Shaker Point seeks lower property value, Danville Schools losing $10,000 in taxes during appeal

Published 6:50 am Thursday, November 15, 2018

A second business in Danville is attempting to lower its property value, a move that could cost the Danville Independent School District around $10,000 annually.

Shaker Point Place LLC wants Shaker Point Apartments, a 46-unit housing complex on the north side of Danville, valued at less than half of its current $1.875 million valuation, Danville Schools Finance Office Paul Dean said.

Kroger has already been pursuing a lower value on its Danville store for years.

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“This is the second one now that we’ve had come about and that’s why I say this kind of scares me a little bit,” Dean said. “If there’s going to be a precedent set and everybody starts to do this, we’re going to be collecting a lot less taxes.”

Assistant Property Valuation Administrator Lacresha Gibson confirmed that Shaker Point appealed its valuation in May, but the local Board of Assessment Appeals denied its request.

According to Board of Assessment Appeals files, Shaker Point wanted the property to be valued at $765,400 — a reduction of more than $1.1 million.

Attorney Kenton Ball with the firm Rigsby Ball Law Group made the case for the lower value in a filing with the request. Ball argued the property’s 2018 assessment is too high because it wasn’t determined using the “net income approach.”

As a low-income housing property, Shaker Point is restricted in how much it can charge for rent. And further restrictions were created recently “because of a financing agreement for a rehabilitation of the property in 2016 and 2017,” Ball wrote.

State law requires that low-income housing properties such as Shaker Point be valued using the net income approach, which would give the property a value of just $765,400, Ball argued.

But the Board of Assessment Appeals decided to keep the $1.875 million value due to a “special warranty deed” on the property and a comparison of sales of similar properties, according to a justification for the board’s decision.

Ben Kleppinger/
Danville Schools Finance Officer Paul Dean speaks to members of the Danville school board Monday night.

Shaker Point has appealed that denial to the Kentucky Claims Commission. Gibson, who will take over as PVA in December, said when someone appeals a local denial to the KCC, they only pay property taxes on the value they claim until the case is resolved.

That means Shaker Point will only pay property taxes on the $765,400 value until the appeal is resolved. Shaker Point would only pay the rest of its property taxes on the current value if the KCC denies its request.

Dean said because Shaker Point is appealing its 2018 valuation and has already paid its Danville Schools’ property tax bill, the district may be required to refund around $10,000 to the company.

School board member Steve Becker was incredulous.

“I’m going to make the suggestion that until a court tells us to pay it back, don’t pay it back,” Becker said. “… This is ridiculous.”

Gibson said the next step in the process involves a conference call with Shaker Point that will likely occur sometime after the first of the year.

In a similar dispute that’s been ongoing for more than two years, Kroger has been attempting to lower the 2016 value of its Danville store from $5.5 million to $2.85 million. The KCC recently finalized a ruling against Kroger, but Kroger has petitioned the Boyle County Circuit Court to review the ruling.

“Our side keeps winning, but then the other side keeps appealing,” Dean said. “… The scary part of this is if Kroger were to win this, I think it opens the door for a lot of other businesses to appeal their assessment. Even though we may eventually win those battles, once they appeal then what they’re appealing is exonerated and they don’t have to pay tax on it. So we’re losing out on that tax money until the time that it’s upheld.”

Danville Schools receive the most property tax revenue in Boyle County; property owners pay the district 94.6 cents for every $100 of value. Other taxing districts potentially affected by the valuation of Shaker Point and Kroger include the City of Danville, the Boyle County Public Library, the Boyle County Health Department and the Boyle County Cooperative Extension Service.

PVA Eddie Tamme said earlier this month that if businesses successfully appeal to lower their property values, it shifts the tax burden onto individual property owners, some of whom may not be able to handle the extra cost easily.

Tamme said all of Boyle County’s commercial and industrial properties are valued at a total of about $466 million. If Kroger is successful, it “erodes our tax base” and “forces the citizens of Danville and Boyle County to pick up the difference,” he said. “Look at the ramifications it has for our tax base and look at who suffers.”