The District is refuting allegations made in a Washington Post story that the city's reduction in value of hundreds of commercial real estate properties could be a sign of favoritism.
Sources told The Washington Examiner that the reduced values totaled nearly $2.6 billion, a fraction of the roughly $246 billion total property value in the city. The number was first reported in The Post, which estimated the total loss in property taxes at $48 million.
Sources told the Post that the FBI is looking into the issue, the paper reported.
The past year has seen a dramatic increase in the number of properties that saw their original assessed value reduced after the property owner appealed the assessment, however a spokesman for the Chief Financial Officer Natwar Gandhi told The Examiner that the reductions were all reasonable and accounted for.
For example, Uline Arena had its original assessed value reduced on appeal because the property had been awarded historical designation status after its original assessment, according to the CFO's office. Historical designations typically limit what developers can do with the property, thus lowering its market value.
Another source, who asked not to be identified, told The Examiner that Gandhi had been genuinely surprised and frustrated by the allegation.
The Post story points out that the properties in question were reassessed as part of a settlement and the property owner's appeal never made it into court. In addition, the number of such settlements last year spiked: 532 cases were settled in 2012 while just 164 were settled the previous year.
The CFO told the Post that the increase in settlements was to avoid the lengthy and eventually costly court process.