Ex-Base Village owners lose property tax appeal
October 30, 2013
The four European banks that once held Base Village will not be reimbursed property taxes that they claimed they didn't owe on the Viceroy Snowmass hotel.
Snowmass BV HoldCo appealed a decision by Pitkin County to classify the Viceroy Snowmass as residential for the 2011 tax year, assessing the property's value at $111,543,000.
The banks argued that because they rented out 147 of the Viceroy's units on a nightly or weekly basis, they should have been treated as hotel rooms. By that classification, Snowmass BV HoldCo believes the value of the Viceroy was $22,640,200 in 2011.
The Colorado Court of Appeals upheld the decision by the Pitkin County Assessor's Office in an order announced in early October.
Properties are classified based on their use as of Jan. 1 of the tax year, according to the order. The Viceroy was created to be a condominium hotel, in which the units could be sold to individuals and optionally rented as hotel rooms by the owners. Eighty-two units were under presale contracts before 2008, when a majority of the buyers sued to get out of their contracts.
The banks didn't sell any residences during their ownership.
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"However, contrary to taxpayer's argument, current actual use is not the only relevant factor," wrote Judges Roman Dailey and J. Jones. "Instead, the original architectural design, zoning, and probable use are other relevant factors in determining classification."
Properties can be reclassified if the use changes. The judges said Snowmass BV HoldCo couldn't demonstrate that.
"The original concept of the development included allowing owners to place units in a hotel rental inventory," they wrote.
Snowmass BV HoldCo also disputed the valuation of non-rental units in the Viceroy, which include a fitness center, two employee-housing units and the hotel's two restaurants, according to an Aspen Journalism article.
The appeals were first denied by the county assessor and then the Board of County Commissioners.
The dispute over the non-rented units was resolved before reaching the state level, said Larry Fite, Pitkin County deputy assessor. The state Board of Assessment Appeals denied the petition to change the classification of the rented units, which the Colorado Court of Appeals affirmed with the most recent order.
Fite said it was good that the county wouldn't have to reimburse the taxes. The county collects property taxes and then distributes them to the appropriate districts, which in the case of the Viceroy includes the schools, the Snowmass Wildcat Fire Protection District and the town of Snowmass Village.
The Pitkin County assessor estimated the value of all the holding company's Base Village assets to be $190 million in 2011. Snowmass Acquisition Co., a subsidiary of Related Cos., purchased the stalled project for $90 million in September 2012.
The Viceroy was developed by another Related entity, Related WestPac, which purchased Base Village from Aspen Skiing Co. and Intrawest in 2007 for $169 million.
Since acquiring Base Village again, Related has sold more than 50 residences in the Viceroy. It is set to break ground on a second phase of the hotel this spring.
"We are pleased with the ruling and feel that the assessor has correctly labeled the Viceroy Snowmass as a residential hotel," said Dwayne Romero, president of Related Colorado. "We are not appealing the 2013 Viceroy Snowmass valuation or past valuation periods for the Viceroy."
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