
two
years,
taking
encounter
goodyear
and
then
the
downturn
in
nineteen,
the
two
year
average
eighteen
through
nineteen
average
room
revenue,
is
four
million
four.
Eighty
two,
nine
thirty
four,
either
way
the
county's
room
revenue
was
at
four
million
three
three
nine
below
both
averages
three
year
and
two
year.
C
When
we
look
at
the
miscellaneous
revenue,
we
noted
a
three
year.
Average
was
forty
four
thousand
one
hundred
thirty
three
a
two
year,
miscellaneous
revenue
average,
was
fifty
five
thousand
seven.
Ninety
again,
the
county
used
a
stabilized
miscellaneous
revenue
of
forty
five
thousand
looking
at
the
total
revenue
over
the
last
three
years,
17
through
19
there's
an
average
of
four
million
four
hundred
and
eleven
thousand
three
hundred
nineteen
dollars.
C
If
we
were
just
to
look
at
the
last
two
years,
average
revenue
was
four
million.
Five
hundred
thirty
eight
seven
724
again
either
way
the
county
stabilized
that
revenue
below
both
of
those
at
four
million
three
hundred
eighty
four
thousand
nine
forty
one
again.
Looking
at
a
three
year,
average
of
operating
expenses
came
out
to
three
million
four
hundred
and
ten
thousand
three
thirty
five
two
year
average
was
three
million
five.
C
Oh
six
o
eight
two
and
the
county's
at
three
million
four
zero,
nine,
two
nine
two
that
is
inclusive
of
furniture's
pictures
and
equipment,
which
needs
to
be
noted
as
there's
not
a
report
of
that
expense
from
the
owner
himself.
C
and
a
two-year
average
of
a
million
and
thirty-two
thousand
six
forty-two
county
again
came
in
lower
than
that
in
either
metric
at
975
649.
C
Given
that
we
did
take
into
account
the
downturn
in
2019,
we
do
believe
that
the
county
should
be
confirmed
at
11
million
541
600..
C
In
the
note
to
the
capital
capitalization
rate
that's
used
by
the
county.
It
should
be
noted
that
as
the
highest
that's
able
to
be
applied
other
than
to
those
properties
known
as
lodging,
which
are
essentially
just
a
place
to
lay
your
head,
whereas
this
property
does
in
fact
have
miscellaneous
revenue
and
previously
reported
food
and
beverage
revenue.
C
So
is
not
a
lodging
type
property.
What
we'd
consider
limited
service,
so
the
cap
rate
at
8.25
is
appropriate
and
was
applied
equitably
with
some
other
properties
like
this
one.
Again,
that
being
said,
we
do
believe
the
revision
should
be
confirmed
at
11
541
600..
Thank
you.
G
And
what
do
you
suggest?
An
appropriate
cap
rate
is
for
a
non-flag
hotel.
G
Okay
question
for
the
county:
real,
quick,
hey
chris:
don't
you
believe
that
a
non-flagged
hotel
is
at
a
disadvantage
compared
to
a
flagged
hotel.
C
Yes,
I
do,
I
think,
that's
you
know
I'll
answer
that,
as
simply
as
I
can
there's
benefits
and
deficits,
if
you
will
the
idea
being
that
the
book
of
business
that's
associated
with
a
flag,
hotel
obviously
contributes
to
a
good
bit
of
revenue
associated
with
that
being
able
to
call
upon
the
website
and
the
name
associated
with
that.
That
being
said,
there's
obviously
also
costs
associated
with
association
with
a
flag
and
and
to
our
credit,
we
did
in
fact
reach
out
to
the
appellants.
As
you
can
see.
C
On
page
16
of
the
packet,
we
asked
when
the
property
changed
from
a
best
western
to
a
hotel
pentagon,
and
if
there
were
any
costs
associated
with
that
flag
change,
because
we
know
sometimes
there
can
be
costs
again
that
are
associated
with
either
dropping
the
flag
sort
of
termination
fees.
If
you
will,
but
yes
more
directly,
there
are
benefits
associated
with
that.
I
think
what
we
were
trying
to
point
out
with
the
stabilized
performance
of
the
property
is
even
when
it
was
associated
with
the
flag
in
2017,
there's
a
drop
of
almost
6
in
revenue.
C
So,
whether
or
not
it's
through
management,
as
opposed
to
association
with
a
a
brand
name,
the
property's
been
up
and
down
over
the
years,
and
so
this
is
the
first
year
at
least
half
a
year
per
mr
mitchell's
comment
that
we've
seen
a
disassociation
with
that
flag.
G
A
Okay,
mr
hoffman.
I
For
the
appellant,
I
noticed
the
next
case
looking
through
these
last
night
is
like
right.
Next
door
seems
to
be
the
same
same
ownership
or
similar
ownership.
Are
they
operating
the
two
hotels
kind
of
same
you
know
management
office?
Is
there
any
kind
of
shared
operation,
or
is
it
all
just
two
separate
properties
being
managed
completely
separately.
J
You
know
they're
they're,
certain
they
are
operating
them
same
ownership
and
there
are
some
management
expenses
that
get
spread
across
the
two
properties,
so
they
would
be
probably
lower
than
typical
market
expenses
on
those
items.
I
Okay
and
then
was
there
any
capital
expense
in
canada
or
anything,
or
is
this
just
all
upkeep
that
we're
reporting.
D
A
question
for
the
department
on
page
three,
the
irony
summary
columns,
g
and
h:
there's
just
bottom
lines-
you,
I
guess
you
know
they're
both
repellent
one's
a
review
level,
one's
a
boe
level.
What's
the
difference
and
why
are
the
the
bottom
line
numbers
so
disparate.
C
If
you're
third
party-
but
that
is
explained
in
the
comments
field,
this
mitch
can
probably
expound
upon
it,
but
essentially
it's
the
idea
of
looking
at
an
average
of
2018
and
2019's
capitalized
income,
where
we
took
a
bit
of
issue
with
that
is
that
they
imputed
a
four
percent
reserve
for
ffd
and
then
deducted
the
personal
property,
whereas
that,
just
by
its
nature,
imputation
of
that
four
percent
is
something
that
was
actually
not
incurred
by
the
owner.
C
It's
something
that
was
essentially
added
in
so
it's
it's
generally
that
difference,
and
then
at
the
boe
level.
I
believe
the
cap
rate
was
changed
yeah,
so
the
cap
rate
at
the
department
level
is
8.25
same
as
the
department
and
then
at
the
boe
level.
They
use
the
cap
rate,
approximately
some
130
points
or
so
basis
points
higher
9.526.
H
To
you,
the
appellant
did
best
western
pull
this,
or
did
the
owners
give
up
the
flag.
J
I
actually
I
I
don't
know
the
answer
to
that.
I
know
that
over
the
years
best
westerns
increased
pip
requirements,
performance
improvement,
plan
requirements
and
franchise
fees
were
really
becoming
an
encumbrance
relative
to
the
income
that
this
property
was
able
to
generate
and
that
they
did
incur
a
termination
fee
per
mr
chicas's
question.
So
I
think
this
was
kind
of
they
were
faced
with
really
two
bad
options
in
2019.
J
H
Okay
and
to
the
county,
how
many
other
unflagged
facilities
are
there,
and
especially
still
of
the
size.
C
That's
a
good
one,
mr
it's
it
caught
me
unprepared.
I
will
tell
you
that
most
of
those
that
are
unflagged
tend
to
be
the
lodging
style.
C
Yeah,
the
american
and
americana,
I
believe
it's
called
generally
speaking
once
you're
at
the
limited
service
level
or
full
service
you're,
going
to
be
associated
with
that
flag.
That
again
drives
a
lot
of
that
business
and
then
again
has
those
costs
associated
with
it,
either
through
franchise
fees
or
other
fees
associated
with
brand
ownership.
H
C
Yes,
ma'am
again
without
a
lack
of
a
trend,
one
way
or
the
other,
the
revenues
going
up
and
down
year,
every
year,
every
year,
every
year
an
associated
pull
on
the
net
operating
income.
To
do
the
same,
we
do
believe
that
the
most
effective
way
to
look
at
this
is
stabilize
that,
as
we
did
looking
at
the
three
year
and
two
year
averages
both
the
revenue
operating
expenses
and
that
outbreak
income.
C
A
J
Sure
I'll
just
begin,
my
wrap
up
by
stating
our
proposed
value
after
the
adjustments
that
we've
requested,
which
is
seven
million
three
hundred
and
eighty
thousand.
The
department
has
assessed
this
at
eleven
million
five
forty
one.
Six
hundred
and
again
we
reach
our
value
by
placing
primary
emphasis
on
what
was
going
on
with
the
property
in
2019,
given
the
changes
that
occurred
in
2019.
J
But
if,
if
we
do
give
any
credence
to
the
department's
concern
that
you
know
there
was
up
and
down
fluctuating
performance
over
the
trailing
three
years,
then
we
think
that
the
department
still
made
an
error
in
failing
to
fully
stabilize
the
properties
operating
expenses.
You
can
see
in
the
department
submission
page
three
of
their
memo
that
operating
expenses
over
the
trailing
three
years
were
77
percent,
75,
almost
76
and
then
79
percent
and
they've
stabilized
to
that
73.8
percent.
So
we
feel,
like
that's
a
little
bit
low.
H
H
I
think
it
does
bring
down
the
revenue
and
the
value
and
anyone
who
would
come
in
as
a
buyers
looking
at
what
it
takes
to
bring
it
up
to
a
status
of
a
better
facility
that
would
be
flagged.
But
unless
anyone
else
has
got
thoughts,
I
don't
know
what
you'd
pin
it
on.
D
Then
in
2019
the
noi
was
22
percent
less
than
in
2018,
and
they
had
a
lot
to
do
with
the
flag
and
it's
a
half
a
year
of
flag
loss,
and
so
I
can't
possibly
imagine
if
the
noi
goes
up
in
2020
without
the
flag
added
on
mark's
consideration
that
probably
the
physical
plant,
maybe
service
facilities
are
not
up
to
par
and
that's
why
they
lost
their
flag,
which
I
hadn't
thought
of,
but
certainly
makes
sense
to
me
so,
but
so
what
I
came
up
with,
that
it
couldn't
possibly
have
done
better
in
2020
than
it
did
in
2019
bottom
line,
and
knowing
that
we
can't
pick
figures
amounts
dollars
out
of
the
air.
D
D
Finally,
on
covid
had
covered
in
december.
First,
for
instance,
2019
been
the
probable
threat
that
we
saw
in
february
december
1st
2019
the
probable
threat
that
it
became,
but
still
elusive.
In
february
1st
2020,
I
might
have
given
some
credence
to
do
something
about
the
value
of
this
as
a
january,
1st
2020,
but
I'm
responding
to
the
appellant's
argument,
but
it
didn't-
and
I
give
no
credence
whatsoever
to
the
the
looming
disaster
that
kogi
presents
for
the
the
lodging
industry.
G
G
I'm
I'm
in
agreement
that
losing
the
cap
has
an
impact
ken.
What
I
did
is.
I
took
the
operating
year.
2019
used
that
and
ended
up
at
a
assessed
value
of
10
million
650
to
300.
G
G
Okay,
does
he
okay,
but
you
know,
I
think
the
value
is
probably
even
less
than
that,
but
I
don't
know
how
you
get
there
so.
D
A
Yeah
that
739
yeah,
you
know
my
only
concern
and
I
get
that
they
lost
the
flag,
but
that's
six
months
I
mean
we
look
at
all
other
issues
we
look
at
when
there
is
a
trend.
I
think
2020
will
certainly
set
the
tone
as
well,
but
even
the
appellant
said
you
know
with
having
the
flag
there's
expenses
that
go
in
line
with
having
to
maintain
that
you
know.
I
don't
know,
I
think
the
test
that
they
did.
It
does
reduce
it.
A
I
mean
if
you
look
at
historically,
this
was
a
16
million
dollar
property.
What
you
know
16
14
13.
You
know
it
is
slowly
coming
down.
I
don't
know
if
I'm
comfortable
just
saying:
oh
okay,
it's
lost
its
flag,
let's
go
ahead
and
drop
it
to
10
million
and
see
what
happens
next
year.
I
think
the
fact
that
you
know
the
income
is
down.
A
You
know
it
has.
You
know
historically,
bounced
up
and
down
all
over
the
place.
I
think
2020
is
going
to
have
its
own
issues
with
the
copen19,
for
where
this
is
proximity
to
the
pentagon
and
to
the
airport.
Travel
is
down.
You
know
there's
less
meetings
and
whatnot
at
the
pentagon.
You
know
so
this
is
probably
going
to
have
a
reduced
income
for
next
year,
but
again
that's
next
year.
You
know,
I
I
don't
know.
E
What
I
did
is
without
really
taking
into
consideration
the
flag
or
you
know,
being
there
or
not.
I
think
the
income
is
still
there.
It's
still
showing
that
you
know
the
income
was
still
coming,
it's
not
like
it
dropped
dramatically
and
rather
than
taking
the
approach
that
the
appellant
took,
you
know
average
in
2018
and
2019
and
just
come
up
with
that
capitalized
value.
E
For
that
I
came
up
with
an
amount
which
is
almost
to
the
amount
that
the
appellant
had
when
they
had
the
review
at
the
department
level,
and
the
other
thing
I
did
is
I
did
an
average
for
the
expenses
for
the
past
four
years
and
by
doing
that,
the
average
expenses
are
3
million
354
and
deducting
that
from
the
revised
assessment,
I
come
up
with
a
final
value.
You
know,
after
personal
property
and
all
that
of
10
million
74
000
839.
E
Which
is
a
little
bit
lower,
but
you
know
that's
really
not
like
I
said
not
taking
into
consideration
the
flag
or
not
flag.
We
because
we
don't
really
know
exactly
at
this
point
whether
it
affects
it
or
not.
Location
is
still
good.
They
still
have
the
other
hotel
next
door,
which
you
know
it's
a
flag
to
a
hotel.
So
I
don't
know,
I
guess
we'll
see
next
year
how
he
does.
I
I
was
going
to
say
the
you
know:
I'm
I'm
supporting
cutting
them
a
break
either
the
way
jose.
Did
it
the
way
ken
and
and
barnes
did
it.
I
would
just
worry
about
getting
below
that,
because
there
is
still
the
backstop
land
value,
like
barnes
kind
of
mentioned,
that
there's
there's
some
it's
an
rah
zoning,
which
has
been
in
the
past,
used
for
residential
across
the
street
with
the
bell
apartments.
I
F
Okay,
yeah,
I'm
fine
with
reducing
it.
I
probably
go
along
with
mary's
suggestion.
H
I
think
jose's,
probably
getting
closer
but
losing
your
flag,
does
dramatically
increase
that
value
and
it
and
decreases
excuse
me
and
if,
if
the
offset
from
cost
of
having
a
franchise
was
that
great
you'd
have
more
people
that
are
actually
dropping
their
flags,
that
doesn't
happen.
The
values
in
having
that
flag,
you're
you're
near
airport
property
people
flying
in
look
for
you
know
they
look
it
up.
They
find
where
they're
going
to
stay
a
non-flag
hotel
doesn't
work
very
well
that
way.
H
But
you
know-
and
I
understand
not
dropping
it
too
much-
we'll
see
what
it
comes,
but
either
the
operating
expense
or
is
the
19
2019
or
what
jose
has
I'd
go
with.
G
Yeah
the
the
comment
I
was
going
to
share
and
again
this
is
from
memory
and
I
did
not
go
by
there
if
I'd
known
how
the
conversation
would
have
evolved,
I
would
have
my
recollection
is
that
this
is
difficult
to
get
to
off
of
95
and
again
that's
a
recollection,
but
I
think
when
you
come
off
95
and
you
make
your
left
on
glee
to
come
to
this-
there's
not
a
left
turn
you
can
make.
I
think
you
have
to
meander
around.
G
I
could
be
wrong
in
this,
and
I
also
think
that
somebody
has
filed
a
site
plan
to
convert
to
residential.
You
know
again,
I
don't,
I
wouldn't
swear
to
it,
but
I
I
think
I
remember
seeing
that
on
the
board's
agenda
at
some
point
in
time.
D
One
last
comment
on
on
jose's
work.
I
certainly
followed
the
logic
and
it
made
sense,
but
I
feel
uncomfortable
dropping
it
25
from
2019.
That's
a
big
number.
It
should
be
dropped,
but
that's
a
very
big
percentage
and
that
makes
me
feel
uncomfortable.
E
D
I
make
a
motion
that
we
reduce
the
value
of
this
property
to
ten
million
nine
hundred
thirty
six
thousand
seven
hundred
and
thirty
nine
dollars
so
that
it
reflects
the
what
was
achieved
in
2019.
A
A
So
it's
six
to
one
with
no
mpd
and
it
is
reduced
to
10
million
936
700.
F
G
A
J
Thank
you.
This
property
is
for
in
pentagon,
it's
a
limited
service
hotel
with
a
120
rooms,
and
our
concern
here
primarily
lies
with
the
department's
determination
of
of
a
stabilized
noi
before
f
and
e
for
this
process
forward
basis
of
the
data
value,
the
department,
after
revision
over
their
noi
before
ffa
to
967
850,
and
if
we
look
at
the
actual
noi
before
ffa,
achieved
at
the
subject
for
the
prior
four
years,
laid
out
nicely
on
page
three
of
the
department's
memo.
J
You
see
that
it's
never
generated
more
than
nine
hundred
thousand
dollars
a
year
in
noi
before
ff
e,
and
so
we
feel
like
where
they
started
north
of
a
million.
We
appreciate
them,
taking
into
account
our
concerns
and
making
an
adjustment,
but
still
ending
up
at
you
know,
still
close
to
a
million
at
967
or
968
is
still
far
too
aggressive
for
the
property.
J
The
the
department
seems
to
have
made
the
more
or
less
reasonable
adjustment
on
the
revenue
side,
but
expenses
in
particular,
are
still
a
little
bit
low
or
too
aggressive.
For
this
older
limited
service
hotel,
which
does
have
some
of
the
management
and
admin
expenses
spread
across
the
other
property,
the
preceding
property
that
was
subject
to
the
appeal
which
neighbors
at
the
hotel
pentagon-
no
disagreement
on
cap
rate.
So
it's
just
that
stabilized
noi.
C
Yes
ma'am,
so,
unlike
the
last
property,
we
actually
do
see
a
bit
of
a
trend
what's
going
on
here
at
the
property
and
we'll
start,
of
course,
with
our
the
four-year
summary
chart.
Page
three
one
thing:
you'll
note
at
the
basically
right
above
room
revenue,
we
list
the
average
daily
rate
and
occupancy,
and
it
should
be
noted
that
occupancy
actually
ticked
up
quite
a
bit.
C
Seven
percent
2019
that
helped
to
drive
the
average
daily
rate
up
almost
over
two
dollars,
average
daily
rate
in
2019
and,
of
course,
that
drove
up
the
revenue
per
available
room
up
almost
nine
dollars.
In
2019.
C
we
saw
year-over-year
growth
in
all
metrics.
As
far
as
the
room,
revenue,
food
and
beverage
and
total
revenue.
The
room
revenue
alone
was
up
approximately
3.6
food
and
beverage
about
34.25.
Now,
literally,
that
we
do
believe
is
the
difference
in
reporting.
As
you
can
see
in
that
the
four
years
16
through
19.
C
C
all
the
while
property,
actually
stabilized
its
operating
expenses
year
over
year.
In
fact,
they
tricked
down
just
about
0.2
percent.
We
did
see
growth
in
net
operating
income
three
years
in
a
row.
17
18
and
19,
with
19's
increase
approximately
16.2
percent.
C
Aggressive,
if
you
will
in
our
projections
for
the
2020
year,
we
over
projected
revenue,
but
to
be
clear.
We
also
over
projected
operating
expenses
and,
of
course,
net
operating
income.
So
we
did
a
revision,
as
you
can
see
in
column
f
again
a
bit
of
a
smoothing
out
if
you
will
in
looking
at
the
averages
over
these
last
three
years
and
two
years
and
again,
we
were
underneath
projections
across
the
board
with
our
revision.
C
In
fact,
you
can
see
that
we
actually
underprojected
with
a
revision
total
revenue
by
approximately
1.6,
and
it's
important
to
note
too,
while
operating
expenses
look
like
they're
at
74
percent,
you
do
have
to
include
the
reserves
for
ffme
on
top
of
those,
so
you
get
to
a
number,
that's
almost
spot
on
with
the
operating
expense.
C
That's
was
achieved
last
year
at
the
property
again
adding
in
reserves
for
ffne
to
the
total
operating
expenses
to
get
a
true
total
operating
expense
as
allocated
by
the
county,
given
that
we
actually
ended
up
under
projecting
a
net
operating
income
by
almost
seven
percent.
C
B
A
Did
you
just
start
to
raise
your
hand,
okay,
all
right,
then,
mr
cheek,
is
there
anything
else
you
want
to
tell
us
about
the
property.
J
We
would
just
request
that
the
board
does
pay
special
attention
to
the
way
that
the
department
has
stabilized
expenses.
We
would
disagree
with
their
characterization
of
how
to
view
reserves.
We
think
that
any
buyers,
the
date
of
value,
would
look
at
the
actual
noi
before
f
and
e,
which
has
been
two
million
nine
over
the
prior
two
years
and
then
separately
and
additionally
take
a
deduction
for
reserves,
so
they
would
stabilize
around
two
nine
and
then
also
take
a
reserves
deduction
to
account
for
future
replacements
needed
at
the
property.
J
A
A
A
E
A
Okay,
thank
you,
mr
mitchell
and
mr
chicas.
If
you
could
stay
on
the
call
for
a
minute
after
everybody
goes,
they
just
have
one
thing
for
you.