Assessor dropped appraised home value by $128K in 2006
St. Tammany Parish District Attorney Walter Reed didn’t balk at paying $337,000 for a new home in the Abita Lake subdivision nine years ago, but when it was time to pay property taxes on the house at 219 Thornwood Drive, he seemed to think he was getting a raw deal.
He complained to Patricia Schwarz Core, who was then the parish assessor, and she dropped the appraised value from $320,100 to $191,000 — $78,000 less than the loan he took out to buy the handsome red brick home in 2005.
For Reed, the highest-paid district attorney in the state, the revision meant a refund of nearly $2,000 on his 2006 property tax bill.
Reed did not return calls for comment for this story.
The DA’s quibble, according to Core, was over square footage. He said a “bonus room” on the second floor was unfinished and shouldn’t be counted as livable space.
That argument is at odds with the homestead exemption application that Reed signed on Feb. 14, 2006, which said the house had 2,000-plus square feet of living area. A checklist indicated that the home had four bedrooms, three and a half baths — and no bonus room.
Nevertheless, Core issued a change order on Feb. 27, 2007, with a handwritten personal note to Reed that said, “I enjoyed speaking to you last evening.” According to Core’s note, the house had been “assessed incorrectly compared to similar homes,” and there was a square-footage error.
Core said this week that Reed’s reduced assessment used the same cost per square foot as she used for other properties in the neighborhood. But she reduced the living area to 1,692 square feet — less than the minimum 2,200 square feet required by the subdivision’s restrictive covenants.
Under state law, property assessments are supposed to reflect a property’s fair market value — what a willing buyer would pay for it.
When Reed sold the house this April, it fetched $395,000. But the price wasn’t the only number that went up. Real-estate listings said that the house was now 2,826 square feet.
That’s too large a difference to be attributed to a bonus room. According to the home’s new owner, the second-story room is only 300 to 400 square feet — considerably less than the 1,134 square feet that somehow reappeared between the revised assessment of the property in 2007 and its sale in 2012.
Reed’s reduced assessment was good for 2006 and 2007. But in 2008, a reassessment year, the value of 219 Thornwood Drive went up, according to assessment records, and was pegged at $378,900 — much closer to its real value.
Reed’s finances, both personal and public, have been the subject of heavy scrutiny in recent weeks. Four FBI agents visited the office of the six-term district attorney at the St. Tammany Justice Center on Friday, the FBI and courthouse logs confirm.
Last month, a federal grand jury issued a subpoena to the Castine Center, where Reed held fundraisers in 2008, 2011 and 2012, seeking records related to Reed and his son, Steven Reed. The younger Reed has two companies that have received more than $95,000 in payments from his father’s campaign fund over the past seven years. That includes a $29,400 payment for a September 2012 fundraiser at the Castine Center for services that remain unclear.
Reed also used campaign funds to throw a birthday party for his then-girlfriend, Claire Bradley, and to pay her and her son for work she says they didn’t do.
One of Steven Reed’s companies, Globop, listed the Thornwood Drive property as its address in forms filed with the secretary of state in 2006. Bradley says that Steven Reed lived in the house with his father and the bonus room was his bedroom.
Reed also gave up a $30,000-a-year legal job at St. Tammany Parish Hospital last month, saying in a letter to the board that he was doing so to allow the hospital to avoid what he described as the “distractions” of the last few weeks.
The New Orleans Advocate filed a request with the hospital for any subpoenas that might have been issued in connection with that deal, but hospital officials said they would not consider such a document, if it existed, to be a public record.
As for Reed’s property tax situation, he continued to claim a homestead exemption on the Abita Lakes property even though he moved out of it at some point. Yancie “Bubba” Moseley III, his partner in a gold-buying business called MR Precious Metals, confirmed that he lived in the home for a year and a half with plans to buy it. That plan fell through when he got divorced, he said. But while he lived there, he said, he paid Reed $2,100 a month rent.
That arrangement raises more questions about Reed’s property taxes. A property owner has to apply for a homestead exemption, St. Tammany Assessor Louis Fitzmorris said, and that exemption typically remains in place until a property is sold or transferred. When that happens, the exemption is automatically removed.
But the law also says the exemption is supposed to be for “your domicile, your primary residence, and you can only have one,” Fitzmorris said.
Reed did not have more than one exemption, the assessor said, and he noted that Reed is now applying to change his exemption since he sold the Abita Lakes house in April of this year.
But according to Moseley, Reed was renting out the property before that, which would mean he wasn’t entitled to the exemption he was still claiming.
“If you rent out your property, if you don’t live there, then you’re not eligible,” Fitzmorris said.
Follow Sara Pagones on Twitter at @spagonesadvocat.