If the Mecklenburg County website is correct, Uptown developer Afshin Ghazi is among those property owners who have yet to pay their 2008 property taxes. Interest charges began to accrue on any unpaid balances yesterday.
Overall, partnerships registered to Ghazi according to the North Carolina Secretary of State show some $588,449 in unpaid city and county property taxes. In June Ghazi received $550,000 from the city of Charlotte in connection with his development of the old Convention Center site Uptown, a once city-owned parcel Ghazi planned to turn into the $200m. Epicenter complex.
In addition a development underway in South Charlotte by prominent developer Crosland Inc. shows an unpaid tax balance of over $18,000.
Update: Here’s another bill the county shows as unpaid that I think also illustrates the meltdown in the local real estate market quite well.
Hobart Smith Construction Company in 2006 embarked in a small infill development project on Kuykendall Road in South Charlotte. Essentially one single family home on a couple acres was replaced by 10 lots, each between one-third and one half acre. The developer razed the existing structure and began to spec build full-brick luxury homes on several of the lots.
The intended price point was in the high $500s and the homes were completed in late 2007 and were on the market all of 2008. In May the county assessed the properties at their new, improved values. One property went from $45,000 for the empty lot to $560K, another was valued at $525K. In October, presumably at the builder’s request, the county came back with revised valuations 15 to 20 percent lower. Yet one is still for sale for $550K. The county website shows a tax bill of almost $5900 based on an assessed value of $439K due on the property.
In short, there remains a massive disconnect between real estate prices and values. More precisely, the numbers have flipped from where Charlotte’s spec builders are used to operating. For the decade before 2008, the costs they incurred in any given project could always be made up in the values they would generate with the finished product. Not anymore. This is why 2009 is going to be so jarring for the local economy. I’ll be back with an even higher price-point problem shortly.
Update: The above Hobart Smith parcel had its property taxes paid sometime yesterday, according to the county website. However, it is unclear to me why the county did not collect interest charges on that 1/7 payment if 1/6 was the cutoff date for interest-free payments.
