Local business owners share concerns about rising property values

Several local business owners joined Rio Rancho Regional Chamber of Commerce President and CEO Jerry Schalow at the April 24 Sandoval County Commission meeting to raise concerns about drastic increases in commercial property valuations in Rio Rancho.

Schalow and Rebecca Bogan, who owns Guerrero Village on Southern Boulevard, highlighted the impact on retail operations, while Dale Sapp, owner of Budget Blinds, and Anne Parham, owner of Kumon Math and Reading Center of Rio Rancho, emphasized the negative effect on small and medium-sized businesses.

Questions and concerns have arisen over changes in commercial property values in Rio Rancho.

The Rio Rancho Regional Chamber of Commerce sent an email on April 17 “urging all commercial and business property owners to carefully review their property tax statements and consider filing an appeal with the county.”

The chamber said it is concerned about “the significant increase in proposed property tax rates for 2024, which has been a cause of concern for many local businesses.”

“The county Assessor's Office has dramatically increased commercial property valuations throughout the county. In particular with retail operations where most tenants are small businesses,” Schalow said. “As president of the chamber, I've heard a lot of concerns around this. Based on the sample review, we see anywhere between 30% to 600% increases in the value. The small businesses that have already experienced 20% inflation over the past two years on top of wage inflation, a commercial property that is assessed at a higher value will also include higher property insurance rates. This is also going to lead to even higher property insurance rates if these small businesses go out of business because their price per square foot has to go way up because of the taxes that are assessed on this.”

Sandoval County Assessor Linda Gallegos, who was not at the commission meeting, said earlier this week that her office works hard to make sure all of the nearly 150,000 accounts they have are assessed correctly and fairly.

“My team and I work to ensure that all properties are valued at current and correct,” Gallegos said. “My staff has been mandated to review and amend all valuations to current and correct, further ensuring that the valuation of properties that are deemed non-residential does not shift the burden of taxation to residential properties.”

The Sandoval County Assessor’s Office determines property values for tax purposes.

Schalow provided each commissioner with a document showing six properties in Rio Rancho that saw their valuation rise at least 108% from 2023 to 2024.

“We would really like the county commissioners to help us out to review this and take a deeper dive into how this is being assessed,” Schalow said. “Another concern is that the increase in properties every year will affect us for 10 years and more to come. So this is a dramatic concern. And we hope that you will take this under advisement and take a deeper look at it.”

The parking lot at Turtle Mountain went from $51,024 in 2023 to $324,608 in 2024, an increase of $273,584, or 536%, over the previous year.

Elevate also saw its property value spike, going from $1.3 million in 2023 to $6.6 million this year.

Joanna Boothe State Farm was valued at $179,857 each year from 2018-23. This year the value is listed at $548,910.

Guerrero Village went from $906,462 to $2,195,886 (a 142% increase).

“We currently have seven tenants who are all small businesses,” Bogan said. “I got my property valuations in and our county assessor Linda Gallegos has raised our property tax by 142.16%. That's just not sustainable for us. It's not right. It's outrageous. Jobs will be lost over this. Small businesses will go under because of this. The bottom line is we go all the way down to families whose breadwinner may lose their job, the raise that you were supposed to get, you won't get because we can't afford it or small business can't afford them. This is just bad for Rio Rancho. It's bad for small businesses and bad for the state of New Mexico. This is not what we elected Linda Gallegos to do.”

Gallegos said Guerrero Village recently sold for an amount that showed the property had been undervalued by more than $1.5 million while noting that state statute prohibits the selling price of the subject property to be used to value that specific property if there are sufficient market comparables to use to value the property.

"Sales of comparable properties showed that the parcel was undervalued," Gallegos said. "The recent sale of Guerrero Plaza also indicated that the 2023 value was undervalued by over $1.5 million. The sale was not utilized to value the parcel, but it does show evidence of a higher market value than what was realized in prior years."

The increase in Guerrero Village’s value would affect both Sapp and Parham, whose businesses are tenants of the village.

“The shock and just absolute sheer horror that Rebecca shared with us is mutual and will have a long-term negative effect on small and medium-sized businesses,” Sapp said. “We ourselves support 13 households so their employees and their families with the repercussions of the fallout from COVID, minimum wage increases, it's becoming near impossible to keep small business going in the city of Rio Rancho.”

Parham said she hasn’t given herself a paycheck in years in order to keep Kumon open. The value increase would put her out of business if it’s not adjusted.

“I opened my center in 2005. I love working with the kids; I love employing retired teachers. I've been treading water since COVID to the point where in order to stay in business, I'm not paying myself,” Parham said. “If my rent goes up as significantly, as we fear, there's no way I'm going to be able to sustain my business in the city of Rio Rancho.”

District 1 Commissioner Katherine Bruch asked the business owners for patience as the commission works with Gallegos to see what is going on with the spike in some valuations.

“I don't think we have enough information to understand exactly what some of these concerns are around assessments and what's been going on there,” Bruch said. “So we need to reach out to madam assessor and learn more about that situation.”

District 2 Commissioner Jay Block was careful with his words while showing support for local business owners, many of which are in his district.

“I don't want to comment too much because of the potential issues with the assessor, and I wish the assessor was here tonight,” Block said. “I look forward to her working with our small business partners because when you start raising taxes, you know, 100% or greater. I mean, holy crap, what are you going to do? Especially in (Parham’s) small business back there, who said, 'I haven't taken a paycheck for like three years and now you're throwing this on me.'

“I want to just apologize to you for the stress that this has caused to your businesses, your employees. Your employees have no clue what the hell's going to happen," Block added. "Every one of us up here wants to help you. We want you to be successful. We want you to hire employees with a stake in Rio Rancho, so I'm very concerned about this. And I know the assessor is working on it. This has got to be resolved somehow because this current course of action is unsustainable for business.”

Property owners receive valuation figures on the Notice of Value, which is mailed by April 1 each year. This notice represents the final step in the review process and determines the taxes property owners will pay after local government agencies and school districts set their budgets and adopt tax rates.

County appraisers regularly review real estate data and add new properties to ensure the values of existing land and buildings are up to date. The taxable value of property is determined as one-third of the total appraised value, minus any allowable exemptions, such as head-of-household or veteran’s exemptions. The net taxable value is then multiplied by the tax rate to calculate the actual taxes property owners are billed.

The assessor is charged with three basic duties: to identify, locate and value properties within Sandoval County.

Sal LiRosi, who owned Sal-E-Boy's Pizzeria for nearly four decades and currently owns several properties in Rio Rancho, discussed the challenges he faces with high tax assessments for his shopping center. He highlighted how small businesses in the area are struggling with doubled taxes in the past two years and how he has been successful in negotiating with the assessor's office in the past.

“My taxes went up 30% last year, and we were able to negotiate with the assessor. And just so we’re clear, I'm a friend of the assessor. I've been there many times for protests and we've come to an agreement, we compromised, but this seems out of control. This year is another 70% increase so my taxes are about to double within the last two years. I have asked them to do an income approach, which I feel would be the fairest way to determine what my value was. After leaving the (assessor’s) office, two days later, I got an email with a shopping list of 30 items that I needed to produce within two weeks to justify that.”

Property owners who wish to appeal their Notice of Value assessment should contact the Sandoval County Assessor's Office for more information on how to proceed. The deadline for appeals is April 30.

“I don't think I need to encourage you to follow your protests because you need to do that indiscriminately, and I would certainly encourage you to not miss the deadline,” Commission Chair Dave Heil said. “I am very concerned about the numbers that I see as a moment of encouraging people to buy in Rio Rancho. This is kind of discouraging to me."

Both the chamber and the assessor’s office encourage property owners to reach out to the assessor to discuss any concerns with the valuation of their property.

For more information on how to file an appeal or to learn more about protesting property value, go to the assessor's website and complete the protest form: sandovalcountynm.gov/elected-officials/county-assessor/forms/

In addition, you can call the assessor’s office at 505-867-7562 or the Rio Rancho Regional Chamber of Commerce at 505-892-1533.

“My team is committed to reviewing whatever evidence a property owner has to support their value,” Gallegos said. “If the evidence sufficiently shows a diminishment in value, we will reflect that change.”