Posted Wednesday, June 14, 2017 9:36 AM | Contributed by Jeff
Disney filed nearly a dozen lawsuits at the end of last month in Orange Circuit Court, arguing the assessments by Orange County Appraiser Rick Singh exceeded their properties’ fair market value and incorrectly “included the value of certain intangible property in the assessments.”
Read more from The Orlando Sentinel.
I think assessing any of the parks under a half-billion dollars seems pretty fair to me. My house sure was appraised low. Rick Singh has a pretty good reputation here for making that whole department run on the cheap.
It would be an interesting argument in terms of the intangible asset aspect. Presumably the parks are arguing that a large portion of the value of the properties is related to the intangible assets of the brand of each. Without the intangibles, what are the properties worth? Presumably a lot less than what they are worth with the branding. Determining that difference though isn't really easy.
I dunno... if Expedition Everest costs $100 million to build, is it really one-fifth the assessed value? I realize that assessed and actual value are not the same (or my own property tax would suck!), but still.
It depreciated really quickly after the Yeti went disco :)
I won't claim to even have a clue if the numbers are right, but I can get behind the application of intangible property more for Disney/Universal/Sea World than all the big box stores that have been using this same tactic.
In another article, he makes a fair point:
I’ll give you a great example; when the entire theme park of Magic Kingdom is assessed less than the Dr. Phillips Performing Arts Center, that’s a problem.
Oh, wow, that's crazy. DPC is a really nice facility (my wife works there), but it's not an entire theme park. In that context, yeah, sorry Disney, you have no case.
Disney would hate being poor...
Presumably the intangible asset value attributed to the performing arts center isn't significant. The current owner could sell the building tomorrow and no one would even know the difference. Not true of Disney.
How you deal with intangible asset values is interesting to me. No doubt Singh wants the assessed property values to be as high as possible. And property owners want the lowest assessments possible. Somewhere in the middle is the answer.
How many parks spend $100 million on a mediocre roller coaster? There has to be something at play of an intangible nature. You could use projected cash flow as a basis for tax valuations but you are already taxing cash flows (typically multiple times) when they happen. If the performing arts center is not-for-profit its cash flows are not likely taxed (at least not nearly as much).
The aggressive approach Singh is taking today would have been a negative back when Walt was scouting locations. And that aggressive approach may also have altered expansion plans up until now. Now that they are in a building war with Universal its unlikely taxes will influence spending plans. So now I guess would be the time to get aggressive in terms of tax collection.
From a picture I saw online, the performing arts center looks relatively new. If you look at tax valuations with properties built over long periods of time, the older properties are typically assesses at lower values. In large part the cost/value of the performing arts center is presumably due to the success of Disney and all of the people it brings to the area. At that is true for a lot of the business assets in the area.
DPC opened about 2.5 years ago. It's a non-profit and received a fair amount of public and private money (including from Disney, who has the naming rights to the main theater). It's a centerpiece to downtown, which is finally seeing some lift in commercial rent. Point is, it's not at all a conventional commercial property, and as such I would expect it to be assessed less. I think that's the point that Singh was trying to make.
I suspect Singh doesn't think any property should be assessed less but expects a lot of properties to be assessed more. Its the nature of what he does. So he is not saying the DPC should be assessed less but rather Disney should be assessed more.
You initially stated you thought the Disney parks' assessment seemed fair to you. But once you learn that DPC is assessed more than the Disney parks you changed your mind. Maybe DPC is just over assessed?
Centerpiece of an international tourist mecca with increasing rents sounds like valuable property to me. That its use isn't conventional commercial doesn't change the property's value.
You mean DPC? I don't think you understand Orlando. Downtown has nothing to do with global tourism. It could be the downtown area of any city in the US and has nothing to do with the tourist economy. If I dropped you at Orange and South, you'd never know there was a Walt Disney World. It's like the downtown of any major metro... banks, law firms, corporate offices, residential high-rises and some restaurants and bars. In fact, it's important because it diversifies the economy so it isn't so reliant on tourism.
And yeah, I'm all for Disney being assessed as high as possible because we share the same millage. The more they pay, the less I do.
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