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From YouTube: Board of Equalization Hearing - July 29, 2020
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A
A
B
Good
morning,
I
hope
everyone's
doing
well.
Thank
you
very
much.
So
this
is
the
ninth
road
residences
located
at
3119.
Ninth
road
north.
B
It
was
built
in
2014
and
this
is
somewhat
unique
property
for
the
sub-market.
It
only
has
18.
C
B
Total
so
that
that
presents
some
interesting
challenges
for
the
ownership
here
and
in
particular,
as
it
deals
with
vacancy
collection
losses
and
expenses.
So
I'm
going
to
get
into
that
in
just
a
moment.
But
what
we've
done
here?
We
looked
at
several
years
of
income
and
we
came
to
a
stabilized
value.
Now.
B
One
thing
that
I'll
just
enlighten
everyone
here
about
some
recent
developments.
We've
had
some
discussions
with
the
assessor
and
we
were
speaking
about
the
valuation
of
the
property
and
and
the
most
recent
income,
and
we
both
noticed
that
the
actual
noi
for
year
end
19
was
below
what
was
used
by
the
assessor's
office
to
you
know
to
capitalize
and
come
up
with
a
value,
and
so
we
were
speaking
about
possibly
using
year
end
19
noi
as
a
kind
of
a
an
agreement
or
settlement
value.
B
Here
now
we
weren't
able
to
finalize
it,
and
just
because
of
some
of
the
covet
situations,
schedules,
timing,
things
of
that
nature,
but
what
I'd
like
to
do
is
is
actually
revise
our
requested
value
here.
So
we
were
originally
requesting
11
for
22,
and
what
we'd
like
to
do
is
revise
this
number
to
13
146
620,
and
this
is
reflected
by
capitalizing,
the
actual
year-end
19
noi
at
the
assessor's
cap
rate.
Okay.
B
So
after
just
putting
that
out
there,
let
me
go
through
some
information
about
the
property
and
again,
as
I
mentioned
before,
the
the
size
of
this
property
presents
an
interesting
challenge
and,
let's
just
say
for
instance,
as
it
as
it
turned
out
to
be
this
year.
B
This
property
has
18
units,
but
two
tenants
gave
notice
that
they
were
leaving
so
that
immediately
made
the
property
as
of
january
88
occupied
and
so
the
the
parameters
of
the
current
vacancy
in
the
sub
market,
you
know,
provides
a
three
percent
vacancy
and
that's
what
the
county
is
using
here.
Three
percent
vacancy,
but
those
kind
of
parameters
really
don't
work
for
this
type
of
property,
with
only
18
units
they're
right
now
at
88
percent
occupied
and
then
actually,
several
months
later,
they
had
another
tenant
lead.
B
So
you
can
see
how
that
percentage.
Really,
the
three
percent
number
really
doesn't
work
well
for
this
property,
and
so,
as
these
tenants
leave
the
vacant
that
the
vacancy
increases,
the
expenses
are
going
to
stay
the
same
so
you're
going
to
have
a
higher
percent
of
expenses.
B
With
this
you
know
this
high
vacancy
rate,
and
so
that's
what
creates
an
interesting
situation
for
this
property.
So
on
our
valuation
model.
On
page
four
of
my
paperwork,
we
originally
had
had
looked
at
adding
some
additional
percentage
points
for
covet
19..
Now
I
understand
that
that's
not
something
you're.
Considering
now
this
property
actually
has
some
demonstrated
issues.
They
have
a
budget
here,
a
revised
budget,
and
you
know
they
were
expecting.
B
You
know
about
two
hundred
thousand
dollars
losses
due
to
covert
19.,
but
regardless
again,
as
I
mentioned
before,
we've
laid
out
the
income
for
the
last
three
years
here
on
this
property,
and
you
know
it's,
it
can
be.
We
tried
to
put
together
a
stabilized
occupancy,
not
necessarily
going
with
the
worst
year
the
best
year
or
the
one
in
between.
B
We
try
to
you,
know,
stabilize
this
and
that's
how
we
came
up
with
our
original
value
and
then
we
added
50
basis
points
to
the
cap
rate
and
that
came
out
with
a
12
actually
came
out,
11
4,
but
if
we
use
the
original
cap
rate
and
not
account
for
covid,
the
valuation
came
out
to
be
12.4.
B
I've
included
for
you,
the
budget,
the
reforecasted
budget.
Here
on
page
five
from
this
property,
where
they're
you
know
expecting
some
losses
for
for
covet.
Additionally,
some
information
here
regarding
you
know
most
of
this
is
related
to
covet
and
situations
that
the
multi-family
is
having
and
we've
included
the
financials
as
well.
B
So
essentially
what
we
have
here,
I
think
it
can
be
seen
that
you
know
we
we've
got
there's
the
assessment.
We've
got
a
value.
B
There's
looking
at
the
actual
2019
noi,
but
it's
everywhere
that
we
go,
it
points
to
a
slightly
lower
value,
and
so
I
think
that
when,
when
we
look
at
you
know
the
information
that
mr
chicas
presents
as
well,
it
can
be
noted
on
his
packet
that
you
know
he
didn't
know
that
the
that
they
had
over
projected
the
noi,
and
so,
if
we're
using
actual
2019
year
end
noi
again,
our
indicated
value
is
13
million
146
620,
and
that
is
our
requested
value
for
for
the
2020
text.
So
thank
you.
D
So,
yes,
we
are
in
agreement.
This
is,
I
don't
know,
that'll
use
the
word
unique
building,
but
it
is
an
example
here
of
what
we're
looking
at
when
we
talk
about
essentially
new
gardens,
not
many
of
them
are
made.
This
one
in
particular,
is
fairly
new
to
the
county
nets.
I
believe
been
online
about
five
years
and
what
we
are
seeing
are
things
that
we
tend
to
see
with
buildings
that
lease
up,
in
other
words,
when
you're
looking
and
primarily
we'll
be
talking
about
the
summary
sheet.
D
D
Everything
essentially
was
up
metric
wise
as
far
as
2019's
performance
parking,
other
income
utility
reimbursement,
all
up
gross
potential
incomes
up
two
years
in
a
row
with
the
2019's
increase
at
7.4
percent,
and
again
this
tends
to
follow
the
idea
of
the
the
building
being
stabilized
down
from
16
and
true
vacancy
in
2016
down
to
2.5
2.2
in
2019.
D
D
One
of
the
things
that
we
noted
too
was
when
you
look
at
the
operating
expenses,
they've
been
basically
up
down
up
down
up
about.
19.5
percent
of
effective
gross
in
2016
rose
to
26
in
2017
dropped
back
down
to
17
and
18.,
and
again
it's
back
up
to
23
in
2019.
D
D
We
under
projected
operating
expenses
by
about
57
000,
and
we
over
projected
net
operating
income
by
17
000,
so
we're
within
2.3
percent
of
what
was
achieved
in
that
year.
We
did
run
a
test
column
just
to
see
what
would
happen
with
this
new
information,
especially
regards
to
the
difference
in
operating
expense.
As
you
can
see
in
column
f,
we
made
a
fairly
modest
projection
of
growth
and
gross
potential
income
of
two
percent.
D
That
would
follow
again
less
than
five
percent
of
the
growth
that
happened
in
2019.
D
We
projected
a
growth
of
approximately
3.5
percent
of
effective
gross
again
keying
in
on
the
stabilized
property,
at
2.7,
18
and
again,
2.2
and
19.,
and
again
that's
less
than
half
of
the
growth
effective
growth
that
was
seeing
effective
growth
that
was
seen
in
2019.
D
We
also
then
projected
upwards
to
reflect
that
three-year
operating
expense,
average
of
23,
which
was
an
increase
of
approximately
2.8
percent,
and
it
should
be
noted,
too,
that
was
essentially
having
a
per
unit
operating
expense
of
12,
000,
780,
and
so
so
well
above
the
guidelines
as
put
out
by
the
the
county,
and
we
saw
that
it
actually
called
for
an
increase
over
the
january
1st
real
property
assessment
by
the
county.
D
A
Okay,
thank
you.
Questions
from
board
members.
A
F
Oh,
maybe
I
was
too
quiet
a
question
for
the
appellant
these
two
tenants:
when
did
they
leave
what
month
or.
F
B
Thank
you.
Sorry.
It
was
in
january
of
2020,
but
it
was.
I
can't
say
that
it
was
january
1,
2020
or
mid-january.
F
Okay,
thank
you
for
the
department.
You
had
started
off
mr
chicas
with
yeah.
This
is
an
unusual
property,
a
vacancy
here.
There
percentage-wise
really
matters,
but
what's
but
apparently
I
just
want
you
to
confirm
or
deny
this
apparently
there's
no
exception
for
such
a
small
place
and
such
a
small
apartment
building
with
so
relatively
few
apartments
such
that
you
wouldn't
just
apply
the
standard
garden
vacancy
rate
to
it.
D
Yeah
that
that
is
correct
and
just
to
be
clear,
mr
mitch,
can
really
what
I
was
referring
to.
Is
it's
fairly
unusual
to
have
a
luxurious
garden,
new
gardens
that
are
built
in
the
county?
Not
many
operators
are
building
these.
Usually
they
go
from
mid-rise
or
high-rise,
but
the
reflection
of
vacancy
was
more
mr
aidan's
point
his
opening
remarks.
But
yes
to
answer
your
question,
we
don't
have
a
separate
sub
subcategory
for
smaller
gardens.
F
G
G
For
the
county
and
then
another
one
for
the
applicant
for
the
county,
the
percentage
of
three
bedroom
units
is
really
high
and
very
few
rental
projects
are
being
built
with
very
many
three
bedrooms
here.
It's
33,
6
out
of
18
are
three
bedrooms.
Does
that
impact
your
analysis
of
value
at
all?
G
B
Well,
I
would
say
that
these
are
common
amenities
that
are
becoming
more
popular
and
for
this
unique
building
to
ensure
that
the
tenants
are
in
fact
happy
and
continuing
to
stay,
which
is
essential
for
this
property.
They've
added.
You
know
these
amenities
to
to
make
folks
happy
but
you're,
seeing
more
and
more
of
these
types
of
things,
concierge
type
services
and
things
in
the
sub
market
and
for
some
of
the
newer
products.
B
It's
just
something
that
they
need
to
become
to
keep
residents
where
they
are,
but
I
wouldn't
necessarily
say
because
these
could
be
cut
at
any
time
based
on
budgets
and
things
of
that
nature
or
the
use
of
them.
So
I
wouldn't
necessarily
say
that
it
increases
the
value,
but
what
it
does
do
is
keep
folks
happy
and
keep
them
keep
them.
You
know
as
tenants
and
which
is
vital
here
for
the
product.
G
B
Well
it
it
can
be,
I'm
not
quite
sure
if
it
saves
from
you
know
the
the
the
team
that
works
there
as
far
as
their
as
far
as
their
their
time,
and
maybe
it
takes
less
folks
to
to
run
this
type
of
system
and
that's
helpful.
And
but
you
know
what
we're
use
a
lot
utilizing
here
is
the
the
actual
revenue
and
you
know
the
actual
income
and
expenses.
If
they
have
saved
some
expenses.
D
Yes,
ma'am
so
essentially
just
again
looking
at
the
performance
of
the
property
and
not
including
the
information
that
has
occurred
in
the
2020
year.
The
way
we
knew
it
was
that
it
was
leasing
up
vacancy
dropping
four
years
in
a
row
resulting
in
income
increasing
three
years
in
a
row
two
years
ago.
Rather,
we
do
believe
if
we
look
at
a
stabilized
operating
expense
as
a
percentage
of
effective
gross
as
we
performed
in
the
test,
it
actually
would
call
for
a
higher
value.
D
B
Thank
you.
Yes,
so
again,
you
know
we
we're
trying
to
come
up
with
a
valuation
of
fair
market
value
here,
looking
at
the
most
recent
actual
income
and
expense,
you
know
a
test
is
one
thing:
a
percentage
is
one
thing,
but
you
know
the
the
buyer,
the
the
person
determining
the
fair
market
value
they're
going
to
look
at
actual
performance.
B
You
know,
I
think
that
the
year
end
19
is
most
accurate
as
far
as
that
goes
looking
at
the
actual
performance
of
the
property
using
the
financials,
as
stated
before,
the
the
county
has
overstated
the
noi
and
their
in
their
model,
and
you
know
we'd
ask
that
you
know
you
use
the
actual
income
and
expense
when,
when
you
do
that
with
not
adding
anything
extra
for
covid-
and
you
know
considering
the
unique
aspect
of
the
building
they're
talking
about
percentages
of
vacancy.
B
Well,
it's
over
70
vacant
right
now
and
it's
gotten
way
worse
for
this
year,
and
I
know
we're
going
to
talk
about
that
probably
next
year,
but
performance
hasn't,
you
know
necessarily
ramped
up
at
as
well
as
they
had
discussed
and
again
using
the
actual
income
with
the
assessor
cap
rate
of
5.65.
B
The
indicated
value
is
13
million
146
620..
Thank
you.
G
Here's
kind
of
what
I
think
you
know
it's
a
small:
it's
a
small
project
has
18
units,
and
last
year
two
tenants
vacated
this
year.
There
may
be
no
tenants,
vacate
or
two
years
from
now,
no
tenants,
you
know
it
kind
of
seems
to
me
like,
like
maybe
the
three
percent
ought
to
be
six
percent
or
a
smaller
project
such
as
this.
You
know,
I
think
a
very
modest
reduction
could
be
in
the
cards,
but
not
down
to
the
original
amount.
H
Yeah
I
mean
tacking
on
to
that.
I
would
not
want
this
property
to
be
jumping
around
from
year
to
year,
just
because
one
tenant
moves
out
or
one
tenant
moves
in
which
it
would
do
if
we
just
looked
at
each
year's
income
and
expense
in
a
vacuum.
But
if
you
just
take
kind
of
what
the
appellant
has
proposed
of
the
2019,
that's
still
a
seven
and
a
half
percent
increase
over
last
year
and
it
kind
of
smooths
out
the
value
you've
got.
H
You
know,
kind
of
smooth
general
upward
trend
from
18,
19
and
20..
So
I
mean
I
would
out
I'm
kind
of
with
the
appellant
on
using
the
13
million
146
number
based
on
the
2019
performance.
I
thought
10,
I
mean
we
saw
this
case
last
year.
We
supported
the
the
county's
assessment
and
that,
but
I
think
I
don't
know
that
really.
These
units
have
gained
10
percent
value
in
one
year,
so
I'd
support
a
minor
reduction.
F
F
So
I
looked
hard
at
column
d
and
said:
well,
I'm
not
so
sure,
based
on
the
performance
of
the
four
years
2016
to
19
that
that
percentage,
18
is
really
correct
and
I
bumped
it
up
closer
to
the
average
of
those
four
years
and
made
it
20
and
did
everything
else,
the
same
on
column,
d
and
capped
it
out
at
the
the
appropriate
cap
rate
and
came
out
oddly
enough
with
just
a
little
bit
a
very
little
bit
lesser
amount,
namely
three
million
one
one,
nine
seven
hundred,
but
but
instead
of
just
saying
well,
2019
is
20
20
and
they're.
F
I
I
think
the
points
that
barnes
made
as
far
as
the
amenities
you
know
makes
this
project
a
little
bit
more
special.
You
know
mr
raiden
says
that
you
know
those
things
can
go
anytime
according
to
budget,
but
if
they
do,
I'm
sure
tenants
would
go
also
because
they
would
have
you
look
for
other
options.
I
That's
what
brings
the
tenants
and
I
think
that's
what
keeps
him.
I
think
this
property
has
been
on
the
you
know
going
up
and
up
every
year.
So
I
think
the
value
also
should
justify
that
yeah,
I'm
okay,
with
the
value
the
way
it
is
with
the
current
assessment,
there's
a
really
very
minor
difference
between
what
the
felon
is
requesting
and
what
the
county
has.
So,
I'm,
okay
with
it.
K
Well,
I
do
see
something
or
the
expenses
slightly.
I
do
understand
and
I
have
apartment
buildings,
small
ones.
You
do
get
impacted
dramatically
when
you
have
rollover
and
the
three
percent
doesn't
quite
work,
although
that
does
come
out
to
a
happy
unit
a
month
empty
across
the
board.
It
which
is
not.
K
K
H
I
think
ken's
rationale
was
good.
I
think
that
was
a
good
approach,
rather
than
just
taking
the
appellant's
argument
at
face
value.
F
I
move
that
we
reduce.
Excuse
me
the
assessed
value
to
13
119
800
as
a
result
of
increasing
the
operating
expenses
estimated
operating
expenses
from
18
to
20
percent
of
gross
projected.
K
C
A
B
B
B
Timing,
coveted
remote
access
vacation
times
things
of
this
nature,
but
again
it
was
discussed
that
the
actual
the
actual
income
here
utilized
by
the
county
was
over
projected
in
their
models
by
114
246
and
when
you,
when
you
use
the
county
cap
rate,
the
actual
cap
rate
that
they're
using
here
that
that
came
out
to
be
a
value
of
2
million
214
214.70.
B
B
Again,
that's
74
405
130,
and
it
comes
by
using
the
actual,
the
actual
19
income,
a
difference
of
about
a
hundred
and
fourteen
thousand
two
forty
six.
That's
that
was
over
projected
by
the
county,
and
so
let
me
talk
a
little
bit
more
about
this
property
here.
B
You
know
again,
it
was
in
the
it
was
recently
constructed
and
one
of
the
things
that
we
wanted
to
discuss
as
well-
and
this
is
not
the
basis
of
our
assessment
for
our
analysis,
but
it
is
considered
to
be
an
element
for
consideration
in
assessing
the
fair
market
value
and
I
and
it's
the
cost
and
this
building
was
recently
constructed.
So
we
do
have
that
information
available.
B
The
the
you
know,
the
construction
costs
here
and
in
the
land
value
indicate
that
about
53
million
122
000
was
required
to
build
this
property,
and
so,
when
you
look
at
that,
the
cost
to
acquire
the
land
and
build
this
building,
you
would
think
just
rationally.
Why
would
someone
pay
a
fair
market
value
of
the
current
assessment
of
76
million
when
they
could
build
this
building
for
53
or
you
know
in
the
low
50s,
acquire
the
land
and
build
a
similar
property?
B
And
so
I'm
not
saying
that
the
basis
of
assessment
and
any
means
should
be
the
cost.
But
I
think
that
it
is
an
element
and
the
virginia
courts
have
held
that.
You
know
the
replacement
costs.
Minus
depreciation
is
something
that
can
be
considered
as
an
element
for
consideration
of
the
fair
market
value.
So
I
put
that
out
there
just
so
that
it
can
be
known
that
this
building,
you
know,
was
constructed
for
easily
20
million
dollars
below
the
current
assessment.
B
B
B
You
know,
you
know
it's,
it's
it's
just
becoming
getting
its
footing
here
in
the
market,
but
we're
using
you
know
using
some
of
the
actual
income.
B
Here
we
built
built
a
stabilized
model
and
and
tried
to
mimic
many
of
the
the
county's
areas
here,
keeping
the
vacancy
at
five
percent
keeping
the
expenses
the
same
percentage
and
also
the
capitalization
rate
now
mind
you,
we
did
add
for
covet
19,
we
put
in
a
50
basis,
point
increase
and-
and
I
know,
there's
been
discussions
and
you
know
we
can
just.
We
can
just
eliminate
that
from
your
consideration,
but
we
had
thought
at
the
time
that
it
may
be
something
that
you
would
consider
this
year.
B
We
included
some
concrete
information
that
we've
obtained
regarding
the
budget
for
this
property
and
they
are
looking
at
potentially
about
a
million
dollars
of
lost
revenue
in
2020
due
to
tenants
moving
out
not
paying
and
things
of
this
nature,
but
you
know
to
be
considered
next
year.
I
cannot
understand
the
board's
decision.
There.
We've
also
included
some
emails,
which
we've
blocked
out
personal
information
of
folks
that
were
having
trouble
paying,
rent
and
folks
that
wish
to
no
longer
make
rental
payments
and
things
of
this
nature.
B
B
The
financials
here
provided
and
we're
looking
at
again
making
an
adjustment
here
based
on
the
over
projected
noi
in
the
county
model
of
a
hundred
and
fourteen
thousand,
and
when
you
make
that
change
at
the
county
cap
rate,
the
indicated
value
is
74,
405,
130,
and
so
that
is
our
requested
value
for
2020
and
that's
a
change
of
2
million
to
14
00
70..
D
D
D
So
really,
we
are
looking
at
projections
based
off
of
what
was
reported
in
18
and
19.,
but
we
do
see
is
that
they've
performed
well
in
the
fact
that
the
gross
potential
is
up
almost
7
percent
at
6.7
percent
and
that's
primarily
due
to
the
true
vacancy
dropping
nine
percent
year
over
year
in
2019
and
total
vacancy
and
concessions
dropping
also,
approximately
nine
percent
in
2019,
and
that's
essentially
reflective
in
the
metrics
of
revenue
received
retails
up
366
percent
parking's
up
14
other
incomes
up
over
100
pass-throughs
are
up
over
100
and
utility
reimbursements.
D
D
D
We
did
want
to
test
that
information,
as
you
can
see
in
columns,
f1,
f2
and
f3
again,
reflecting
the
market
committed,
affordable
and
retail
components,
primarily
the
idea
of
that
we
underprojected
gross
potential
in
our
original
assessment,
so
doing
an
extremely
modest
0.23
percent
increase
of
gross
potential
did
lead
to
a
increase
in
effective
gross.
But
again
we
also
projected
higher
on
total
operating
expenses,
even
though
we
were
actually
almost
60
000
overprojected.
C
D
D
So
we
do
not
call
for
an
increase
over
the
january
first
assessment,
but
do
feel
that,
based
on
our
metrics
under
projecting
gross
potential
and
over
projecting
on
effective
gross
and
operating
expenses
that
are
over
projection
of
net
operating
income,
again
fairly
modest
at
2.9
percent,
but
again
based
on
the
increases
across
the
board
at
the
property
in
2019.
D
D
G
Thank
you,
madam
chairman,
for
the
applicant
page
46,
your
page
2
of
30.
cost
approach
to
value.
Where
are
your
soft
costs.
B
So
the
soft
costs
we
don't
actually
have
an
accounting
for
per
se,
but
you
know
most
folks
take
a
10,
15
percent
increase.
So
that
would
still
put
us
you
know
into
the
low
in
about
well
50,
mid,
50s
or
so
well
below
obviously
well
below
the
current
assessment.
But
you
know
still
a
20
million
dollar
likely
20
million
or
so.
B
Well,
you
could
add
a
10
for
that
and
you
could
add
another
10
percent
you'd
still
be
at
you'd,
still
be
at
only
60
million
give
or
take
all.
G
Right,
I
got
a
one
more
question
for
you:
would
you
personally
guarantee
to
a
bank
a
loan
of
48
million
293
or
a
10
turn
on
your
investment.
H
H
For
the
appellant,
we've
got
the
2019
income
statements
and
then
the
county's
reconstruction
were.
You:
was
this
building
stabilized
through
all
of
2019.
B
Well,
it's
hard
to
say
if
it's
stabilized
per
se,
I
mean
you
know,
the
occupancy
has
been
up
and
down
during
the
year,
but
I
mean
for
the
most
part,
the
building
has
been
leased
up
and
it's
operating.
But
you
know
when
we're
talking
about
the
projection
of
this
building.
B
It's
actually
gone
quite
a
bit
down
with
you
know
the
current
situation
in
the
market
right
now,
so
you
know
they're
projecting
you
know,
like
I
said
about
a
million
dollars
difference
at
this
point,
but
you
know
I
would
say
the
2019
income
is
is
pretty
reflective
of
the
actual
performance.
H
D
Yes,
we
do,
you
know
typical
again,
if
you
note
the
mid-rise
vacancy
for
the
sub-market,
for
the
market
rather
is
five
percent,
so
the
fact
that
they
dropped
over
nine
percent
and
just
that
one
year's
operating
history
is
a
fairly
strong
indication
of
what
we
believe
was
to
come.
You
know
it's
not
only
the
the
aspect
of
having
the
amenities
on
site,
but
again
it's
also
one
of
these
properties.
That's
approximately
three
tenths
of
a
mile
from
the
metro.
D
F
A
question
for
the
department,
in
the
comments
section
on
below
the
ine
summary
says
that
you
didn't
get
ines
from
the
applicant
in
2018
and
19,
but
you
show
their
results
for
between
the
19..
Did
you
get
that
after
the
fact.
D
No
sir,
it's
as
you
can
see
at
the
top
of
the
columns
underneath.
D
Year,
18
and
19:
it's
the
per
income
statements,
that's
provided
by
the
ownership.
So
it's
not
to
be
cute
about
it's
just
a
statement
of
fact
that
the
we
didn't
receive
county
issued
incoming
expense
questionnaires.
We
use
their
income
statement.
F
D
Mr
baskin,
generally,
we
will
in
the
mixed
use
component
that
makes
up
the
entirety
because
they
have
a
different
vacation
concessions
and,
more
specifically,
they'll,
have
different
cap
rates
that
apply
to
those
individual
components.
F
No,
that's
exactly
why
I'm
asking
the
question,
but
they
didn't
seem
to
give
you
the
those
divisions
among
uses.
They
don't
display
them,
but
they
didn't
give
us
a
year,
okay
and
which
I
guess
is
reflective
back
to
the
beginning
that
they
didn't
use
the
county
forums.
They
just
used
their
own
internal
lump
sum
form
all
right.
That
makes
sense.
Thank
you.
D
Absolutely
again
using
true
projection
based
on
the
property
heavily
stabilizing
in
just
one
operating
year.
We
do
believe
that
the
under
projections
and
the
overprojections
made
by
the
county
are
within
reason,
especially
again
we're
within
three
percent
of
the
net
operating
income
that
was
achieved
and
that's
after
a
growth
of
25
and
one
calendar
year.
D
B
Great,
thank
you.
Yes,
the
property
did
stabilize
to
some
extent,
and
you
know
things
were
trending
up,
but
guess
what
it's
going
down
now?
It's
not
a
rosy
future
for
2020..
I've
included
some
documentation
from
the
ownership
regarding
the
2020.
B
So
to
you
know
to
to
have
that
part
of
this
increase
here
just
doesn't
seem
quite
right
when
you
know
we're
expecting
some
some
difficult
situations
ahead
here
for
this
property
and
so
again
that
forecasted
budget
of
a
million
dollars
lost
revenue
for
for
2020
the
tenants
not
paying
things
of
this
nature,
and
so
that's
why
we've
requested
that
the
the
the
the
new
value
actually
be
the
the
new
value
of
74
million
405
130,
which
takes
into
consideration
the
actual
performance
and
the
fact
that
the
noi
was
overstated
by
the
county.
B
And
so,
if
you
look
at
that
actual
noi,
that
would
become
the
new
value
and
we
feel
that
that's
more
reflective
of
the
fair
market
value
of
this
property,
considering
the
difficult
situation
ahead
for
this
property,
it's
not
in
part
straight,
but
it's
not
a
straight
arrow
up.
It's
it's
going
to
be
going
down
on
the
downside.
B
So
to
use
this
income,
which
is
the
best
it's
going
to
see
for
a
while,
seems
to
be
fair
and
reasonable
here
and
that's
why
we
recommend
adjusting
the
noi
by
the
stated
amount
that
it
was
that
was
overstated
by
the
county
and
that
amount
of
a
hundred
and
fourteen
thousand
two
forty
six
we're
requesting
that
be
the
actual
value
for
this
year.
B
74
405
130,
when
you
capitalize
that
difference
at
the
assessor
capri.
Thank
you.
E
I
mean
just
to
start
the
conversation.
I
think
that
this
is
a
stabilized
property.
I
think
it's
there's
there's
enough
data
there
that
the
county
could
pull
together
a
pretty
accurate
appraisal.
H
Swayed
by
the
construction
cost
method,
a
little
appraisal
here
and
you
know,
for
everything
going
against
this
property
next
year-
there's
also
some
things
that
are
going
in
its
favor.
For
example,
you
know
I
just
read:
jbg
smith
got
a
got
a
portfolio
loan
from
an
agency
for
multi-family
properties
for
what
amounts
to
below
three
percent
interest
rate.
H
So
you
know
you
get
those
conditions
and
all
of
a
sudden,
the
property
values
are
actually
going
up.
So
you
know
it's
there's
some
good
things,
there's
some
bad
things
for
apartment
owners
and-
and
I
think
this
is
a
this-
is
pretty
much
prime.
As
far
as
arlington
apartment
real
estate
goes.
G
I
I
agree,
I
feel
the
same
as
the
previous
case.
I
think
the
county
did
a
good
job
in
this
and
yeah
the
coast.
Approach
to
me
doesn't
really
apply
or
we
you
know
we
wouldn't
even
look
at
it
to
me.
It's
like
saying
hey,
you
know:
why
would
anybody
pay
a
two
million
dollar
prize
for
a
housing
north
arlington,
where
you
can
find
a
lot
for
500
and
build
it
for
500?
You
know
it
doesn't
really.
Maybe
you
can.
Maybe
you
can't,
but
I
don't
think
this
applies.
H
All
right
I
mean
one
thing
I
would,
I
would
add,
is
I
I
would
take
into
effect
into
account
the
retail
but
the
appellant
didn't
seem
to
make
a
case
towards
retail
concessions.
So
it
seems
to
be
stabilized
least,
and
all
the
tenants
are
we're
paying
at
least
in
2019.
So
I
don't
think
we
really
had
any
any
reason
to
reduce
the
retail
component.
Maybe
it's
different
next
year
so
we'll
see
that
okay.
K
I'm
I'm
my
notes,
I'm
good
with
the
what
the
county
has
and
I
would
have
said
that
if
these
were
normal
times
we'll
see
what
it
does
next
year
a
little
bit
if
it
does
continue
to
drop,
but
I
think
you
know
given
the
virus,
it's
that
may
not
apply
if
it
was
not.
For
that
I'd,
say:
we'd!
Look
at
it
next
year,
but
this
is,
I
don't.
I
think
the
county's
assumptions
are
reasonable.
A
J
A
I
G
I
B
I
believe
that
I
will
present
this
case.
I
don't
want
to
keep
anyone
waiting
here,
so
I
will.
B
Okay,
yes,
thank
you
one.
I
apologize
one.
Second,
okay,
all
right
very
good.
So
this
is
the
concord
apartments
2600
crystal
drive,
multi-family
property
412
units
built
in
2007..
B
This
has
a
kind
of
unique
tenant
mix
here,
where
we
have
about
70
of
the
property.
Our
efficiency
in
one
bedroom
units
and
the
rest
are
two
bedrooms.
So
what
you
find
is
that
you'll
have
a
lower
price
per
unit
when
looking
at
the
overall
assessment.
B
We
use
the
slightly
increased
expenses,
the
county
is
using
24
and
we're
actually
using
a
26
based
on
actual
performance
of
the
property
and
we've
included
the
actual
income.
B
So
it
appears
that
the
guidelines
for
expenses
are
are
higher
than
both
the
low
and
high
side
of
the
subject
property
for
a
high
rise.
So
you
know
again
we're
using
26
based
on
the
the
actual
performance
here
and
that's
typical
for
for
this
type
of
property,
we
found
that
the
assessor
is
using
a
4.451
capitalization
rate.
B
We
looked
at
pricewaterhousecooper's
manual
for
some
guidance
on
the
reasonable
apartment,
capitalization
rate,
and
we
found
that
the
average
is
5.13
adjusting
for
the
dc
metro
area,
and
so
that's
a
a
difference
of
about
30
basis
points.
B
So,
on
page
three
of
our
paperwork,
we've
did
a
little
breakdown
here
of
the
cap
rate
and
if
you've
actually
switched
these,
we
meant
to
say
assessor
and
taxpayer
the
their
opposite,
but
the
one
that's
a
little
bit
higher.
That's
the
taxpayers
version,
so
we're
used
again
a
4.75
and
the
tax
rate,
including
the
the
vid
for
crystal
city
and
the
reserve.
B
Our
indicated
cap
rate
came
out
to
be
5.839,
and
so
we
used
that
cap
rate,
and
that
indicated
a
value
of
approximately
155
million
433
390,
and
so
again,
we've
laid
these
out
on
page
four,
using
again
actual
income
here
and
for
both
the
commercial
and
the
apartment
side.
B
I
think,
if
you
were
to,
if
you
were
to
look
at
the,
I
guess,
the
assessor's
model
and
actual
they
again
have
overstated
to
some
extent
the
the
noi
and
I
think,
in
both
the
test
and
the
actual
performance.
B
The
the
county
is
using
just
slightly
above
income
and
other
metrics
slightly
above
what
the
actual
performance
of
this
property,
which
is
stabilized
property,
and
so
we're
asking
that
the
actual
performance
will
be
the
last
year
and
then
we've
made
a
slight
adjustment
to
the
capitalization
rate
based
on
the
pricewaterhousecoopers
industry
publication
regarding
caprents
and
we've
included
the
income
for
your
review,
and
then
that
is
essentially
our
position
here.
We
did
include
some
additional
information
on
kovid,
which
obviously
we've
discussed
previously
and
is
not
an
issue
for
this
year.
D
Yes,
man
essentially
we're
looking
at
a
stabilized
property
located
in
crystal
city.
What
we've
seen
is,
there
was
apartment
revenue
increases
three
years
in
a
row.
2019's
increase
was
just
shy
of
2.5
percent
gross
potential
income
is
up
three
years
in
a
row
because
of
the
stabilized,
approximately
five
percent
or
so
true
vacancy
effective
gross
is
also
up
three
years
in
a
row.
D
We
did
note
that
the
operating
expenses
saw
an
uptick
of
approximately
12
percent
in
2019,
and
that
was
after
a
decrease
of
about
eight
percent
in
2018,
but
looking
at
a
three-year
average,
we
saw
a
operating
expense
of
25.4
percent
as
a
percentage
of
effective
gross
resulting
in
a
drop
in
the
net
operating
income,
approximately
2.3
percent,
but
again
that
was
after
an
increase
of
9
and
18..
D
So
when
we
look
at
how
the
county
projected
its
numbers,
as
this
will
be
the
january
1st
assessment,
we
underprojected
gross
potential
by
238
thousand,
we
underprojected
effective
gross
by
374
thousand.
D
D
As
you
can
see
in
columns
f1
f2,
we
did
a
test
with
this
new
information.
Again,
a
very
modest
projected
increase
in
gross
potential
income
of
about
1.3
percent,
with
the
stabilized
property.
Just
about
six
percent.
We
did
run
a
projection
of
0.03
percent
for
effective
gross
and
in
fact,
because
we
were
already
at
the
three-year
average
of
25.6
7.
D
We
actually
projected
a
bit
of
a
downturn
in
our
operating
expense
and
came
again
within
point
six
percent
of
the
net
operating
income
that
was
achieved
in
2019
again,
as
we
do
not
recommend
an
increase
with
a
third
party
appraisal.
H
I
was,
I
was
just
looking
through
it.
Maybe
the
appellant
can
find
it
faster
for
me,
but
it
looked
like
there
was
a
drop
in
administrative
expenses
about
well.
B
H
B
I
apologize,
I
don't
have
the
detail
as
to
why,
if
it
you
know,
was
the
concierge
or
what
was
the
cost.
That
may
have
been
changed.
I
apologize.
I
don't
have
that
information
here
about
the
subject
but
yeah,
I
think
so
what
we've
done
is
we
in
our
model
we
used
that
26,
which
was
what
we
found
to
be
kind
of
indicative
of
the
subject.
D
Looking
through
the
community
amenities
for
the
web
page,
I
don't
see
it
sometimes
there'll
be
something
associated
with
like
again.
We
talk
about
in
the
other
cases,
package
receipt
package
delivery,
which
is
usually
one
of
the
jobs
of
the
concierge,
but
I
don't
see
one
specific
okay.
All
right!
Yes,
excuse
me
yeah,
it
does
list
you'll,
be
fully
taken
care
of
here
with
our
professional
front
desk,
consideration.
H
I
Yes,
I
have
one
for
mr
chickas
when
you
did
the
reconstruction
on
the
test.
I
noticed
that
you
used
less
space
on
the
retail.
Is
that
something
that
you
find
out
afterwards?
That
was
just
how
much
space
they
had.
D
Exactly
yeah,
it
looks
like
that
was
an
overshoot
on
the
county's
parts
of
approximately.
I
don't
know
if
there's
a
transposed
number,
because
we
went
from
six
seven,
two
nine
to
two
six,
two:
nine
right.
We
did
confirm
that
with
mr
branham,
so
we
wanted
to
make
sure
that
that
test
was
reflect
above
that
different
number.
D
Yes,
ma'am
again,
based
on
stabilization.
A
D
On
under
projections,
virtually
across
the
board
of
gross
potential,
240
000,
effective
gross
of
375
000
operating
expenses
and
and
a
slight
overprojection
of
net
operating
income,
again,
we
came
within
0.2
of
the
net
operating
income
that
was
achieved
and
just
to
note,
we
did
in
fact
ensure
that
the
operating
expense
per
unit
was
a
good
bit
above
the
guideline
that
was
presented
by
the
county's
guidebook.
D
B
Great,
thank
you
so
much
again,
just
looking
at
our
model
using
the
actual
income,
even
when
we
use.
Obviously
when
we
use
the
assessor's
cap
rate,
I
mean
tests
are
great
and
one
thing
and
it
looks
at
you
know
the
potential
for
the
future
and
things
of
this
nature
and
the
tests.
B
But
what
we're
talking
about
was
the
actual
performance
here
that
we
charted
for
the
taxpayer
side
and
if
we
use
the
proper
cap
rate
again,
we
adjusted
it.
But
even
if
we
use
the
assessor
cap
rate,
the
indicated
value
is
164
million
526
796,
and
if
we
were
to
again
noi
overstated,
I
mean
just
that
fact.
There
indicates
that
it's,
you
know
slightly
overvalued,
and
so
we
request
that
you
know
the
taxpayers
information
here
with
the
actual
performance
of
the
property
be
utilized,
even
with
the
assessor's
cap
rate.
Our
indicated
value
is
164..
I
Well
I'll
start,
I
think,
like
I
was
pointing
out
on
the
retail
it
had
the
department
known
that
the
square
footage
was
less.
I
think
they
probably
would
have
used
those
numbers.
So
if
any
correction
was
to
be
made,
I
would
just
make
the
correction
on
the
retail
using
the
test
part
for
that
portion.
I
I
know
that
puts
the
noi
lower
than
a
little
bit
lower
than
what
the
the
pellet
has
you
know,
combined
both
retail
and
the
apartments.
But
you
know
when
an
error
is
made.
I
think
a
correction
needs
to
be
made.
F
I
F
A
G
A
Opposed
it's
unanimous:
it's
reduced
to
166
million
six,
sixty
three
seven
hundred
even
adjusting
every
detail.
Thank
you,
mr
rayden.
A
Okay,
it's
1007,
we'll
take
a
five
minute
break
and
come
back
and
do
the
final
cases
or
it's
actually
1008,
so
we'll
come
back.
10
13.
A
A
A
A
A
A
C
A
Okay,
great,
I
can't
see
you
so
okay
moving
along
to
the
fourth
case
on
the
agenda
rpc,
one,
six,
zero,
three:
six:
zero,
zero,
five,
thirteen
1325
wilson,
boulevard,
centric
and
speaking
on
behalf
of
the
appellant
is
mr
grant
steinhauser.
So,
mr
steinhauser,
when
you're
ready,
you
can
start
with
your
eight
minutes
and
tell
us
about
the
property.
L
Yes,
thank
you,
madam
chair,
since
this
is
my
first
case
of
the
year
I'll,
introduce
myself
again
for
anyone
that
doesn't
remember
me.
My
name
is
grant
steinhauser,
I'm
a
senior
manager
at
ryan
llc.
L
I
also
have
leo
kuwait
with
me,
who
is
a
consultant
on
my
team,
and
our
office
is
just
down
the
road
from
you
all
in
roslyn,
since
this
is
my
first
case
of
the
year
and
first
hotel
of
the
year,
if
it's
okay
with
the
board,
you
know
I'm
hoping
to
just
take
a
little
bit
of
extra
time
on
this
one,
and
then
I
can
incorporate
my
reference
for
all
the
future
cases.
L
So
just
sort
of
some
general
comments
you
know,
operating
performance
at
hotels
in
arlington
has
been
absolutely
decimated
by
kova
19,
the
impact
of
which
is
completely
unprecedented.
In
its
suddenness
scope
and
death,
many
hotels
in
arlington
were
completely
closed
in
march,
some
of
which
are
still
closed.
Those
that
stayed
open
were
operating
at
five
to
ten
percent
occupancy,
but
nearly
every
hotel
operator
that
we've
spoken
to
is
projecting
a
negative
noi
in
2020.
L
Many
are
unable
to
make
their
mortgage
payments
and
are
approaching
foreclosure
with
their
lenders.
The
ultimate
result
is
people
that
are
that
work
at
these
hotels
are
losing
their
jobs.
This
is
a
real
2020
issue
for
hotel
owners
and
operators.
Whether
the
board
and
assessment
department
agree
or
not,
we
do
find
it
somewhat
irresponsible
and
unfair
that
the
assessor
at
this
year's
organizational
meeting
essentially
instructed
the
board.
You
know
that
covet
is
a
next
year
issue.
You
know.
We
hope
that
each
board
member
is
able
to
make
their
own
decision.
L
You
know,
based
on
the
evidence.
We
also
take
issue
with
mr
bailey,
offering
that
he
spoke
to
the
assessment
departments
in
fairfax
loudon
and
dc
and
that
they
were
all
on
the
same
page
in
terms
of
how
they
would
be
treating
covet
19
in
appeals.
This
year,
the
d.c
assessment
department
actually
took
the
exact
opposite
stance
of
the
county
and
offered
10
to
20
reductions
at
the
first
level
of
appeal
to
the
majority
of
hotels
this
year.
L
Unsurprisingly,
that
information
was
not
included
in
this
year's
boe
memos.
We
understand
the
ultimate
question
here
is
whether
or
not
a
knowledgeable,
prudent
buyer,
as
of
1120,
would
have
known
about
the
pandemic
resulting
market
crash
and
factor
this
into
a
prospective
purchase
price.
The
fact
is
that
it
is
called
covet
19
not
covet
20
for
a
reason,
the
disease,
the
disease
did
start
in
china
in
2019,
and
there
are
articles
in
the
washington
post
in
washington
and
other
publications.
L
L
I'm
not
saying
that
we
knew
everything
about
the
pandemic
and
its
effects
on
one
120,
but
there
were
some
signs.
What
we
do
think
is
reasonable
is
not
increasing
hotel
assessments
in
2020
we
use
a
direct
cap
pro
forma
income
model
to
value
hotels,
and
it's
supposed
to
be
forward
thinking,
given
what
we
know
we,
you
should
not
be
forecasting
increases
to
income
and
thanks.
So
thank
you
for
letting
me
say
my
piece
and
now
we'll
get
to
the
property
specifics
here.
L
L
The
assessment
increased
by
six
percent
to
2020
to
69.4
million
or
218
000
per
key
last
year
was
2019
was
negotiated
a
first
level
settlement
at
the
65.4
million,
our
estimated
value,
57
million
918
000
or
182
000
for
key.
L
L
So
for
anyone
unfamiliar
with
this
property,
you
know
it's
right
on
wilson,
boulevard
and
there's
a
nice
picture
of
it
there
for
you
on
page
70.,.
L
Sort
of
the
meat
of
our
analysis
is
on
page
73
of
104
and
I'll
walk
you
through
this.
Basically,
it's
the
county's
income
approach
on
the
far
left
hours
right
next
to
that
and
then
the
preceding
four
years
of
actuals,
the
assessor's
total
revenue
estimate
of
21
million
650
000
is
high.
L
We've
applied
20
approximately
20.6
million,
which
represents
the
trailing
four-year
average
income.
The
assessor's
estimate
is,
is
higher
than
any
of
the
preceding
four
years.
Secondly,
we've
made
a
slight
increase
to
the
operating
expense
ratio.
The
assessor
has
used
68.5
percent.
If
you
look
at
the
preceding
four
years,
it's
69
69.5
68.7
and
69.6
we've
selected
a
rate
of
69.7
which,
if
you
look
at
the
2020
hotel
guidelines,
that
is
the
average
total
expenses
before
reserves
for
full
service
hotels,.
L
L
There
really
just
haven't
been
that
many
hotel
sales
in
the
county
in
the
past
few
years
we
looked
so
we
looked
at
pwc,
rerc
kind
of
the
same
reports
that
the
county
mentions
in
their
guidelines,
and
you
can
see
that
on
page
74.,
but
basically
we're
looking
at
a
rate
between
7.4
percent
and
7.7
for
first
year,
washington
dc
and
so
ultimately,
we've
concluded
on
a
rate
of
7.6.
L
So
after
deducting
personal
property,
that's
how
we've
concluded
to
our
value
of
57.9
million
again
I'll
just
point
out.
The
assessor's
noi
is
higher
than
any
of
the
preceding
four
years
and
much
higher
than
the
four-year
average.
I'll
also
point
out
that
there
is
a
ground
lease
at
this
property.
It's
been
in
place
since
1975
when
the
property
was
built.
L
You
can't
operate
this
hotel
without
paying
the
ground
lease
expense,
and
that,
apparently,
you
know
seems
to
be
an
issue
this
year.
For
some
reason,
it's
nothing
new
we're
45
years
into
a
100
year,
ground
lease,
and
you
know
we're
a
little
bit
confused.
You
know
we
were
able
to
sort
of
set
a
framework
for
settling
this
last
year,
but
apparently
it
seems
like
something
completely
different.
L
On
page
75,
we
have
a
uniformity
analysis,
so
we
just
want
kind
of
want
to
take
a
look
and
see
you
know
what
are
comparable
hotels
assess
that
on
a
per
key
basis,
I
think
probably
the
two
most
comparable
are
the
courtyard
arlington
rosalind
and
the
hilton
arlington,
which
are
assessed
at
196
000
per
key
and
206
000
per
key
ours
is
at
218
000
per
key
and
sort
of
based
on
an
average
there.
We
would
expect
an
assessment
closer
to
180
000
per
key
just
to
wrap
up
quickly.
L
You
know
the
rest
of
my
appeal
package.
I
have
the
assessor
guidelines,
page
76,
an
article
many
articles
about
how
four
percent
capex
isn't
isn't
working
several
other
articles
and
if
anyone
wants
to
flip
through
they're,
more
than
welcome
tying
this
back
to
the
test
page,
because
I
know
that's
what
we're
going
to
be
looking
at,
we
think
the
board
should
be
considering
columns
a
b,
c
and
f
as
the
four
year
history
and
comparing
that
to
the
assessment,
which,
as
you
can
see,
the
income
is
completely
overstated
and
noi
is
overstated.
L
D
Yes,
ma'am:
when
we're
looking
at
this
property,
we
see
a
property
that
had
an
uptick
excuse
me,
a
downtick
in
the
occupancy
of
approximately
1.5
percent,
and
even
when
you
consider
that
the
occupancy
actually
went
down
year-over-year,
the
average
daily
rate
went
up
almost
12,
which
resulted
in
a
revenue
prevail,
room
increase
of
almost
six
point,
six
dollars
and
eighty
cents
room
revenues
up
four
point:
eight
percent
food
and
beverage
revenues
up
one
point:
eight
percent
miscellaneous
revenues
up
four
point:
seven
percent
total
revenues
up
four
point:
five
percent
operating
expenses
were
up
three
point:
eight
percent
and
and
now's
a
good
time
as
any
to
mention
one
of
the
discrepancies.
D
D
J
D
You
do
that
you'll
see
that
the
county
actually
over
projected
total
revenue
by
four
and
ten
thousand,
but
we
also
over
rejected
operating
expenses
by
seven
hundred
and
eighty
thousand.
D
D
Mr
steinez
need
not
look
far
in
the
sense
that
the
property
itself
sold
in
march
of
2018
for
79
million
700,
000
and
co-star
reported
the
cap
rate
at
six
point.
Three
two
percent,
which
is
well
below
the
one
he
believes
should
be
applied.
D
D
We
do
believe
based
on
these
metrics,
that
the
assessment
of
69
million
425
300
should
be
confirmed
as
fair
and
equitable.
Thank
you.
J
I
would
also
like
to
add
that,
as
far
as
mr
steinhauser
comments
about
the
the
meeting
we
had
at
the
end
of
the
year
with
the
board
members,
during
that
meeting,
we
expressed
that
we
met
with
dc
loudon
and
fairfax.
During
that
time.
We
also
explained
that
dc
is
on
a
different
time
schedule
than
the
virginia
jurisdictions
and
that
it
was
loud
in
fairfax
who
said
that
they
would
treat
covet
19
in
the
2021
assessments
that
was
communicated
to
the
board
and
anybody
who
was
present
during
that
meeting.
J
So
what
dc
is
doing
is
different
because
they're
on
a
different
time
schedule
the
actual
assessment,
I
believe
that
they
were
working
on
this
year
was
the
2021
assessment
starting
in
february,
whereas
everybody
knows
virginia's
on
the
2020
assessment.
So
that
would
be
the
difference
in
how
dc
treats
covert
19
compared
to
the
virginia
jurisdiction.
J
We
also
communicated
that
we'll
send
out
the
inds
again
this
year
for
january,
to
august
2020
information
in
preparation
for
the
2021
assessment
to
take
in
consideration
the
impact
of
covet
19..
If
anybody
have
any
questions
about
that
meeting
or
our
procedures
for
handling
covert
19
any
2021
assessment,
they're
more
than
welcome
to
contact
me
either
email
phone
call
or,
however,
to
discuss
that
further.
A
Okay,
thank
you.
Questions
from
board
members,
mr
hoffman.
H
Yeah,
looking
through
the
guidebook
for
2020
and
we've
got
two
sales
listed
for
that
property,
there's
one
at
79
million
700
in
march
of
2018
and
then
another
one
for
34
million
in
august
of
the
same
year,
and
I
just
questioned
for
the
county
since
this
is
being
used
for
the
basis
of
the
cap
rate,
is
the
understanding
that
the
first
sale
was
the
was
the
fee
interest
in
the
property,
and
the
second
sale
was
just
for
the
ground
lease.
Is
that
what
that
is?
That's
exactly
right.
H
Okay,
so
so
the
sale
in
2018
was
a
completed
hotel
building
at
250,
000,
a
room,
the
first
sale,
that's
correct,
okay
and
then
the
sale
in
in
august,
which
is
that
a
hundred
and
seven
thousand
a
room
value
was
really
just
for
the
ground.
These
payments
that
they're
going
to
receive
from
the
from
the
hotel
operator
that.
D
Is
correct,
yeah
and
it's
not
to
be
argumentative
about
that,
but
I
believe
there's
a
little
bit
difference
in
the
remaining
years
of
the
ground
as
they
reported.
Actually,
the
initial
term
expires
in
2025,
but
as
it's
typical
there's,
a
lot
of
10-year
renewals
that
are
available.
H
F
I
want
to
ask
the
department
about
columns
h,
and
I
we've
seen
these
headings
every
every
case
today,
but
the
constituent
numbers
were
always
the
same,
but
in
this
case
they're
not,
and
so
that's
why
I'm
asking
this
question
now.
What
is
the
difference
between
the
department
in
general?
You
know
one
fonts
hard
to
read:
department
review
versus
boe
review.
Did
you
do
these
two
columns.
D
So
yeah
so
to
answer
specifically,
these
are
representative
of
the
packets
that
are
received
by
the
appellant
and
and
then
phrased
even
more
succinctly.
The
idea
behind
that
is
that
column
h
was
submitted
by
the
march
first
apartment
review
deadline
and
then
column.
I
comes
in
at
the
board
of
equalization
deadline.
Approximately
six
weeks
later.
D
If
you
will
it's
really
one:
rework
the
the
appellant
initially
submitted
the
value
that
you
see
the
opinion
value
in
column,
h
and
then
at
the
board
of
equalization
level,
adjusted
some
of
their
numbers
and
the
cap
rate.
A
Okay,
thank
you,
mr
lawson.
You
had
a
question.
G
D
Sort
of
the
lessee
who's
being
taxed,
I
wouldn't
know
the
the
way
they
list.
The
ownership
is
really
allowed
to
basically
list
whatever
they'd
like
so
I
can
work
backwards
and
try
to
find
who
that
true
owner
is,
but
as
far
as
an
llc,
I'm.
G
G
L
C
L
H
D
Yes,
ma'am
again,
given
the
county's
position
on
on
not
including
ground
rents
as
a
operating
expense,
the
property-
we
do
believe
the
board
should
focus
upon
the
reconstructed,
columns,
column,
d
and
g,
which
actually
show
an
increase
in
value
year
over
year.
This,
of
course,
is
booed
by
the
fact
of
across
the
board
increases
in
revenue
and
room
revenues,
food
and
beverage
miscellaneous
total
revenue.
D
L
Sure
thanks,
so
we
settled
this
case
last
year
at
the
first
level
for
65.4
million
and
that's
obviously
after
providing
the
new
year
ine.
So
using
all
that
same
exact
information.
Somehow
the
assessor
was
able
to
conclude
this
year
to
a
value.
That's
six
percent
higher.
L
If
you
look
at
columns
a
b
c
and
d
and
f
you'll
see
that
the
gross
income
has
never
reached
a
21
million
point
and
six
hundred
fifty
thousand
dollar
level
the
assessment
again
higher
noi
than
any
of
the
preceding
four
years,
and
just
last
week
the
assessor
agreed
for
a
case
crystal
flats
apartments
that
the
sale
price
was
was
the
best
indication
of
value
and
it
was
a
ground
lease
and
it
was
discussed
by
mr
lawson,
mr
and
mr
pinaronda,
the
ground
league
situation
and
the
board
ultimately
agreed
7-0
the
property
with
the
ground
lease.
H
Yeah
I'll
share
my
thought,
because
it
was
more
of
a
comment
than
a
question
but
they're
going
down
a
slippery
slope
that
will
ultimately
end
in
probably
increasing
the
overall
assessment
if
they
did.
If
the
county
did
what
barnes
was
suggesting
and
they
took
the
ground
interest
which
was
sold
for
34
million
dollars
in
2018
and
took
the
income
from
that
ground
interest
and
used
a
market
cap
rate
for
ground
leases
which
would
be
well
below
8
percent.
H
Then
the
taxable
the
tax
bill
for
that
property
would
be
much
higher
than
if
you
just
applied
that
offsetting
income
to
the
eight
percent
or
808.08
cap
on
the
hotel
side.
So
I
mean
if
they
want
the
county
to
look
at
that.
I
think
it's
going
to
ultimately
increase
the
overall
assessments.
H
You
can't
ignore
the
fee
ground
owner
when
you,
when
you
appraise
the
property,
that's
just
like
saying,
because
I
have
a
an
oil
lease
on
the
land,
we're
just
going
to
appraise
the
the
oil
lease
value
and
not
the
rest
of
the
fee
interest
on
land.
So
I
don't
know
if
if
grant
wants
to
kind
of
pursue
that
approach
with
the
county
next
year,
but
I
think
ultimately,
it's
not
going
to
be
to
their
benefit
on
this
particular
property.
H
You
know
it's
sold
in
2018
for
almost
80
million
dollars
going
through
the
guidebook.
We
have
another
sale
in
19
of
a
similar
hotel.
That
was,
I
think
it
was
about
350,
a
room.
H
H
You
know
that
would
urge
the
county
that,
as
a
chamber
member,
to
look
at
any
and
all
relief
that
it
can
give
hotel
owners
that
the
county
board
can
do
as
far
as
tax
relief,
but
I
don't
think
that
an
appraisal
using
january
1
would
would
warrant
a
gigantic
reduction
for
this
type
of
stabilized
property.
G
G
Unfortunately,
all
the
deals
that
have
been
canceled
or
amended
or
changed
are
all
after
january
1.,
and
so
I
just
wanted
to
weigh
in
and
defend
the
position
that
we've
taken,
that
we're
going
to
look
at
it
next
year
and
we
can't
look
at
it
this
year.
We
knew
it
existed,
but
it
really
didn't
have
an
impact
until
getting
into
really
march
and
that's
when
all
the
deals
started
going
away.
So
I
just
wanted
to
share
that.
H
Our
motion
is
confirming
the
county's
number
at
69
425
300.
I'll
second.
L
L
This
assessment
last
year
was
85
million,
340
000
and
it
increased
this
year
by
5
to
298
000
per
key.
Our
estimated
value
was
74,
962,
000
or
250
000
per
key.
L
I
also
just
wanted
to
point
out
on
the
first
page
that
the
original
total
assessment
for
2019
was
actually
93.9
million
or
to
be
specific,
93
907
400
and
was
reduced
at
the
first
level,
so
not
super
relevant,
but
I
at
least
wanted
the
facts
on
page
one
to
be
right,
the
assessment
has
increased
by
30
percent
over
the
past
five
years
and
again,
five
percent
this
year.
Our
I
asked
that
everyone
flipped
to
page
33
for
the
beginning
of
our
documentation.
L
We
used
a
four-year
average
for
income
to
get
to
26
million
274
387,
it's
about
250
000,
less
than
what
the
assessor
is
using
we're
using
a
70
operating
expense
ratio,
which
you
know
is
reflective
of
the
previous
years.
You
know
maybe
a
touch
higher
than
previous
years,
but
but
in
line
and
again
you
know
we
have
the
guideline
value
at
69.7
percent,
so
we're
right
in
line
with
that.
L
L
If
you
go
to
page
39,
we
can
look
at
the
assessments
per
key
of
comparable
hotels.
This
hotel
has
one
of
the
highest
assessments
per
key
in
the
county,
the
top
five.
I
believe
you
look
at
the
marriott
embassy,
suites
hilton
weston,
homewood
suites.
You
know
they're
all
in
the
200
to
260k
per
key
range
and
again
we're
at
300
000
per
key.
I
would
also
just
remind
you
know
everybody
that,
when
we're
looking
at
sales
of
hotels,
the
reported
sales
price
is
for
the
going
concern,
not
just
for
the
real
estate.
L
Again,
we
have
the
2020
hotel
guidelines,
so
we
can,
you
know,
double
check
that
our
test,
our
our
expense
ratio,
is
in
line
the
same
cap
x,
study,
basically
showing
four
percent
reserves
really
is
not
enough.
This
hotel
is
going
to
be
in
need
of
a
refresh
pretty
soon.
If
you
look
at
the
personal
property
assessment
here,
it's
very,
very
low,
which
basically
shows
us.
You
know
it
hasn't
been
updated
since
I
think
2011
or
2012.
L
The
rest
of
our
appeal
package,
you
know
the
other
articles
that
we
had
discussed
in
the
previous
case
as
well.
As
you
know,
the
most
recent
income
and
expense
as
well.
As
you
know,
the
pwc
and
re-rc
cap
rate
surveys
that
we'd
also
discussed
previously.
L
So
we're
tying
this
back
to
the
test
page
again.
It
definitely
felt
like
the
assessor
over
protected
income
based
on
what
he
had
at
the
time,
which
was
16,
17
and
18,
knowing
what
we
know
that
this
hotel
literally
closed
within
the
first
three
months
of
the
year,
it
doesn't
make
sense
to
us
to
project
any
increases
in
income.
D
That,
of
course,
led
to
the
following:
metrics,
with
the
room
revenue
increasing
by
4.5
percent
food
and
beverage
revenue
increased
by
12.4
percent.
Miscellaneous
revenue
was
up.
10.2
percent
and
total
revenue
up
7.7
operating
expenses
did
tick
up
5.4
percent,
and
when
we
look
at
a
three-year
average
17
through
19,
we
saw
that
the
operating
expense
average
as
a
percentage
of
effective
gross,
was
68.1
and
you'll.
D
Note
that
in
the
summary
sheet,
the
county's
at
68
percent,
so
we
believe,
that's
fairly
represented
this
led
to
a
net
operating
income
increase
of
13.5
percent
in
2019..
D
Those
metrics
lead
to
the
belief
that
the
board
should
confirm
the
january
1st
2020
real
property
assessment
of
89
million
546
5500..
Thank
you.
H
Yeah
for
grant-
I
think
I
remember
this
case
last
year-
there's
a
residence
inn
attached
to
the
hotel,
so
two
different
flags
on
the
same
parcel.
H
L
Rpgs
and
they're
they
are
yeah
they're
right
next
to
each
other,
2800
and
2850
potomac
they're
completely
run
separately.
They
have
separate
books.
The
residence
inn
is
appealed
as
well,
and
I
think
that
hearing
is
coming
up
next
wednesday.
L
L
D
Yes,
ma'am
again,
metrics
across
the
board
are
up
year
over
year,
increases
and
average
daily
rate
increases
in
revenue
prevailable
room
even
with
the
flat
occupancy
increases
in
room
revenue,
food
and
beverage
revenue,
miscellaneous
revenue,
total
revenue
and
again,
even
with
an
uptick
in
the
operating
expense.
The
county
believes
that
the
under
projections
it
made
in
regards
to
gross
potential
and
the
overprojection
on
reserves
replacement
led
to
that
under
projection
of
noi
by
525
000,
so
based
upon
those
metrics,
we
do
believe
the
accounting
should
be
confirmed
at
89
million
546
500..
L
Sure,
thanks
so
again,
you
know
there
was
a
first
level
reduction
here
last
year
to
85.3
million.
Now
the
assessment
you
know
has
gone
up
five
percent,
and
you
know
the
assessor
had
all
the
same
information
this
year
that
he
did
when
he
made
the
reduction
last
year.
L
L
Personal
property
here
is
getting
to
the
end
of
its
useful
life
and
there's
going
to
be
a
needed
refresh.
You
know
for
this
hotel
to
even
reopen
so
yeah.
We
hope
the
board
will
consider
that
this
year.
G
Yes,
ma'am.
Thank
you.
You
know
this
is
the
part
of
the
job
that
we
have
undertaken.
That's
really
tough,
because
you
know
we.
We
know
the
impact
and
we
got
two
hotels
that
have
been
closed
and
yet
you
know
our
duty
we're
bound
by
our
duty,
which
is
to
assess
it
based
on
its
value
as
of
january
one-
and
you
know
I
I
wish
we
could
do
something
to
help
these
folks,
but
you
know
that's
up
to
others,
and
you
know
it's
the
same
thing.
G
If
you're
a
judge-
and
you
know
you
sentence
someone
for
marijuana,
even
though
you
know
you
think
it's
just
silly
but
you're,
not
the
general
assembly-
and
you
know
I
just
want
grant
to
understand
that
we're
not
unsympathetic,
but
we
have
to
do
in
accordance
with
law,
and
you
know
I
I'm
kind
of
okay
with
what
the
county's
done.
H
Yeah
barnes.
I
also
point
out
that,
when,
when
things
turn
down,
there's
usually
a
lag
in
the
county's
assessment
for
when
the
data
starts
to
actually
reflect
that
through
sales
and
through
through
income
statements
that
can
that
can
actually
point
to
the
turn
down.
H
So
you
get
a
lag
where
you
get,
maybe
years
where
the
assessment
is
a
little
bit
behind
the
curve
and
then,
when
things
turn
back
up,
the
the
the
same
thing
works
in
the
favor
of
the
landowner.
So
you
know
you
end
up
with
lagging
values
because
the
data
hasn't
shown
just
like
you
know.
We
were
sitting
here
last
year
going
well,
we
don't.
H
We
can't
take
hq2
into
consideration,
because
hq2
wasn't
announced
on
january
1st,
so
you
know
kind
of
it
kind
of
cuts,
both
ways
and
again
going
to
continue
to
push.
You
know
and
advocate
that
the
board,
the
elected
bodies
try
to
do
something
to
help
these
hotels
and
retail
properties.
A
Yeah,
I
agree
other
comments.
I
Yeah
I
was
trying
to
see
like
barnes
said
you
know
where
we
can
make
any
changes
any
adjustments.
I
looked
at
all
the
averages.
You
know
on
gross
potential,
the
expenses
the,
but
even
their
you
know
reserves
for
ffe,
but
you
know
overall,
looking
at
the
whole
the
big
number
that
they
had
for
2019
and
I
I
don't
think
it's
really
far
from
any
adjustment
that
I
would
make
so
I'm
okay
with
the
county.
The
way
it
is.
A
G
A
L
L
It's
a
thirty
two
percent
increase
over
the
previous
four
years
on
an
eight
percent.
Year-Over-Year
increase
our
estimated
value,
86
million
197
000,
and
that
equates
to.
L
L
L
L
The
assessor's
total
revenue
estimate
of
40
to
40.2
million
is
slightly
high.
We've
been
we've
applied,
thirty
nine
million
six,
thirty
eight
one
hundred,
which
is
in
this
case
it's
the
actual
2019
revenue,
it's
the
highest
of
any
of
the
years
that
have
been
reported.
So
again,
you
know
the
highest
year,
we're
using
it
it's
about
a
600
000
difference
from
what
the
assessor
is
using.
L
The
assessor
is
using
72
expense
ratio
before
reserves
we're
using
75
look
at
previous
years,
74
74.
we
kind
of
throw
out
2017,
because
we
only
have
partially
here
information
so
can't
really
rely
on.
You
know
three
or
three
or
four
months
of
information
there,
but
for
16
it
was
77,
so
higher
expense
ratio.
Here
at
75.
L
Getting
down
to
the
noi
we're
at
8.3
million,
so
a
modest
decrease
from
previous
years.
I'll
point
out,
you
know:
2019
was
8.8
million
2018
8.6
million,
so
not
nothing
crazy
happening
from
18
to
19,
certainly
nothing
to
warrant
an
eight
percent,
year-over-year
increase
and
nothing
really
crazy.
You
know
it's
comparable
to
previous
years
either
the
assessor
is
at
approximately
nine
and
a
half
million
for
his
noise.
L
Our
base
rate
cap
rate
again
seven
point:
six
percent
is
based
on
our
erc
and
pwc
surveys
that
we
had
discussed
in
previous
cases.
Lastly,
we
deducted
a
cost
to
cure
here
of
approximately
6.8
million.
They
had
a
tremendous
amount
of
capital
coming
up
in
early
2020.,
again,
we've
kind
of
shown.
You
know,
four
percent
reserves
aren't
cutting
it.
L
These
days,
properties
are
getting
to
the
point
where
you
know
they've
reserved
four
percent,
but
the
flag
is
coming
in
with
a
pip
that
you
know
requires
double
the
amount
they've
reserved
for.
So
this
has
to
sort
of
be
taken
into
account
somewhere,
whether
it's
a
higher
reserve
or
we
deduct.
You
know
the
actual
costs
below
the
line
to
keep
the
flag
that
affects
the
value
and
it
affects
what
you're
ultimately
going
to
pay
for
the
property,
especially
when
you
see
properties
in
the
county
that
have
just
recently
lost
their
flags.
L
L
Tying
this
back
to
the
test
page,
we
really
put
place
most
reliance
on
columns
c
and
d,
the
first
two
full
years
that
you
know
this
operator
has
owned
the
hotel.
I
excuse
me
not
cndc
and
f,
and
the
noise
have
been
8.6
million
in
8.8
million.
L
I
also
want
to
point
out
again,
one
week
ago,
boe
case
number
61
crystal
flats.
The
property
has
a
ground
lease.
The
leasehold
was
what
was
purchased
for
73.5
million,
the
assessor,
which
was
also
mr
chicas
agreed.
That
was
the
best
indication
of
market
value
and
the
board
agreed
unanimously
7-0
that
that
was
the
best
indication
of
market
value.
This
property
just
sold
two
years
ago
for
105
million,
but
it
includes
inclusive
of
a
tremendous
amount
of
personal
property.
L
D
Yes,
ma'am.
We
believe
the
value
increase
is
attributable
mostly
through
the
the
new
management's
efforts
to
increase
occupancy,
as
well
as
again
the
metrics
that
the
hotel
industry
standard
standard
uses
as
a
standard
basis,
occupancy
average
daily
rate
and
revenue
prevailable
room.
It
increased
almost
four
percent
in
2018,
and
even
though
it
actually
occupancy
went
down
one
percent
in
2019,
they
were
still
able
to
increase
their
average
daily
rate
by
over
nine
dollars
and
resultant
revenue
prevailable
room
by
over
five
dollars.
D
These
led
to
increases
in
room
revenue
approximately
2.7
and
though
food
and
beverage
was
down.
3.6
miscellaneous
was
up
6.3,
which,
led
year
over
year,
increase
of
total
revenue
of
approximately
0.6
again
like
the
hotel
centric.
This
property
included
ground,
rent
payments,
approximately
1.2
million
in
their
operating
expenses,
as
we
indicated
on
the
income
and
expense
questionnaire
for
the
county.
Those
are
expenses
to
the
owner,
not
to
the
property
itself.
D
When
we
look
at
some
of
the
projections
made
by
the
county,
we
did
in
fact
over
project
total
revenue
by
approximately
five
hundred
and
ninety
nine
thousand
seven
twenty.
But
we
also
again
when
you
exclude
those
inappropriate
ground,
rent
payments.
We
over
projected
operating
expenses
by
nine
hundred
ninety
nine
thousand
five
hundred,
and
we
also
over
projected
the
reserves
for
replacement
ffe
by
225
179.
D
These
metrics
led
to
an
under
projection
of
the
noi
by
approximately
625
thousand.
I
think
that's
one
thing
that's
important
to
look
at
is
when
you
look
at
a
true
average
of
operating
expenses.
D
You'll
see
that
the
two-year
average
is
70.73
percent,
whereas
the
county
is
at
72
percent
property
has
been
reporting
4
to
ffe
and
we're
at
4.5,
given
that
we
are
approximately
again
6
below
what
was
achieved
in
2019.
D
D
They
essentially
are
listed
as
a
forecast
with
notes
that
say
revenue
renovation
on
hold
so
based
on
a
february
forecast
that
was
dated
april
8th
of
2020.
We
do
believe
that
would
be
inappropriate
to
deduct
6.8
million
dollars.
That's
a
essentially
a
forecasted
amount
for
a
project.
That's
now
on
hold.
D
H
H
Was
that
a
complete
fee
title
for
the
property,
the
land,
the
air
rights
and
everything,
or
was
that
just
the
hotel
and
the
the
ground
was
not
included
in
that
sale.
H
H
So
I'll,
I
guess
I'll
ask
grant
what
would
your
opinion
of
the
value
of
that
ground
lease
for
the
for
the
the
ground
holder,
be
it?
Would
it
be
greater
than
zero.
H
L
Honestly,
I
would
want
to
do
some
more
information
before
responding
to
that
question
on
on
live
television
or
on
live
microsoft.
Teams.
C
F
I
have
two
for
the
department.
First,
one
is
the
appellant
mentioned
that
he
said
four
percent,
but
for
full
service
you're
getting
4.5
percent
reserves
for
ffe.
Where
does
that
number
come
from
from
from
annual
ines
or
the
latest
dinees.
D
That's
correct,
so
let
me
state
two
ways:
the
number
that
we
use
that
4.5
comes
from
our
guidebook
for
full
service
hotels
and
the
four
percent.
That's
representative
in
the
columns
comes
from
the
ines,
that's
submitted
by
the
owners
himself.
D
Yeah
so
specifically,
the
guidebook
records
all
the
ines
that
are
submitted
by
the
owners
and
then
we'll
break
them
down
by
the
service
type.
So
it
looks
like
we
received
18
ines
from
full
service
owners
of
the
19
that
are
in
the
county.
F
And
it
costs
you
around
4.5
yep
thanks
the
other
question.
I
hope
I
can
read
my
writing.
Oh
the
the
2019
results
that
led
to
evaluation
in
2019
versus
this
year's
results
and
valuation.
The
results
are
very
much
the
same,
but
there's
still
an
eight
percent
increase.
As
we
can
see
on
page
one,
it
was
the
what
was
the
cap
rate
in
2019.
F
D
Yes,
ma'am,
based
on
the
performance
of
the
property
based
on
over
projections
on
not
only
gross
potential,
but
again
your
million
dollar
overprojection
for
operating
expense.
D
Once
the
ground
rents
were
taken
out,
we
do
believe
that
the
county
under
projected
the
performance
of
the
property
by
625
thousand
and
just
a
note-
we
normally
don't
reflect
upon
last
year,
but
this
case
was
brought
before
the
board
last
year,
with
virtually
the
same
argument
of
looking
at
the
numbers
exclusive
excuse
me
not
including
the
ground
repayment
and
was
voted
to
confirm
that
assessment
from
last
year.
We
do
believe
that,
based
on
these
metrics
and
the
information
that
the
county
should
be
confirmed
at
160
million,
seventy
one
thousand
six
hundred.
L
Thanks
yeah,
so
just
to
reiterate
a
case
last
week
where
dweck
bought
the
leasehold
interest
in
the
crystal
class
apartments,
the
assessor
agreed
that
that
was
a
good
indication
of
market
value,
even
though
carrier
family
owned
the
below
land
and
the
board
agreed
and
voted
7-0
unanimously.
L
J
L
Was
just
purchased
for
105
million
the
leasehold
and
in
this
case
there's
some
personal
property
involved.
We
have
a
massive
eight
percent
year-over-year
increase,
and
yet
the
net
operating
comes
there's
a
massive
disparity
in
the
revenue
that
the
assessor
has
estimated
here
and
really.
This
is
what
we
feel
is
a
runaway
assessment
and
we
really
ask
the
board
to
take
a
close
look
here
and
step
in
thanks.
A
F
Quickly,
respond
to
the
last
note
that
the
appellate
made
that
the
the
revenues
are
very
consistent
throughout
projected
reconstructed
and
and
the
rest
I
mean
very
close
couple
of
percent
at
most.
So
I
don't
want
to
consider
that
I
do
want
to
go
back,
though,
to
his
argument
that
he
made
twice
about
last
week's
determination
on
when
a
sale
is
relevant
and
when
it
might
not
be
relevant,
and
I
can't
comment
on
it,
but
I'm
hoping
somebody
else
on
the
board
can.
H
All
right
I'll,
just
hammer
the
point
home
and
since
I
think
this
is
the
last
case
today,
but
grant
you'll
be
back
next
week,
maybe
you
can
bring
some
data
to
the
table
on
ground
leases,
but
doing
some
just
basic
math.
Here,
quick
math,
we
had
a.
We
have
an
noi
on
this
hotel.
Actually,
I
probably
won't
even
say
what
it
is.
Take
the
noi
deduct
the
lease
the
ground
lease
payment,
which
you
stated
is
a
1.25
million
more
or
less.
H
So
you
end
up
with
a
reduced
noi.
If
you
apply
the
8
cap
rate,
your
value
for
the
hotel
is
a
million
to
500,
which
roughly
corresponds
to
the
sale
price
in
2017.,
deduct
the
personal
property,
so
you've
got
an
assessed
leasehold
interest
of
a
million
or
a
hundred
million
four
hundred
thousand
dollars.
H
So
I'm
not
suggesting
we
do
that,
because
we're
looking
at
each
property
according
to
the
guidelines
which
is
to
not
use
ground
lease
payments
as
an
operating
expense,
we're
trying
to
treat
every
property
the
same.
But
if
we
want
to
treat
groundless
payments
as
an
operating
expense.
On
one
end,
it
has
to
be
treated
as
income
to
the
ground
holder,
who
then
needs
to
get
a
separate
tax
bill,
as
barnes
has
pointed
out,
and
that
would
be
an
assessment
for
this
property
somewhere
in
the
neighborhood
of
30
million
dollars.
H
So
that's
my
point.
Maybe
next
week
come
back
on
the
next
ground
lease
and
bring
some
data.
A
Okay,
mr
lawson.
G
Yes,
last
year,
I
think
it
was
last
year
or
the
year
before
we
had
that
project
down
in
roslyn,
that's
on
a
ground
lease
and
it's
getting
towards
the
end
of
the
ground.
At
least
I
forget
the
name
of
the
project.
G
It
just
escaped
my
mind,
but
anyhow
I
seem
to
recollect
pointing
out
that
river
house
that's
what
it
was
and
the
value
kept
going
down,
and
I
pointed
out
well
yeah
that
that
value's
going
down,
but
the
reversion
of
the
landlord
ought
to
be
going
up,
and
so
I
think
in
that
situation
the
county
did
in
fact
come
up
with
two
tax
bills,
one
to
the
co-op
owners
or
condominium
owners
and
another
to
the
reversion,
and
I
really
think
if
I
were
grant,
I
would
leave
that
alone.
A
All
right,
okay,
mary
hogan
seconds,
all
in
favor
aye.
G
A
Opposed
okay,
it's
unanimous,
the
county's
confirmed
at
116
million
zero
seven.