Another Cell Tower Question

[Gobears81]

I am working on an ad valorem appraisal of a property that previously had a cell tower lease on the same parcel. The cell tower operators bought out the lease and the rights to the easement so the current owner is not getting any income from the lease. The attorney said that the cell tower operator owns the cell tower itself and my understanding is that, if the cell tower component would in fact be included in the assessment, the owner of the property would be responsible for the entire tax payment (I suppose that isn't entirely a crucial item to point out, but if there was an agreement by the cell tower owner to reimburse for a portion of the tax expense, that might tilt the evidence to it being included). Do you think it is appropriate to include the contributory value of the cell tower? I am seeing both sides.

 

[Terrel L. Shields]

he attorney said that the cell tower operator owns the cell tower itself and my understanding is that, if the cell tower component would in fact be included in the assessment, the owner of the property would be responsible for the entire tax payment (I suppose that isn't entirely a crucial item to point out, but if there was an agreement by the cell tower owner to reimburse for a portion of the tax expense, that might tilt the evidence to it being included). Do you think it is appropriate to include the contributory value of the cell tower?

I believe in my state cell towers, railroads, pipelines, etc. are valued by the state and not the local assessor as public utilities. The usual practice is for there to be two separate parcels, one for the land (valued as a commercial lot) and the other the tower. If I am asked to value the ownership of the land in a small dedicated parcel, then the land would be valued as a commercial lot. If simply placed on a large agricultural parcel however, I would add it to the land value as a contributory value based on the income, and the footprint would be subtracted from the total acreage. At least that was how I did it. The income was about $400 a month, so that $4800 was capitalized as income to the parcel. The remaining pasture was valued by sales, again, I subtracted 2 acres that was impaired by the guy wires, tower, building and road to the tower out and gave it zero value.

 

[Meandering]

if the cell tower operator owns the cell tower itself, it can be taxed separately to the cell tower owner, while the land, if still held as an easement, can be taxed to the land owner.

This would not be much different than the owner of a house on rented land, being taxed only for the building, while the leased fee holder of the land is taxed for the land.

Except, no income from the cell tower is no financial benefit to the land owner, if the land owner does not own the tower and can not have it removed and replaced by a rent paying cell tower company.

.

 

[Gobears81]

This would not be much different than the owner of a house on rented land, being taxed only for the building, while the leased fee holder of the land is taxed for the land.

Everyone that I've talked to thus far seems to be in the omit the cell tower improvement boat, which I am probably going to end up doing. But, on this statement, I've only seen one case in Illinois where they separated the parcels by land and building due to a long-term ground lease. In every other ground lease case that I'm aware of in IL, there is one parcel/ total assessed value for both building and land, regardless of whether there is a ground lease or not.

Not trying to disagree or nitpick , just want to make sure that the reasoning for my omitting it is sound.

 

[Meandering]

Everyone that I've talked to thus far seems to be in the omit the cell tower improvement boat, which I am probably going to end up doing. But, on this statement, I've only seen one case in Illinois where they separated the parcels by land and building due to a long-term ground lease. In every other ground lease case that I'm aware of in IL, there is one parcel/ total assessed value for both building and land, regardless of whether there is a ground lease or not.

Not trying to disagree or nitpick , just want to make sure that the reasoning for my omitting it is sound.

I don't feel picked on.
Here, if you are a state resident,
you can rent land in the state forests and build a house.
The taxes are on the building only, so we have precedence.
Taxes should be only on what you own.
If your state sees ownership differently, perhaps the cell tower owner needs to record a deed for it.

.

 

[PL1957]

Everyone that I've talked to thus far seems to be in the omit the cell tower improvement boat, which I am probably going to end up doing. But, on this statement, I've only seen one case in Illinois where they separated the parcels by land and building due to a long-term ground lease. In every other ground lease case that I'm aware of in IL, there is one parcel/ total assessed value for both building and land, regardless of whether there is a ground lease or not.

Not trying to disagree or nitpick , just want to make sure that the reasoning for my omitting it is sound.

I guess I don't know why the cell tower isn't considered personal property. It could be disassembled and moved without too much trouble ...

 

[DREA Dean]

I guess I don't know why the cell tower isn't considered personal property. It could be disassembled and moved without too much trouble ...

That's certainly a pertinent question, and one that would need to be answered by a lawyer (perhaps the lawyer involved in the tax appeal case), or a careful review of state assessment appeal cases. With help from an attorney who provided pertinent assessment law, I excluded industrial equipment from a site that the county had included in assessed value.

I find many errors in my state, as I see Amish sheds (no foundations and no utilities), storage containers and even semi truck trailers included as valued real estate on assessment cards. When I appraise for tax appeals, I make sure to note in my report that I have excluded such personal property and point out that it is inaccurately included in the current assessment.

 

[leasedfee]

I guess I don't know why the cell tower isn't considered personal property. It could be disassembled and moved without too much trouble ...

The signals engineering of a cell tower location is very complex, beyond RE site or demographic criteria. Not all locations are the same. PP or RE fixture, either school of thought is okay.

 

[PL1957]

The signals engineering of a cell tower location is very complex, beyond RE site or demographic criteria. Not all locations are the same. PP or RE fixture, either school of thought is okay.

As technology changes, desirable locations also change.

 

[Howard Klahr]

The cell tower operators bought out the lease and the rights to the easement so the current owner is not getting any income from the lease.

If the tower lease was bought out, then there would need to be an easement agreement allowing the tower operator access to the tower. What does the terms of the easement agreement state in regard to real estate tax issues associated with the tower? if silent, then hence the issue.

While under the lease agreement, the tower was likely considered improvements owned by the tenant. Depending on the jurisdiction, some assessors will recognize the lease and assess accordingly (i.e. real property for the site and tangible property for the tower). Other jurisdictions will treat the entire property as real property improvements and allow the parties to allocate payments among themselves.

The attorney said that the cell tower operator owns the cell tower itself and my understanding is that, if the cell tower component would in fact be included in the assessment, the owner of the property would be responsible for the entire tax payment (I suppose that isn't entirely a crucial item to point out, but if there was an agreement by the cell tower owner to reimburse for a portion of the tax expense, that might tilt the evidence to it being included).

"The attorney" - What attorney? for the Taxing authority or for the taxpayer?
I imagine that your reference noted above ""if there was an agreement" means that you do not have information about a formal agreement. Has anyone searched public records to see if there is in fact a recorded agreement?

Do you think it is appropriate to include the contributory value of the cell tower?

How does this jurisdiction handle property assessments? Only as real property? or Do they have Tangible property assessments as well?