The city has agreed to lower the assessment of a Bridgeport Avenue office building by about 20%.
The Shelton Board of Aldermen recently voted to drop the assessed value of 1000 Bridgeport Ave. from $10,547,250 to $8,400,000, a decrease of 20.4%.
The aldermen voted in favor of a stipulated agreement between the city and 1000 Bridgeport Associates LLC, the entity that had owned the structure on lower Bridgeport Avenue until earlier this year.
The owner had gone to court to appeal the assessment. Due to the agreement, the property owner’s tax bill will drop by one-fifth.
Court challenges not uncommon
It is not uncommon for large commercial taxpayers to go to court to try to have their assessments lowered. When the appeals appear to have some merit, municipalities often will reach settlements with the property owners, such as in the 1000 Bridgeport Associates LLC case.
The five-story structure has 134,000 square feet of office space. People’s United Bank previously had a branch office in the building. The property is just south of the Shelton Square Shopping Center that includes a Stop & Shop.
Fair market value: $12 million
According to the stipulated agreement, the current fair market value of the property is $12 million. That includes $10.6 million for the building and $1.3 million for the land. Previously, the overall fair market value had been considered $15.1 million.
Property is assessed at 70% of fair market value in Connecticut.
Real estate is re-assessed every five years. The last re-assessment in Shelton took effect in July 2012, and the next one will be implemented in July 2017.
Sales price down 50%
The property at 1000 Bridgeport Ave. was sold this May for $8.1 million to Fairfield Realty Group LLC.
In 2007, the building had sold for $16.8 million. Real estate values then dropped in the following years due to the economic recession, with commercial property values in particular being negatively impacted by some unique factors such as advancing technology.
Tax credits for overpayments
The new assessment means the property owner will be credited for past overpayments on the next two tax bills, which are due in January and July of 2015. The city will not have to pay any interest on the overpayments.
Based on the city’s current tax rate of 22.31 mills, the building owner’s annual tax obligations will go from $235,300 to $187,400.
In the tax appeal, the commercial property owner was represented by attorney Paul A. Sobel of the Bridgeport-based law firm of Green and Gross. The city of Shelton was represented by its corporation counsel, Thomas J. Welch of Shelton-based Teodosio, Stanek & Blake.
Hersam Acorn, the company that produces the Shelton Herald, has an office in the building at 1000 Bridgeport Ave.