A New Look at the Real Property Taxes Generated by Highland Fairview’s Skechers Building

A New Look at the Real Property Taxes Generated by Highland Fairview’s Skechers Building

Although the Riverside County Assessor’s Office shows three types of tax assessment for the property we are discussing here, one of those assessment taxes will be permanent in nature, with two of them only temporary (Supplemental Assessment and Secured Escape Assessment).

In computing how much property taxes collected from this development actually will go into the City of Moreno Valley’s general fund, the only true tax which will last upon this property is the Secured Assessment, for as stated above two of the assessed taxes are only temporary and will expire and will no longer be collected.

The total “Secured Assessment” on the Skechers property is $1,400,015.92 annually paid in two installment payments of $700,007.96 each, to be paid on or before December 10th, 2012 and April 10th, 2013, with the next payments becoming due in December of 2013 and April of 2014.

Of the $1,400,015.92 total annual tax bill, the City of Moreno Valley will only collect 10% of those taxes, which will go into the City’s general fund, or around $140,001.60 per calendar year.

This number is far off from the actual benefit this project was to create for the City of Moreno Valley in the way of tax revenue generation; however there are also additional taxes such as utility taxes, and sales taxes. However  this is a wholesale business and therefore the only sales tax collected would come from any sales of products from within its attached retail outlet store, and the utility tax alone fall greatly short from the taxes to the City that have and were stated by the developer and the City.

It is hard to tell where Highland Fairview came up with the numbers for economic benefits to the local area at $194 million annually, as the only real number by which they can base the true benefits to the area is in the area of taxes. They claim it will come in the form of wages, commerce, operations and support services, however none of those have yet to come to fruition or even be felt in our local economy.

Highland Fairview also claimed that the Skechers building alone would contribute 1.2 million dollars into the cash strapped Moreno Valley Unified School District, however to date the district is still struggling to financially survive, one would think that a 1.2 million dollar infusion of money from this development would have rectified in some way the districts shortfall of revenue, however that never happened.

Now that we face yet another Highland Fairview development, of a size close to 23 million square feet in total larger than the Skechers development, Highland Fairview is only claiming that this project will only create 17 million dollars towards the Moreno Valley Unified School Districts annual budget.

This number just doesn’t seem correct, if the development is 23 times the size than a development which was to create 1.2 million in annual revenue to the school district, then why would the World Logistics Center create less?

1.2 million annual revenue times 23 = 27.6 million annual revenue, this number is 10.6 million dollars below what Highland Fairview has claimed the World Logistics Center would bring to the MVUSD, that’s a large gap, again pointing to some numbers which don’t work.

Highland Fairview also claims this project will provide the City of Moreno Valley’s general fund a “*net surplus” of more than 5 million dollars annually.”

*Net surplus: The profits remaining after subtracting all operating expenses, such as wages, police and fire services, or any other item which is paid for out of the City’s general fund.

Once again this doesn’t add up. The only monies that this project can in fact state for a fact is revenue to the City by way of their share of the 10% take of the total property taxes collected, these taxes will not reach their total expectancy for at least 20 years after the start of construction (and that is if there are no delays or financing problems like those associated with the Skechers development).

Even at that based on current tax assessments on developments equal to the Skechers building and equal property size, you would only see an annual tax revenue to the City around 3.2 million and not the 5 million they claim. Furthermore the building sizes have not yet been addressed by the developer, however they will be in a size of no less than 500,000 square feet per the DEIR, that’s 1.3 million square feet smaller than the Skechers building itself and therefore would generate less in property tax revenue to the City.

There is also the issue of the total building costs stated by Highland Fairview. Highland Fairview claims that the total building cost will be up to 3 billion dollars. With the Skechers development alone costing $250 million, the 3 billion dollars would only develop 12 buildings of its size, and this doesn’t even cover the need for all required infrastructure, roadways, street lighting etc. (Let’s do the math: $250,000,000.00 x 12 = $3,000,000,000.00).

I guess Highland Fairview will be building warehouses of a size closer to the 500,000 square foot type, but they state no one wants those anymore, it’s all about going big.

Click Above Images to Enlarge

Advertisements

4 thoughts on “A New Look at the Real Property Taxes Generated by Highland Fairview’s Skechers Building

    • They sought and were granted a one time extension, as well as an additional loan amount. Their payment were to begin December 15, 2012 at an amount of $84,000.00 on all principal and accrued interests and unpaid interests until they are paid in full.

      TG Development (the Trump Group) must maintain a minimum book net worth of $150,000,000.00.

      The original loans maturity date was November 29th, of 2012, however HF LOGISTICS-SKX T1, LLC opted to utilize their option to extend the load for an additional 3 year period.

      The new agreement and addition monies are secured by Development Corp., Trans LP Holdings, LLC, Boca Ocean Holdings, LLC, T/CAL Holdings, LLC, and Island Boulevard Holdings, LLC, all held by the Trumps.

      As for if they are paying on their loan, I have no idea at this time, but I would assume they are doing so.

  1. So we know the Skechers distribution center is the center of a loan already in default, but how long before court proceedings begin against it for enforcement of non-payment and what would that mean? Foreclosure?

    • Nothing will take place like that, as long as the Trump Group maintains the equity in the properties to cover the debts. If their finance’s fall below a specific value, then proceedings could start.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s