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Local Governments Miss Billions of Dollars in Unassessed Tangible Assets... Never in a million years did PlanWireless expect to get the kind of reaction we did last month from the article suggesting that some local governments weren't collecting their fair share of property taxes (see "You May Be Losing..." from PlanWireless, July 1999) on cell sites. We received calls of incredulity ("You mean these things may be taxable?") and offers to become bounty hunters ("We'll give you 10% of all the taxes you can find."). Here is the full message, folks: personal wireless service facilities are worth much more than you think. Ted Kreines, AICP, has a personal favorite in the revelation department. It occurred during a workshop in a certain Florida jurisdiction. The atmosphere inside the meeting hall was charged with tower testosterone and cellular cynicism. The Commissioners' minds were already made up and they were signaling Ted "don't bother us with any more information." One Commissioner actually slept during the entire workshop. That is, she slept until Ted Kreines announced that Kreines & Kreines, Inc. had helped another County find over $1.5 million in uncollected taxes and that more was being found every week. Eyes popped open. Heads leaned forward. Commissioners started taking notes. You can be a hero in your own jurisdiction: this powerful subject cuts across all lines of favoritism or bias … no one is opposed to local governments collecting taxes when they are rightfully owed. And the first thing your city or county has to do is to stop calling them "towers." When you tell the assessor to "go assess that tower," the assessor sees steel and puts a price on replacing that steel. The steel may be the tower, but it is not a personal wireless service facility. So, OK, the assessor sees the antennas (some enlightened folks in Washington D.C. don't call them "towers"; they call them "antennas") and assesses for the value of the steel plus the antennas. But the antennas are not the personal wireless service facility either, and they may represent no more than 10% of the cost of the total personal wireless service facility. Antennas do not a personal wireless service facility make. PlanWireless suggests that assessors look in the boxes (equipment shelters and equipment cabinets) because that's where the real money is. And if you capitalize the net revenue from a cell site, the valuation is a whole lot greater. Whatever you do, don't capitalize the lease rate: it's a pittance. Now comes the part that most of us trip on. Carrier ABC builds a "tower," has a permit and the assessor is getting a fair share of taxes from the landowner (who usually is not Carrier ABC). Then carrier ABC leases space on their "tower" to Carrier X (a paging company), to Carrier Y (a multi-point service) and Carrier Z (a specialized mobile radio service). The landowner doesn't pay taxes on X, Y or Z. Sometimes the landowner doesn't even know there are other services paying rent to Carrier ABC because they are not sub-lessees in the lease. And, of course, there is no mention of X, Y or Z in the permit. This problem is even more common on rooftops. Kreines & Kreines, Inc. advises its clients to require an amendment to the permit for co-location. (Otherwise the local government doesn't know that other carriers are there.) Here's the real tip-off: each co-location maybe another personal wireless service facility, so instead of dealing with one personal wireless service facility on a "tower," you may be dealing with several. The next installment of this saga is: how does a local jurisdiction collect taxes? Remember, most cell sites are leased. Many personal wireless service facilities have co-locations that the local jurisdiction doesn't know about. And most boxes have no identification on them. Wireless carriers are sometimes invisible when they want to be. |
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