I’ve been through this process several times plus once taught Public Finance, so can offer you this:
Pencilneck is right–80k spent on fixup, cleanup, etc. should only add to assessed value to the extent it was an addition. Assessor’s don’t put much value into condition–it is largely a matter of price/sf.
You have documented well the fact that you are overassessed, i.e., it was an open market, arm’s length transaction with sufficient market exposure. Stick to your guns–county assessors rely on bluff and intimidation these days.
Immediately appeal and demand a hearing. Believe me, they will cave beforehand. Once you file for a hearing, they have, by law, 2 years to give it to you. They are so backed up–by tens of thousands–and they can only get 2 – 4 hearings in per hour, that probably less than 1% actually make it to hearing. Instead, they will call you a few weeks before the hearing and offer to stipulate, that is, compromise. Even that offer will not be everything you are asking for, but at least they are ready to seriously compromise on valuation.
Also, the two-year time gap does not mean you shouldn’t file ANOTHER appeal for the interim year. Otherwise they will eventually grant you the lower value for the first year, but not the second year because you technically did not ask for a lower valuation for that year.
Yeah, it is pretty sleazy on their part. They are extracting what they can from the taxpayer by fair means or foul. But this did actually did happen to me–they only granted the lower valuation for the year of the appeal, not the second year (at a time of declining market values!), so the $1200 or so I eventually extracted from them in a refund should have been about twice as large.
Also, to everyone here thinking of appealing, I believe you only have till the end of November to file your appeal. It is a simple one-page form available on line or at the County Assessor’s Office. It requires you to do some homework & get comps, so cozy up to your favorite RE agent to get some documentation for your claim.