12/15/2008 Meeting Minutes - Laserfiche WebLink

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Regular Council Meeting Minutes 12-15-08 Page 17 The other issue is about property values. Council President Buckholtz does not think Ted was "hanging his hat on this". Ted thought that the Gund Foundation memo was interesting to tie it to maintaining property values as opposed to property values that may be dropping in other areas. Fiber technically becomes like a utility. It's a tangible personal property. It's not attached to the real estate. Council President Buckholtz told Mr. Marquardt he is correct when he says when an appraiser comes out to re-evaluate commercial property, it is done totally differently than residential property. It's not looked at by the actual appurtenances that might be attached in terms of utilities. What was explained to him, after a long arduous discussion, that he will save everyone from, on how they appraise the commercial property, having said that there were two examples that are pretty easy. One, with the, residential house. If it's two houses, side by side, one is landscaped and one is not, the houses would typically be valued the same but obviously one would sell much quicker than the other. Possibly the price would be negotiated differently. In a commercial example, if you had two buildings side by side and one had fiber running to it, the odds are that you could command better rent and you would have a greater occupancy given apples to apples in the one that had the fiber going into it. Going through that whole exercise with the head of the commercial appraisal group for Cuyahoga County, he said, well then I guess that could be looked at because there is an income component to the appraisal. It's not to say that it's going to raise property values as such, but it does clearly make properties more desirable. Council President Buckholtz wanted to put that to bed. It doesn't raise property values as an assessment. Mayor Rinker stated that Council President Buckholtz touched upon it and it depends on how you are defining the assessment. How the County evaluates and how an appraiser may evaluate could be two very different things. A competent appraiser can look to three different methodologies for approaches to value. Income approach is one of them. The analogy about the two houses is touching upon it. It's also fair to say that we are looking at an infrastructure component, a utility component that while you can strictly say it's a personal property issue, you could analogize that to say whether a building has sewers and running water as opposed to septic and other less desirable facilities. In other words, there are blighting factors that come into any valuation, any kind of comparison of what makes a property have value. There is no question that buildings show a much more tangible improvement to property. Part of what we are trying to identify here is that we are at the early stages of a change in infrastructure and the way it's looked at. This is a utility. Even though Ted wasn't able to document any more than what we have anecdotally within the Village, those are pretty substantial indications of how there is a demand out there. Mayor Rinker would only add that as he commented at prior meetings, the feedback he has gotten from people who are looking, like Mr. Ryavec of AMTI, people he has talked to, commercial real estate brokers, and in talking with some of the individuals that are here tonight that also will talk about the end users. Everything we are getting is that there is a crying need. We are early. The fact that we are more cutting edge makes it harder for us to look with that level of surety or assuredness that this is a going thing.