Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, April 1, 1993 TAG: 9304010330
SECTION: VIRGINIA PAGE: C-1 EDITION: METRO
SOURCE: JOEL TURNER STAFF WRITER
DATELINE: LENGTH: Long
LAND TAX BREAKS WEIGHED
Tax breaks for the owners of agricultural land in Roanoke may end, causing tax bills for 21 property owners to increase by $126,025 a year - and putting pressure on them to allow their land to be developed.Mayor David Bowers wants to repeal a policy that allows agricultural property to be assessed for taxes based on its use rather than its fair market value.
There are 670 acres in the city with agricultural assessments. Most of the land is in outlying areas, particularly in the vicinity of Valley View Mall and the Hershberger Road interchange on Interstate 581.
Under the agricultural-exemption policy, much of the vacant land around the Hershberger interchange is taxed at only a fraction of its market value.
For example, city tax records show that two vacant tracts near the Hershberger interchange are assessed at $85,200 but have a market value of $4.9 million. Two other parcels are assessed at $96,300 but have a market value of $1.1 million.
"I hope they don't do that. If they do, I'll have to stop farming the land," said Glenn W. Ramsey, a farmer who owns nearly 50 acres off Hershberger Road and I-581.
Ramsey's assessment would go from $37,000 to $559,300. His tax bill would jump from $462 to $7,000. Ramsey grows hay on the land for cattle on his farm in Botetourt County.
Bowers said Wednesday the agricultural-exemption policy is an "impediment to growth" within the city and encourages the owners to keep using their land for agricultural purposes rather than developing it.
If the taxes were higher, there would be more pressure on the owners to sell their property for development.
In a letter to council members, Bowers has recommended that council consider the agriculture-assessment issue during budget study this spring.
Bowers said the city needs to encourage growth within its boundaries because it is landlocked and unable to expand by annexation.
As the major city in Western Virginia, Roanoke should promote population growth, he said. He suggested that the agricultural policy is outdated for the city.
But some property owners said Bowers' proposal could cause haphazard growth.
The agricultural policy enables the owners to hold onto their property without financial hardship and then sell it for large, attractive developments that benefit the entire city, said city Planning Commission member John Bradshaw.
Bradshaw, a spokesman for the Andrews family, which owns 60 acres on Thirlane Road near the airport, said the city was able to get the United Parcel Service terminal two years ago because the owners kept their property until they could sell it for one development.
Bradshaw said the city could never have gotten the UPS terminal if the owners had not been able to hold onto the property so that it was available when UPS was looking for a site.
"If the agricultural assessment goes off, there will be economic pressures on owners to dispose of land on a piecemeal basis" he said, because they will need the money to pay the higher taxes.
The assessment on the Andrews' family land on Thirlane Road would increase from $57,900 to $2.4 million if Bowers' proposal is approved. The tax bill would increase from $723 to $30,000 a year.
It the city had not had an agricultural-assessment policy, Bradshaw said, it would probably not have Valley View Mall. Because of the property's high market value, the Huff family probably would have sold it years before Valley View was developed there, he said.
If the city wants to buy the land at market value and hold it for commercial or industrial development, that would be fairer to the property owners, Bradshaw said.
To qualify for agricultural assessment in Roanoke, the landowner must have a tract of at least five acres and the property must have been used for agricultural purposes for the five previous years.
Will Claytor, director of real estate valuation for the city, said there are detailed guidelines to determine whether a landowner qualifies.
If the agriculture use of the land is changed, the owner is required to pay back taxes for the preceding five years based on the market value of the land.
Bowers said it's not fair for the owners of some vacant property to be taxed at fair-market value while the owners of agricultural land get a tax break.
For example, city records show there are 193 vacant properties, encompassing 3,235 acres, that have a market value of $24 million. The owners of the these properties, which do not have agricultural exemption, are taxed at market value.
Bowers said these property owners pay 97 percent of the taxes on vacant properties, while the agricultural landowners pay 3 percent.
Roanoke County and many rural counties have agricultural-assessment policies that enable farmers to keep using their land without having to pay high taxes. Salem, however, does not have such a policy.
Nearly 14,000 acres in Roanoke County have agricultural assessments.
\ AGRICULTURAL LAND USE IN ROANOKE\ \ Acres: 670.\ \ Property owners: 21.\ \ Agricultural-assessed value: $758,000.\ \ Current taxes: $9,483.\ \ Market-value assessment: $10.8 million.\ \ New taxes: $135,508 (increase of $126,025.)\ \ BIGGEST POTENTIAL INCREASES IN ASSESSED VALUE:\ \ Huff estate/Dominion Trust, near Valley View Mall: $52,900 to $2.5 million.\ Matilda Bradshaw/Andrews family, near Roanoke Regional Airport: $57,900 to $2.4 million.\ \ Ellett/Russell estate, off Brandon Avenue Southwest: $146,000 to $1.1 million.\ \ Coulter estate, on Airport Road near the airport: $13,600 to $938,300.\ \ Maury Strauss property, near Countryside Golf Course: $28,100 to $774,500.