CASE STUDIES

Shopping Center Property Tax Valuation

Challenge

In 1995, the Arizona Supreme Court issued a ruling that reinterpreted an Arizona statute governing the method to determine property valuations of shopping centers. This decision gave ammunition to County Assessors to question current valuation methods and employ other methods that would increase property taxes on shopping centers.

Strategy

After reviewing the history of this decision, Landry-Creedon determined that the solution was new legislation that restored the original legislative intent of the law and provided clear direction on a narrow use of comparable sales to avoid unfair “apples and oranges” comparisons. For this strategy to succeed, it needed to be conducted with broad-based, bi-partisan support and stay below the media radar-screen. It could not be seen as a developer relief issue. The firm concluded that small business could better tell the story because tax increases are generally passed through to the individual retail tenants.

Advocacy

Landry-Creedon recruited allies of the shopping center industry to build a broad based coalition.
This included the endorsement and active support of groups like the Arizona Association of Realtors, National Federation of Independent Businesses and Valley Partnership.

Working at the grassroots level, Landry-Creedon convened industry leaders to develop a comprehensive strategy to present their case to lawmakers.

To explain the effect of tax increases on small business and tenants, Landry-Creedon developed background materials demonstrating the adverse impact of the new interpretation by the court.

In advance of drafting legislation, Landry-Creedon convened regular meetings with legislative leadership, tax committee staff and officials to identify potential solutions and language for legislation.

The firm drafted legislation, which was reviewed with tax attorneys and tax consultants.

Landry-Creedon then assisted retail shopping center developers to organize their tenants to target and influence legislators and to develop advocates among state elected officials. The firm designed and implemented an aggressive outreach campaign that included mailings and telephone calls to inform supporters and mobilize constituents from every legislative district. Supporters were provided with talking points to use in making phone calls to ensure consistency of message.

Results