04/15/2007

Property values tumble

Community experiences 10 percent drop

By CRAIG McCOOL

cmccool@record-eagle.com

BAY HARBOR — This posh community's resort-wide assessed property values fell by 10 percent over the past year, and dragged down the city of Petoskey's estimated assessed worth by half as much.

Petoskey was the only area of Emmet County to see an overall decrease in assessed value this year, according to a recent county equalization report. The drop was largely thanks to the decrease at Bay Harbor, which accounts for more than 50 percent of the city's tax base.

What the figures reflect — a flagging economy or a needed "correction” to over-inflated values — is a subject of disagreement. Assessing is "not a hard science,” said City Assessor John Gehres, who used sales figures from April 2004 to March 2006 to assign the new values.

"Based on the data that I collected, it looked like (the resort) deserved a decrease. They've had sales that show that property selling for a lot less,” Gehres said.

Chris Etienne, sales director for Bay Harbor Properties, estimated about $40 million in sales in the exclusive Little Traverse Bay resort in 2006, an increase, she said, of about $4 million over 2005.

Etienne contended that Bay Harbor property values historically have been assessed too high. The resort's total estimated worth has grown from about $4 million in 1995 to above $300 million today, she said.

"We have really seen some of the assessments of the properties sold here come on the tax rolls higher than they should have,” Etienne said. "We really do feel it's a correction that needed to take place, anyway.”

The 10 percent decline is an average, but nearly everyone who owns property in Bay Harbor saw a decrease, Gehres said.

"Some would have gotten 15 or 18 (percent drop) and some would have gotten 5,” he said. "The only way you would have gotten an increase last year is if you built a new house. Other than that nobody got an increase.”

The resort's property owners have long contested their assessments. The city of Petoskey had about 80 landowners come before the board of review this year, Gehres said, adding that it "was a light year.”

"Out of 80, definitely more than half were Bay Harbor residents,” Gehres said. "They still think I'm way too high.”

An erratic assessment trend in recent years reflects the back-and-forth struggle between assessors and resort owners. Overall assessed values in Bay Harbor saw a double-digit drop in 2004, Gehres said. They jumped by 10 percent last year after a downstate firm conducted a city-wide reappraisal but fell back the same amount this year.

The recent assessment decreases in Bay Harbor will mean only minor adjustments to the 2007 city budget, Petoskey Treasurer Al Terry said. While the city-wide assessed value dropped 5 percent, the real taxable value actually saw a 1 percent increase, still the lowest taxable value increase in Emmet County.

The budget approved by council last fall projected a 3 percent increase and Terry estimated a resulting $60,000 impact on an anticipated $7.8 million budget.

"We're not talking about much difference here,” he said.