Franklin County survey seeks details about finances
Franklin County Auditor Michael Stinziano’s office last month mailed thousands of owners of commercial properties a questionnaire asking for their tenants’ names, the amount of rent they paid, lease terms, and the bottom-line profit for the landlord over the last three years, along with dozens of other business questions.
But if you got one of the surveys, you’re not required to respond.
The data is to be used for the “sexennial revaluation” set for 2023, where all parcels will be reviewed for market-value appraisals used to set their property taxes, with a lesser “update” between revaluations.
“It is too early to share any specific findings for the data, but we rely on local data as the best source of information regarding the current state of commercial properties,” Anthony Caldwell, spokesman for Auditor Stinziano, said in an email. “The information from the surveys is aggregated to create cost schedules/tables that will then be used in the valuation of similar types of commercial and industrial properties.
“Sales continue to be used for the valuation of properties — residential especially — but that data is harder to come by for commercial properties,” particularly those valued at more than $250,000, which are fewer and don’t sell as often, Caldwell said.
A letter signed by Stinziano accompanying the survey and two survey forms all begin with the words “Under Ohio law” and note that a mass reappraisal must take place every six years, suggesting participation might be required. Then they note lower down that: “Participation in this survey is completely voluntary.”
Of the more than 7,500 questionnaires mailed out before Thanksgiving, only about 100 had been returned as of mid-December.
“Of course, there’s no legal obligation to return any information, so they get what they get,” said Mark Gillis, a Columbus attorney specializing in property-tax law. “I don’t expect a large turnout.”
Why neighboring counties don’t ask landlords for property income information
Auditors for Delaware and Union counties said they don’t typically use such surveys, but prefer to rely on other information provided by trade groups and consultants to try to get at what revenue-generating properties are currently worth on the open market.
That’s because owners don’t typically want to reveal details about their business finances, making the process generally unproductive, said Delaware County Auditor George Kaitsa.
“Once that’s provided, that becomes public information, and I think that’s part of the reluctance,” Kaitsa said. He said he hasn’t relied on surveys since taking office in 2009.
Prior to him taking office, income surveys may have been used “once or twice” over the years, but “for the effort and the lack of response, we had other sources of information that we could use,” Kaitsa said.
“Companies aren’t always wanting to disclose that, Union County Auditor Andrea Weaver said of tenant and rental information. Weaver said she used a survey only once that she recalled, in 2019, to try to gain income-approach and replacement-cost data. It was mailed to just a couple dozen commercial property owners.
“Once it’s provided to us, it’s no longer private,” Weaver said.
Franklin County’s survey is voluminous.
It wants to know first what an owner paid for the property — including whether the price was for any “considerations other than real estate.” It asks if any of that amount was mortgaged, for how many years and at what interest rate.
Then, it goes into asking about construction costs: architectural fees, site preparation, paving, fencing and other improvements, as well as “major rehabilitation & remodeling,” and “other data and comments.” The survey also asks the recipient’s name, telephone number and email “for question purposes.”
From there, it asks about income and expenses, including the “tenant name,” floor level the tenant rents, leased square footage, rental income (monthly or annually), lease start and expiration dates, and whether the tenant pays for utilities, insurance, taxes or “common area maintenance,” and in what amounts.
It also asks the owner’s gross or net income for the last three years, as well as management and administrative expenses, payrolls, and maintenance costs.
Finally, the survey asks for a bevy of information specifically on apartments, hotels or self-storage units. For apartments, it asks the number of units by bedroom/bath layout and their associated monthly rents, and also if they include use of garages, fireplaces, air-conditioning, elevators, pools, clubhouses, health clubs, or washers and dryers.
For hotels, it asks if they serve breakfast, what their franchise fees are, and nightly rates for single-bed, double-bed and suite rooms, and its occupancy rates currently and for the last year.
Even if fully filled out, auditors have almost no way to know if any of the answers to the questions are truthful, with the possible exception of the sales prices and mortgages, which are public in Ohio.
There is no penalty for failing to fill out the survey or filling it out incorrectly,” Caldwell said. “While we appreciate the local data we are requesting, we are also gathering data from other sources, so the survey is just one piece of the puzzle.”
The Franklin County Auditor’s office used a commercial survey during the 2011 reappraisal, but not in the 2017 one because they were switching appraisal vendors, Caldwell said.
If enough people don’t respond, the data may not be used, Caldwell said. The hope is that at least 5% of commercial property owners will reply before the Jan. 31 deadline, he said.
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