Thursday, Jan. 16, 1997 | 11:59 a.m.
An attorney for the Fremont Street Experience claims it is exempt from taxation and that county appraisers have inflated the downtown tourist attraction's taxable value by 3,000 percent.
The county assessor's office set the taxable value of the property and improvements at $35.6 million, or about 35 percent of what they estimate the jointly owned tourist extravaganza is worth.
But Reno lawyer Paul Bancroft said in a petition filed with the assessor's office Jan. 9 that the taxable value exceeds the full cash value of the attraction. Bancroft placed that value at $1.25 million.
Further, he said in his petition, that if "similarly situated taxpayers are not subject to tax, the assessment will violate" the Nevada Constitution.
"That's not true," Clark County Assessor Mark Schofield said. "We had the district attorney's office review that contract between the city and the Fremont Street Experience, and it is taxable."
Bancroft and officials from the Fremont Street Experience Ltd. Liability Corp. refused to comment.
Schofield said he had anticipated an appeal since this is the first year the Fremont Street Experience was placed on the tax rolls and because the property offered some unique challenges to his appraisers.
In fact, the company has agreed to hire an independent appraiser to look at the property because it's so unusual, Schofield said. If the value is lower than the county's assessment, the case will go forward to the county's Board of Equalization.
If the outside appraisal is higher, Schofield said, "then they have a problem."
The Fremont Street Experience company is a for-profit corporation of downtown hotel-casino property owners such as Jackie Gaughan and Steve Wynn. The group privatized four blocks of Fremont Street and spent $70 million to build a canopy-covered pedestrian mall.
The company also built a parking garage valued at $9 million on land obtained through condemnation proceedings that are currently being challenged in court.
Deputy District Attorney Paul Johnson reviewed the development agreement a year ago for Schofield, and determined that the property is clearly taxable according to Nevada statutes.
The bulk of the property's value is the underlying land, which the county gave a taxable value of $27.9 million. The canopy structure and other improvements were valued at $7.6 million.
But Bancroft said the property is only worth $980,000 and the structural improvements are $270,000.
The appeal does not include the parking garage.
The Fremont's appeal is the largest of 242 appeals logged as of Wednesday's close-of-business deadline, Schofield said. Another 100 appeals are expected to arrive through the mail, he said.
The Rouse Co., which bought the Howard Hughes Corp. last year, appealed 10 Summerlin South properties out of the hundreds it now holds.
The appeals are the lowest they've been in 10 years, Schofield said, and a substantial drop from the 948 appeals filed the same time last year, after Sun City Summerlin residents protested an average 22 percent increase in their assessed value.
Last year, 557 Sun City Summerlin residents filed individual appeals, compared with only six this year, he said.
"There was a tremendous benefit from what we went through in the Sun City engagement," Schofield said.
Because of the intense media exposure over the tax issue, Schofield said, the public got a crash course on the tax assessment process, proving his theory that an informed public makes for a better constituency.
"The more you go out into the public and take a proactive position, the better off government will be," he said.
Ironically, Schofield said, almost half the appeals filed this year are from tax representatives on behalf of clients, while 125 were from individual homeowners.
Very few appeals were filed by Mount Charleston residents, who got socked with an average 64 percent assessment increase, Schofield said.
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