Burritt Real Estate LLC v. New Britain: On July 7, 1997, long after a real estate and banking shakeout that caused Burritt Savings Bank to be sold by federal authorities, the two New Britain buildings that served as the bank’s headquarters sold for $111,000.
The properties, at 267 and 277 Main St., have remained vacant for more than a decade. Even so, property tax assessments rose. In October 2007, New Britain notified the owners of a $1,431,800 assessment for the two buildings, up from $998,260.
The owners, Burritt Real Estate LLC (no relation to the bank), retained Kenneth Laska, of Plainville’s Segal & Laska to fight for a lower valuation. As expected, he did not prevail at the administrative level, but on appeal to Superior Court, Laska appeared with an appraisal prepared by John W. Nitz, a certified real estate appraiser in Plantsville.
In the report, Nitz made the case – using both comparable property sales and potential rental income – that the buildings were worth far less than town officials said they were.
The structures consist of a bank building on a third of an acre, built in 1968, and an office building for bank executives built on a fifth of an acre in 1952. The two structures, located behind the Connecticut Bar Association headquarters, have a combined area of 36,467 square feet. Nitz put the total valuation at $841,000.
The case was set to be tried before New Britain Superior Court Judge George Levine. But Laska and city attorney Joseph Skelly, who did not return a call seeking comment, reviewed the appraisal data and came to a resolution. “We just agreed to stipulate that the total value was $900,000,” said Laska. This resulted in a tax savings for the owners of more than $13,000 a year. “The taxes on both properties would have been $35,059.35 and with the settlement they’re going to be $22,037.40,” Laska said.
In a case like this, bad news is good news for the party seeking a lower valuation. Nitz reported that the spaces did not appear to comply with the handicap access requirements of the Americans with Disabilities Act. He also noted that the unoccupied buildings may have lead paint, asbestos or mold costs associated with rehabilitation. The best use of the buildings, he suggested, would be some kind of public or private office or institutional space. There was also the option of tearing them down and starting over.
Some of the most persuasive information in the appraisal was in the final few pages, where Nitz summarized the commercial housing market. Between 2006 and 2007, the decline in median home sale prices was 2.6 percent, wrote Nitz, quoting The Warren Group, which collects and publishes New England estate information.
But in just the first quarter of 2008, real estate values dropped even more suddenly and dramatically in New Britain. The median value of homes fell 12 percent.
The news in the appraisal was not all negative for New Britain officials. Nitz quoted an office market survey prepared by the real estate firm of CB Richard Ellis, which said that New Britain’s office space had a vacancy rate of just 4.9 percent in the first quarter of 2008, far below the Hartford County average of 16.5 percent. That would increase prospects for rental income, though not guarantee it.
While some sections of New Britain suffer, others have been revitalized and new construction is evident, the appraiser noted. The report’s longer term outlook warned that a “decline in the commercial market may follow the current decline in the residential market.”
Laska, who grew up in New Britain and Plainville, said he recalls vividly the vitality of New Britain’s central business district in the 1950s and 1960s.
In his view, in its latest real estate assessment, the city overvalued all the commercial and industrial property. It’s a natural tendency, he said, for cities to push those sorts of properties higher than residential properties because fewer voters are affected by the increased taxes.
But the bad news, he said, is that the high appraisals and taxes thwart downtown redevelopment. “The sad part about it,” said Laska, “you go to the center of New Britain and it’s basically a dead zone.”