Real Estate Lawyers Win $2.5 Million Real Estate Tax Refund
Holland & Knight's real estate lawyers successfully challenged the real estate tax assessments on a 500,000 square foot vacant office building in Washington, D.C., owned by an entity including Forest City Enterprises, Kaempfer and Bresler & Reiner. The property includes two office towers plus retail space, including a Safeway store, and is located in the southwest area of D.C.
The City originally assessed the property for tax year 2003 at $70,527,310. Following an administrative appeal, the assessment was increased to $133,766,850. With the assistance of the client, Holland & Knight's lawyers prepared their own estimate of value and concluded that the property was worth about $48,561,520. They then filed suit seeking a reduction in this assessment to their estimate of value.
Meanwhile, the City assessed the property for tax year 2004 at $130,624,320. Holland & Knight's lawyers again filed administrative appeals on the assessment and obtained a modest reduction to $123,622,645 before filing suit and consolidating with the 2003 case. After filing the lawsuit, our lawyers went to mediation (as is required in the tax division of the D.C. Superior Court) in an attempt to settle the cases. The City refused to respond to the offer.
Holland & Knight engaged an expert appraiser for trial who valued the property near the original numbers the firm had prepared with the client. The City chose to rely on its own assessment and assessor staff. On the eve of trial, the City approached Holland & Knight to request a settlement. After several meetings and e-mails, the parties agreed to settle the cases at $66,600,000 for tax year 2003 and $73,300,000 for tax year 2004. The settlement resulted in a total tax refund of $2.5 million and an extremely happy client.
The property has been assessed for tax year 2005 and 2006 at about $123,000,000 for each year.
There was an effort to include the newest assessments in the settlement package but the City would not agree to a figure that was appropriate. The Holland & Knight team has lawsuits pending on the 2005 and 2006 assessments and fully expect to obtain similar reductions and tax refunds in those cases.