Thursday, Feb. 26, 2004 | 11:17 a.m.
The Clark County Board of Equalization tackled some of Southern Nevada's thorniest property-tax disputes Wednesday in a daylong meeting.
High-profile cases included golf course developer Billy Walters' appeals of the assessments against his four golf courses in the county, a long-running dispute that is already in District Court for previous years' tax bills, and Howard Hughes Corp.'s $1.4 billion assessment for Summerlin West and Summerlin South.
The five-person board of equalization is the panel that serves as the arbitrator for county landowners with disputes over their property taxes, which are based on resale value or potential to produce income. The board, which includes several experienced land appraisers, hears arguments from landowners and staff from the Clark County Assessor's office.
Howard Hughes Corp., which has annually brought its concerns to the board, argued that the assessment of $1.4 billion on vacant land it owns in Summerlin was too much. The bill would total about $14 million on 9,000 acres in the fast-growing master-planned community.
The board ultimately decided to value the land at $1.1 billion, splitting the difference between the company's appraisal of $800 million and the assessor's office's figure.
Hughes representative Paul Bancroft had to deal with one tricky issue before he began making his case. Last month, Bancroft sent a letter to board Chairman James Howard that questioned fellow board member Jared Shafer's ability to issue an impartial decision.
Shafer, a former elected Clark County Public Administrator, assured Bancroft and the other members of the Hughes team that he did not come to the discussion with a "preconceived nature."
"I come here in search of the truth, and only in search of the truth," he said.
The board denied the company's appeals last year. Although the company has the right to take appeals further, to the State Board of Equalization, and ultimately on to the courts, the company withdrew its protests before they went to the state board.
Bancroft and Timothy Morse, an appraiser working for Hughes, argued that the models the company produced showed that the thousands of acres in Summerlin were overvalued by the assessor's office.
In part, the lesser $800 million value represented "the limited pool of potential investors," Morse told the board. The value also represented the potential income-producing value of the land over the straight market value.
Deputy Assessor Dennis Jurica said, however, that the large pieces of land could be very attractive to potential investors. Such swaths of property have become scarcer in recent years as developers have grabbed much of the available land for new master-planned communities.
For large land parcels, "There is a very limited supply. There is a very high demand," Jurica said.
He said that the price tag for such land has reflected the demand.
"Over the last 10-year period, the average price for land sales has increased about 1,000 percent," Jurica said. Within the last year, he said vacant land prices have risen 3 percent per month.
Board member and appraiser Tio DiFederico, however, said the Hughes representatives were correct on focusing on the income-producing potential of the property -- but the company's analysts came far short of what that value would be.
DiFederico said Summerlin is a model for similar master-planned communities throughout the Southwest.
"They are the best," he said, and asked the board to support an adjusted value of $1.1 billion. The motion passed 4-1, with board member Scott Dugan opposed.
Appraiser Timothy Morse also represented developer Billy Walters on the appeal of the values set for four Clark County golf courses: the Stallion Mountain, Royal Links, Desert Pines and Bali Hai clubs.
Morse argued, as he has before, that the land underneath the clubs has only "nominal value" of $1,000 an acre. Walters' representatives also rejected the values the assessor placed on the many improvements, buildings and other features that turn the desert into a golf course.
Morse did not provide a full alternate value for the clubs, but he and William McKean, Walters' attorney with the firm of Lionel Sawyer and Collins, argued that the assessor's staff erred again in deviating from a standardized manual that sets values for all kinds of property, including golf courses.
Marshall & Swift, a book that sets the industry standard for assessments, is the only source the assessor is legally allowed to use to set property values, McKean argued. He has made the same argument to the District Court, where unresolved property tax disputes from previous years could soon be decided.
"Marshall & Swift does not mandate that you pull one of its numbers out and use it," deputy assessor Richard Stewart said. The manual is only a guide, he said.
"We feel confident we have not violated the statutes in applying Marshall & Swifts, and so far that has been upheld through the county and state boards," he said. "Now it is apparently before the courts.
"These are very complicated cases," Stewart said. "We think our values are right. I think there's value on land at a golf course. Mr. Morse does not."
The assessor's staff also raised the issue of Walters' offer to sell the Desert Pines golf course to the city of Las Vegas for a price of $22 million. Walters' representatives have argued that the sale would provide protection to the city, which makes it more valuable than a straight transaction.
But the point scored with DiFederico.
"I'm looking at a property you're trying to sell the city for $22 million," he said.
The assessor's value on Desert Pines was $11.2 million. The other three courses were valued at a total of about $64 million.
Ultimately, the board upheld the assessor's original valuation, rejecting McKean's argument.
Howard, the board chairman said the legal issue could not be decided by the board of equalization.
"I can't be in a position to adjudicate on that," he said.
Schofield said he doesn't believe the issue is closed.
"The board's decision was fair," he said. "We fully anticipate this to go to the state board, and on to District Court, and on to the Supreme Court."
In other actions, the board:
Assessor's staff reduced that value to $510 million, but Morse and company representative Robert Richmond said the real value should be in the range of $390 million to $430 million.
The board set the price at $420 million.
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