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From YouTube: Board of Equalization Hearing - October 14, 2020
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A
A
B
B
Good
morning
again,
this
is
michael
tucci
on
behalf
of
the
federal
deposit
insurance
corporation
with
me
today.
I
hope,
although
I
don't
see
him
as
john
farrell
managing
director
at
cushman
and
wakefield
in
washington,
who
has
performed
some
work
on
this
project,
we
found
a
letter
of
authorization
from
mr
farrell's
participation
sometime
yesterday.
B
Before
getting
into
the
nuts
and
bolts
here,
I
think
it's
important
to
recognize
the
uniqueness
of
this
piece
of
property,
we're
dealing
with
an
extraordinarily
large
commercial
property
of
almost
seven
hundred
thousand
square
feet
attached
student
residence
center.
It's
five
buildings
with
one
lobby,
one
cafeteria
access
to
the
garage
from
only
some
of
the
buildings,
not
all
of
the
buildings,
and
it's
not
a
general
commercial
property
as
we're
used
to
seeing
in
arlington
county,
and
that
presents
some
challenges
from
an
assessment
and
evaluation
standpoint.
B
It
can't
be
valued
and
can't
be
assessed
just
like
a
normal
commercial
property.
Its
uniqueness
must
be
taken
into
consideration
and
to
our
way
of
thinking,
the
assessment
process
has
to
be
gone
about
a
little
bit
differently,
with
its
uniqueness
again
being
taken
into
consideration.
We
have
four
major
areas
of
disagreement
with
the
assessment.
B
B
The
second
problem
we
have
with
the
rental
rate
is
if
the
county
is
going
to
apply
a
market
rental
rate
and
assume
that
this
could
this
property
could
be
marketed
to
multiple
tenants
like
a
normal
commercial
building.
Then
it
also
logically
has
to
take
into
consideration
the
costs
that
would
be
incurred
in
converting
the
property
to
a
multi-tenant
amenable
property,
and
those
costs
would
be
in
the
tens
of
millions
of
dollars.
As
I
said
earlier,
there
is
one
lobby
in
this
property.
B
If
you
have
five
buildings,
you
can't
have
one
lobby.
If
you're
going
to
rent
them
to
multiple
tenants,
you
would
have
to
establish
lobbies,
some
of
the
staircases
would
have
to
be
reconfigured.
Passageways
would
have
to
be
cut
off
again.
I
said
earlier
that
there
some
of
the
buildings
have
access
to
the
parking
garage
and
some
of
them
don't
in
order
to
provide
access
for
all
buildings
they
build
it.
The
the
property
would
have
to
be
reconfigured
and
again
that
would
cost
tens
of
millions
of
dollars.
B
So
you
can,
on
the
one
hand,
apply
a
market
rental
rate
and
then
not
take
into
consideration
the
costs.
That
would
be
incurred
in
order
to
achieve
that
rental
rate.
The
second
area
of
disagreement
we
have
with
the
county
is:
it
uses
a
five
percent
vacancy
and
collection
loss
and
this
one's
the
most
curious.
If
it's
applying
a
market
rental
rate
to
the
to
to
to
the
assessment,
then
it
also
should
apply
a
market
vacancy
and
collection
loss,
and
we
all
know
that
five
percent
is
not
the
market
vacancy
and
collection
loss.
B
It
seems
as
though
the
county
is
trying
to
have
it
both
ways.
It's
trying
to
it's
trying
to
establish
a
market
rate
for
for
the
rent
for
the
property,
but
then
a
non-market
rate
for
the
vacancy
and
collection
loss.
In
other
words,
it's
choosing
a
higher
rental
rate
and
a
lower
vacancy
and
collection
loss,
and
that's
just
not
right.
You
have
to
be
consistent
across
the
board.
B
B
And
finally,
the
fdic
submitted
ine
reports
that
reflected
an
almost
11
million
dollar
capital
expenditure,
deferred
maintenance
expenditures
for
the
year
prior
to
this
to
the
year
prior
to
2020,
and
that
does
not
seem
to
have
been
taken
into
consideration
by
the
county
when,
when
coming
up
with
this
its
assessment
now,
I
said
earlier
it's
hard
to
evaluate
this
property,
but
it's
not
impossible
and
that's
why
we
hired
cushman
and
wakefield
to
do
the
analysis
and
do
the
research
that's
required
in
order
to
adequately
and
fairly
value
the
property
and
attach
to
our
submission
to
the
board.
B
And
I
think
it's
in
a
pdf
entitled
supporting
documents
are
three
documents
and
I'll
just
identify
the
three
and
then
we'll
discuss
each
one.
The
first
document
is
a
rent
comparables
grid
which
uses
these
transactions
of
at
least
a
hundred
thousand
square
feet
in
order
to
come
up
with
a
real
rent,
comparable,
effective
rent
that
is
applicable
to
large
leases
in
the
northern
virginia
area.
B
The
second
document
is
a
capital
capitalization
rate
summary
which
identifies
all
of
the
transactions
that
were
researched
by
cushman
and
wakefield.
There
are
nine
of
them
large
building
sales
that
occurred
between
june
of
2019
and
august
of
2016
in
order
to
establish
the
actual
cap
rate
from
these
sales,
and
the
third
document
in
the
supporting
documents
is
cushman
and
wakefield's
income
approach.
Summary
dated
april
10th
2020,
where
they
used
the
rental
rate
indicated
by
their
rep
comparables,
the
cap
rate,
indicated
by
their
capital
a
capitalization
rate
summary
and
deducts
for
the
deferred
maintenance.
B
Supportable
indicated
final
value
for
the,
for
the
office
portion
only
is
117
million
695
168.
Now,
for
the
purposes
of
this
proceeding,
we
are
not
challenging
the
assessment
on
the
student
residence
center.
So
when
you
add
the
county's
assessment
of
54
million
791
451,
the
total
for
this
property
should
be
no
more
than
172
million
486
619.
A
Yeah
actually
but
you're
out
of
time.
So
I'm
going
to
go
ahead
and
give
you
a
minute
to
wrap
up
and
do
something.
And
then
we
can
come
back
and
ask
you
some
questions.
After.
D
Sure
well,
yeah.
D
I
think
everything
that
michael
said
is
accurate,
with
with
regard
to
the
leases,
there
was
one
lease
that
we
use,
that
was
under
100
000
square
feet
only
because
it
was
in
december
of
19,
which
was
recent,
but
otherwise
the
only
thing
I
think
that's
left
out
of
here,
although
michael
did
mention
it-
is
the
issue
of
conversion
costs
that
if
this
were
going
to
be
multi-tenant
building
that
the
cons,
the
cost
would
be
considerable
and
that's
not
factored
into
the
direct
cap
summary
that
we
submitted,
but
it
would
definitely
be
an
issue.
A
Okay,
thank
you,
sir
okay.
I
believe
I
saw
mr
peralta
on
the
line
for
the
county.
E
Yes,
good
morning
board
good
morning,
mr
tucci,
when
reviewing
this
case,
the
the
county
did
take
a
look
and
we
we
had
some
follow-up
questions.
Unfortunately,
there
were
some
communication
issues
with
the
appellant.
We
did.
E
We
sent
out
a
a
can't,
get
a
whole
new
letter,
but
then
we
were
able
to
review
this
property
with
the
information
we
had.
We
did
receive
information
after
this
review
was
completed
and
what
you
see
in
our
summary
ine
is
just
the
results
of
what
we
come
up
with
after
giving
the
information
that
we
had
now.
It
appears
that
the
appellant
was
only
reviewing
or
contesting
the
office
portion
of
this
property.
E
However,
the
test
did
show
a
reduction
in
the
lodging
portion
due
to
the
agreement
that
they
had
with
the
county,
with
respect
to
the
highest
room
rate
charged
for
any
given
night
in
the
lodging
portion.
When
looking
at
this
property,
we
did
see
that
it
is
owner
occupied.
I
believe
we
had
a
case
last
week
regarding
a
similar
issue,
where
you
know,
without
any
income,
I
wouldn't
say
any
income,
but
for
the
office
portion
there
wasn't
any
income
reported
due
to
the
owner
occupied
space.
E
We
did
see
that
the
market,
the
sub
market,
where
the
subject
property
lies,
did
command
an
average
of
42
dollars
per
square
foot
and
with
that
average
the
county
reduce
it
for
concessions,
and
that's
where
we
have
the
38
dollars
per
square
foot
that
we
used
in
the
original
assessment
as
well
as
the
test.
E
We
did
look
at
the
below
the
other
spaces
as
well
and
had
a,
I
believe,
a
27
per
square
per
square
foot
value
for
those
below
grade
spaces
which
totaled
the
the
line.
Item
five
on
row,
five
injuries
test,
column,
f
and
column,
f1.
E
We
did
look
at
what
mr
tucci
supplied
us
with
initially
with
the
review,
and
we
were
able
to
look
at
the
2019
ine
and
match
the
expenses
that
was
reported,
and
then
we
came
up
with
a
lower
value
than
original
assessment.
E
With
that,
we
did
see
that
the
the
subject
property
was
built
in
1990
with
effective
age
of
2000.
We
use
the
appropriate
cap
rate,
given
the
county's
guidelines.
E
That
is
all
what
we
that
is
all
that
I
have
for
now
we're
open
for
questions.
Thank
you.
F
Oh,
we
want
to
speak
on
the
sorry
about
the
background.
We
want
to
speak
on
the
comp
she
does
provided
with
the
that
the
appellant
reference
to.
I
think
it's
on
page
124
of.
F
F
Comp
10,
I
think
that
was
a
renewal
by
gsa
for
gsa
leads
that's
the
lowest
one
there
at
30
and
30
cents
per
square
foot.
I
think
they
also
happen
to
be
one
of
the
smaller
comp
on
this
sheet
as
well.
F
The
comp
12
has
a
initial
rate
of
45
dollars
and
two
cents
for
their
rent.
When
you
take
consideration
some
of
the
concessions,
this
property
received,
which
we've
also
I
mean,
if
you
look
at
the
name
of
the
property
we've
had
this
property
come
before
us
before.
F
So
there's
been
great
discussion
about
the
renewal
of
this
space
and
also
was
probably
omitted
from
this
comp
sheet
is
money
that
was
given
to
this
tenant
as
well,
which
we've
discussed
comp,
15,
you're
at
43
dollars,
a
square
foot
and
there's
a
two
and
a
half
percent
escalation.
F
F
All
the
other
comps
out
of
the
17
counts
provided
are
not
in
arlington
county,
so
there's
four
comps
out
of
17
on
this
comp
sheet
that
are
from
as
far
as
reston
and
tysons
and
merit
field.
So
again
I
mean,
when
you
look
at
the
comp
that
they're
providing
on
this
sheet,
consider
the
fact
that
when
we
do
mass
appraisal,
when
we
do
assessments
for
arlington
county
we're
relying
on
rents
in
arlington
county
and
as
rob
stated,
he
looked
at
the
rent.
F
They
were
provided
to
us
for
this
particular
market
when
we
valued
this
property
and
when
we
also
did
the
test
for
this
property,
which
again
did
result
in
a
lower
value
than
the
original
assessment,
which
again
was
pointed
out
by
mr
peralta.
So
I
just
wanted
to
make
those
highlights,
since
that
sheet
was
referenced
as
the
reason
why
the
rents
that
we
use
are
too
high
in
consideration
that
four
out
of
the
17
comps
are
in
arlington
county.
A
Okay,
thank
you
first
off
on
a
question.
I
just
want
to
clarify
something,
mr
peralta,
that
you
testify
to,
and
I
just
want
to
make
sure
I
understand
it.
You
said
that
that
you
did
receive
information
from
the
appellant
after
the
assessment,
so
it
was
all
the
information
that
they
gave.
You
was
used
in
this
test
or
have
you
gotten
information
since
you
did
the
test.
E
A
Okay,
so
all
other
information
was
used
done
correct
that
you're
only
seeker,
okay
and
then
wasn't
there
a
lawsuit
on
this
property.
Was
there
an
order
from
the
judge.
B
Yes,
I
can
speak
to
that.
There
was
a
lawsuit
on
years,
2014
through
2018,
and
there
was
a
settlement
between
the
county
and
the
fdic
that
was
entered
by
the
court.
I
think
in
december
of
last
year,.
A
F
Mary,
I
think
the
initial
agreement
that
you're
referring
to
is
not
about
the
lawsuit
from
last
year.
It's
about
the
one
I
think,
some
years
back
with
tommy
rice
and
around
when
rick
first
got
here
and
that
pertained
to
the
lodging
portion
of
this
property,
where
we
would
value
this
lodging
portion
based
off
of
the
department's
lodging
guidelines
when
it
comes
to
the
expense
rate
when
it
comes
to
the
cap
rate
and
if
I'm
not
mistaken,
the
replacement
reserves
may
have
been
in
that
agreement
as
well.
F
Because
if
you
don't
remember,
I
remember
one
of
the
issues
that
came
up.
F
Last
year,
we
applied
the
lodging
guidelines
to
the
total
facility
and
barnes,
looked
through
the
agreement
and
noticed
that
the
other
revenue
was
not
subject
to
that
lodging
guidelines
and
that's
when
we
decided
that
only
based
off
barnes
interpretation
and
further
reading
that
only
the
expense
portion,
the
cap
rate
and
the
replacement
reserves
would
adhere
to
the
lodging
hotel
logging
guidelines
and,
oh,
I'm,
sorry
and
the
they're
supposed
to
notify
us
every
year,
what
their
rates
are
for
the
student
resource
center
and
they're
supposed
to
notify
on
this
forum.
F
What
is
the
highest
rent
rate
charge
for
that
year?
That
is
the
information
that
rob
is
referring
to,
because
we
had
a
2018
statement
which
stated
that
the
highest
room
rate,
I
believe,
was
251
dollars
per
night
and
the
new
information
that
came
in
was
slightly
higher
than
that,
but
we
received
a
19
after
the
case
is
already
closed.
A
G
The
appellant
stated
that
one
of
the
hurdles
in
assessing
this
property
is
the
fact
that
it's
not
a
typical
hotel
nor
office
property,
there's
a
lot
of
shared
facilities
and
in
order
to
split
them
up
and
make
them
less
unique.
More
market
friendly,
it'd
have
to
there'd
have
to
be
by
some
owner
a
significant
amount
of
money,
getting
access
to
parking
and
extra
lobbies
and
all
that
stuff.
Can
you
respond
to
that?
How
that
might
affect
the
property
as
it
is
owned
and
is
used
today?
Does
that
have?
G
How
the
marketplace
would
look
at
this
facility
yeah
that
certainly
comes
up
often
how
the
you
know:
the
the
fair
market
value.
Well,
there's
real
dollars
and
logistics
hurdles
for
anybody
else
in
the
market
to
buy
and
use
this
place,
namely
shared
lobbies
non-access
to
the
parking
lot.
G
So
does
that
you
feel
that
diminishes
the
the
current
value,
because
the
market
looks
at
it
with
some
real
constraints
have
to
spend
a
lot
of
money
to
make
it
more
multi-tenant
usable
is
that
that
must
come
up,
because
we
talk
about
that
in
in
other
contexts.
You
know
something's
unusual,
about
a
property
such
that
nobody
else
in
the
market
could
use
it,
as
is
they'd,
have
to
spend
real
capital
improvement
dollars.
F
F
There
are
studies
out
there
about
first
generation,
second
generation
headquarter
site,
and
so
what
we
we
in
the
department
are
not
doing
we're
not
assuming
that
a
future
buyer
would
break
it
up,
because
that
isn't
necessarily
the
case.
A
future
buyer
could
use
it
for
their
own
headquarters,
so
we're
only
assessing
it
based
off
of
how
we
assess
other
owned
occupied
buildings
in
the
county
and
so
another
difference
with
this
property
compared
to
other
unoccupied
buildings
in
the
counties
that
there
is
a
court
order
about
how
to
treat
that
lodging
portion
of
this
property.
F
We
also
made
discounts
for
the
below
grade
office
space
as
well
as
the
atrium
that
was
pointed
out
by
the
agent.
We
apply
a
lower
rent
rate
to
those
spaces.
So
again,
we're
valuing
this
property
based
off
its
current
use.
We're
not
assuming
that
the
future
buyer
would
be
a
person
who
wants
to
break
it
up
into
multi-tenant
we're
not
assuming
that
the
future
buyer
would
use
it
for
their
headquarter
space,
because
again,
this
is
fdic
building
which
they
built
for
themselves
and
they're
using
this
building.
A
Okay
and
just
for
informational
purposes
for
mr
tucci
and
mr
farrell,
you
are
joined
by
brian
yellen
from
fdic,
is
also
on
the
call
to
answer
questions.
I
believe,
mr
hoffman,
you
had
a
question.
H
Yeah
thanks:
did
anybody
look
at
the
cost
approach
to
valuing
this.
H
B
No
I'll
defer
to
mr
farrell
from
the
appellate
side.
D
We
we've
considered
the
cost
approach,
but
we
we
did
not
use
the
cost
approach.
D
B
I
Question
for
mr
farrell,
if
you
did
go
into
the
this
project
and
do
a
bunch
of
improvements
and
alterations
and
so
forth,
to
turn
it
from
the
headquarters
of
fdic
into
a
more
marketable
situation.
Wouldn't
you
have
to
amend
the
zoning.
D
The
I
I
haven't
considered
the
the
aspect
of
the
zoning
on
on
the
dividing
of
the
space.
I
I
think
you
would
have
to
go
and
get
cyclone
amendments.
E
Yes,
thank
you.
When
valuing
this
property,
the
department
took
a
market
approach
using
market
rent,
as
discussed
by
by
irving
and
myself.
The
the
comparables
do
support
what
the
county
originally
valued.
The
office
portion
at
the
38
dollars
a
square
foot.
We
did
discount
the
below
below
grade
space.
We
are
using
a
market
vacancy
for
the
owner
occupied
space,
as
we
do
with
other
properties
at
five
percent.
E
We
are
using
the
expenses
close
to
what
they
reported
in
the
most
recent
2019
ine,
with
respect
to
the
notion
that
it
would
take
certain
monies
to
bring
this
to
market
and
rent
it
to
multi-tenant
property,
multi-tenant
multi-tenant,
tenants
that
would
actually
increase
the
effective
age
of
the
property,
thus
dropping
the
cap
rate.
If
we
were
to
consider
that
as
well,
but
that's
like,
we
discussed
speculation
on
what
the
future
outcome
of
this
property
is.
E
As
the
county
sees
it,
it
is
valued
at
a
market
rate
and
we
asked
the
board
that
to
confirm
the
test
value
for
the
property.
Thank
you.
B
Yes,
just
briefly,
mr
bailey
was
commenting
on
the
comps.
I
noticed
in
his
his
discussion
of
the
the
four
arlington
cops
he
didn't
take
into
consideration.
B
In
some
cases,
the
extraordinarily
substantial
concessions
that
were
given
to
the
tenant
on
those
four
comps,
which
reflects
an
effective
rental
rate,
substantially
lower
than
the
initial
rate
that
was
identified
by
mr
bailey,
and
we
all
know
that
the
effective
rate
is
all
that
really
matters
in
cases
of
valuation.
D
Sure,
with
regard
to
the
to
the
rental
rate,
if
we're
talking
about
this
being
a
a
corporate
headquarters
type
facility,
the
competitive
set
for
that,
would
not
be
a
multi-tenanted
office
building
across
the
street,
it
would
be
a
much
broader
area
of
much
larger
spaces.
So
the
issue
about
whether
the
comp
is
in
arlington
or
not
is
is,
is
very
much
beside
the
point
based
on
the
way
the
building
is
currently
configured
and
who
its
typical,
who
its
likely
tenant,
would
be
if
it
could
be
tenanted.
A
A
J
I
start
with
I'm
okay,
with
the
reconstructed
with
the
test
column
that
mr
peralta
did.
I
think
that's
really
the
best
numbers
that
I
can
see
throughout
the
whole
assessment.
I
think
the
rates
that
he's
using
based
on
what
it's
being
used
as
as
an
owner
occupied,
I
think
it's
fair
for
that
area.
It
is
a
good
metro
area
and
I
mean
for
the
past
10
years,
this
property
has
been
assessed
for
even
higher
values
than
what
it
successed
this
year.
J
G
Yes,
I
do
quickly
touching
on
the
appellant's
points.
Excuse
me
the
cap
rate.
I
mean
that
is
a
reasonable
cap
rate
for
excuse
me.
First
class
metro,
accessible
large
office
space
in
arlington.
I
certainly
have
no
problem
with
that.
The
five
percent
vacancy
rate
they
really
have
no
vacancy,
but
they
get
five
percent
bonus
because
that's
how
large
off
most
office
buildings
are
treated
in
arlington
just
for
equalization's
sake,
so
that
seems
to
be
a
good
idea.
G
The
county
has
reduced
the
market
rate
for
this
building
because
it
is
owner
occupied,
I'm
not
by
almost
10
percent.
I
don't
know
38
is
the
right
amount,
we'll
never
know
that.
Maybe
35
is
the
right
amount.
G
We
won't
know
that
either
we
know
it's
not
gsa,
where
they
can
hammer
landlords
significantly
getting
it
down
to
thirty
dollars
in
a
submarket,
that's
40
or
more
so
without
definitive
proof,
a
reasonable,
almost
double
digit
reduction
seems
okay,
again,
not
knowing
if
it
should
be
11
or
15
percent
and
finally,
to
echo
what
jose
just
said.
G
This
we're
seeing
constantly
pretty
good
office
very
good
office
buildings
in
this
county
this
year,
going
up
between
something
over
nothing,
maybe
one
percent
or
so
up
to
about
five
percent
that
from
from
2019,
and
that's
what
we're
seeing
here.
So
this
this
once
again
makes
sense
to
me
that
this
is
the
pretty
much
in
mass
appraisal.
The
the
proper
assessment.
I
Thank
you.
Madam
chairman.
Many
many
years
ago
I
worked
at
first
virginia
bank
and
through
the
years
we
sold
some
of
the
bank
buildings
and
the
the
one
the
one
argument
that
the
landowner
made
that
I
found
somewhat
persuasive,
is
you
know
some
major
alterations
are
going
to
have
to
be
done.
G
I'd
like
to
respond
to
that
barnes,
I
I
was
with
you
completely
until
I
heard
irving's
non-speculation
approach,
and
then
it
occurred
to
me
what,
if
george
mason
wanted
to
move
across
the
street,
because
fdic
was
mandated
to
move
to
denver
what,
if
gw,
which
which
occupies
most
of
the
district
according
to
the
district,
wanted
to
get
into
the
suburbs.
That
would
be
ideal
for
them
in
a
lot
of
ways,
dorms
and
classrooms.
G
A
K
That's
exactly
where
I
was
looking
at
this
originally
too,
and
I
I
do
agree
with
the
county's
test
and
one
of
things.
I
did
look
at
my
notes
from
prior
years
on
this
there's
a
lot
of
discussion
concerning
auditoriums
cafeterias
things
like
that
that
in
a
college
would
be
perfect,
but
that
is
again
speculation
it's
this
is
what
they
have.
This
is
what
they
and
the
rate
seems
to
be
a
reasonable
increase
anyway,.
H
I'm
taking
it
all
in,
I
think
I
I
agree
with
ken
and
I
think
it's
a
it's
kind
of
a
very
unique
property,
so
it
is
tough
to
value
but
unique,
probably
in
a
good
way.
The
fact
that
we've
got
an
eight
acre
private
campus
walk
to
metro
in
arlington
virginia
there's,
not
a
lot
of
there's,
not
a
lot
like
that.
H
You
know
I'm
just
I'm
curious
what
the
guidance
would
be
if
I
was
a
buyer
and
this
was
being
marketed
by
cushman
in
wakefield
right
now,
but
it's
a
this
is
like
kind
of
a
once-in-a-lifetime
type
of
campus.
If
you
were
to
speculate
on
a
buyer,
so
I
wouldn't
worry
about.
If
somebody
has
to
put
in
dollars
a
foot.
D
H
It
up
to
whatever
their
campus
needs.
I
mean,
I
think
the
county's
done
a
pretty
good
job
being
fair
on
this
one.
A
I'm
sorry,
mr
matskin
has
got
a
second
all
in
favor,
aye
opposed
okay,
it's
unanimous!
A
A
Wanted
to
make
sure
okay
next
up
on
the
agenda
is
economic
unit,
one
four
zero:
three,
five:
zero!
Two,
a
at
three
four
four
four
fairfax
drive
virginia
square
towers.
Mr
warren.
You
can
start
with
your
eight
minutes
and
tell
us
about
the
property.
C
Yes,
thank
you
very
much
I'll
direct
the
board
to
page
56
of
144.
of
the
county's
response
package,
which
shows
our
summary
of
facts
that
we
submitted
along
with
our
appeal.
This
is
virginia
square
towers.
It's
comprised
of
two
rpcs.
G
C
C
Okay,
what
we're
asking
for
from
the
board
today
is
that
I
have
229
million
402
900,
which
is
458
000
a
unit.
This
is
a
property
that
was
originally
built
in
2013.
It's
534
total
units
high
rise
in
the
boston,
virginia
square,
submarket,
one
building,
13
stories.
C
C
However,
there
are
a
small
number
six
of
the
534
total
units
that
are
affordable
and
income
restricted
the
county
and
their
initial
2020
assessment
did
not
break
those
units
out
and
apply
the
the
income
guidelines
for
those
affordable
units
and
with,
but
with
regard
to,
the
main
issue
is-
and
this
is
a
pretty
straightforward
case-
we've
had
a
couple
of
these
cases
with
this
particular
client
in
the
past
year
with
the
board.
C
It
has
to
come
down
to
the
operating
expenses
and
the
allowance
that
the
county
is
estimating
in
their
their
2020
assessment,
compared
to
what's
historically
been
reported
here.
The
trend
that
you'll
see
the
last
three
years
and
what
was
most
recently
reported
in
2019.
C
So
the
county
is
currently
using
an
operating
expense
ratio
of
21
of
total
income
in
their
2020
assessments
and
you'll,
see
it's
been
trending
up
in
each
of
the
last
three
years,
dating
back
to
2017,
but
dating
back
2016
you'll
see
that
the
actual
reported
operating
expenses
were
22
in
2016
20
in
2017,
21
in
2018,
and
then
most
recently
23
in
2019.
C
So,
although
the
the
county
is,
is
estimating
what
appears
to
be
income
at
full
market
for
all
the
units
and
and
not
applying
the
the
affordable
units
to
six
of
the
units,
the
big
issue
is
with
regard
to
the
operating
expenses.
This
is
a
property
again,
that's
owned
by
ditmar,
as
we've
spoken
before,
due
to
their
their
footprint
in
this.
In
this.
B
E
C
At
23
for
this
high
rise
in
the
boston
sub
market
is,
is
very
low
and
the
county
is
currently
estimating
operating
expenses.
Well
below
that.
So
again,
that's
our
biggest
issue,
we're
hoping
that
the
county
considers
that
the
operating
expenses
as
you've
seen
for
all
the
bitmore
properties
have
continued
to
rise
in
each
of
these
last
three
years.
The
trend
is
upward,
costs
are
going
up
and
we
expect
that
trend
to
to
continue
and
the.
L
C
Reflection
of
of
what
this
property
is
currently
operating
at
what
will
operate
out
in
the
future
is
this
most
recent
2019
ie
survey
that
was
submitted
that
shows
total
operating
expenses
to
23,
so
we're
hoping
that
the
county
will
consider
that
or
the
board
will
consider
that
in
their
decision.
Regarding
this
case
I
think
jeremy's
on.
I
don't
know
if
you
have
anything
else,
jeremy,
you
would
like
to
add.
L
L
So
in
a
five
year
period,
we've
gone
just
using
the
first
numbers
there,
182
196
205
215
233,
so
the
assessment
has
jumped
18
million
dollars
from
last
year,
and
I
know
we
talk
about
we'll
look
at
the
noi
look
at
the
numbers
a
lot
of
times,
there's
a
focus
on
the
noi,
but
I
think
digging
in
of
why
this
increase
keeps
happening
of
over
10
million
dollars.
Basically,
every
single
year
for
the
last
five
years
is
a
little
bit
alarming.
L
L
So
since
they
marked
it
as
stabilized
they've
increased
it
by
over
51
million
dollars,
which
of
course
is
alarming
to
to
the
owner-
and
I
think
really
to
anybody
to
say:
is
this
property
really
worth
50
million
dollars
more
in
five
years
or
is?
More
importantly,
is
this
property
worth
18
million
more
than
it
was
last
year
and
our
positions
no?
And
we
think
the
reason
that's
the
case
is
with
escalating
operating
expenses.
The
counties
missed
the
mark
a
bit
there
now.
L
One
of
the
reasons
that
the
county's
test
is
lower
than
the
actual
operating
is
because
of
one
column,
and
that
column
is
the
vacancy
and
again
they
give
six
percent
vacancy
to
everyone
and
when
they
give
it
to
us
in
the
test
or
when
they
give
us
to
this
original
assessment,
you
see
the
operating
expenses
are,
I'm
sorry.
The
vacancy
was
563
and
they're,
giving
us
9.54.
L
The
the
most
alarming
thing
here
again
is
a
18
million
dollar
increase
and
if
the
test
column
is
anything
that
gives
us
a
look
in
the
next
year,
it
appears
that
there's
a
good
chance
that
this
is
going
to
go
up
six
million
dollars
plus
or
next
year,
despite
what's
going
on
on
the
market,
so
we
think
it's
quite
alarming
to
see
an
increase
of
10
plus
million
dollars
every
single
year,
but
even
more
alarming
this
year
to
see
an
increase
of
18
million
dollars.
A
Okay,
thank
you,
mr
chicas.
M
M
To
us,
this
is
a
little
bit
easier
than
some
of
the
other
cases
we've
had
this
year
in
the
sense
that
this
is
a
profitable
property.
That's
on
the
ascendancy
of
its
economic
life,
we've
seen
four
years
of
apartment
revenue,
growth,
we've
seen
four
years
of
growth,
with
gpi
we've
seen
four
years
of
growth
of
effective
growth,
we've
seen
four
years
growth
of
net
operating
income
again,
as
the
board
is
very
familiar.
By
now,
we
didn't
have
the
information
relating
to
2019's
operating
year
when
we
had
the
january
1st
2020
assessment
put
out.
M
If
you
do
a
three
year
summary
excuse
me.
Three
year,
average
of
the
years
2016
through
2018
operating
expense,
you
get
an
average
of
3.1
million,
far
below
what
we
projected
for
the
year.
For
january
1st,
we
were
up
some
70
000
or
so
above
that,
even
before
we
receive
the
2019
information
as
again
is
familiar
with
by
the
board.
By
now,
unfortunately,
we
underprojected
near
across
the
board
486
thousand,
almost
a
half
a
million
dollar
under
projection
on
gross
potential
income.
M
We
underprojected
effective
gross
by
almost
nine
hundred
thousand
dollars.
It
is
true,
as
relayed
by
mr
warren
and
mr
chitlick.
We
did
under
project
operating
expenses
by
527
thousand,
but
that
still
left
a
delta
of
361
000
that
the
county
underprojected
for
the
property
for
2020
and
again
this
is
a
property.
That's
increased
in
value
four
years
in
a
row
as
a
quick
aside
in
regards
to
the
the
idea
that
the
property's
gone
up
in
value
each
year.
M
That
is
correct
in
the
sense
that
the
property's
gone
up
in
value
each
year,
as
we've
indicated
the
noise
grown
year
over
year
every
year
and
I'm
gonna
have.
Mr
bailey
fact
check
me
on
this,
but
I
believe
the
cap
rate
changed
so,
in
other
words,
a
net
operating
income
that
increases
and
a
cap
rate
that
decreases
is
going
to
indicate
a
higher
value.
So
it's
not
really
a
surprise
that
this
property
went
up
in
value.
M
Given
its
economic
success,
we
have
seen
a
test
that
we
did
run
in
columns,
f1,
f2
and
f3.
As
indicated
it
was
remiss
of
the
county
not
to
include
the
committed,
affordable
units.
We
did
include
those
in
column,
f2
and
applied.
The
correct
excuse
me.
I
should
say
applicable
guidelines
across
the
board
operating
expenses
per
unit,
so
three
percent
for
vacancy
and
concession
and
the
appropriate
cap
rate.
M
I
would
also
note
that
we
used
explicitly
received
from
the
ownership,
residential
and
retail
rent
rolls,
so
the
columns
that
you
see,
column,
f1
and
f3
are
not
even
necessarily
projections
as
much
as
regurgitation
of
information
from
the
owner
themselves,
so
these
are
rents
that
are
being
achieved.
As
we
speak
again,
all
retail
is
accounted
for
no
vacancy.
M
We
have
again
apartment
revenue,
that's
increased
four
years
in
a
row,
so
our
less
than
one
percent
increase
is
not
only
conservative.
Again,
it's
derived
straight
from
the
owner's
residential
rent
role.
M
You
can
see
that
our
projection
for
gross
potential
is
in
line
with
the
last
four
years.
In
fact,
it's
low
compared
to
3.7
percent
growth
and
17
3.3
growth
in
18
and
3.8
growth
and
19.,
and
in
fact
our
effective
gross
is
below
what
they
achieved
last
year
and
again
that's
after
four
years
of
growth.
So
that's
probably
not
very
believable,
considering
what's
going
on
the
last
four
years
of
the
property.
M
M
M
Even
if
we
were
to
make
up
every
penny
of
the
operating
expenses
that
were
incurred
at
the
property,
we'd
still
be
under
assessed,
underprojected
by
some
360
000
for
that
operating
income.
M
Given
its
proximity
to
metros,
it's
it's
half
a
mile
from
clarendon
metro.
It's
two
blocks
from
virginia
gmu
metro,
it's
six
tenths
of
a
mile
from
boston
quarter.
This
is
all
via
foot.
This
is
all
by
walking
given
again
it's
established
occupancy,
both
retail
and
residential.
M
F
And
I
just
wanna
reiterate
what
chris
said
when
pointing
out
the
changes
for
this
property
over
the
years.
Our
cap
rate
has
indeed
changed.
If
you
just
go
back
to
2016,
the
cap
rate
was
5.6
2017,
it
cap
rate
was
5.5
18
and
19.
The
cap
rate
was
5.25,
and
then
you
can
see
on
the
page
three
what
the
cap
rate
is
for
this
year.
F
Oh
not
just
the
cap
rate,
the
vacancy
even
changed
2016
the
vacancy
was
8
2017
through
19,
the
vacancy
was
7,
so
our
vacancy
has
decreased
on
this
property
as
well.
So
that's
another
indication
of
why
the
value
has
increased
to
go
even
further.
If
you
go
back
to
2016,
so
our
projected
ny
for
that
year
was
actually
700
000
less
than
what
they
achieved
in
2017.
F
F
H
C
H
M
Yes,
ma'am
again,
as
we
reiterated
four
years
of
growth,
residential
four
years
of
apartment
revenue,
growth,
four
years
of
gpi
growth,
four
years
of
effective
gross
growth,
four
years
of
net
operating
income
growth,
we
had
stabilized
debt
operating.
Excuse
me
stabilized
operating
expenses
for
the
first
three
years
on
the
sheet
16
17
18.,
as
the
test
shows,
we
counted
for
that
and
they're
still
short
of
what
was
achieved
at
the
property
in
regards
to
the
net
operating
income.
M
Retail
is
fully
occupied
and
the
apartment
side
is
well
occupied
with
the
three
year
average
well,
less
than
three
percent.
We
do
believe
that
the
county
should
be
confirmed
at
233
million,
eight
hundred
thirty
thousand
seven
hundred.
Thank
you.
A
C
Yes-
and
you
know,
as
mr
chicas
had
relayed
our
pro
forma
in
columns
g1
and
g2,
our
egi-
that
we're
reporting
is
lower
than
what
was
recorded
most
recently
in
2019
we're
using
the
the
gross
potential
income,
the
the
maximum.
C
This
property
is
capable
of
generating,
as
as
reflected
in
the
2019
ie,
but
as
jeremy
stated
previously,
we're
also
applying
that
that
six
percent
vacancy
rate
which
the
county
gives
to
all
multi-family
apartments
in
the
county,
and
then
that
is
then
reflected
in
the
most
recent
operating
expenses
that
are
reported
at
the
subject.
Property
23
again
dipmar
runs
very
efficiently.
C
They
run
much
lower
expense
levels
than
any
other
commercial
owner
in
the
in
the
county,
for
various
reasons
that
we've
previously
discussed-
and
it
seems
like
we're
constantly
in
front
of
the
board
in
this
year
and
prior
years,
with
an
underestimation
of
operating
expenses
with
the
county.
So
we're
hoping
the
county
takes
into
consideration
these.
These
increasing
operating
expenses
in
each
of
the
last
three
years
has
been
expected
to
continue.
L
C
A
C
E
H
H
I
A
Test
because
I
thought
the
expenses
were,
you
know
low,
you
know,
but
the
the
difference
is
the
appellant
doesn't
have
the
affordable
pulled
out.
So
when
I
went
in
and
increased
the
expenses,
my
problem
was
when
I
then
added
the
affordable
and
then
the
retail
I
still
end
up
at
237
million.
So
I
mean
it's
down
from
the
test,
but
not
down
from
the
original
I
mean
that
was
increasing
expenses
to
on
the
market
units
to
3.6.
J
Yeah
I
did
I
mean
I
went
a
little
bit
further
because
I
did
a
couple
of
tests.
I
even
tried
reducing
the
rental
rates
on
the
three
bedroom
and
two
bedrooms.
J
That
the
county
reconstructed,
but
I
still
with
the
value
about
236
million
and
increasing
the
expenses
I
did
the
same.
I
went
to
24
to
3.7
million.
I
still
come
up
with
235
million,
which
is
what
I
think
we
should
be
assessed
at
honestly,
but
you
know
we're
not
going
to
increase
it.
So
I'm,
okay
with
the
current
assessment.
J
Yeah,
I
think
barnes
wanted
to
speak,
he's
been
raising
his
name.
A
I
A
N
A
Opposed
okay,
it's
unanimous!
It's
the
county's
confirmed
at
233
million
830
700.
A
Okay,
the
third
case
rpc
one
four:
zero:
three:
zero,
zero,
five
one.
They
signed
the
reduction
order
yesterday,
so
we
won't
be
hearing
that
case,
and
so
we
will
move
on
to
the
final
case
on
the
agenda.
A
N
Thank
you,
madam
chairwoman,
hello
board
and
county
at
this
property.
The
owner
has
received
an
offer
of
a
reduction.
The
original
assessment
was
112.7,
the
reduction
offer
was
to
108..
We
do
not
believe
that
that
is
sufficient,
I'll
just
point
out
a
couple
of
things.
Last
year
the
board
heard
this
case
and
reduced
the
assessment
to
99
million
427,
and
this
year's
assessment,
or
the
proposed
assessment,
represents
a
substantial
increase
which
is
not
justified.
N
N
Now
I
know
those
expenses
attributable
to
that
space
be
broken
out
and
the
income
attributable
to
those
spaces
be
broken
out,
and
I
will
tell
you
that
this
owner
has
told
me
that
they
cannot
segregate
out
the
income
or
the
segregate
out
the
expenses
associated
with
the
affordable
units
and
the
market
rate
units
and
as
a
result
that
is
reported
together.
N
I
think
to
ask
them
to
do
something
else
would
be
to
ask
them
to
participate
in
guesswork
and
to
basically
report
something
on
their
income
and
expense.
Survey
forms
and
certify
to
it
that
they
honestly
can't
certify
to
and
I'd
just
like.
C
N
Point
out,
one
of
the
reasons
why
I
don't
think
that
should
matter
we
have
two
code
provisions
that
address
multi-family
apartments.
One
address
is
affordable
and
one
addresses
market
rate
units
they're
very
similar.
My
law
firm
actually
worked
with
aoba
to
get
the
affordable
section
of
this
passed
and
they're
they're,
incredibly
similar.
So
on
the
I'm
going
to
go,
one
number
one
will
be
the
affordable
number
two
we'll
deal
with
market
rate,
so
in
number
one
affordable.
N
N
Number
two
market
rate
units,
basically
the
same
thing:
actual
gross
income
generated
from
such
real
property,
any
resultant
loss
in
income
attributable
to
vacancies,
collection
losses
and
rent
concessions
again
shall
be
considered.
So
in
both
cases
the
actual
income
is
to
be
considered
in
the
mar
affordable.
N
When
you
get
to
the
market
rate
units,
it
says
actual
operating
expenses
and
expenditures
and
the
impact
of
any
additional
expenditures
shall
be
considered.
Okay,
so
both
say
you
have
to
consider
actual
income
and
you
have
to
consider
actual
rent
so
by
forcing
the
actual
income
into
these
separate
categories
for
the
purposes
of.
N
Is
not
done
when
people
buy
a
property
they're
going
to
look
at
the
actual
income
and
the
actual
expenses?
What
you
end
up
with
is
doing
exactly
the
opposite
for
the
affordable
units,
because
you
are
not
considering
the
actual
expenses
you
are
considering
guideline
expenses.
When
people
go
to
buy
properties,
they
don't
say
wait.
Let
me
look
at
the
arlington
line,
so
I
know
what
to
use
for
expenses.
N
So
if
I
could
ask
you
to
turn
to
page
46
of
138,
that
is
our
appeal
and
on
that
page,
what
you
see
is
exactly
the
opposite
of
what
you
saw
in
the
last
case.
In
this
case,
you
see
income
from
2017
to
2019.
Reducing
it's
gone
down,
it
has
not
gone
up.
2017
was
the
height.
It
went
from
eight
million
one.
Now
it's
at
seven
million
seven.
So
it's
declined
for
each
of
the
last
three
years.
N
You
also
see
that
expenses
have
gone
up
in
the
last
three
years
from
one
million
six
to
one
million,
eight
to
two
million
three,
so
we
have
gross
potential
income
declining.
We
have
expenses
increasing
the
other
thing
that
declined
was
vacancy
rate,
which
is
in
large
part
why
the
expenses
increased
so
on
our
page,
46
you'll
see
on
the
very
bottom.
Well,
the
third
line
up
from
the
bottom
in
the
chart
you
see,
vacancy
vacancy
was
16
and
17
14.4
and
18
and
5.5
in
19..
N
So
there's
a
reason
for
the
expenses
to
go
up
now,
while
we
are
on
this
page,
I
want
to
point
out
the
cap
rate
that
the
county
has
used
on
each
of
the
various
elements
so
affordable
for
market
rate
units.
The
base
cap
rate
was
5.15,
and
that
is
the
lowest
cap
rate
that
was
used
for
any
of
the
three
approaches
that
they
did
for
the
affordable
units.
The
cap
rate
was
5.9
and
for
the
commercial
it
was
seven
percent.
N
So
if
you
look
at
page
46
and
you
look
at
the
noi,
we
used
a
blended
rate
based
on
the
assessment.
But,
let's
not
let's
say,
let's
use
the
lowest
cap
rate
here.
N
Let's
use
the
cap
rate
on
market
rate
units
which
is
5.15,
let's
forget
about
the
others,
but
we're
that
still
allows
us
to
consider
the
actual
income
and
expenses
and
if
we
use
a
5.15
percent
cap
rate
on
the
actual
17
income,
the
value
is
102
200
000.,
if
you
use
the
lowest
cap
rate,
the
market
rate
cap
rate
on
2018
and
the
actual
income.
The
value
is
a
hundred
million
two
hundred
thousand,
and
if
we
use
the
lowest
cap
rate
on
the
2019
income,
the
value
is
98
million,
seven
hundred
thousand.
N
N
One
was
the
admin
and
one
was
excuse
me:
I'm
sorry,
one
was
administrative
expenses
and
the
other
was
repairs
and
maintenance.
Now
this
building
was
constructed
in
2012
and
the
there's
been
a
lot
of
apartments.
Coming
online
in
arlington,
county
and
a
2012
building
is
now
eight
years
old
and
there
are
expenses,
and
you
can
see
on
page
32
that
the
main
cost
was
preventative
maintenance
and
repairs
for
mechanical
building
systems
and
this
fire
safety
monitoring,
system,
repairs
and
inspections.
N
These
aren't
miscellaneous
costs
that
you
can
avoid.
These
are
a
real
cost
of
operating
a
property
that
is
now
eight
years
old
and
then,
in
terms
of
the
admin
costs
you
know,
as
the
building
has
leased
up
and
has
stabilized
for
the
first
time
in
2019,
you
have.
The
main
addition
of
cost
was
for
concierge
service
that
was
subcontracted
out,
whereas
before
property
managers
handled
the
front
desk,
so
these
are
costs
that
are
associated
with
a
stabilized
property
and
an
aging
property.
N
Now
I've
spoken
with
the
owner
and
the
expenses
are
supposed
to
increase
again
because
of
the
age
of
the
property
on
turn.
Now
the
owners
are
having
to
do
additional
items
that
they
didn't
necessarily
have
to
do
during
the
initial
years
of
property,
but
I
think
the
most
important
thing
and
the
most
telling
thing
here
is
you
know
I
added
up
all
of
the
income
that
was
used
to
derive
the
revised
assessment
and
the
income
that
was
used
to
derive
the
revised
assessment.
N
If
you
add
it
up,
for
all
three
categories
is
five
million
seven
hundred
thousand
dollars:
that's
six
hundred
thousand
dollars
greater
than
the
actual
income
at
the
property
and
it
is
and
they
used
once
you
add
it
all
up.
It's
a
5.274
cap
rate
forget
the
5.274
cap
rate.
Let's
use
the
5.15
on
the
whole
thing,
let's
use
the
actual
on
it.
The
way
that
the
code
requires-
and
you
know
the
the
commercial
section
is
a
very
small
section.
N
There
is
it's
been
a
troubled
spot
for
commercial,
commercial
enterprises,
it's
75
occupied
now,
who
knows
what
it'll
be
at
the
end
of
this
year?
N
It
is
fair,
however,
to
look
at
the
actual
income
and
in
these
circumstances
it's
fair
to
use
the
lowest
cap
rate
and
it
and
an
income
that
is
700
620
000
less
than
the
income
used
by
the
county
again
operating
income
net
operating
income
has
declined
for
the
last
three
years.
Gross
effective
rents
have
increased
or
have
declined
for
the
last
three
years.
Expenses
have
increased
for
the
last
three
years,
so
this
seems
to
me
a
clear
case
of.
N
Good
intentions
gone
awry
in
terms
of
of
the
affordable,
and
so
I
would
ask
that
the
board
reduce
the
assessment
in
accordance
with
that
repeal.
Thank
you.
M
Yes,
ma'am
so
again,
we'll
be
relying
primarily
on
page.
I
believe
it's
for
the
mixed
use.
Income
expense,
summary
sheets.
M
As
again,
the
board
is
familiar
by
now
projected
columns,
d1,
d2
d3
prior
to
receiving
the
2019
income
and
expense
form,
obviously,
for
those
who
are
familiar
or
those
who
are
not
familiar,
the
biggest
drop
off,
at
least
in
the
county's
opinion
and
income
generating
income
generation.
If
you
will
was
the
loss
of
the
retail
tenants.
M
I
believe
this
is
the
property
that
was
associated
with
the
chef
who
unfortunately
lost
all
four
of
his
properties.
I
believe
within
a
month
or
so,
and
so
obviously
created
the
retail
for
the
2019
year.
I
would
point
to
page
54
of
138,
which
is
the
owner
supplied
retail
rent
roll,
and
that
shows
that
in
a
three
month
time
they
signed
up
three
of
their
four
retail
tenants
to
long
term.
M
While
I
can
speak
to
the
third
tenant,
two
of
the
three
are
strong
fidelity
brokerage
and
lebanese
tavern
is
obviously
an
arrington
institution
been
around
25
plus
years,
so
both
the
county-
and
I
believe
I
won't
put
words
in
in
mrs
borman's
mouth,
but
I
believe
the
appellant
also
is
projecting
rosier
picture
for
2020.
M
in
that,
when
you
look
at
our
projections
for
gross
projection
income
compared
to
the
appellants
we're
only
seventy
thousand
dollars
difference:
seven
zero,
seventy
thousand
dollars,
so
it
really
comes
down
to
the
applicability
of
the
retail
tenant.
As
you
can
see,
in
our
revision,
columns,
f1,
f2
and
f3,
our
rents
are
pulled
from
the
rent
rule,
that's
supplied
by
the
owner.
M
Our
retail
rates
are
supplied
again
by
the
owner,
so
this
this
isn't
conjecture
as
much
as
it
is
again
a
regurgitation
of
the
numbers
that
we
receive
from
the
owner
in
regards
to
what
retail
and
residential
rates
are
being
achieved
in
regards
to
the
committed
affordable.
Obviously,
again,
the
board
is
very
familiar
with
that.
There
are
stipulations
on
rent
restrictions.
M
I
believe
those
are
kept
in
check
in
regards
to
the
area
meeting
income.
That
component
did
receive
the
guiding
three
percent
vacancy
concession.
Sixty
nine
hundred
dollars
a
unit
operating
expense
was
testified
by
ms
borman.
We
have
no
way
of
knowing
exactly
what
kind
of
expenses
are
being
incurred
by
the
the
committed,
affordable
components.
M
Again,
in
regards
to
retail,
we
will
derive
that
directly
from
the
owner's
supplied
retail
rent
roll
in
regards
to
the
residential
scene
in
column.
F1.
We
got
that
directly
from
the
retail
excuse
me,
owner,
supplied
residential
rent
roll
you'll,
see.
That's
no
coincidence
that
projections
were
nearly
spot
on
in
regards
to
parking
revenue
and
other
revenue,
because
that's
essentially
pulled
directly
from
2019's
what
was
achieved
in
2019.
M
again,
as
testified
by
ms
borman.
This
property
is
doing
a
good
job
as
far
as
tightening
up
its
occupancy
18
vacant
in
2016,
now
down
below
just
shy
of
4.2
percent
in
2019
partner
revenue
is
up.
Effective
gross
is
up
three
years
in
a
row
in
regards
to
operating
expenses.
M
As
you
can
see,
it's
a
bit
volatile
2016
through
2019,
there
has
been
a
bit
of
a
change
from
a
low
of
approximately
1.6
up
to
about
2.3,
it's
quite
a
bit
of
a
jump,
but
again,
as
you
can
see,
that
the
county
was
very
proactive
in
trying
to
stay
in
the
midst
of
what's
going
on
with
the
property
in
regards
to
its
increases
on
the
operating
spin
side.
M
So
as
far
as,
if
we're
looking
at
projections,
we're
basically
on
par
with
what
they've
done
the
last
four
years
and
again
very
much
what
they've
achieved
the
last
two
years,
if
we're
looking
at
an
average,
that
being
said
again,
the
biggest
highlights
are
going
to
be.
The
difference
is
the
treatment
of
the
retail
components.
M
We
believe
that
the
retail
component
to
now
is
75
occupied
and,
given
that
they
signed
three
tenants
in
a
three
month
period,
we're
bullish
on
the
idea
of
them
being
able
to
sign
that
fourth
tenant
if
they
haven't
already.
Obviously
we'll
have
that
report
in
the
coming
years.
2021
excuse
me
2020,
I
e
that
will
be
reported
in
march.
M
Given
the
revisions
that
we
made
column,
f1,
column,
f2,
column
f3.
We
do
believe
that
our
value
of
one
hundred
eight
million
ninety
six
thousand
should
be
confirmed
as
fair
inequality.
Thank
you.
G
I
have
an
easy
one
for
the
department,
given
that
this
landlord
doesn't
apparently
know
what
the
affordable
apartments
are
generating
in
terms
of
income.
Where
did
you
get
your
and
and
as
testified
by
the
appellant?
Where
did
you
get
the
the
income,
as
reported
on
page
two
of
138
and
from
2019,
and
the
the
modest
increase
projected
for
2020.
M
M
Yeah
so
the
committed.
M
M
M
A
A
You
can
look
at
the
numbers
there.
I
don't
have
to
read
them
out
loud,
but
you
know
we've
got,
you
know
a
pretty
stable,
especially
when
you
start
looking
at
from
2017-18
and
then
19..
The
average
over
the
four
years
is
just
a
little
over
5
million.
Yet
the
noi
being
used
in
the
original
assessment
is
5.9
million
and
the
test
is
5.7
million.
It's
significantly
higher
than
what,
regardless
of
the
fact
that
the
appellant
hasn't
broke
out
those
three
components,
I'm
just
specifically
looking
at
that
number
alone,
it
just
seems
very
high.
A
M
Yeah,
absolutely
and
I'll
try
to
phrase
it
carefully,
because
I
don't
wanna
sound
by
all
means,
don't
sound
like
a
smart
ass,
but
it's
essentially
just
the
math.
That's
involved
with
it,
in
other
words,
we're
getting
the
income
directly
from
the
owner.
So
we
know
what
rents
are
in
place.
We
know
what
rents
are
in
place
on
the
retail
side.
We
know
what
rents
are
in
place
on
the
rental
side.
Excuse
me,
retail,
on
the
residential
side,
we're
using
guideline
vacancy
and
concessions.
M
So
once
those
numbers
are
set,
those
those
are
the
numbers
that
they
are
in
regards
to
the
operating
expenses.
We
told
you
how
we
derived
that
the
three-year
operating
expense
average
16
through
18
was
1.6
million.
So,
even
before
that
we
were
some
forty
thousand
dollars
ahead
of
that.
If
you
look
at
the
set
just
the
18
and
19
average,
your
2
million
74,
so
we're
a
hundred
and
forty
thousand
dollars
higher
than
that
average.
M
So,
while
we're
not
at
the
exact
dollar
amount
of
2019,
we're
well
above
a
tier
average
or
a
three
year,
average
or
any
other
average
other
than
the
one
years
set
so
again,
once
we
have
the
retail
the
revenue
side
set
we're
using
guidelines
that
come
up
with
the
effective
gross
and
then
we're
applying
the
operating
expense
that
we
project
we
get
this
net
operating
income.
So
we
can't
well.
I
understand
your
your
maybe
confusion
as
far
as
well.
How
can
we
project
that
high?
M
It's
all
logical
if
you
follow
that,
we're
using
established
rental
rates,
we're
using
guideline
vacancy
and
concession
and
then,
unless
you
believe
that
we
should
be
a
hundred
thousand
dollars
higher
on
operating
expenses.
That
would
still
have
our
noise.
Some
five
point:
six
million,
so
we'd
still
be
four
four
hundred
thousand
dollars.
A
A
F
Yeah
so
I'll
take
over
for
this
go
ahead.
Mister,
this
property
has
actually,
I
think
they
start
didn't
lease
up
until
actually
around,
like
2015
2016..
F
F
F
You
know
a
stabilized
income
for
this
property
based
off
of
again,
like
chris,
said
the
guideline
vacancy
rates
that
we
use,
but
this
property
I
mean
it
truly
was
one
property
that
had
some
vacancy
issues
in
the
beginning
of
lisa,
and
the
agent
has
contested
to
that
plenty
of
times
in
the
past,
and
the
difference
again
with
2019
is
once
the
apartment
vacancy
starts
to
stabilize
to
where
the
guidelines
are.
F
That's
where
you
also
see
that
huge
dip
in
the
retail
rents,
because,
as
that
apartment
vacancy
goes
down
from
18
to
5,
the
retail
income,
which
would
stabilize
well
over
500
000
for
the
first
two
years
began
to
drop
drastically
down
to
the
mark,
was
below
100
000..
So
again
I
mean
we're
just
trying
to
value
this
property
as
a
stabilized
property.
It
just
so
happens
that
once
the
apartment
rents
when
the
apartment
base
has
stabilized
the
retail
is
an
issue,
and
I'm.
M
F
Yeah
exactly
but
that's
about
I'm
just
comparing
like
the
original
assessment
to
the
2019
number,
because
we're
focused
on
the
noi
and
that's
what's
causing
the
ny
to
stay
low,
like
in
the
first
three
years
of
the
higher
vacancy
and
in
2019,
is
the
drop
in
the
retail
income,
which
is
keeping
that
noise
so
low.
Okay,.
A
M
Yes,
man
so
just
kind
of
following
along
with
what
miss
bailey
pointed
out.
You
know,
looking
at
the
property
again
vacancy
is
drop
over
50
percent
from
18
to
19..
M
Again,
although
our
projection
does
seem
high,
2019's
numbers
is
also
low
by
you
know
almost
430
000
of
retail
revenue,
so,
given
that
the
operating
expense
ticked
up
for
the
first
time
in
four
years
and
retail
revenue
dropped
from
the
first
time
in
four
years,
it's
going
to
paint
a
picture-
that's
not
quite
as
it
is
on
the
ground
and
again
point
out
that
the
appellant's
own
number
is
only
some
two
hundred
thousand
dollars
below
our
projection.
M
Given
the
rent
and
residential
retail
rent
rolls
we
receive
from
the
owner
are
included
in
columns,
f1,
f2
and
f3,
given
our
revision
and
projection
upward
for
operating
expenses.
In
line
with
what
was
achieved
in
2019,
we
do
believe
the
county
should
be
confirmed
at
108
million
96
000..
Thank
you.
A
I'm
sorry,
thank
you,
miss
borman.
If
you
would
take
a
minute
to
wrap
up,
please
can
you
turn
your
microphone.
N
I'm
there
yes,
okay
and
it's
one
of
my
girlfriends
who
just
is
who's
an
air
force
pilot
says
everybody
has
a
plan
until
the
bullets
start
whizzing
around,
and
in
this
case
the
bullets
have
whizzed.
We
have
a
history.
Mr
chicas
has
been
very,
has
pointed
out,
averages
that
but
ignored
the
sum
total
of
the
averages
and
ignored
the
fact
that
the
noi
has
fallen
over
the
last
three
years
and
the
average
of
the
over
the
last
four
years
that's
been
completely
ignored.
N
I've
explained
why
operating
expenses
have
gone
up
the
addition
of
a
contract
concierge
service
that
allows
the
management
now
to
not
sit
at
the
concierge
desk
and
the
fact
that
repairs
and
maintenance
are
increasing.
I
and
further
to
stated
that
the
owner
expects
those
expenses
to
continue
to
go
up
turnover
expenses
should
increase.
N
I
think
that
we
have
a
good
history
here,
that
to
break
it
out
the
way
that
it's
that
the
end
result
is
noi
used
to
derive
the
assessment
that
is
almost
more
than
600
000
greater
than
the
actual
in
2019,
and
represents
a
substantial
increase
in
over
the
value
of
99
427
000,
set
by
the
board
in
2019
in
a
year
when
the
actual
income
has
declined.
Thank
you.
I
I
I
Where
you
have
you
know,
what
is
it
nine
units
spread
out
in
a
high
rise
with
you
know:
100
market
units,
you
just
can't
you
just
can't
do
it
the
way
the
code
anticipates,
and
I
think
the
county
has
given
it
a
a
different
cap
rate
which
is
meant
to
address
that
issue.
Given
that
you,
you
can't
figure
out
what
the
actual
figures
are
having
to
analyze
this
and
listen
to
the
testimony
on
this
one,
I'm
okay
with
the
county.
A
Yeah,
I
would
I'm
just
gonna
jump
in
here.
First,
mr
mask,
and
I
again
I
I
have
a
problem
with
the
noi
and
I
don't
think
it
truly
represents
where
the
property
is,
and
I
I
would
disagree
that
we
can't
apply.
A
You
know
looking
at
those
the
affordable
units
differently.
I
think
that
we
can.
We
might
have
to
kind
of
extrapolate
in
some
numbers
for
expenses,
because
it's
not
reported
that
way,
but
I
think
that
from
that
standpoint,
I'm
fine
with
what
the
county
did
on
both
the
retail
and
the
affordables.
You
know
my
concern
is
just
projecting
seven
to
nine
hundred
thousand
dollars
higher
than
what
the
property
has
achieved.
A
G
It's
quite
all
right.
I
got
plenty
of
time.
Thank
you.
I
I
took
seriously
the
the
difference
historically
versus
currently
on
the
vacancy
rate,
and
maybe
that
has
to
do
with
balls
to
quarter
opening
and
it's
just
a
more
desirable
sub-market.
G
So
so
I
cap
the
difference
between
the
current
versus
the
historical
vacancy
rate
and
said,
okay,
what
if
it
continued
to
suffer
and
about
vaguely
350
000
well,
that
caps
out
at
6.8
million
dollars,
so
all
of
a
sudden
taking
the
original
assessment
of
was
it
112
million?
Also
it
gets
it
down
to
the
you
know
the
104
range
or
so,
which
is
what
the
appellant
is
looking
for.
G
I'm
not
going
to
make
definitive
I'm
just
making
observations
a
definitive
conclusion
like
like
mary
dooley
did,
but
you
know
that's
a
big
difference:
6.8
million
difference,
because
now
they've
gotten
well
vacancy-wise.
Second,
I
don't
see
in
a
high-rise
any
difference
between
the
operating
expenses
for
affordable
versus
market
rate.
I
do
see
it
in
a
campus
garden
setting,
but
here
maybe
there's
a
little
more
wear
and
tear
on
units
that
turn
over,
but
there
always
is
and
you've
got
to
paint
them
and
you
got
to
do
carb.
I
don't
see
any
difference.
G
I'm
sympathetic
that
the
appellant
can't
accommodate
for
those
15
units
versus
the
rest
of
the
market,
but
I
don't
think
they
have
to.
I
think
it's
just
fine
the
way
they've
done
it
continue
to
do
it
and,
at
the
same
token,
the
department
has
given
a
little
bit
of
a
credit
for
higher
operating
expenses
for
committed
affordable.
So
I
find
that
unnecessary
but
generous
bless
their
hearts.
So
I
I
I
I
and
I
struggle
with
an
increased
noi,
but
at
least
half
of
it
a
relatively
big
increase.
I
Isn't
this
the
building
that
had
like
three
construction
projects
surrounding
it?
You
had
boston,
redid,
the
shopping
center.
You
had
the
high
rise
in
boston
and
then
directly
across
quincy.
You
had
construction
and
I
thought
the
in
fact
I
kind
of
remember
and
maybe
I'm
wrong,
but
I
thought
I
remember
from
last
year.
The
argument
was
that
all
this
construction
had
driven
down
the
vacancy.
A
Okay,
mr
panorando,
did
you
have
something.
J
Yeah,
I
did
what
I
looked
when
I
looked
at
this
case.
You
know
it's
like
with,
like
you
mentioned
mary,
so
many
times
since
throughout
the
year
and
throughout
the
years.
Actually
we
looked
at
everything,
income,
expenses
vacancy
and
the
noi
was
whether
it
makes
sense
or
not-
and
I
looked
at
the
original
assessment
to
to
begin
with-
and
I
thought
it
was
okay,
except
with
the
expenses
on
the
market.
J
Apartments,
I
you
know,
I
normally
look
at
rental
rates
and
all
the
things
that
are
composed
in
the
total
value
and
what
I
did
is
I
increased
the
expenses
on
that
portion
on
the
original
assessment
to
28,
and
I
thought
that
would
bring
the
value
more
in
line
with
you
know
all
the
numbers
from
the
previous
years
in
the
current
year
that
gave
me
and
let
me
see
an
end-
an
expense
amount
of
1
million
953
381
using
the
same
cap
rate.
J
J
That
would
bring
the
total
value
for
the
whole
property
at
a
little
bit
more
than
what
the
appellant
is
requesting,
but
I
thought
it
was
more
in
line.
He
brings
it
to
104
million
879
800.
J
I
know
that
you
know
we
normally
look
at
okay.
Well,
we
have
new
numbers
and
I
think
that's
going
to
be
considered
for
the
next
year
and
I
think
that's
one
of
these
cases
to
be.
To
be
honest,
I
know
the
retail
is
increasing
and
but
I
think
to
bring
more
in
line
and
more
equalized
with
what
we've
seen
this
year.
I
think
it's
appropriate
to
make
that
change.
A
Well,
I
certainly
agree
with
the
the
downward
movement
that
you're
going
there.
My
only
concern
again
is
the
point
that
I
made
original.
Your
noi
is
5.5
million,
which,
for
your
average,
is
just
under
5.1
million,
so
I
still
think
that's
a
little
bit
high.
I
mean
in
lieu
of
keeping
the
original
assessment.
I
would
go
with
that.
If
that's
where
the
group
was,
but
I
think
that's
still
a
little
high
myself.
K
When
I
was
looking
at
it,
it's
the
vacancy,
that's
it
was
one
of
the
two
big
kickers
as
we've
discussed,
but
2016,
I'm
basically
discounting
out
it
it's
it's
early
and
it's
le
it's
still
in
its
lease
up.
I
tried
to-
and
I
did
come
up
with
a
number
close
to
where
jose
was,
and
I
went
to
it,
28
vacancy
on
that
it
yeah
in
the
operating
expenses
they're,
not
28
vacancy
28
operating
expenses.
K
H
Yeah
I'd
go
with
jose
I've
been
in
this
building.
I
toured
it
a
while
back
and
there's
it's
getting
a
little
bit
up
there
in
age
as
far
as
the
competitive
set
that
it's
got
to
work
within
there's
a
lot
of
units
that
have
come
online
in
the
last
two
years
that
are
very
modern
in
that
neighborhood,
and
so
I
I
think
it
just
makes
sense.
H
What
they're
doing
is
you
know
kick
up
the
concierge
service
kick
up
the
operating
expenses
in
order
to
kind
of
bend
their
way
into
a
95
occupancy
level,
and
they
have
to
do
that
because
the
other
buildings
that
are
coming
online
are
brand
new
and
they
have.
You
know
nicer,
pool
nicer
amenities,
all
those
things,
so
I'm
with
jose.
I
Yes,
ma'am.
Thank
you.
You
know
greg
it's
interesting.
We
just
went
to
contract
with
our
front
desk
and
mary,
I
think
it
may
have
been.
Your
boss
was
instrumental
in
passing
a
living
wage
law,
and
so
the
wages
are
going
to
go
up
significantly
for
all
the
labor,
that's
being
provided
to
projects
like
this.
I
You
know
my
my
analysis
of
this
was
that
the
reason
it
was
struggling
a
little
bit
was
all
the
construction
activity,
and
you
know
it
was
driving
me
crazy,
as
well,
just
being
a
resident,
a
block
or
two
away.
It
sounds
like
there's
a
majority.
That's
wanting
to
reduce
it
to
approximately
around
104
figure,
so
I'll
I'll
go
ahead
and
go
with
the
consensus.
A
I
A
Opposed
okay,
it's
unanimous:
it's
reduced
to
104,
879,
800
and
jose
you
can
and.
J
A
A
That
concludes
the
agenda.
Does
anybody
have
any
board
member
any
other
business?
Does
the
county
have
any
other
business?
A
Okay,
we
will
not
be
meeting
next
tuesday,
so
we
will
adjourn
here
today
at
10,
42
and
re-adjourn
next
wednesday,
the
21st
at
9
00
a.m.
All
right
thanks!
Everybody.
Thank
you.