Aspen Skiing Co. gets tax relief
July 22, 2011
ASPEN – Aspen Skiing Co. is getting a healthy dose of tax relief after a state board ruled that the Pitkin County Assessor’s Office overvalued three of its major properties in 2009.As a result of the decisions by the Colorado Board of Assessment Appeals, Skico overpaid property taxes by a cumulative amount of $401,858 for the 2009 and 2010 tax years, according to the Pitkin County Treasurer’s Office. The various taxing districts that collect revenues from Skico won’t have to issue refunds, according to Pitkin County Treasurer Tom Oken. Instead, they will credit Skico the overpaid amounts on the 2011 taxes that will be paid in 2012, he said.The property tax credits were anticipated by Skico, spokesman Jeff Hanle said. The company views it as a reduction in expenses rather than a boost in revenue.”It’s not like we’re getting a windfall,” Hanle said.The roots of Skico’s tax relief go back to the revaluation of property that all Colorado counties undertook in 2009. (They must calculate property values every other year, in the odd-numbered years.) Skico protested the values assigned to The Little Nell hotel, the Snowmass Club and two parcels at the base of Lift 1A.After failing to earn relief in Pitkin County, Skico filed petitions with the Colorado Board of Assessment Appeals. The board heard the three cases in April and June, but did not make a a final decision on the Lift 1A parcels wasn’t made until this month.Lift 1A parcels drop in valueWhile property at the base of Aspen Mountain has significant value in the eyes of many developers, the state board ruled that Skico’s parcels must be considered open space with limited uses, such as ski lift operations.The two parcels combined are about 1 acre in what’s known as the Eames Addition at the base of the mountain. Various broader development proposals for lodges and commercial property on the Lift 1A base area have included Skico’s property. None of those proposals has earned approval by the Aspen City Council, noted Skico attorney David Bellack, so that led to the company’s argument that the value of its parcels should be lower.In the assessment appeals hearing in April, representatives for the county said the larger of the Skico’s Lift 1A parcel, which is 27,300 square feet, should be valued at $532,350 and the smaller parcel, at 15,600 square feet, should be valued at $304,200. The Assessor’s Office felt that the combined value of the parcels was $836,550.The state board asked the county for additional information, then held a second hearing in June. On July 5 the board ruled that the property “was most analogous to open space” and noted that Pitkin County values open space at $20,000 per acre. It reduced the actual value of the Skico’s Lift 1A parcels to $20,000.The new value reduced the property tax for 2010 on the larger parcel from $31,717.08 to just $98.28. That saves Skico $31,618.80.The new value reduced the property tax on the smaller parcel from $18,124.04 to $56.64 for a savings of $18,067.40 for Skico.Similar savings were gained by Skico for the 2009 tax year, Oken said. For both years combined, Skico’s property tax was reduced by $96,665.20 on the Lift 1A parcels.Skico had already paid the taxes based on the higher property values. It couldn’t skip payment on its property tax bills for 2009 and 2010 while the appeals were pending, Bellack said.
The state board earlier directed Pitkin County to reduce the actual value of The Little Nell hotel by several million dollars. In an April hearing, Pitkin County was willing to reduce the actual value of the luxury hotel to $81.51 million. The Board of Assessment Appeals ruled that it should drop to $70.7 million.The state board ruled that some adjustment was necessary to reflect the degree of risk in the hospitality business, such as seasonal occupancy fluctuations and macroeconomics.That change in value reduced Skico’s 2010 property tax bill on The Little Nell from $633,001 to $547,555.40. That represented a savings of $85,445.84.There was an adjustment of $80,790.68 off the Nell’s 2009 property tax bill, Oken said.For the two years combined, the Skico whittled $166,236.52 off its tax bill for the five-star property.
Rounding out Skico’s sweep in property value reductions was the Snowmass Club. In an April hearing, the county recommending adjusting the value to $23 million for the 18-hole golf course with a clubhouse and the athletic club with a tennis facility.Duff & Phelps, a financial advisory and investment banking services firm with an office in Denver, represented Skico in all three valuation hearings. The firm argued that the county inflated the Snowmass Club’s earnings potential, so the actual value should be reduced.The state board reduced the value to $17.79 million. Again, there were big implications for Skico’s 2010 property tax bill. It had paid $235,462.32, but the state’s decision reduced the bill to $164,289.80, according to the Treasurer’s Office. That saved the Skico $71,172.52.Oken said Skico’s tax bill for 2009 for the Snowmass Club decreased by $67,784.For the two years combined, Skico saved $138,956.52 in property tax for its club.Oken said Skico tax credits of $401,858 won’t create a severe financial pinch for any individual taxing district because it is divided up among several of them, such as the school, hospital and county government.The taxing districts will be able to recoup the amount given back to Skico by charging all property tax payers a minuscule amount more for the 2012 taxes due in 2013, Oken said. The increase that all taxpayers face because of the credit to Skico will be small for each individual because it is divided among so many, he email@example.com