Valuation of a new self storage facility for tax purpose

[Jim Su]

Hi,

I am buying a raw land to build a new ground up self storage facility in central Ohio. I understand the lender will determine the value from the construction cost for the lending purpose. I am wondering how the county determines the market value of a self storage facility for calculating the property tax.

I have studied the property tax of the most recently developed new self-storage facilities in the area. I noticed that the market value of these facilities is much lower than the actual construction cost. One facility (about 60k sqft built in July. 2021) is valued at $1.3M ($1.1M improvement, $0.2M land). I know their construction cost (include land cost) is about $4.5M. Another one (built in April 2021) is valued at $670k while the construction cost should be over $2M. 

The problem I have now is that the project won't be profitable if the county taxes based on the construction cost. So we would need find out the answer now. I am curious how the county values a new ground up construction. 

• What is the county's appraisal process like?
• Is this based on the comparison method or the construction cost? 
• Do I provide the information of the actual construction cost the county for their appraisal?

Thanks for your reply.

Jim