Real Development Corp. faces $28,000 judgment and lets corporate charter lapse

WICHITA — There’s a judgment in Sedgwick County District Court against Real Development Corp. for more than $28,000 the company owes Tax Adjustment Specialists.

As Have You Heard? reported earlier this year, Tax Adjustment Specialists helped Real Development save about $61,000 by appealing to the county to lower appraisals on a few of its downtown buildings.

“I have spoken to them, and we have a payment plan,” says Real Development’s Michael Elzufon.

“I wish to God that were true,” says Jim McIntyre, the lawyer for Tax Adjustment Specialists.

“We had a deal,” McIntyre says. “They didn’t keep their word — again.”

In the process of preparing the lawsuit, McIntyre discovered Elzufon and partner Dave Lundberg let their corporate charters for several entities — including Real Development — expire.

The Real Development charter in Minnesota, where Elzufon and Lundberg are based, has not lapsed.

McIntyre says Kansas charters cost between $25 and $2,000 to maintain depending on the amount of real estate someone has.

Elzufon says the filing lapses are news to him.

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Kansas Court of Tax Appeals substantially raises fees for commercial property owners wanting to appeal property tax valuations

UPDATED — Commercial property owners who want to appeal their property tax valuations now have something else to complain about.

The Kansas Court of Tax Appeals in Topeka today voted to change the filing fees for those appeals after the Legislature slashed its funding earlier this summer.

“We now have the highest filing fees in the nation for commercial tax appeals,” said lawyer Jim McIntyre.

Fees have doubled, tripled or gone even higher. McIntyre said a lot depends on the number of parcels within a property and what county it is in.

What used to cost, say, $125 to appeal now might cost $1,600 due to the number of parcels, he said.

“It’s going to be a mess.”

He plans to file a lawsuit against the state this week to stop the fees from taking effect.

“A lot of people have a lot of money at stake here,” McIntyre said.

According to Sedgwick County, there were 3,618 appeals of commercial property taxes in 2010.

Since January, there have been 522, all of which required fees.

Until a few years ago, the entire budget for the Court of Tax Appeals came from the state’s general revenue fund and property owners didn’t have to pay to contest their valuations.

In recent years, the majority of the budget still came from the state, and commercial property owners made up most of the rest with filing fees.

Now, commercial property owners will fund about two-thirds of the court’s budget.

“What it does, it restricts access to the courts,” said Jim Hudson, co-owner of Tax Adjustment Specialists, which is one of several Wichita-area companies that help commercial and some residential property owners appeal their taxes.

For small tax issues, he said, the increased fees will mean “it’s just no longer feasible to take those cases.”

Hudson said $25 is about the most commercial property owners have to pay in other states in this area.

“In fact, most of the surrounding states don’t charge anything to file,” he said.

All Kansas property owners — residential and commercial — can make an informal appeal to their county appraiser’s office through a hearing for no fee.

The next level is a small claims division of the Court of Tax Appeals that’s generally used for residential property appeals.

The highest level for appeals is to the judges with the Court of Tax Appeals.

Residential property owners generally don’t have to pay anything to appeal their property taxes unless they take it to the highest level of the court, which isn’t as common as taking it to the small claims division.

That’s part of why McIntyre is filing the suit.

“They’re treating commercial taxpayers worse than residential taxpayers — far worse,” McIntyre said.

He said the suit will allege denial of federal constitutional rights of due process and equal protection.

He said the new fees also violate the state Constitution’s classification scheme in which commercial properties are taxed at 25 percent of their fair market value and residential properties are taxed at 11.5 percent.

“In my opinion, that classification requires that residential . . . homeowners pay based on a proportion of use,” McIntyre says. “That prohibits the Legislature from setting the filing fee at zero.”

McIntyre says that companies asking for industrial revenue bonds or that groups, such as churches, asking for tax exemptions also will have to pay significantly more.

McIntyre says he’ll name Gov. Sam Brownback in the suit.

“Brownback says he’s a big supporter of business, yet the people being gouged here are businesses,” McIntyre said. “The bigger the commercial taxpayer, the more they’re getting gouged.”

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Massage Junkie owners face lawsuit; former customers have outlet for gift certificates and packages

WICHITA — When Massage Junkie co-owner Heather McKendry changed store sites earlier this year, she didn’t return inquiries to discuss it.

Nor is she talking now that her store is closed and she is facing a lawsuit from her former landlord at Douglas and Rock Road.

A number of past Massage Junkie customers are wondering what happened and whether they can be reimbursed for gift certificates and packages they purchased.

“We’re chasing them just like everybody else,” says Jim McIntyre, the lawyer for Jehan Family Investments, which leased space to Massage Junkie at the family’s center on the northeast corner of Douglas and Rock Road.

“They just packed their bags in February and moved out of my clients’ . . . retail space,” McIntyre says.

The group filed a lawsuit for $29,000, which includes $21,000 for what the suit says is unpaid rent and $8,000 for reduced rent through the end of the lease in October 2012.

Smoothie King is now in that space at a reduced rent, which is why the landlord is willing to deduct from the full amount of the Massage Junkie lease, McIntyre says.

Massage Junkie briefly moved to 9390 E. Central earlier this year and opened for only a brief time before closing without notice.

“They’ve abandoned that location owing rent there,” McIntyre says.

He says that business was conducted under the name Massage Junkies.

“They set up two companies with one letter difference between them to confuse their creditors,” McIntyre says.

“I, quite frankly, don’t expect a good resolution on this one.”

There is, though, a resolution for Massage Junkie customers who still have gift certificates and packages that they purchased.

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Tax Adjustment Specialists sues Real Development over $18,000

WICHITA — The $5.6 million mortgage that “Minnesota GuysDave Lundberg and Michael Elzufon recently received helped with one headache, but hardly all of them.

“We just paid out $5 million to cure all our problems at the (Wichita) Executive Centre two weeks ago, and now we’re working on the balance of the problems,” Lundberg says.

It’s not fast enough for Wichita’s Tax Adjustment Specialists, though.

Real Development, Lundberg and Elzufon’s company, owes the group about $18,000 for help with tax appeals a couple of years ago.

Tax Adjustment Specialists helped Real Development save about $61,000 by appealing to the county to lower appraisals on a few of its buildings.

That’s not in dispute.

There’s a court date Friday, though, over a civil suit Tax Adjustment Specialists filed in Sedgwick County District Court over lack of payment.

“We were supposed to be paid at that (loan) closing, and we weren’t,” says attorney Jim McIntyre, who is representing the tax group.

“They made a promise to us that if we sort of put things in limbo (while waiting for the loan) then we would be paid in full,” McIntyre says. “That hasn’t transpired.”

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