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Fulton County, school district lost out on potential $1.5M tax windfall

Alpharetta successful in fight to retain Avalon tax payment

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Fulton County and Fulton County Schools sat out on a case that could have cost them a combined $1.5 million in tax collections.

Representatives for the county and school district chose not to participate in a 2016 court battle waged by Alpharetta against North American Properties, owners of Avalon.

The mega-development filed an appeal in February 2016 claiming that its 2015 tax assessment was too high.

It sought reimbursement from the county, the school district and the city for a majority of the $2.3 million it had paid in property taxes claiming its property was assessed improperly.

Avalon argued that the development was not issued a certificate of occupation until after Jan. 1, 2015, and, therefore, the property should be valued based on its pre-development status.

For tax year 2015, the Fulton County Assessor’s Office initially set the property’s fair market value at $338,344,500. It set the taxable value at $67,668,900.

As such:

  • The City of Alpharetta received $389,096 in 2015 taxes from Avalon, based on its mill levy of 5.75 mills.
  • Fulton County received $727,000 in taxes based on its 10.7 mills rate.
  • Fulton County Schools received $1,252,000 based on its 18.5 mills rate.

After Avalon protested, the Fulton County Board of Assessors reduced the assessed fair market value from $338,344,500 to $8,152,300 for Tax Year 2015, a reduction of more than 95 percent.

Both Fulton County and Fulton County Schools reimbursed North American Properties more than $1.5 million of the nearly $2 million they had collected.

But Alpharetta refused.

Court action filed

In December 2016, attorneys for Avalon filed suit in Fulton County Superior Court seeking judgement against Alpharetta.

In the city’s response, Alpharetta City Attorney Sam Thomas argued that the development was not entitled to reimbursement of its property taxes and should never have been reassessed.

Thomas noted Avalon held its grand opening and was fully operational by Jan. 1, 2015. The city also claimed Avalon received its reduced assessment with false information.

Avalon and the Fulton County Development Authority “agreed to provide the Fulton County Board of Assessors with false information regarding the completion and occupancy of the New Retail Buildings so that [Avalon’s] leasehold interest in the New Retail Buildings would not be taxable for tax year 2015,” the city stated in its filing.

Then, in February, Avalon dropped its case against Alpharetta.

The settlement means the city will keep $370,000 in property taxes under dispute. If Avalon had prevailed, the city would have kept only $19,000 in property taxes.

Thomas said only that both sides concluded that it was best to move forward together as partners rather than spend more time in litigation.

Thomas was asked about the city’s claim that Avalon and the Development Authority supplied the tax assessor’s office with “false information.”

Thomas said a more accurate description would be that Avalon based its argument on “information that was in error.”

Al Nash, executive director of the Fulton County Development Authority, said his office wasn’t even named in the suit and it certainly does not go about performing property assessments.

Other governments notified of judgment

Further, documents obtained through Open Records requests show that the City of Alpharetta notified both Fulton County and the school district back in March 2016 of its intent to fight any tax reimbursement to Avalon. 

In emails sent by Alpharetta Finance Director Tom Harris, both the county and school district were urged to take note.

“We encourage you or an appropriate person of your agency to review this and make your concerns known to David Fitzgibbon, chief appraiser, as soon as practicable.

“He has informed us that while he disagrees with our view he will bring this matter to his legal department for their take. We hope to hear from his office soon,” the email read.

Contacted this week, Fulton County Interim Chief Appraiser Dwight Robinson said, “Fulton County’s decisions were based on established practices and on legal advice.”

In earlier correspondence, Robinson held that the county followed the memorandum of agreement between Avalon and the

Fulton County Development Authority which states that “full value is not established until January 1st after a final certificate of occupancy is issued. Until then, we appraise the property as undeveloped.

“A ‘grand opening’ is not a ‘final certificate of occupancy,’” he said.

Susan Hale, spokeswoman for Fulton County Schools also responded.

“The guidance given to us by the Fulton County Tax Commissioner’s Office is that property valuations and appeals are handled by the County Board of Tax Assessors, Boards of Equalization and Superior Court.

“If applicable, cities, school systems and other taxing authorities should not intervene in the valuation or appeal process,” Hale said.

Officials with Avalon did not respond to requests for comment. 

Whether Fulton County or the school district can change course and ask Avalon to return the reimbursed tax money is unclear.

Thomas, the Alpharetta City Attorney, said Alpharetta began from a position of strength because Avalon had already paid taxes on the full assessment. The city had the money, and Avalon was asking for part of it to be returned.

But the county and school district have already returned their share.

“They’re certainly in a weakened position,” Thomas said.


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