Matlock bailed out on the whole TIF, Tax Increment Financing, that has become so unpopular with local officials and came up with his very own plan he called ALF, Appraisal Levied Financing. Well, looks like Matlock's ALF has hit a bit of a snag. It's not legal.

Matlock's ALF plan depended on upping the appraisals on his strip mall along Hwy. 321. The city would then borrow five or six hundred thousand dollars to give to Matlock and the city would get their money back over the next twenty years from the higher appraisals. As Matlock explained to the city council, if certain costs increase to his property like taxes, insurance, garbage pick up, etc., those costs are passed along to the tenants of the property.

According to a letter from Loudon County Property Assessor, Chuck Jenkins, to Lenoir City mayor and council, Matlock's proposal can not be implemented under current law. See letter below.

July 31, 2009

Dear Mayor and Council:

I have had several calls over the past few days regarding a request by developer Mark Matlock for an “ALF,” or “Appraisal Levied Financing.” From my understanding, the proposal hinges on having the subject properties reappraised for ad valorem taxation purposes.

After a review, we stand by our recent property tax appraisals of Mr. Matlock's properties. Using the market- and income-based approaches to commercial valuations, for the two strip centers, we have the land on at $650,000/per acre (the highest rate we have for Highway 321) and the buildings are on at adjusted-base-rates of $76/ft² and $81/ft² respectively, resulting in a total value of $5.9 million appraised ($2.3 million assessed, at the 40% commercial assessment ratio). If we include the Angelo’s Brick Oven property and an adjacent vacant parcel, that brings the total to more than $7.1 million appraised (or $2.8 million assessed).

If Mr. Matlock has a bank or fee appraisal that shows something different, we would be glad to take a look at it. But unless it can be shown that we have reached our decision in error, we cannot simply change his appraisal. (“Spot” reappraisals -- whether to increase or decrease and whether at the taxpayer’s initiative or our own -- are not allowable under any circumstances that I am aware of.) Barring a correction of error, Mr. Matlock does have the option of filing an appeal with the County Board of Equalization, but for 2009 that window of opportunity has closed. The Board has adjourned for the year and will reconvene next June.

To the broader question, even if Mr. Matlock were correct in that he is under-appraised and we were to increase his appraisals accordingly, the resulting additional taxes would rightfully be owed to the respective local governments of Lenoir City and Loudon County. To my knowledge, there is no alternative provision under state assessment law, but you may wish to consult the state Comptroller, Division of Property Assessments, or the state Attorney General’s office for a more qualified opinion.

I hope this helps in your deliberations, and please do not hesitate to call if you have further questions.

Sincerely,

Chuck Jenkins
Loudon County Property Assessor

cc:  Shannon Littleton, City Attorney

       Dale Hurst, City Manager

So, just like the fictional TV character ALF, seems Matlock's ALF turns out to be only a fantasy too. Back to the drawing board.