For What It’s Worth 

Closing out his 44-year career, Jim Hester reflects on appraising Stone Brewing, taxing CenterStage and the value of Richmond real estate.

click to enlarge Richmond's longtime chief assessor, Jim Hester, has had a unique vantage point on deal-making in City Hall. - SCOTT ELMQUIST
  • Scott Elmquist
  • Richmond's longtime chief assessor, Jim Hester, has had a unique vantage point on deal-making in City Hall.

Jim Hester tried to retire once. After 25 years of assessing property in Petersburg and seven in Charlottesville, he was ready to do consulting, maybe relax a little, when the job of city assessor opened up in Richmond.

“I knew the problems they were having here. And I thought: ‘Well I can go up there and fix some things, get the office back on track,’” he says. “But it was worse than I imagined. A month after I’d been here I thought it was the biggest mistake I’d ever made.”

Ten years later, Hester is retiring for real this time. He marked his last day in the office Thursday, June 30, when Style met with him to discuss his 44-year career becoming the most tenured real estate assessor in Virginia.

Style: Did you expect to have your name in the paper so often?

Hester: No! I don’t understand it. I run from that stuff. I want to sit in here with my door shut and do my work but they won’t let me. [Reporters] didn’t even know our names [in Petersburg], which was kind of a nice thing.

What were the early years like?

Mayor [Doug] Wilder fired me. He said, if you don’t turn in your resignation, you’re locked out. He wanted the office under his auspices (the city assessor is one of five positions in city government that is appointed by City Council, rather than by the mayor). It took a few weeks for the circuit court to deal with it and say: “No, you can’t do that.”

I had no idea how complex they had made this job. Because we’re just appraisers. We appraise properties and the city uses it as an assessment and then they do whatever they’re going to do with it. But here it got politicized all the time.

But you’ve had no qualms jumping into the fray?

That’s my approach. Because I didn’t feel a financial threat to do what I thought was the right thing to do. Everything we do in the office, we do on top of the table -- that’s just the way I do it. If you don’t like it, at least you know we did it.

Like a few years ago when you assessed Richmond CenterStage properties, including the Altria Theater. The Richmond Performing Arts Center was found to owe $1.75 million in city taxes for leases on the Altria Theater and Carpenter Center.

I guess I put them on the spot a little bit, but it just had to be done. They had to pay taxes under their scenario -- state law said you couldn’t exempt them. But [council] granted them enough money so that they could then give it back to us and clear their tax debt. So then whoever had the political pull went to the General Assembly and had them change the law. The change only affected two properties in Virginia: the two we have. It was very narrowly written to accommodate them. Now they’re exempted.

And more recently with Stone Brewing, where you assessed it at a rate four times what they expected?

They have a way out, but they have to do a public act. I don’t know if you’ve ever seen the stack of documents for Stone, but they’re like this [he raises his hand a foot off the table]. Council had what, 10 days to make a decision? When the pieces of the puzzle are not all in the same section, but a little here, a little there, it makes it more difficult for someone to make the right decision.

I knew they had another agreement that said, if the assessor, now or at any time, charged more than the low end of the agreement, that the city would make up the difference. I thought, what the heck -- if it doesn’t make any difference, they’re just going to give it back to them no matter what the amount is. …

Apparently it wasn’t quite that simple, because it has to be put in the budget line item. Council wasn’t asked to do that. Now council will have a public hearing and everybody in the world now will know what’s really happening.

Stone came here under three auspices: It’s going bring in industry, provide jobs, and pay taxes. But nobody said they were going to pay well-reduced taxes. So that’ll all come up.

Does the city ever come to you for assessment expertise before they make these agreements?

In all the years I’ve been here, I was invited to two meetings, which immediately made me suspicious.

We had one discussion about whether or not $25,000 would be considered a “nominal” purchase price [at the end of Stone’s lease]. They knew the statute, and they threw out $1,000, they threw out $20,000, $250,000. I just listened.

I guess they were expecting me to agree that $25,000 was enough. If someone sells me a $50,000 Escalade, and only charges me $40, which is the ratio, that’s pretty damn nominal in my mind.

Somebody on their side has apparently gone to the attorney general’s office to see if they’ve got a definition of “nominal.” If they want to overturn it, I don’t care. But I have to stand on something.

And the other meeting was about how much land they were going to give [Stone], particularly with the terminal and the beer garden and stuff like that. And I spoke up then, I said: “Why are you giving away the riverfront? Give them what they need, don’t give them extra because they’ll just turn around and sell it if they don’t really need it.”

Did you ever get push back from council about your assessments?

No, I actually expected that. But they never did. However, I did hear them grinding their teeth a little bit, because they didn’t want to be put on the spot either. But as the elected officials, they’re the final say-so on these things. They did ask why: “Why are we doing this?” “Do we have to do this?” Yeah, we gotta do it. But they were always good about it.

What do you consider some of your best accomplishments in office?

The people I’ve brought on, the changeover in the office, the change in attitude, the professionalism. When I came here, it wasn’t like that. But if you tell people, “You’ve got to produce and you got to do it right, and we got to have it on time,” the people who can’t do that just drift on off.

Also, when I came here I knew that our assessment ratio was 80 percent. The state doesn’t want anything less than 90 percent, so I had to make up all that ground. The theory is the more accurate you are at the local level, the more deserving you are to receive state funds. They want us to properly tax the citizens locally, before they consider how much they’re going to add on to that for schools. In the 10 years I’ve been here, we’ve doubled the assessed value of the land because we’re more accurate and more equitable in how we do it. And that produces money.

And we did a major renovation of the rehab programs. At any time, we have over 7,000 properties that are getting abatements. And I’m not arguing for or against it but one thing we tried to do, tax-policy wise, was tighten it down. Incentives are one thing, incentives are good. But where do you cross the line to a giveaway? When you give something for 15 years, I think you’re giving away stuff. So they did tighten that down, now it’s seven years max for commercial-industrial and 10 years max for residential. That actually saved the city a lot of money, and it did not stop the program. It’s running at a higher level now than before.

Can you articulate some of the challenges that remain for the city government?

They need to quit giving away money. We work too hard to put the assessments out there to have them abated or credited out. We have issues with exempt properties: 25 to 27 percent of our land, you can’t tax. A lot of state property, [Virginia Commonwealth University], the bio-park, {the Medical College of Virginia]. It just goes on and on until suddenly all the big dollars we can’t touch.

This is where maybe working tax policy a little has helped, with the cooperation of council. We were exempting everybody and their brother. If they asked, they got it. About two years after I’d been here, we tightened down on the categories that we could. In fact, there’s a moratorium on it.

And, this is outside my area, but it’d be great to see the schools working better with the city government.

What real estate changes have you seen in your decade here?

Church Hill has changed tremendously and is still morphing. Now they’re not only renovating, but adding new houses wherever they can. The North Side is finally coming back. Those are huge houses.

Condos are flat right now, but they’ll come back. And we’re adding like a thousand a year in apartments. There’s a bubble to everything though. It should go soft at some point.

VCU’s not growing quite as fast, but they’re bringing back the young professionals. There seems to be no end to them, I don’t know where they’re coming from.

Everything just looks great here. It’s just the best city as far as I’m concerned.

What will you miss the most?

The camaraderie. Most of the people I work with are just fantastic people: the city attorney’s office, the appointed board that oversees our function, council members. I can’t say enough good things about them. They’re driven by different things, but they’re always trying to do the right thing for their constituents.

What are your plans for retirement?

I have a cottage on the New River in Southwestern Virginia. The repressed contractor in me is going to work a little bit on my cottage and ride bikes and take it easy. I’m going to go buy that lifetime fishing license. I’ve got a 20-year-old fly rod and I’ve only used it twice.


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