Milan gets huge property tax cut
Milan REI X LLC, an affiliate of Milan Capital and owner of the 116-acre Sully-Miller parcels in East Orange, got a sweetheart deal from the county assessor’s office in 2016, reducing its property tax by a whopping 78 percent.
In 2016, JMI Associates, another Milan Capital affiliate, signed a quitclaim deed to Milan REI X LLC, giving its partner full ownership of the property. County tax records show that, coincidently, about that same time, the assessed value of the parcels was “corrected," and mysteriously dropped from $16,643,907 to $3,678,000.
The Sully-Miller site consists of 12 parcels, each assessed and taxed separately. In 2007, JMI purchased the parcels from Sully-Miller for $15 million. That sales transaction determined the assessed value of each parcel. Two of them, the horse arena and a parcel north of Santiago Creek below Mabury Ranch, are zoned for housing (r-1-40, r-1-8) and were purchased for $1,801,000 and $2,782,876, respectively.
How low can you go?
The 7.6-acre horse arena, entitled for six one-acre-lot units, is now assessed at $249,696 and the other 10-acre parcel, entitled for at least 25 houses, is assessed at $325,645. A negligible portion of the parcel neighboring the entitled 10 acres also carries an r-1-8 zoning.
Milan’s total property tax liability for 2016, based on the $16-plus-million assessed value, was $173,372. The assessor’s “corrected value,” apearing after the quitclaim was recorded on Sept. 8, lowered the tax bill to $39,370, an annual reduction of $134,002.
The 2016 "corrected value" reduced the property taxes for the horse arena from $20,746 to $2,574 and the entitled parcel next to Mabury Ranch from $14,565 to $3,351. Milan paid the lower amount on Nov. 15.
The developer is also getting off light on its “fair” share of the Rancho Santiago College District and Orange Unified School District assessments.
Milan managed the same “corrected value” assessment for its Ridgeline property. The 2016 assessed value for the five parcels making up the 51-acre property was $12,219,050; taxes were $132,067. The assessor’s corrected value was $2,686,797 and taxes due, $33,552.