PLUM ISLAND -- The state Appellate Tax Board has approved requests for tax abatements from a half-dozen oceanfront property owners here due in part to what it said was the effect of vicious winter storms and the resulting decline in beachfront property value.
Town officials said more abatement requests are pending, since the matters referenced in a Nov. 25 letter from the board related to assessments as of Jan. 1, 2012. Most of the affected homes are in the Annapolis Way area, a section of beachfront that took the brunt of ocean storms last winter.
Michelle Branciforte, principal assessor in Newbury, said more abatement requests are pending due to postponements. Some property owners could be not present at hearings this fall, she said.
The total of abatements, which will appear on owners’ bills as tax credits, is about $11,221 but it won’t have a damaging effect on municipal finances, said Tracy Blais, town administrator.
“We have an overlay account to in preparation for abatement,” said Blais yesterday. “This won’t affect us.”
A series of storms last winter was responsible for significant erosion and subsequent property damage. Six houses in the Annapolis Way area were destroyed and/or removed as a result of severe winds and pounding waves. The damage -- which included two homes falling into the sea as waves ripped apart the dunes beneath them -- drew intense media attention. The “stigma” attached to those images has caused home values on Plum Island to decline. It’s also caused financial hardships for homeowners who have seen their flood insurance rates increase significantly, and financing become harder to obtain.
The panel noted there had been “extraordinary erosion and tidal damage” and “an inability to obtain affordable insurance as well as market financing.”
The ATB also noted “an inability to sell oceanfront properties on Plum Island despite depressed offering prices.”
Though the state board noted that “the assessors have already adjusted the value of the subject properties to account for stigma, the board orders appropriate abatements.”
The following abatements were approved: Paul Buzzotta, 4 5th St., $2,408; Daniel Tolpin, 32 Fordham Way, $1,947; Kathleen Connors, 39 Annapolis Way, $1,851; Steve Badoian, 41 Annapolis Way, $1,869; and David Williamson, 1 Southern Blvd, $1,325; Joseph DiNapoli, 46 Northern Blvd, $1,821.
The abatements are the latest in a roller coaster effect of property values on the island, particularly on the ocean beachfront. For decades, the island was seen as a low-cost housing market, dotted with small vacation homes.
That changed about 15 years ago when property values began to soar, driven in part by national media stories that portrayed the island as a good deal for those seeking waterfront properties. The size of homes began to grow as waterfront shacks were torn down and replaced with large, year-round houses. In 2003 the island saw a milestone -- it’s first $1 million home sale. Several more were recorded in subsequent years. At its peak, the two dozen or so homes along oceanfront Fordham Way had a combined assessed value of nearly $25 million, rivaling the value of the mansions along “The Ridge” on High Street in Newburyport, the city’s highest-value neighborhood.
Around 2008, significant erosion problems were noticed in the Beach Center area. Within two years, the problem was serious enough to require a $5 million project to replenish the a half mile of eroding dunes that the Army Corp of Engineers said was in danger of being breached, exposing sections of Northern Boulevard and underground water and sewer lines to destruction.
Property values had begun to tumble, and continued to do so as the nation’s real estate bubble burst and erosion problems on the island began to slip southward, toward the Annapolis Way and Fordham Way neighborhoods. In 2011, some residents in the Northern Boulevard area successfully convinced the state tax board that the “stigma” attached to the erosion in their neighborhood justified reducing their property values, thus granting them a tax break.