Traverse City Record-Eagle

Grand Traverse County

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January 30, 2010

More businesses contesting assessments

Great Wolf Lodge wants reduction from $19.76 million to $10 million

BY BRIAN McGILLIVARY

TRAVERSE CITY -- The Great Wolf Lodge is among Grand Traverse County's top 10 biggest taxpayers, but the resort and waterpark off U.S. 31 South wants to quit that exclusive club.

Great Wolf officials appealed the resort's $19.76 million assessment for its Garfield Township property, and wants a reduction to $10 million.

Great Wolf joins a growing number of commercial properties that contested their tax assessments. The strategy could offer a significant reward: a possible quick settlement that saves the business owner thousands of dollars in taxes.

But settlements concern county officials, who worry township officials are too quick to settle because they have the least revenue on the line.

"If the local unit of government only stands to lose $1,000 and it costs $50,000 to defend it, why wouldn't you stipulate to it," said Grand Traverse County Administrator Dennis Aloia.

Laurie Spencer, the county's equalization director and top assessor, said businesses filed nearly 200 tax appeals in 2009, the most ever in Grand Traverse County.

A favorable ruling by the state tax tribunal could trim Great Wolf's 2009 tax bill by $444,000, plus interest. Great Wolf officials declined requests for an interview, but in a prepared release said they believed their 2009 assessment failed to reflect the faltering economy's impact on the property's fair market value.

Government officials question if other factors drive the increased number of appeals.

Spencer said some law firms in Michigan advertise their expertise on lowering assessments, and offer to work on a contingency basic so the business incurs no up-front costs. Lawyers instead get paid a portion of the tax refund.

"I think we have to be a little more proactive in helping where we can, even if it means financial assistance," Spencer said.

Garfield Township agreed to cut Lowe's of Traverse City's assessment from $13.3 million to $8.2 million and lowered the Cherryland Center's levy from $2.3 million to $1.6 million. Those moves cost the county more than $29,000 in lost taxes.

Garfield Supervisor Chuck Korn welcomed the county help in any tax assessment fight, but defended the township's decisions.

"We've shown we're not afraid to stand up to big businesses, but it has to be a good fight and winnable," Korn said. "The way tax tribunal rules are set up right now, these just aren't winnable."

Korn said the state allows businesses to determine market value based on the income it can generate, and there's precious little income in today's economy.

East Bay Township agreed to trim the assessment for Auto-Owners Insurance Co. by 18 percent for 2007, 19 percent for 2008, and 31.5 percent in 2009. The assessed value, which is supposed to be half of the true cash, or market value, was dropped from $4.16 million to $2.85 million.

Spencer, whose office also handles East Bay's assessing chores, signed off on the settlement.

"Believe it or not, their appraiser came in with a $400,000 true cash value for a place they paid $12 million for," Spencer said. "It was a heck of a lot better than where they were going."

Stewart Mandell, an attorney with Honigman Miller Schwartz and Cohn LLP who specializes in tax appeals, said it's not advertising, contingencies, or rules changes and new laws that spurred appeals.

"The explosion of appeals here and across the country is all being driven by the economy," Mandell said. "It's just a reflection of the dramatic decline in the market place."

Mandell said mass appraisals conducted by assessors often fail to take full account of economic impacts on the market.

The extent of losses surprise even business owners.

Barry Gorbutt's commercial office building in Garfield Township was appraised at $420,000 when built in 2001. Last week a private appraiser told him it's worth $246,000.

"It is ugly," Gorbutt said of the number. "It's less than half of what I thought it should be."

Top 10 taxpayers

The Top 10 Grand Traverse County taxpayers in 2009:

1. Consumers Energy (utility)

2. Great Wolf TC Development LLC (hospitality)

3. Grand Traverse Band of Ottawa and Chippewa Indians (tribal)

4. Central Bradley GT2 LLC (commercial/retail)

5. Michigan Consolidated Gas Company (utility)

6. Sara Lee Corporation (food processing)

7. Grand Traverse Mall LTD Partnership (commercial/retail)

8. Cherryland Electric Cooperative (utility)

9. State of Michigan (government)

10. Arbors of Traverse LLC (residential)

Source: Grand Traverse County Equalization Department

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