Newspaper Case Study
Hilco Valuation Services' Property Tax specialist Frank Lima authored the below case study featuring a former newspaper business.
The property contains a newspaper business, with office, press operation, and distribution buildings in the central business district of a Mid-Atlantic city. The property has a gross building area of approximately 152,260 square feet (SF), comprising 78,166 SF for offices; 46,910 SF for the press operation; and 27,184 SF for distribution. Each of the three buildings is standalone, but all are inter-connected with a skywalk system. The site consists of 16 parcels, collectively totaling 165,981 SF, or 3.81 acres, with a land-to-building ratio of approximately 0.92:1.
Each building is approximately three stories high. The distribution building is on the north side of the campus, with the office building on the south and press operations on the east. The office and distribution buildings were constructed in 1969 and 1986, respectively, and the state-of-the-art press operation was built in 2003. The buildings utilize natural gas, central air, and forced air. The distribution and press buildings are fully sprinklered.
Our initial objective was to consolidate the assemblage of the 16 parcels to conform to the uses of the three unique buildings. Due to the parcels’ inconsistent uses, the assessor was valuing each parcel based on an assumption of the percentage of office, distribution, and press operations performed respective to the parcel. Hilco filed a plat of subdivision consistent with the three uses into three primary parcels. We were now able to compare each of the three uses accurately.
In 2015, Hilco filed an appeal at the assessor’s level, but were not granted a reduction. Hilco appealed further to the Board of Equalization and achieved the results illustrated below.
| Building | Assessment From | Assessment To | Taxes From | Taxes To | Percentage Savings |
| Office | $6,306,400 | $4,975,900 | $83,244.48 | $65,681.88 | -21.10% |
| Distribution | $1,995,600 | $1,786,400 | $26,342.92 | $23,580.48 | -10.48% |
| Press Operations | $7,354,700 | $6,738,900 | $97,082.04 | $88,956.27 | - 8.37% |
In fall 2015, HIlco issued an informal challenge to the assessor for additional reductions based on recent market sales of office and distribution/warehouse transactions, and the Board reductions. Results of the 2016 informal appeal are illustrated below.
| Building | Assessment From | Assessment To | Estimated Taxes From | Estimated Taxes To | Percentage Savings |
| Office | No Change | | | | |
| Distribution | No Change | | | | |
| Press Operations | $6,738,900 | $5,728,200 | $89,608.68 | $76,167.38 | - 15.00% |
In early February 2016, Hilco filed a formal appeal with the assessor’s office and met with them in mid-February to do a physical walk-through of all three buildings. The results of that appeal are noted below.
| Building | Assessment From | Assessment To | Estimated Taxes From | Estimated Taxes To | Percentage Savings |
| Office | $4,975,900 | $4,764,300 | $60,705.98 | $58,124.46 | - 4.25% |
| Distribution | $1,786,400 | $1,611,700 | $21,794.08 | $19,662.74 | -9.78% |
| Press Operations | $5,728,200 | $4,419,500 | $82,214.58 | $63,428.55 | -22.85% |
In Summary, the total reductions in Real Estate taxes granted in 2015 and 2016 are as follows:
This county reassesses on a five-year cycle, and these reductions are expected to remain stable throughout the cycle. The total tax savings is approximately $65 thousand annually and approximately $327 thousand throughout the cycle.