You may recall that we pointed out several weeks ago that the EpiCentre was revalued downward by Mecklenburg County by 26 percent from its 2008 peak. We said that did not bode well for county real estate values. Our prediction got around to county officials, who protested that the EpiCentre was a special case and it was “erroneous” to draw sweeping conclusions from the EpiCentre.

You may have also seen this very detailed UPoR core sample of local commercial real estate over the weekend:

By one measure, an Observer analysis found the group of stressed properties may have shed an estimated $633 million, or 23 percent, of their value. The analysis used a valuation measure from the original loan and the most recent operating income, as reported by Bloomberg.

Experts estimate Charlotte-area commercial properties have shed an average of 35 percent to 45 percent of their value.

In other words, the EpiCentre is more or less exactly indicative of commercial real estate in the county. Not only that, blocks away there is another property which received local government subsidies and has lost value, The Westin hotel. The convention center hotel.

However, the for some reason the UPoR account failed to mention that the city of Charlotte paid some $16m. for the hotel’s parking deck and re-routed a portion of the hotel-motel tax back to the property. We did get these very telling details:

Uptown’s sleek, high-end Westin has suffered in the downturn, with more than 40 percent of rooms empty last year and profits tumbling.

The hotel fell at least $1 million short of the money needed for payments on its $185 million loan. … In 2008, soon after taking its $185 million loan, the Westin was earning nearly three times what it needed to make its loan payments. Last year, those monthly payments rose to about $1.2 million. At the same time, earnings fell. The Westin generated about 90 cents for every dollar due, according to Observer analysis of Bloomberg data and original deal documents. … In another remnant of boom times, the Westin’s appraised value at the time of the 2007 loan was $250 million. In 2004, on an earlier loan, the hotel was valued at $120 million.

First, question what happened to the $65m. left over from the 2007 refi of the 2004 note? Then, how is that the county has valued the hotel at $70m. since 2005? Next, how in the world do you set an accurate valuation in 2010? Finally, getting back to the question at hand, if local commercial real estate has taken this kind of hit, who or what makes up the revenue difference when it comes to the county’s property tax take?

I keep coming back to 10 to 20 percent property tax hike for most Mecklenburg County homeowners next year. I’m sure that is wrong as well — and will be wrong right up until it actually happens.