2025_12_02 BOER Minutes - Laserfiche WebLink

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Docusign Envelope ID: B280D705-EADF-4415-899E-F125316E835B Current Assessed Value $18,061,700 County Opinion $18,061,700 Time of Hearin 2:13 PM Appellant Opinion $11,606,552 County Representative Roger Gunn Board Decision $18,061,700 No change in value Evidence submitted by the appellant: • The value of the furniture, fixtures and equipment which are taxed as personal property need to be deducted from the value of the hotel. Per the tax card the value of the personal property for the hotel is $3,164,330. • The property is 45-year-old and expensive to operate due to its age and inefficient design. Utilities alone for this hotel cost 348k in 2024 compared to a newer similar size hotel which costs under$200k per year. • Ongoing maintenance and replacement of depreciated items are estimated to cost 8%of revenues per annum compared to 4%often used for newer properties. Simply put, older hotels are considerably more expensive to maintain due to aging backbone systems. • The EBITDA for the hotel for year end 2024 adjusted for an 8%replacement and maintenance reserve is approximately $1.1M which utilizing a 10%capitalization rate results in a value of $11,606,552. From this value you subtract the personal property which is taxed separately and valued at$3,164,330 which equals our opinion of value. If the proposed tax value offered by the County already excludes personal property for the hotel,then the owner's opinion of value is $11,606,552. • A portion of the value of the hotel is intangible personal property related to the Marriott brand, which is not real property and needs to be deducted from the value of the property. This has not been taken into consideration in the owner's opinion of value. • The property is 45 years old and its mechanical, plumbing, and electrical backbone systems are generally original to the hotel. While the hotel has been renovated to upgrade its interior and certain mechanical systems have been replaced, the building itself remains inefficient and in many ways functionally obsolete. A significant portion of the building(former Shula's restaurant and the related kitchen) is unused due to obsolete design. The cost to maintain this hotel is double the cost to maintain newer hotels. This space is unusable without considerable expense. • The property is in C quality and below average in condition due to its age design. The interior finishes in the property are new as is the personal property in the hotel but most of the backbone of the hotel is original. Evidence submitted by the county representative: • The County has provided some similar sales comparables. The first two are very similar full- service hotels. All data points to a value more than$100,000 per key. Also,the recent investment in the hotel by the owner is $24,000,000(see notes in the attached sheet) and https://chapelboro.com/news/business/sheraton-chapel-hill-reopens-after-15m-renovation- embraces-carolina-community. • 1 have prepared some sales comparables to review. The first two are very similar full-service hotels. All data points to a value more than$100,000 per key. • All sales include FF&E(business personal property. The indicated sales comparison value of $22,285,344 less the 2025 Orange County business personal property value of$2,416,377 yields an indicated real property value of$19,868,967 which exceeds the current real property valuation of$18,061,700. As a result,no change in value is recommended. • GIS Map of Subject