Commercial property values slashed by 20% in Ferguson

FERGUSON, MISSOURI — Almost a year after Michael Brown’s death, this city is still struggling to find its financial footing.

Home values have crashed. Youth unemployment remains high. The remains of burnt-out buildings still blight the city’s main drags.

And just now, businesses owners here and in nearby Dellwood are learning that St. Louis County has significantly slashed the assessed values of most commercial properties, dealing yet another blow to small businesses—as well as to both cities’ already strained budgets.

The cut, which was previously unreported and enacted without so much as an announcement, includes most of Ferguson and Dellwood as well as some parts of neighboring Jennings, said Crystal Adkisson, deputy assessor and director of external affairs at the county assessor’s office.

The office made the move in order to be “fair” and “mindful” of lost revenues and sales following the looting and rioting over Brown’s death last year, Adkisson told me. “We usually base the valuations on income and sales, but since nothing is selling, we had nothing to compare it to,” she said.

For lack of a better solution, the county reverted commercial property assessments to 2013 amounts—and then cut an additional 20% percent.

City officials were stunned when I broke the news to them. “This is the first time I’m hearing this,” said Cordaryl Patrick, the city administrator of Dellwood. He shuffled in his seat. “I’m gonna have to make some calls and start some conversations with my colleagues on this one.”

Officials at the city of Ferguson I spoke with had not heard of the new measure either, though the finance director is on medical leave until Thursday, and was unavailable for comment.

Aside from the hurt it puts on business owners, the 20% cut will impact Ferguson’s municipal budget, which was already under pressure.

In 2014, 17% of Ferguson’s revenues came from property taxes, a number which will now be diminished by the new commercial valuations (and which was already diminished by plummeting home values). Additionally, about 20% of the city’s budget came from the city courts, a figure which has now been capped at 12.5% for all municipalities in St. Louis County, thanks to a state bill that was passed last month. The municipal court system in Ferguson had been slammed by the Department of Justice as being “constitutionally deficient” and for operating with the express purpose “of maximizing revenue.”

Some business owners, however, welcome the move. John Zisser, owner of Zisser Tires on W. Florissant, told me the cut in tax dollars he owes to the city will help offset the increase in insurance costs he has been paying since his property was twice looted. His last insurer dropped him after the second time, and he had no choice but to pay more for insurance. “In the long run, yeah it’s bad for them to tell me my property is worth less today than it was a year ago,” he said. “But hey, paying less taxes will help me keep going here.”

It’s affected more areas than just Ferguson, it’s affected a lot of areas in North [St. Louis] County — Terry Gannon, REMAX real estate agent

Homeowners and residents in the region have already been feeling the pain of dropping property values. As Fusion previously reported in March, home values in Ferguson dropped as much as 50% in the months following the refusal of a grand jury to indict Wilson for the incident. Since then, some high-value properties in the area have sold, but they are often going for well under market price, said Terry Gannon, a REMAX real estate agent who has worked in Ferguson and Dellwood for over 30 years.

“I’m putting homes up for sale and getting offers way below what we could have expected just a year ago, just because they’re in this area,” she told me. “It’s affected more areas than just Ferguson, it’s affected a lot of areas in North [St. Louis] County.”

One of the homes Gannon has up for sale right now is a standard single-family home with a garage, sitting on a small grassy hill in Dellwood. “We have this listed for $49,900,” she said as we pulled up to it. “We just got an offer on it early this morning, and I can tell you, it was for less than half of that.” There’s been several offers at this point, she said, and they’ve all been in the same price range.

George Gilbert, 80, has owned the home since 1963, and he lived there until a few months ago when he moved to South St. Louis County to be closer to his daughter. “Before what happened in Ferguson it was my understanding that we could get at least $40,000 for it,” he told me in a phone conversation. “But now most people I talk to say, ‘No, I don’t want to buy a house in that area,’ and they don’t even bother to understand that it’s a nice area. I know all the neighbors there, and it’s nice, it’s lovely.”

His home has been on the market about six months now, longer than the 50 days an average home stays on the market in St. Louis County, according to the St. Louis Realty Association. Gilbert hasn’t figured out what he’s going to do with the home yet if he can’t sell it for what he considers a fair price.

“We’re still weighing our options,” he told me.

There are some positive signs. Two weeks ago, the major eyesore of a burnt-out building on W. Florissant and Chambers Rd., near the shared border of Ferguson and Dellwood, was mostly picked up by construction crews. “Just in time for the news cameras this weekend,” joked Zisser, the tire shop owner, who complained of the sight from his office window when I talked to him in March.

On the other side of the burnt-out building, workers have spent the last week demolishing the inside of the smoke-damaged strip mall, in preparations for building it back up with fire resistant walls. “Right now we’re working on fixing up the part that wasn’t burnt down, on the shops here on the side,” project manager Antwon Dudley told me, walking us towards newly exposed section that was burnt to the ground. “But they’re gonna rebuild here eventually, is what the owner tells me.”

A few hundred feet from where we stood, one local business had done just that. Hunan Chop Suey, a restaurant that was completely destroyed by the looting, had a banner hanging above the entrance, reading “Grand Re-Opening,” with “welcome back home” written in smaller letters underneath. Just two weeks ago, the shop reopened its doors after being closed since last November.

When I asked an employee if the owner was there, a woman who asked not to be identified told me he wasn’t there, but offered with a smile: “We could not open fast enough. It took us eight months, but we’re back and we’re happy.”

At one point when I was eating some egg rolls there, the line stretched toward the door.

Daniel Rivero is a producer/reporter for Fusion who focuses on police and justice issues. He also skateboards, does a bunch of arts related things on his off time, and likes Cuban coffee.