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Owner of 485FallCreek bed-and-breakfast challenges assessor’s valuation, cites unusually high operating expenses
Summary
At a June 17 Oklahoma County Board of Equalization hearing, a presenter for 485FallCreek argued the assessor’s income approach undercounted operating costs and proposed a stabilized expense rate that would lower the property’s income-indicated value to about $3.0 million.
The Board of Equalization of Oklahoma County heard a valuation appeal June 17 from the owner representative of 485FallCreek, a bed-and-breakfast at 1235 Northwest 38, who urged the board to set fair-market value far below the assessor’s figure.
The presenter told the board the assessor’s income analysis used a 79% expense ratio while the property’s actual expense ratio was roughly 97%, and proposed a stabilized 85% expense adjustment. "Nobody reasonable is gonna think that property is worth 399,000," the presenter said when describing an unadjusted income result and arguing for the higher expense assumption. The appellant’s revised income-indicated value after the 85% stabilization and a personal-property deduction was $3,000,006.09, or about $100,000 per unit, the presenter said.
Board members and the assessor’s representative questioned the choice of comparable properties and the treatment of restaurant revenue and cost of goods sold. Tom Shannon (agency official, assessor’s side) stressed market drivers for hotel-style properties and noted that hotels are typically valued "on a price per room" because room revenue drives value. Shannon also emphasized differences in cap rates, effective age and depreciation schedules as key reasons assessor and appellant numbers diverged.
The parties debated whether certain nearby properties were true, marketable comparables for a bed-and-breakfast and how to allocate restaurant income and expenses. The presenter said the property had been listed for $5.5 million and had one $4 million offer that was declined because of financing terms; he argued asking prices and listing brochures can overstate net operating income.
The board closed the hearing on BOE 188 without issuing a decision at the meeting and told the appellant a written decision would follow. Chair Eleanor Thompson said the panel would meet the next day to render decisions and that mailed notices may arrive Monday because of the holiday.
If a decision is issued, the board said it would notify parties by mail.
