Minority Business Ownership Certificate
minority business ownership certificate
Challenging The Assessments Of Chain Restaurants In Texas
The author discusses a special type of valuation discrimination in Texas relating to the assessments of chain restaurants as a class of property, based on the principal appraisal method being used-the cost approach.
In the Dallas/Fort Worth area, fast food chain locations sell for a fraction of their original construction cost because they no longer operate as chain restaurants or because they are sold to second generation non-restaurant-chain operators. Texas appraisal districts, however, tend to take the opposite approach. That approach is a dollar spent equates to a dollar of taxable market value, so how do you prove that the districts are wrong? Can one prove that the cost approach is not the best approach to use when valuing chain locations? Doesn’t the cost approach really determine the fee simple taxable market value of a chain restaurant? Is it true that the income and the sales comparison approaches may not be appropriate in valuing a new chain property? How do appraisal districts measure the going concern value of a chain restaurant? These are some of the questions that are discussed in this article.
VALUING CHAIN~THE COST APPROACH
Is it safe to assume that the cost approach is the best approach to use when valuing a chain restaurant? The answer in this author’s estimation is, no. The cost approach should be challenged as the exclusive method of determining the taxable realty value of chain locations. Further, the other two approaches to value, income and sales comparisons, should be modified to truly appraise the taxable restaurant market. In the third quarter, 1990 issue of the Enterprise Valuation Reporter, John D. Emory, value points out that:
business valuation has to do with the value of the rights inherent in ownership of a commercial, industrial or service organization pursuing an economic activity. Real estate appraisal involves the valuation of land, improvements and associated rights. Real estate appraisal does not deal adequately with the whole area of intangible business assets such as patents, trademarks, copyrights, goodwill, customer lists, employment contracts, covenants not to compete, exploration rights, intangible drilling costs, franchises and licenses. The more a company depends on its intangible assets to generate earnings, the more important such assets are in any business enterprise value. Robert Reilly notes in the January 1993 issue of Valuation, published by the American Society of Appraisers, that:
Traditionally, real estate appraisals of location-dependent commercial encompass a portion of (if not all of) the intangible business enterprise value of the property. . . . The naive application of real estate appraisal procedures to location-dependent businesses will ignore the fact that the real property’s highest and best use (and total concluded value) are dependent upon the existence and assemblage of such location-specific intangible assets as business licenses, certificates, permits, and franchises and such non-location-specific intangible assets as a trained and assembled workforce, goodwill, and going concern value. Therefore, by including an economic contribution from these intangible assets, the real estate appraisal may overstate the true market value associated exclusively with the subject “bricks and sticks” for these location-dependent businesses.
It has been this author’s experience that Texas appraisal districts believe the primary approach to valuing chains is the cost approach; that is, the acquisition cost of the land plus the cost of personal property, plus the hard and soft costs of the improvements, less accrued depreciation, represent the taxable market value of a chain restaurant. The theory apparently relies heavily on the principle of “substitution,” which The Appraisal of Real Estate, published by the American Institute of Real Estate Appraisers, defines as:
The principal of substitution is basic to the cost approach. This principal affirms that no prudent investor would pay more for a property than the cost to acquire the site and construction improvements of equal desirability and utility without undue delay. . . . Because cost and market value are closely related when properties are new, the cost approach is important in estimating the market value of new or relatively new construction. The approach is especially persuasive when land value is well supported and the improvements are new or suffer only minor accrued depreciation and, therefore, represent a use that approximates the highest and best use of the land as though vacant.
About the Author
Paul Edward Pennington is President and Principal of
P. E. Pennington & Co.
, Inc. Mr. Pennington has authored numerous articles on property tax management and property tax appeals. Read the entire article on
Challenging The Assessments of Chain Restaurants in Texas.
|
|
The Nuts and Bolts of Business Ownership (DVD) $44.73 The idea of owning their own business can be very alluring to many individuals—making their own schedule, handpicking their staff, choosing their own rules, and so forth. Unfortunately, it’s not as easy as it might otherwise seem to be. There’s plenty of groundwork that is necessary for individuals who want to own and operate a thriving business. Business ownership requires a lot of work, dedication, and passion. The Nuts and Bolts of Business Ownership spells out the truth behind business ownership. The DVD reviews several of the key factors involved in owning a business, such as time management, excellent communication, and an eye for detail, all of which can be crucial to the success or demise of a business. Among the topics covered: myths and facts of owning a business, start by asking yourself, and the five absolutes (nut and bolts) of business success. Produced in cooperation with IDEA Health & Fitness Association. |
|
|
Managing A Business Entrepreneurship & Ownership $171.99 No Synopsis Available |
|
|
Americas Persecuted Minority: Big Business $12.63 No Synopsis Available |
|
|
Minority The $10.29 Rated: NASynopsis: The Minority, filmmed in New York city in 2007, is a fictional story about a young, honest african american guy who is oblivious to racial discrimination. Then he gets fired from his job and experiences a series of racially biased incidents which deeply affects his cheerful personality. The Minority is an ambitious and courageous film that questions the current state of race relations. |
|
|
Corporate Ownership and Control : British Business Transformed $136.64 No Synopsis Available |
|
|
Family Business Ownership : How to Be an Effective Shareholder $19.15 No Synopsis Available |
|
|
Rapid Value Management for the Business Cost of Ownership $75 This book is in New – Excellent condition |
|
|
African American Economic Development and Small Business Ownership $176.48 No Synopsis Available |
|
|
Gendered Processes of Korean Small Business Ownership $108.23 No Synopsis Available |
|
|
Other Essentials of Business Ownership And Management Development $24.33 No Synopsis Available |
|
|
National Directory of Minority-Owned Business Firms $42.47 This book is in Good Used condition |
|
|
National Directory of Minority-Owned Business Firms, 1988 $190.13 No Synopsis Available |
|
|
Business Ethics : The Ethical Revolution of Minority Shareholders $48.7 No Synopsis Available |
|
|
Minority Business Success : Refocusing on the American Dream $58.5 No Synopsis Available |
|
|
National Directory of Minority-owned Business Firms $287.63 No Synopsis Available |
