Most flood reappraisals higher; council member wants reviews

CEDAR RAPIDS - Get a new appraisal at city expense if you still have a flood-damaged piece of property waiting a city buyout, advises Craig Seeley Jr.

Seeley's flood-ruined home at 1617 Sixth St. NW saw its value jump 28.4 percent from $64,710 to $83,100 after the analysis from the certified appraiser he hand-picked.

With nearly 800 of some 1,300 buyouts now complete, 64 property owners - a list that includes several commercial properties and two churches - took advantage of the city's offer of a new appraisal of the pre-flood value of their home or business. Fifty-nine of 62 appraisals have come back with values higher than pre-flood value plus 7 percent that the city's buyout program is paying.

The new value from the appraiser of the property owner's choice is the number that the city will use in the buyout. No question. No review. No challenge.

City Council member Chuck Wieneke, who supports reinstating a review process as a check on upcoming appraisals, has brought the victory string of new values to light as the city prepares to take on the buyout of most of the 115 or so commercial properties on the city's buyout list.

Wieneke has suggested new appraisals on commercial properties significantly higher than pre-flood values could start to cost a lot of money.

“We had a review process to see if it was fair,” Wieneke said. “But what happened, very bluntly, the council said, ‘Oh no, there's no need for a review. If they get a new one, then we're just going to trust these people.' And philosophically, that rang bad with me.”

The few new appraisals of commercial property already complete would seem to bear Wieneke out.

A new appraisal for a commercial property at 1010 First St. NW is $1.2 million, or 66.7 percent higher. Another at 838 First St. NW is $731,524, or 67.8 percent higher. A third, at 120 Third Ave. SW, is 100 percent, or $180,000 higher; another, at 207 Third Ave. SW, is $376,146, or 122 percent higher; and a fifth, at 100 First St. SW, is $547,347, or 63.5 percent higher.

In total, the value of the 59 properties that now have secured favorable new appraisals is $5.1 million more or 53.8 percent more than the value on the properties at the time of the flood. The latter are values established by the City Assessor's Office upon which property-tax assessments had been based.

In nearly every instance, federal and state disaster funds are picking up the tab for the extra spending, not the city. City officials note that neither the Iowa Department of Economic Development nor the U.S. Department of Housing and Urban Development has raised any questions about basing buyouts on the new appraisals.

Tim Waddell, division administrator at the state agency, says as long as a certified appraiser is doing the work and can support the decision with documentation, the new valuation is acceptable.

The story of appraisal victories for property owners - 59 of 62 - reads much differently than the year-in, year-out one in which property owners appeal their property valuations and the city's Board of Review rules on the appeals.

In 2009, 755 residential property owners in Cedar Rapids appealed their valuations to the Board of Review, and 153 appeals were upheld, 602 denied, according to the assessor's annual report. In 2008, there were 959 residential appeals and 106 were victorious, 853 denied.

For commercial property in 2010, 47 of 124 appeals were upheld, 77 denied; and in 2008, 16 of 62 were upheld, 46 were denied.

City Assessor Scott Labus says he isn't sure what to make of all the new appraisals of flood-damaged property that conclude that nearly every one of the properties had a higher pre-flood value than Labus' office had set for them.

In some instances, Labus said owners may have been able to document work they did on their homes that the assessor's office did not know about because the owner had not taken out building permits.

“If we aren't aware of it, we don't value it,” he says.

Council member Wieneke says he wants the full City Council to revisit the idea of a review panel for flood-damaged commercial properties, though council member Don Karr and Mayor Ron Corbett don't think it's necessary.

If nothing else, Wieneke says he would like to see the city identify owners of flood-damaged property now getting new appraisals and who before the flood appealed the property's valuation, saying it should be lowered. Wieneke thinks the city now should use those lower valuations in the buyout deal.

Karr says the appraisers taking a new look at flood-damaged properties must be state-certified professionals.

“It's their reputation and business,” Karr says.

As for Seeley, he's encouraging others to get new appraisals.

“Why not?” he said.

“You have a right to appeal. That's what I love about America,” he said.