By Martin S. Katz

As published in Corporate Real Estate Executive, September 1997


Property taxes and assessments vary dramatically from state to state and, in some instances, from jurisdiction to jurisdiction within states. The increased demands on local authorities to produce revenues for their taxing bodies arising form the federal cutbacks of the Reagan Administration has produced a climate where taxpayers must proceed to higher levels of appeal to obtain fair and appropriate assessments and corresponding tax bills on their properties.

American Property Tax Counsel, The National Affiliation of Property Tax Attorneys (APTC) was established several years ago by experienced law firms in the property tax field with the common philosophy that local counsel is required to achieve optimal results. Strict criterion was established for membership in APTC by the original firms including years experience in property tax law, types of cases tried in court, clients represented, articles written and speeches presented on property tax issues. A membership committee was established and APTC has grown to 25 independent law firms across the United States and Canada.

One of the major activities of APTC is an annual seminar on valuation issues involving a particular sector of the real estate industry. APTC members invite their clients to what has become a two day “think tank” on issues such as business / intangible value in regional shopping malls and hotels. The seminar on regional shopping malls was attended by the tax representatives of major shopping mall owner / developers such as Simon, Taubman, Jacobs, JMB/Urban, Rouse and many others. The hotel conference held last November in Scottsdale, Arizona, was attended by the tax representatives of Hilton, Doubletree, Marriott, Promus, Interstate Hotels, etc. New and creative approaches to minimizing tax liabilities have emanated from the APTC seminars.

This year’s APTC seminar will explore in depth the Valuation of Office Buildings, and, as a subtopic, the dramatic recovery of the commercial real estate market as evidenced in particular by recent acquisition prices paid by real estate investment trusts APTC member law firms are recognized as leaders in the property tax field both by their clients and major national real estate organizations. Two firms, Fisk Kart and Katz, Ltd., in Chicago, and Wilkes, Artis, Hedrick & Lane in Washington, D.C., presented a panel presentation at this year’s NAREIT Law and Accounting Conference in San Diego on how real estate investment trusts can structure acquisitions to avoid future tax increases.

APTC members collaborating to represent their clients have achieved outstanding results. In one case, a regional shopping mall in a major metropolitan area had its assessment increased from $125 million to $144 million. In the previous year, a non-attorney tax consultant had unsuccessfully appealed the $125 million market value. Through the creative approach of the two APTC law firms, working together, the governmental authorities agreed to a reduction from $144 million to $108 million for the succeeding year.

In another case, two APTC member law firms worked as co-counsel in an appeal on an unique issue concerning a major commercial property under development. The land had previously been assessed as agricultural, but that state’s legislature had eliminated its qualification for farm valuation and increased the taxes on the property for the two years prior to construction by $700,000. A non-attorney tax consultant had filed an appeal, but then recommended that little could be gained and recommended that the complaint be withdrawn. The local APTC member law firm through its APTC affiliate in another city whose client owned the property, substituted in the case and was able to wipe out $500,000 of the $700,000 projected tax increase.

Similar results have been obtained for hotels, industrial complexes, office buildings and mixed use projects. Representation by APTC member law firms offers corporate and institutional owners of diverse real estate portfolios the unique benefits of experienced, aggressive local representation at all levels of appeal and the availability of centralized reporting.