Winning tax cases for communities

In one case, the owner of an industrial site claimed that its property’s value had plunged to zero dollars because of environmental contamination. In another case, the owner of nearly 200 acres of prime residential land asserted its property was worth less than half of what the community believed it was worth when considering its highest and best use.

Both cases arose in Middlesex County, Massachusetts. Several hundred thousand dollars of real estate tax revenue were at stake for the communities when these property owners appealed their cases to the Massachusetts Appellate Tax Board.

The property owners hired an array of experts to assert their positions. Municipal leaders in both communities knew they needed specialized representation to make their cases, so they turned to John Richard Hucksam Jr., an attorney in the municipal practice at Brooks & DeRensis.

These tax cases are complex and nuanced, so having significant experience with land use, valuation, and the appellate process is essential, Hucksam said.

The industrial case concerned a multi-building complex used for manufacturing for more than 50 years. In the 1990s, environmental testing at the site revealed groundwater contamination. The owners claimed that contamination rendered the property worthless for tax purposes, even though it continued to be largely occupied by rent-paying tenants.

In the residential land case, the owners argued their property should be assessed as a single large and vacant parcel that possibly could be developed in the future. However, the owners already had prepared a subdivision plan creating more than 30 single-family home lots on the land. The subdivision plan had been reviewed and approved by the town. So, the town assessor argued that the property should be valued based on the total fair market value of the home lots on the approved plan.

The cases covered multiple tax years and involved complex analysis of remediation and development costs, income projections, land use and market absorption of house lots, among other financial and operational elements. After hearing the evidence, the ATB decided favorably for the communities in both cases.

Fairness is a fundamental element of taxation. People and companies all should pay their fair share, Hucksam said. When we are successful with cases like these, there is a sense of satisfaction because the communities get the revenue they deserve to pay for important public services and there is equity for all taxpayers in those communities.