ALBANY, GA (WALB) – Many property owners are expected to appeal the tax value of those buildings in the new year, and that could hurt the tax base.
Realtors say it's simple supply and demand. Lots of empty stores and industries has caused rental prices and property values based on them to plummet in the last five years. That means the taxes paid on those buildings could also fall, and put more strain on government budgets.
Lots of big commercial stores and industrial sites sit empty. The economy and those empty spaces have made Albany lease values fall by as much as 30 percent.
"You are looking at a 25 to 30 percent reduction in the value of that building, based on the lease income," Coldwell Banker Walden and Kirkland President Larry Walden said.
A new Georgia law gives property owners more rights to appeal their tax values, and Walden thinks many owners will be appealing January 1st. Besides the jobs losses when these businesses closed, now those empty commercial properties could take a double hit on the local tax base.
"We not only lost the sales tax on these businesses operating, but we lost the ad valorem tax value of those buildings," Walden said.
The Economic Development Commission is working to get new business and industry to move to Albany, but there is little growth and county officials say they fear 2011 could bring many more cuts in government services.
"Those people who work so hard making sure that we are able to carry on the government we have, have to deal with that. We have seen it at every level, and I think we'll continue to see that," said Dougherty County EDC Chairman Robert McKinney.
The bright spot in the Albany economy, the new East Albany Walmart going up. That will be a big shot in the arm, but along with it comes 33,000 square feet of new store fronts for lease. More supply with less demand could mean even more slips in the lease incomes.
Dougherty County Commission Chairman Jeff Sinyard said despite the tax base woes, property owners paying only fair tax value on their property is the most important factor. He said property owners confidence will be paramount during appeals.
Larry Walden told us most commercial retail property was renting for $12 a square foot five years ago. Now businesses are asking to break long term leases and reduce to $8 a square foot.