As­sessed prop­erty val­ues surge.

As­sess­ments in­di­cate strong growth led by large com­pa­nies such as Ap­ple, Google

The Mercury News Weekend - - FRONT PAGE - By Se­ung Lee slee@ba­yare­anews­

Bay Area coun­ties’ as­sessed prop­erty val­ues have surged sig­nif­i­cantly higher than a year ago, with Santa Clara County see­ing a rise of more than 7 per­cent, and Ap­ple and Google each see­ing a $1.5 bil­lion in­crease in as­sessed value within the county.

Santa Clara County’s 2018-2019 as­sess­ment roll shot up 7.34 per­cent higher than a year ago to $483.2 bil­lion. The county’s As­ses­sor Larry Stone, in an emailed state­ment Thursday, at­trib­uted the strong growth to large com­pa­nies with a Sil­i­con Val­ley pres­ence — like Ap­ple, Google and Sam­sung — buy­ing land and prop­er­ties across the county.

Alameda County said it sawa 7 per­cent in­crease year-over-year in net as­sessed val­ues in its new as­sess­ment roll, reach­ing $288.2 bil­lion.

Con­tra Costa County As­ses­sor Gus Kramer told this news or­ga­ni­za­tion his county’s up­com­ing as­sess­ment roll saw sim­i­lar year-over-year growth to last year’s, when as­sessed value rose 5.78 per­cent froma year ear­lier. For Con­tra Costa County, “any­thing above 4.5 per­cent growth is con­sid­ered to be a re­ally good, healthy in­crease,” Kramer said.

“Santa Clara andAlameda (coun­ties) are the epi­cen­ters of rapid high-tech and hous­ing booms,” said Kramer. “We are a county fo­cused on man­u­fac­tur­ing, and of com­muters.”

Con­tra Costa County did not dis­close pre­cise 2018-2019 as­sess­men­troll fig­ures to this news or­ga­ni­za­tion, as it was wait­ing un­til the of­fi­cial July 1 dead­line.

San Ma­teo County As­ses­sor Mark Church said his of­fice would be clos­ing the county’s as­sess­ment rolls late Thursday, or on Fri­day, and would

re­lease the data once the rolls were closed.

The as­sess­ment rolls re­flect the to­tal net as­sessed value of all real and busi­ness prop­erty within the coun­ties up to Jan­uary 1, 2018, and will be used to de­ter­mine prop­erty taxation.

In Santa Clara County, Ap­ple’s as­sessed value to­taled $7.8 bil­lion, up from $6.3 bil­lion last year.

Google’s as­sessed value in the county was $6.6 bil­lion, up from$5.1 bil­lion last year. Nearly $1 bil­lion of Google’s as­sessed value this year came from land ac­qui­si­tions.

Google is work­ing to ex­pand in the county be­yond its Moun­tain View head­quar­ters, buy­ing up prop­er­ties in Sun­ny­vale and down­town San Jose. It aims to build a mas­sive vil­lage in San Jose where up to 20,000 of its em­ploy­ees could even­tu­ally work.

Stone at­trib­uted Ap­ple’s $1.5 bil­lion in­crease in as­sessed value pri­mar­ily to its con­struc­tion of the Ap­ple Park “Space­ship” cam­pus in Cu­per­tino, and its ac­qui­si­tions of busi­ness prop­erty nearby.

Santa Clara County Deputy As­ses­sor David G ins borg also noted that Ap­ple saw a huge rise in new equip­ment and ma­chin­ery.

“What the num­bers tell you is (Ap­ple) is busy build­ing a build­ing and mov­ing em­ploy­ees, and (Google) is ac­quir­ing land to build a cam­pus them­selves,” said Gins­borg.

The cur­rent as­sessed value of the new Ap­ple Park cam­pus was around $3.5 bil­lion, ac­cord­ing to Gins­borg. But since Ap­ple Park is not fully com­pleted, the fi­nal as­sessed value of the cam­pus is not yet known, he said.

The Cu­per­tino tech gi­ant paid more than $45mil­lion in prop­erty taxes in 2016-2017, the sec­ond high­est in the county af­ter util­ity PG&E’s $47.6mil­lion, ac­cord­ing to the Santa Clara County As­ses­sor’s Of­fice’s 2017 an­nual re­port. This is the most re­cently dis­closed tax pay­ment for Ap­ple to the county, as tax pay­ments typ­i­cally run 18 months af­ter they are first cal­cu­lated, ac­cord­ing to Gins­borg.

The Santa Clara County As­ses­sor’s Of­fice last year told this news or­ga­ni­za­tion it es­ti­mated the con­struc­tion cost for Ap­ple Park would likely be around $5 bil­lion. It said at the time, how­ever, that Ap­ple Park’s fi­nal as­sessed value — the ba­sis for the tax bill for the new cam­pus — may be less than its fi­nal con­struc­tion costs. That’s be­cause cer­tain ma­te­ri­als and con­structed goods may be valu­able only to Ap­ple and can’t fac­tor into the as­sessed value, which also con­sid­ers the fair mar­ket value of the prop­erty.

Ap­ple and other busi­nesses have dis­puted the as­sessed val­ues from the county in the past.

Cu­per­tino— with an 8.83 per­cent in­crease in as­sessed val­ues from last year — had the third-high­est year-overyear growth among cities in Santa Clara County. Santa Clara had the high­est growth, at 11.71 per­cent, fol­lowed by Sun­ny­vale with 11.39 per­cent growth. San Jose had 6.54 per­cent growth.

No city in Santa Clara County saw a year-over-year in­crease of less than 6 per­cent.

The tech­nol­ogy sec­tor’s boom fol­low­ing the Great Re­ces­sion has boosted Bay Area de­mand for jobs and prop­er­ties. Since 2010, Santa Clara County as­sess­ment val­ues have soared 63 per­cent higher and its un­em­ploy­ment rate has dropped to 2.3 per­cent from 11.2 per­cent, Stone noted.

“Em­ploy­ment growth dur­ing the past eight years has trig­gered an in­cred­i­ble de­mand for of­fice and in­dus­trial space, apart­ments, and homes,” Stone wrote. “The re­sult has been a nearly twothirds in­crease in the County’s net as­sessed val­ues.”

But Stone warned of signs in Santa Clara County point­ing to a pos­si­ble eco­nomic down­turn. The of­fice va­cancy rate jumped dur­ing the first quar­ter of 2018 to 17.4 per­cent from 11 per­cent at the end of 2017, and the pre-leas­ing of of­fice space un­der con­struc­tion fell to 46 per­cent last year from80 per­cent in 2016, which may in­di­cate “an over­sup­ply of new of­fice space,” ac­cord­ing to Stone.

Stone also noted that the apart­ment mar­ket may have al­ready peaked.

“The six-year apart­ment mar­ket ‘ boom’ is also be­gin­ning to soften as price fa­tigue sets in,” Stone said of Santa Clara County’s hous­ing sit­u­a­tion. “Rent growth in 2017 dropped dra­mat­i­cally to less than 3 per­cent.”

But Stone said apart­ment rents in the metropoli­tan San Jose area have in­creased “a whop­ping 52 per­cent since 2010, a level that is un­sus­tain­able for a healthy lo­cal econ­omy.”

In Alameda County, Dublin, Ne­wark and Alameda saw the high­est growth in as­sessed prop­erty val­ues. Dublin’s as­sessed value rose 9.6 per­cent from last year, while Union City saw the low­est rise in as­sessed value at 4.8 per­cent— the only city in Alameda Coun­ty­with less than a 5 per­cent in­crease.

Staff writer Ethan Baron con­trib­uted to this ar­ti­cle.


In Santa Clara County, Ap­ple’s as­sessed value to­taled $7.8 bil­lion, up from $6.3bil­lion last year.

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