ECONOMIC
OBSOLESCENCE
Gregg Martin and Dave Duty
Property Valuation Specialists
North Carolina Department of Revenue
Property Tax Section/Local Government Division
2011 Advanced Personal Property Seminar
Greensboro Sheraton Four Seasons Hotel
Monday September 12, 2011
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Economic Obsolescence

Economic obsolescence-wikipedia, the free
encyclopedia-information about economic
obsolescence can be found here…
http://en.wikipedia.org
ECONOMIC OBSOLESCENCE

External obsolescence is loss in value as a result
of an impairment in utility and desirability
caused by factors external to the property
(outside the property’s boundaries) and is
generally deemed to be incurable. External
obsolescence can be caused by a variety of factors
such as changes in the highest and best use of a
property due to market shifts or governmental
actions, restrictions on income, zoning,
neighborhood decline, lack of property demand,
and national economic conditions.
BOUNDARIES BOOK STORE
Letter to county from Thomson Reuters
concerning assets in the company
 Closing of other sister stores
 Related business decision to downsize
 Costly development of website for retail sales
online
 Job openings?
 Airport business is taking off!
 PTD recommendation

FUZZY PICTURE, INC.
Letter from Ernst & Young to county addressing
value of assets
 Numerous phone calls from affected counties
 Shotgun approach
 PTD recommendation

ELITE HOME APPLIANCES,
INC.
Phone call to county asking for review of values
related to manufacturing plant assets
 Tour of plant
 Conference discussion
 County decision
 PTD recommendation

FANCY PAPER PRODUCTS
CORP.
Phone call to the county with request for a
conference
 Guided tour of 2 plants
 County decision
 PTD recommendation

DGM AUTOMOTIVE PARTS,
INC.
Letter from tax representative to county
requesting a review of listing forms, etc.
 Tour of plant
 Conferences
 County decision
 PTD recommendation

STUFFHAULER TRUCK MFG. CO.
o
o
o
o
o
Letter from tax representative to county requesting an
adjustment for economic obsolescence.
Review of information about company.
Review of information presented in media.
County decision.
PTD recommendation.
CONGLOMERATED DIESEL, INC.
Letter to the county requesting value reduction
due to economic obsolescence
 Conference call with Assessor
 Review of documents
 Determination of percentage amount of economic
obsolescence to recognize
 PTS recommendation

ECONOMIC OBSOLESCENCE
Summary
Questions?