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What's a Country Club Worth?
...and why is it so little?
To my subscribers, this post is going to be a little off the usual topics. But only a little. And definitely related. I promise a fresh essay and an update on the book soon. The deadline is fast approaching, so I’m irregular on Substack for now. To non-subscribers, what are you waiting for?
This post contains lots of information shared with me by concerned and engaged Charlotte residents. I’m grateful to them, though they did not want to be named.
If you bought a lot to build a house in Charlotte this week, and you purchased near Monroe and Sharon Amity, in the southeast part of town, the Mecklenburg County Assessor’s Office would tell you that your land has a tax value of about $1.375 million per acre.
But if you bought a permanent resting place at Sharon Memorial Gardens, the cemetery at the same corner, then Mecklenburg County would tell you that the land you bought has a tax value of $78,000/acre.
That’s a big difference, but it probably doesn’t take you long to intuit that a cemetery and a lot to build a house upon are relatively different. The real estate market treats them differently. The law treats them differently. People, in normal practice, treat them differently. And if the cemetery owner wants to sell the land, well, it won’t be valued like residential land would.
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If you’re charged with assessing value, you need multiple tools, then, to have systems that reflect reality. Different types and uses of property will require different approaches for measuring their value. I’ve learned over the past week that one method appraisers use to assess value is called the income approach. The basic idea is that you wouldn’t, as an assessor, assign a value to a property far beyond what it would sell for within its use. In fact, state law requires that assessments reflect “the price estimated in terms of money at which the property would change hands between a willing buyer and a willing seller” (NCGS 105-283, Article 13).
To get at this, imagine a junkyard in an industrial area. The county might assign it a per-acre value far below that of a residential area a mile or two from it, or a bowling alley, or grocery store To get an idea of what a junkyard might sell for, you need to understand the capital investment needed to purchase and operate a junkyard, not a nearby bungalow with some nice shade trees. The junkyard's value is approximately what a willing and able buyer would pay for the junkyard. Think of it as a matter of fairness and of public good. You wouldn’t assign a value to a junkyard operator that would run him out of business. We need junkyards for spare parts and metal recycling and photo shoots and whatnot. They serve some sort of public good.
With differences like that in mind, the Mecklenburg Assessor’s Office released new property tax valuations last week. It is a huge and somewhat mysterious job. Sure enough, it contained some surprises.
Like this one:
Here in Enderly Park, site of 40 years of systemic disinvestment, inside an “Opportunity Zone,” residential land is valued at about $1,000,000/acre. Over in Myers Park, where much of Charlotte’s “old money” is, the Myers Park Country Club got valued at $103,000/acre, around $16.5M total, and that includes the ornate buildings, the pools, the tennis courts and the other amenities. Across the street from the club, a surface parking lot is valued at $2.5M/acre.
And at Quail Hollow Club, probably the most prestigious golf club in the state, recent site of the President’s Cup, occasional site of the PGA Championship, land was valued at $40,000/acre, inclusive of all of the amenities. All 250+ acres were valued at just under $10M total.
The cemetery, I get. The golf club: that’s hard to understand.
According to Mecklenburg assessor Ken Joyner, in an interview with local public radio station WFAE, “you have to look at the overall income viability of the operation.” Rather than assign a value in accordance with the fair market value of the land immediately next to the club, WFAE reported, assessors looked at “the club’s ability to make money.”
Obviously the reasoning “it’s hard for country clubs to make a lot of money” is not going to elicit much public sympathy for the clubs or for the assessors. Quail Hollow and Myers Park have fees around $100,000 just to join, plus annual membership fees, monthly spending minimums, occasional required assessments,and assorted other fees. If the business plan can’t cover all of the expenses, that seems like the club’s problem, not the taxpayers’.
There’s another issue as well: it is unclear whether the county even followed its own guidelines. The county’s revaluation process has a handbook of well over 200 pages. The three pages on golf courses begin on page 180. It suggests a per-hole valuation of courses, depending on the quality of the course. The top grade of golf course, an “excellent private course with extensive features and numerous amenities” - perhaps the type that might host the PGA Championship - has a suggested per-hole value of $833,000 to $1,307,000. That cost, according to the manual, does not include “clubhouse, snack bar, or extensive landscape improvements.” That’s roughly $18M in value there, before adding in the enormous clubhouses with all their fine finishing. It seems plain to me that the county is not following its own rules. And that’s before we talk about the nature of those rules.
The tax value at Myers Park Country Club last year resulted in a tax bill of about $160,000. That’s kid money in Myers Park. In my avocation as a musician, I’ve played many a party there, and at least one or two of them probably costed as much as the annual tax bill.
There are still some questions I don’t have answers to yet, but I’m digging. There’s more to understand. Among my questions:
What other kinds of businesses receive income-based valuations? Who decides on what basis a specific parcel gets valued?
To what extent are these decisions governed by code and official policy, and to what extent are they discretionary by staff?
Where decisions are governed by policy. Is it county policy? State? Some of both?
How do I incorporate as a country club and get my house revalued?
If you have more questions, put them in the comments.
I’m not going to opine extensively on this. The numbers speak for themselves. I will briefly state that we live in a society that continually places impossible demands on the poor while offering every possible handout to the wealthy. Tax valuations are political decisions that help to structure our common life. 160 acres of golf course within a couple miles of downtown is not the “best and highest use” of space in a city with untenable housing issues and a serious lack of public green space. Country clubs avoiding the taxes that fund our schools, in part, while those schools struggle to hire enough teachers is a political decision that does not speak well of our body politic.
I’ll post again soon with some updates. In the meantime, you’ll find email addresses for Meck Commissioners in the comments. I’ve communicated with some of them, and they genuinely want to hear from you on this. Your emails and calls will help to push for change.
A Quick Book Update: Our Trespasses is due to Fortress May 15. It is currently 105,000 words when they asked for 80,000. There’s a long way to go to tighten it, but honestly, I’m damn proud of it. A handful of people have seen it, and given me work to do to make it better. I’m off to do it now.
Cemeteries don’t pay income tax in NC, but they still get an assessed value.
I’m learning here, so if I got the concept wrong somehow, feel free to correct me in the comments.
What’s an assessment, you ask? Last year at MPCC, the club was making improvements to locker rooms and notified members that they each owed more than $7,000 to cover the cost. When somebody tells you you owe them money and you have to pay it, that’s an assessment.