Movie theaters win big property value challenges

The largest single reduction in assessed value was $526,689, granted to GKC Theaters Inc. for its Palace theater at 415 Detroit Drive on Bloomington’s east side. (Photo courtesy of the City of Bloomington Township Assessor's website)

BLOOMINGTON – McLean County property owners seeking a lower property tax bill won $16.1 million in total assessed-value reductions this year – and Twin City movie theaters were at the top of the list.

Of the seven largest reductions won by Twin City commercial property owners during the county’s just-concluded Board of Review process, records show three were movie theaters: Carmike Palace Cinema 10, Starplex Cinemas and Bloomington Galaxy 14 Cine.

Any property owner can appeal its assessed value – ideally one-third of market value – which is used to calculate one’s tax bill. In 2011, the owners of 1,166 properties filed appeals, leading to an average reduction of $18,541.

The largest reductions were, not surprisingly, won by commercial properties. The largest single reduction in assessed value was $526,689, granted to GKC Theaters Inc. for its Palace theater at 415 Detroit Drive on Bloomington’s east side. That brings the theater’s assessed value to $1,058,040, down from $1,584,729. GKC paid $130,476 in taxes in 2011, the largest chunk going to Unit 5 schools.

GKC originally wanted its assessed value reduced to just $718,177, citing two appraisal methods called “income approach” and “cost approach” that the company said showed the property was over-assessed.

GKC also told the county’s Board of Review that annual operating profits at the theater had plunged from a high of $1.4 million in 2007 to $215,475 in 2010. In filings with the Board of Review, GKC said the reason was the opening of competitors Galaxy in 2008 and Starplex in 2009.

Galaxy property owner Bloomington IL Cine LLC saw its assessed value fall $265,971, or 11 percent. Starplex property owner Constitution Trail LLC assessed value fell $383,525, or 19 percent.

An average year

The year 2011 was a fairly average year for the number and amount of assessed value complaints filed in McLean County, said Supervisor of Assessments Robert Kahman. The number of complaints – 1,166 – is slightly less than in 2010 and far less than its recent peak (1,642 complaints) in 2009, as the economy tanked and taxpayers got thrifty.

The median assessed-value reduction on commercial properties that saw any reduction was $44,000, and $7,000 for residential properties, Kahman said. The $16.1 million in reductions is a small slice of the $4 billion in total assessed value countywide.

“The folks coming in this year had pretty good data. They had appraisals, they had sales. They could show their value, and they did a good job of it,” he said.

Kahman said the slowdown in complaints, and other observations, tells him that the housing market in Bloomington-Normal may have bottomed out in late 2011. He said one major hurdle remaining is that lawmakers haven’t dealt with state and federal government debt issues, scaring potential buyers away because they fear their taxes could go up after signing their mortgage.

“I try not to be a bottom fisher, but I would think that prices have gotten about where they’re gonna go,” Kahman said. “The low volume of complaints tells me that.”

Ryan Denham can be reached at ryan@wjbc.com.