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Property Use: It’s in the Details

Typically, schools, churches, and some charitable organizations are state-owned and therefore tax-exempt. This was the case for Pivotal’s client until the date at which they became the first for-profit Christian college in the United States.  Since that time, the campus was subject to commercial property taxes. Upon moving the property to taxable status, the assessor’s office combined all of the improvements on the campus  and gave it a commercial (Class 1) designation for all of the campus buildings in a commercial assessment ratio tax bracket.  Pivotal, recognizing that the campus was comprised of buildings with multiple uses, zeroed in on the student housing portion of the campus that accounted for nearly fifty percent of the parcel land, and over 70% of the value that was under assessment.  Pivotal argued that the student housing should receive a residential designation (Class 4) and that portion of the property should be taxed under the residential assessment ratio which was nearly 50% lower than Class 1.   It was successfully argued that the mixed-use ratio was more representative of the makeup of the campus and resulted in a nearly $2.3 million tax reduction for the current year under appeal, and even more for the future years.

Once again Pivotal’s practice of visiting client properties and diligently reviewing every item pertaining to their taxation led to an incredibly successful engagement.


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