For the week of June 19 - 25, 2002

Sun Valley assessments deemed fair

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By GREG MOORE
Express Staff Writer

Sun Valley Co. appears to be paying its fair share of property taxes even though its commercial land is assessed at only one-fifteenth that of downtown Ketchum’s, the Idaho State Tax Commission implied in a recently released report.

The issue came to light last fall when a Sun Valley resident filed a complaint with the commission alleging that Sun Valley’s 50-acre commercial core is undervalued for tax purposes in relation to his residential property. The core contains the Sun Valley Lodge, ice rink and mall, but is only a portion of the 2,100-acre resort. The ski lifts are on additional, public land managed by the U.S. Forest Service.

The resident compared the assessed value of the Sun Valley Co. land to that of Giacobbi Square in Ketchum to prove his point. The 50-acre parcel in Sun Valley is assessed at $12.3 million, for a value of less than $6 per square foot, while the 1.1-acre Giacobbi Square property is assessed at $4.4 million, for a value of over $90 a square foot.

In a report dated June 7, the Tax Commission upheld Blaine County’s method of assessing the resident’s property. The report did not thoroughly investigate the fairness of Sun Valley Co.’s assessment, but did touch upon it.

"We don’t find evidence that it’s not being valued fairly," said Gregory Cade, administrator for the commission’s County support Division.

Ronald Craig, the report’s author and the commission’s section manager for the North Region, stated that the best way to place an accurate value on the Sun Valley land would be to find a recent sale of a comparable property in the area—of which there are none. Craig stated that a second method would be to review Sun Valley Co.’s income, but much of that income is generated by public land, not Sun Valley’s

However, the report reviewed the county’s method of assessing the property by using the 1977 sale price of $12.5 million for the entire resort and increasing it by the estimated value of local real estate inflation. The 2,100-acre property was assessed in 2001 at $35.5 million.

The 50-acre core was deemed to make up $3 million of the total 1977 price, and was assessed in 2001 at $12.3 million.

The report stated that the core parcel’s value must be determined by looking at it as a whole, not by what it might be worth if sold in small chunks. For one thing, it points out, the value of large parcels is always less per square foot than that of small parcels.

"The ‘core area’ is unique not only from the total size as compared to other areas," the report adds, "but also from the fact that much of this area is ‘open space’…It remains undeveloped by choice. This open area is part of the image that Sun Valley uses to distinguish it from other destination resorts that have buildings on every square inch of the property. These large open areas will…never be marketed, as a primary commercial center in town would be."

State law requires an assessor to take into account the current use of the property as a "major consideration" in determining its value. In an interview, Cade said Idaho is the only state in the country that applies that criterion to every type of property.

"It’s that requirement that changes the fundamental definition of the scope and purpose of an appraisal," Cade said.

 

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