After getting new information, Madison is cutting millions of dollars — and in five cases, more than $10 million — from the assessments of hotels that saw huge increases in property values this year.
After initial assessments were announced in April, city officials had said hotels and big apartment buildings had been undervalued and that increases were appropriate and warranted.
But following appeals, the city Assessors’s Office reduced values for many big hotels and other properties.
After the decreases for hotels are factored in, the net value of all taxable property is nearly $97 million less than earlier estimates for the 2018 budget.
The latest changes will add $9.67 to the tax bill for the average home for next year, bringing the increase to $75.60 and the total bill to $2,493.19. Madison’s average home is valued at $269,377. The city’s Finance Committee approved a $314.3 million operating budget on Monday, and the City Council will make final budget decisions the week of Nov. 13.
In all, 30 hotels challenged their 2017 assessments — triple the highest number in the past decade.
The city’s Board of Assessors followed staff recommendations and this week reduced assessments for 26 of the 30 hotels.
After the changes, 24 hotels still had assessments above 2016 values — including some with triple-digit percentage increases — and six smaller hotels have values now lower than the previous year. On the bottom line, the Board of Assessors reduced initial assessments for the hotels a total $161.5 million, though the impact on the budget is lower because some of the hotels are in tax incremental financing districts. The 30 properties’ total value was still up $104.7 million from 2016.
Overall, “it shows we were on the right track,” city assessor Mark Hanson said. “We knew this class of property needed some adjustment. They hadn’t been looked at since the recession.”
The hotel assessments initially came in far too high because assessors had to rely on assumptions based on available occupancy and room rates and didn’t have actual income and expense information, Hanson said. In the appeal process, hotels provided actual data, he said.
“We increased some of them way more than they should have been,” he said. “We all now understand the process better.”
Earlier this month, the Board of Assessors reduced assessments for 24 apartment buildings valued at more than $1 million, including some sizable cuts for four properties initially valued at more than $30 million.
It’s unclear if hotel and apartment owners will accept the revised values or pursue their appeals further.
Among hotels, the Madison Concourse, 1 W. Dayton St., the city’s biggest hotel, would be reduced 44 percent from $61.1 million to $33.9 million. In April, when new assessments were announced, the Concourse received the highest dollar jump with a whopping $41.7 million increase, or 215 percent, to the $61.1 million.
Concourse general manager Steve Zanoni could not be reached.
Other large hotels also are seeing large decreases.
The changes for hotels, apartments and other properties have forced the Assessor’s Office to revise total increases over last year for various classes of property.
The increase in commercial property was revised from 16.6 percent to 13.4 percent, Hanson said in a memo. The residential property increase changed slightly from 6.6 percent to 6.5 percent. And the overall increase was revised from 10.2 percent to 9 percent.