For the week of  Sept. 26 - Oct. 2, 2001

Assessor: Sun Valley land among cheapest in county

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By TRAVIS PURSER
Express Staff Writer

Sun Valley Resort is paying far lower property taxes than other business owners in the Wood River Valley, because the Blaine County assessor’s office says the land on which the resort sits is not worth as much as commercial land in Ketchum, Hailey and Bellevue.

The assessor’s office this year determined that the land in Sun Valley Resort’s commercial core, where the famous lodge, opera house and mall sit, is worth $247,900 per acre. At the same time, the assessor’s office set the value of an acre of commercial property about a mile west in downtown Ketchum at $4.4 million.

The higher the assessment, the more taxes the county charges. Last year, Sun Valley Resort owed $2,010 for each acre, while businesses in Ketchum owed $30,879 per acre, the county treasurer’s office calculated.

If Sun Valley Resort is vastly undervalued for tax purposes, a shift in the tax burden to other county residents occurs. That’s why a Sun Valley resident complained to the county last summer about the resort valuations.

The head of the assessor’s office, Valdi Pace, held a private meeting in her courthouse office in early August to discuss the matter with people from the resort’s accounting department and from the Idaho State Tax Commission.

The result of that meeting is unclear. Pace declined requests for an interview with the Mountain Express and her staff deferred questions from the press to her. But, so far, the issue appears to have generated little interest among county and state officials.

"It’s not a big deal to us right now, because we really have no involvement with it," said Idaho Tax Commission section manager Scott Erwin in an interview. He acknowledged that it may be a big deal for taxpayers.

Erwin said Pace had agreed to look into the matter, but the state would not get involved unless a taxpayer submitted a written complaint, which hasn’t happened.

If it did happen, the tax commission would appoint an investigator and a lawyer, Erwin said. But even if they found Sun Valley Resort’s assessments to be incorrect, the commission would have no authority to change the assessments. Only Pace’s office could do that.

"I don’t think we know why" Sun Valley Resort’s valuation is lower, Erwin said. "We’re certainly not prepared to make a statement that those values are too high or too low until the county does its own review."

State law requires that land be assessed at market value for tax purposes. If Pace’s office does determine the resort’s values are less than that, she would be bound to bring them up to market value in a single year, Erwin said. The county would not be able to collect previous years’ lost taxes, however.

Erwin believes that comparing Ketchum and Sun Valley commercial property is a "fair comparison," but there are also differences.

"People need to consider economy of scale," he said. The resort’s commercial core is a single 50-acre parcel that he said would not sell for as much per acre as smaller commercial parcels in Ketchum.

One reason the resort’s taxes are lower is the county treasurer considers the resort’s entire 1,751 acres, including golf courses, as a single piece of land.

Larry Watson, head of the tax commission, said the resort may have a large amount of "waste" land that can’t be developed because of easement restrictions or geography, such as water bodies and steep hillsides. "Waste" land generates little tax revenue, and brings down the resort’s overall tax bill.

Also, assessors typically consider the recent sales of other nearby commercial property when determining land values. Commercial sales in Sun Valley are rare, so comparisons are difficult.

The assessor may have also considered the resort’s original cost, minus depreciation, to determine value, Erwin said. Or the assessor may have determined value based on income the resort generates. Either of those methods could account for a lower valuation.

Looked at another way, it is difficult to find commercial land in the county valued lower than the resort’s.

The assessor’s office numbers work out to a value of about $5.70 a square foot on the resort’s 50 acres of commercial land.

The assessor’s numbers for the commercial land under Giacobbi Square in downtown Ketchum works out to about $90 a square foot.

The value of commercial property on Main Street in Bellevue, using the assessor’s office valuations, is around $10 a square foot, while commercial property on Hailey’s Main Street typically ranges from $10 to $20 a square foot.

Using the assessor’s office numbers, the residential land adjacent to the resort, where single-family homes sit, is worth about $80 a square foot.

The Idaho Mountain Express is distributed free to residents and guests throughout the Sun Valley, Idaho resort area community. Subscribers to the Idaho Mountain Express will read these stories and others in this week's issue.