Written by: Patrick Price
According to Daily Journal, the current owner of a building in Greenwood is in danger of losing its tax abatement after officials say the owner failed to file a form.
But what, exactly, does this mean?
Monmouth Real Estate Investment Corporation (MREIC) purchased a 615,000 square foot warehouse from Scannell Properties in 2019. The Monmouth REIT, or entity, was then acquired by Industrial Logistics Properties Trust in February of this year.
It appears that the new owner was not very familiar with the terms of the abatement agreement they inherited. Scannell had obtained and the property was benefitting from a 10-year, $7 Million tax break. However, the terms of the agreement required the owner to file an annual compliance form by May of each year (for the following year’s benefit) – and MREIC did not file their form.
So the city was already considering revoking or terminating the incentive agreement. Additionally, a valuation appeal was filed with the county assessor, and the abatement language requires the owner to notify the city in advance of filing an appeal.
In fact, the provision in the agreement says that if the owner fails to notify them before an appeal is filed, termination of the abatement is automatically triggered.
It is crucial that consultants, such as our property tax consultants at DMA, understand such nuances with abated properties, and careful evaluation occurs prior to taking such actions.