Gain in industrial property values seen as deceptive
Noting that the 2009 equalized value of all industrial properties in Kent County rose by 7.3 percent from 2008 is true, but it’s also misleading.
Having the value rise from $1.83 billion in 2008 to nearly $1.97 billion for the 2009 report suggests that the industrial real estate market grew by about $144 million last year, which would make for a banner 12 months anytime — even more so during a recession.
While there was some growth in some municipalities, almost all of that gain came from the transfer of commercial properties to the industrial tax roll. And one city accounted for almost all of that increase in value.
“The actual market increase was not very significant. The city of Wyoming, with the introduction of the Michigan Business Tax, reclassified a bunch of their industrial properties to commercial (last year) and this year they reclassified it back. So those percentages are a bit misleading at first glance,” said Matt Woolford, deputy director of the Kent County Bureau of Equalization.
Wyoming reclassified about $128 million worth of commercial properties to the industrial list, which increased the city’s equalized value of industrial properties by 70.6 percent to $308 million in 2009 from the $180 million Wyoming listed in 2008. The city’s transfer accounted for 88 percent of the total monetary increase in the county’s total equalized industrial value.
“I think it’s a combination of a couple of factors. Some special ag parcels came off the (Industrial Facility Tax) roll and the reclassification of properties. The actual market increase for the county was relatively flat,” said Woolford.
In the 2008 report, industrial values throughout the county fell by $131 million, or 6.65 percent, from 2007. And that dollar figure is roughly the value of the industrial properties that Wyoming reclassified as commercial for the 2008 report. So this year’s 7.3-percent gain in equalized value is largely a flip-flop of last year’s value loss.
Besides Wyoming, 15 municipalities recorded a gain in industrial values. Those increases ranged from four-tenths of a percent in Alpine Township to 124 percent in Cedar Springs. The largest percentage loss of the 10 communities that had values drop occurred in Algoma Township at 24.6 percent. (See related chart.)
For the first time in years, Oakfield Township had an equalized value of $265,600 listed on the industrial roll. Township assessor Marla Platt said her office also reclassified a commercial piece of property to industrial.
“I had one parcel that should have been in industrial. When you have one parcel as industrial, it has to be appraised every year for the study. Even if you have five, it’s the same thing,” she said. “So I did put that parcel over into industrial.”