Will HofmannAsheville Citizen Times
ASHEVILLE - Today's burning question is about tax appraisals and how the owners of a vacant 126,000-square-foot building may not pay any taxes on it.
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Question: I was poking around Buncombe County's records on some of the big pieces of land Ingles owns in the area and saw that the 1001 Patton Ave. Kmart is only appraised at $0. Why?
Answer: According to Ben Franklin, there are two certainties in life: death and taxes. In the view of Answer Man, there are two certainties in Asheville: Beer and Ingles.
The 1001 Patton Ave. Kmart closed in 2019 and then was subsequently bought by the Black Mountain-based supermarket chain in 2019 for a whopping $8.5 million.
We've reported extensively about the former Kmart. It saw conditional rezoning in 2022 to be converted into an Ingles, a move that was considered an important development in bringing a new grocery store to the Emma-community. The building, which has seen numerous break-ins in recent months, would be torn down to do redevelop the property.
In 2021, the building, previously appraised at $953,200, saw a precipitous decrease to just $200.
County Tax Appraiser Keith Miller told me the evaluation of the building is connected to its long-term value as a commercial endeavor.
"The K-mart building has been vacant for many years, unmaintained, and has deteriorated to a state that is a burden more than a benefit to the owner/buyer," Miller wrote in an email to the Citizen Times.
Miller noted that when commercial appraisals happen "remaining economic life, use, building condition, and income, all contribute to the value of a building." Miller called the practice of setting building values at $0 common in commercial reappraisal when a building is at the "end of its useful life."
However, if a new owner intending to use the property were to come in, renovate the building and use it, Miller said it would "be assessed in relation to those updates and the most current general appraisal year."
"The building is at the end of its useful life. It doesn’t matter the owner; the building would take major renovations to be useful," Miller said.
It should be noted that the 2021 commercial reappraisal also saw a nearly $3 million increase in the land value for the Kmart property, bringing the total land value from $5.7 million to $8.5 million, so they are paying taxes on the parcel, just not the building.
Ingles's property is currently appraised at over $270 million in the county. The company currently owns over 400 acres in mostly commercial property in various areas of Asheville and greater Buncombe County, including Merrimon Avenue's former Stein Mart and this Kmart location, which I reported on back in a November Answer Man.
As for redevelopment, city of Asheville Principal Planner Will Palmquist told me that the new Ingles project still hasn't returned for final Technical Review Committee review, meaning "the project is still considered under review."
The building has seen better days, to be sure. While I was passing by earlier this week, it was adorned with paint that covered previous graffiti and the windows and doors of the former Asheville Sun Soo Matrial Arts and Kmart had been boarded up with wooden pallets. A security guard was patrolling the perimeter of the building.
Assessment Office Assistant Director Eric Cregger also explained the evaluation comes from the defunct Kmart having a "poor" condition on its property card, indicating the building is unsound to occupy. As far as the appraisal office is concerned, the "parcel is just land," Cregger said.
Other Ingles properties reflect similar evaluations
The building is not the only Ingles property to receive a low evaluation.
The former Sears building at 1 South Tunnel Road, which is empty, is valued at $0. While I reported on another possible project for the site last year, the building sold to Ingles from Madison Capital Group, a Charlotte-based real estate and development investment firm, for $4.3 million in late 2023.
The former Stein Mart on Merrimon is yet another example of a building with a $0 appraisal. It's also owned by Ingles.
Cregger told me the calculation for the Stein Mart building is based on the "income approach" of evaluation, which means it's the "difference between the land value and the predicted income of the location."
"Our commercial team collects market data (income and rents) and uses that data for our commercial properties that are income-producing, to determine their market value," Cregger said, where the Sears and Kmart are deemed to be at the "end of their economic life" and the Stein Mart is evaluated at $0 using "income documents and analysis and applies an overall market value to the parcel itself."
Joe Minicozzi, who presented on the issue of property assessments in a 2022 Ad Hoc Reappraisal committee presentation, believes appraisals should be higher, where North Carolina state law requires appraisers to make sure they are properly appraising buildings based on location, commercial viability, age and replacement cost.
Other vacant buildings in Asheville are still appraised at a higher building value than the Patton Avenue Kmart, such as the former Car Quest located behind the Orange Peel at 100 South Lexington Ave, valued at nearly $300,000. Minicozzi wondered whether the Kmart, or other commercial buildings, could be used to justify their price.
"Back when the building wasn't broken into, it was only valued at $200?" Minicozzi said. "$300,000 is a long way from $200."
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Will Hofmann is the Growth and Development Reporter for the Asheville Citizen Times, part of the USA Today Network. Got a tip? Email him at WHofmann@citizentimes.com.Please help support this type of journalism with asubscriptionto the Citizen Times.
