Pitkin County denies tax appeals for Base Village properties
November 8, 2011
ASPEN – Pitkin County commissioners on Monday denied a pair of tax appeals for properties at Base Village in Snowmass Village, including one for the Viceroy Snowmass in which the disparity between the value assigned the luxury hotel by the county is $57.6 million higher than the value claimed by the owners.
In a second abatement hearing, involving so-called Lot 3 in the ski area base, the two parties are closer to agreement. Chief appraiser Larry Fite recommended that commissioners deny the appeal but voiced hope for a resolution before the matter goes to the state Board of Assessment Appeals.
In both cases, the five commissioners voted unanimously to deny the appeals. No representative for the property owners appeared at the hearing.
The dispute over the Viceroy is for 2010 – the first year of its operation. It, like the other properties in the Base Village development, has been placed in receivership pending a foreclosure sale. The receiver, Destination Management Services Inc., filed the petition for abatement, or refund of taxes, for both the Viceroy and Lot 3, which contains part of a parking garage and partially-built Arrival Center.
The county assessor’s office assigned the Viceroy, still under single ownership in 2010, a value of $152.7 million, categorizing all of its 154 condo units as residences, as all of them were being marketed for sale. That made 89 percent of the building residential and 11 percent commercial, Fite said.
The tax representative for the receivership contends that only units that had not been placed under contract to sell were being rented for short-term stays as hotel rooms and that those condos should be valued as standard hotel rooms are – based on an income formula. The abatement petition put the value of the hotel at $95.1 million.
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“Should it be a hotel or should it not be a hotel?” Fite mused. “I think that’s a legal issue that may just have to be decided by the Board of Assessment Appeals.”
In the case of the Lot 3 garage, the receivership has actually come up with a higher value than the assessor’s office for the property for the years 2009 and 2010, at $29.9 million. The assessor’s office assigned the incomplete structure a value of $23.2 million, but attributed a larger share of the garage to the commercial properties it will serve. Since commercial property is assessed at a higher rate, the county came up with an assessed value of $2.9 million, while the property owner calculated it at $2.6 million. Property taxes are based on assessed value.
According to Fite, the tax agent representing the receivership assigned a value for the garage based on the percentage of completion of each of three buildings that will use it. The two sides disagree on the allocation of value between residential and commercial use of the structure and the method used for assigning value to partially completed buildings, according to Fite.
“I don’t know that they have adequately accounted for the value of the parking garage itself,” he said.
Nonetheless, the two sides are about 10 percent apart in their calculation of assessed value, and Fite suggested further talks may yield a compromise.
“Sounds like very sage advice to me,” said Commissioner Rachel Richards.
The receivership has 30 days from receipt of the notice of denial to file an appeal with the state, and will likely do so as a matter of course, Fite said. A hearing, however, is typically scheduled six to nine months out, giving the assessor’s office and the owner’s representative time to negotiate on at least the Lot 3 valuation.
He was less certain that the two sides could reach agreement on the Viceroy.
“It is definitely worth future discussions to see if we can find common ground,” he said.