The vexing issue of taxing
The Aspen Times
Aspen, CO Colorado
ASPEN ” The wealthy owner of 55 acres at the base of Mount Sopris near Carbondale can still claim his agricultural tax status, thanks to his assertion that he uses the land to raise and sell Icelandic horses and to grow hay.
But a recently approved caretaker dwelling unit (CDU) now sits under a relatively mild restriction to prevent it from being rented out to anyone but an employee on the ranch.
Because of the controversy surrounding the acreage owned by Gary Snook and his GSS Properties LLC, Pitkin County is about to dive into further talks about what is a “real agricultural operation” versus land that claims to be an agricultural use but in reality is luxury housing for what are known as “gentlemen ranchers.”
“We’re simply trying to equalize what the burden is amongst people,” said Commissioner Michael Owsley this week in Aspen, defending the county’s increasingly fervent dialogue on the subject.
“My tax bill is almost what Mr. Snook’s is, and that hardly seems fair,” he said. “But I don’t have Icelandic horses on my property.”
Owsley said Snook’s taxes in 1999 were approximately $13,200, and noted with amazement that Snook’s tax bill in 2007 actually dropped to $9,266.
“That’s unusual,” he said, raising his eyebrows and drawing laughter from the audience comprised largely of landowners and lawyers.
The issue first arose earlier this year when Snook sought county approval to both expand the house on the property and build an additional 2,500 square feet comprising a barn, the CDU and two ranch buildings for storage and other purposes.
Original approvals for the house and CDU date back to 1994, under previous ownership, although the vested rights linked to those approvals had expired, according to a memo to the county commissioners.
So Snook went to county hearing officer Jim True and won a renewal of the approvals, as well as permission to use transferable development rights to add the 2,500 square feet, including the 1,000-square-foot CDU.
True declined to approve, despite county planners’ recommendations, a requirement that Snook submit to a “covenant … prohibiting commercial agricultural activity on the parcel.” The use of this covenant was added recently to the county’s land-use codes.
The county has been wrestling for years with landowners who claim their property is agricultural in character, and thereby are taxed at a far lower rate, although the agricultural label frequently is considered to be a fraud and a tax dodge.
The county seeks to prevent the owners of properties that are “second homes, speculative and tourist in nature” from skirting tax laws, Commissioner Rachel Richards said.
County planners maintained that the CDU indicated the use of the land had changed from agricultural to primarily residential, but is still listed on the county tax rolls as the former, planner Suzanne Wolff said.
Planning consultant Alan Richman, speaking for Snook, said the land has been ranched “all the way back to the homesteading era” and that most of the property, except for roughly four acres containing the building sites, is still used to grow hay.
Snook said he has been expanding his herd of Icelandic horses, which he said cannot be ridden or marketed until they reach five years of age. They typically sell for between $25,000 to $200,000 apiece, he said.
“The only reason this condition is being imposed is to provide a basis for the county assessor to withdraw the agricultural status of this parcel,” Richman said in the hearing before True. “My client does not believe that the county has the authority to determine tax status, as a condition of land-use approval.”
True disagreed, saying the county does have the authority to regulate commercial uses on a rural property, but ruled against requiring Snook to sign the covenant, apparently unconvinced that the addition of the CDU by itself represented a fundamental change in how the land was to be used. Cindy Houben, director of the county’s community development department, appealed the decision to the county commissioners, asking the commissioners to overturn True’s ruling and impose the covenant.
The commissioners did find that True committed an error in not acting to ensure the land remained an agricultural use by imposing the covenant.
Instead, the commissioners convinced Snook to accept a provision that the resident of the CDU will “primarily support the agricultural use of the property.”
Beyond Snook’s land, however, the commissioners agreed to host a work session with as many of the attorneys in the audience and landowners as possible to talk about the larger issues involved.
John Clark, a landowner in the Old Snowmass region, said he came to the hearing because he was worried the new covenant indicates that the county now “encourages people to cease commercial agricultural operations on their land.”
Another landowner, Chris Collins, also of Old Snowmass, said he has 800 acres on which he is developing a 15-acre cluster of homes but leaving the remainder as a ranch, with 300 cattle and a large hay crop.
The commissioners vehemently denied any intention to undermine agricultural uses in the county and said they are trying to do the opposite ” encourage the preservation of the county’s rural, agricultural history.
The goal, Commissioner Dorothea Farris said, “is to promote agricultural operations that are truly agricultural operations.”
And Richards, replying to an accusation from attorney Herb Klein, said the county’s goal is not “to keep the tax rolls as high as possible in Pitkin County; it is to keep them as fair as possible.”
No date was set for the work session, and county staffers were instructed to come up with some ideas about how to go about holding such a discussion.
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