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Bargain Hotel

With former City Assessor James Vinson’s trial looming, attention turns to the city’s commercial reassessments — like the Hotel John Marshall.


Vinson’s reassessment went against staff recommendations, Style has learned, and came just three months after he was placed on administrative leave and subsequently indicted for ordering staff to reduce the assessment of his West End home by $43,700. (Vinson’s trial starts July 17.)

Including land, building and parking deck, the hotel’s total real estate value dropped from $2.933 million to $801,000. (The parking deck is valued higher than the hotel itself — $450,000 for the land and $50,000 for the structure.)

While Vinson’s justification for the reduction is unclear, the hotel’s decline in value adds a new wrinkle to the saga surrounding the city assessor’s office. To date, the office has been the focus of internal and external investigations into how the city reassesses residential properties.

Now the city is turning its attention to the commercial division. Earlier this year, the city hired the International Association of Assessing Officers to review its residential assessment practices. The association completed that investigation in June, and recommended, among other things, that Richmond hire five additional appraisers. The city now wants the group to conduct a similar review of the commercial division, officials say.

Assessing commercial properties is more complex than assessing homes. Appraisers take into account the amount of revenue the business generates, and whether the building and surrounding land are being used for its so-called “highest and best use.”

In the case of the Hotel John Marshall, such a low assessment typically indicates the property is no longer economically viable. But is it?

The city says there’s a market. The hotel is situated just blocks from the new convention center on Broad, and the city has aggressively pushed to create more hotel rooms downtown. The hotel opened a new restaurant, John Marshall’s Martini Kitchen and Bubble Bar, June 26, and just last week sent out a press release inviting the public to enjoy the restaurant’s “New Virginia” cuisine “served in our fun spirited European Brasserie-styled dining room.”

Elizabeth Stewart Bennett, who manages the hotel with her husband, Roderick F. Bennett, said last week the hotel now has 60 rooms available, complete with “original 1929 colored tile baths, white down duvets, gourmet coffee service” and wireless high-speed Internet access for business travelers. Rates range from $99 to $119 a night.

The John Marshall’s owner, Gilbert L. Granger, says his hotel was in shambles in November 2001 when city staff reassessed his property — along with all of downtown’s major hotels — at $2.933 million. On several occasions the John Marshall had to close to deal with maintenance issues such as leaky plumbing, he says. And the weak hotel was reeling in the wake of Sept. 11. “We’ve been fighting an uphill battle,” Granger says.

So he appealed the decision. The Board of Review sent the appeal to Vinson for an investigation. He decided to overturn the staff assessment, slashing John Marshall’s value to $801,000. This year, the hotel’s tax bill dropped from approximately $40,475 to $11,054, a reduction of $29,421.

Unlike the method used to lower the assessment of Vinson’s home — the city alleges he didn’t follow proper procedures — no one has publicly questioned whether Vinson had the authority to reduce the value of the Hotel John Marshall.

Vinson’s attorney, J. S. Scot Pedin, declined to comment citing pending litigation.

Richie McKeithen, the city’s deputy assessor, says commercial property values are often reduced in a fashion similar to the Hotel John Marshall if the owner can show the building is no longer economically viable. “[Granger] felt they weren’t fully a functional hotel,” McKeithen says. “They only had 46 rooms open. They didn’t have the ability to use it to its full capacity.”

Meanwhile, other downtown hotels saw assessments increase or stay the same. The Jefferson Hotel, for example, saw its assessment jump from $12.4 million to $24 million; the Omni Richmond Hotel increased from $17.5 million to $25 million. The Richmond Marriott was the only hotel with an unchanged assessment at $12.5 million, although it had dropped from $16 million from 2000 to 2001.

While the John Marshall clearly needs the most work physically, its low assessment equates to preferential treatment, says one hotel operator.

“I think it’s very unfair that one property would be treated differently,” says Craig Burks, assistant general manager and controller of The Berkeley Hotel. “It is just evidence that the city has looked the other way, I would believe, numerous times in regards to that hotel.”

Granger maintains that his hotel was at a disadvantage. The city, he says, was giving a nearby restaurant at Sixth Street Marketplace a break on rent, and the John Marshall’s former restaurant, Barrister’s Café, couldn’t compete. That restaurant closed this past winter.

But is hotel property worth more than $301,000? McKeithen, the deputy assessor, wouldn’t commit. McKeithen says he doesn’t know exactly why Vinson lowered the Hotel John Marshall’s assessment so dramatically. And he wouldn’t agree or disagree with the current assessment.

“I couldn’t explain to you per se,” McKeithen says. “I don’t know exactly what [Vinson] thought in his mind.”

He did say, however, that the International Association of Assessing Officers would be looking at the methods used to value commercial real estate assessments, such as the Hotel John Marshall’s. That report is due sometime this fall, he says. S

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