Shorelines

I only know enough to be dangerous when it comes to assessment values, so I wish an experienced Assessor would comment, but I will tell you what I know based on my experience with redevelopment.  In some parts of cities that have seen new development, the price of land experiences dramatic increases - let's use Bayshore as an example.  The success of Bayshore has probably had an effect on nearby parcels and increased all of their land values.  Think parcels on Port Washington Road near Bayshore.  Some of the parcels may have $3,000,000 land values and no improvement value even though a building sits on the parcel.  This is because the value lies in the location, not the improvements.  The Assessor is looking at these parcels with the thought that a developer will probably buy the parcel for its location, demolish the existing building/s and construct something new.  The value of the new development (improvements) will then match the value of the land.

Example (which is made up) to illustrate my point:

Parcel X on Port Washington Road/Silver Spring Drive in 1990 was a 1960’s office building with a land value of $500,000 and improvement value of $1,500,000.

In early 2000 a new shopping mall is constructed next to the parcel.  The mall is successful and land values in the surrounding area rise.

Parcel X on Port Washington Road/Silver Spring drive in 2008 is still a 1960’s office building but now has a land value of $3,000,000 and improvement value of $0.  

Parcel X is purchased by a developer in 2009 and he/she constructs a new multi-story mixed use building with retail on the bottom floor and condos above.   The improvements are now valued at $9,000,000 and the land is still valued at $3,000,000.  The property has now reached its highest and best use.

Obviously there is no Bayshore Mall on E. Capitol Drive so I am not sure what stimulated the value change at 1111 E Capitol Drive.  It could be recent adoption of the Village Master Plan with associated redevelopment projects outlined.  Sometimes a plan such as this creates the expectation of land value increases since they have been "targeted" as projects by the municipality.  The municipality is saying "this is not the highest and best use.  The land is valuable and should have a more valuable development (improvements) on it."  If we look up other target redevelopment properties in the village, we might find the same situation.

Again, I am not an assessor so I don't have the technical details as to how this is done, but I believe this is the theory behind those kinds of assessments.