DATE: Wednesday, September 10, 1997         TAG: 9709100540

SECTION: LOCAL                   PAGE: B7   EDITION: FINAL 

SOURCE: BY JON GLASS, STAFF WRITER 

DATELINE: NORFOLK                           LENGTH:   62 lines

NORFOLK PROPERTY VALUES SHOW 2.18 PERCENT RISE THE INCREASE IS LARGER THAN THE TOTAL FROM THE PREVIOUS 4 YEARS COMBINED.

City officials this year expect to collect an additional $2.1 million in tax dollars thanks to rising real property values over the past 12 months.

The revenue increase is the equivalent of a 3-cent tax boost.

Real property values citywide increased by 2.18 percent, or nearly $150 million, during the 12-month period that ended July 1 of this year, Wayne N. Trout, the city tax assessor, told the City Council on Tuesday.

The increase is larger than the previous four years combined, according to records.

For the first time in several years, Norfolk's real property values showed growth across the board, including land, homes, commercial properties, apartments and condominiums.

``I'm encouraged for the first time in a number of years,'' Trout said.

The value of real property is important because it's the No. 1 source of revenue for the city. In the current fiscal year, the real property tax of $1.40 per $100 of assessed value is expected to generate about $100 million. The city's operating budget is $509 million.

Slow growth in property values in recent years has concerned officials, and it was a factor in the city's AA bond rating being downgraded to A1 earlier this year by Moody's Investor Services. The other major investment service, Standard & Poor's, did not downgrade the city's rating.

The 2.18 percent growth still lags inflation, which government reports said grew by 2.2 percent over the same period.

According to Trout's annual report, residential property increased 2.5 percent in value, or about $106 million. That includes the construction of 139 new homes, additions to 1,197 properties and annual reassessment increases on existing houses.

The most notable increase in commercial property was the construction of new Super K-Mart and Target stores on Military Highway, the report said. In addition, improvements were made to 80 businesses.

Trout said that Taubman Co., developer of the downtown MacArthur Center mall, is expected to pay about $319,000 in taxes in the coming year on land and improvements already made as part of ongoing construction.

Trout said redevelopment has pushed up land values, sparked in part by the city's efforts, as blighted buildings are bought and demolished. The assessed value of vacant land increased by more than 12 percent, Trout said, from $125 million to more than $141 million.

In another positive, Trout said the value of apartments, which had been steadily declining, showed growth.

Apartment values, based on rental income, are stronger in part because city redevelopment projects have eliminated hundreds of units, officials said. That has led to decreased vacancy rates and modest rent increases as supply comes more in line with demand, Trout said.

Even so, apartment values still declined by $41,210, Trout said, in large part because property in East Ocean View slated for redevelopment has been removed from the tax rolls temporarily after being purchased by the Norfolk Redevelopment and Housing Authority.

Norfolk's total assessed real property value now is slightly more than $7 billion, up from more than $6.8 billion. That figure does not include the value of railroads and public utilities, Trout said.

Trout calculated that the city has $6.3 billion in tax-exempt real property, more than half held by the Navy and other federal agencies. KEYWORDS: REAL ESTATE TAX PROPERTY VALUES NORFOLK CITY COUNCIL

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