Colorado Appeals Court remands question of Storm Mountain tax valuations to board of appeals | SteamboatToday.com
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Colorado Appeals Court remands question of Storm Mountain tax valuations to board of appeals

— Routt County officials were uncertain Monday on how to proceed after the Colorado Court of Appeals declined April 23 to decide their challenge of a state agency’s ruling on tax valuations for 14 rural estate lots in the luxury Storm Mountain Ranch, a couple of miles south of Steamboat Springs city limits.

Instead of issuing a definitive ruling, the appeals court judges, in a judgment written by Chief Judge Alan Loeb, remanded the issue back to the Colorado Board of Assessment Appeals (BAA), directing it in turn to remand the matter to Routt County Assessor Gary Peterson for a new tax appraisal.

County Attorney John Merrill said he felt that one of the the three appeals court judges that issued the remand identified with the arguments made by the county, giving some hope that a re-hearing might succeed.



Judge Jerry Jones concurred with his two colleagues in the final ruling, but wrote that he would also have directed the BAA to reconsider evidence presented by Routt County.

Another option, Merrill said, could be to seek to have the Colorado Supreme Court take up the matter, which has statewide implications.



“There is an opportunity for asking for review by the Supreme Court, but the chance of that is low probability,” Merrill told the Board of County Commissioners Monday. “Right now, we don’t know what to do with this, and I think the assessor will have a hard time doing something different. ”

Assistant County Attorney Erick Knaus said Tuesday that the Board of County Commissioners will meet with him, Merrill and Peterson in executive session May 5 to discuss legal strategy.

Richard Srednicki, a Storm Mountain resident who has acted as a spokesperson for the homeowners, declined to comment Tuesday so soon after the appeals court ruling.

The Court of Appeals rejected elements of arguments by both Routt County and the BAA in the matter of how to value 1-acre building sites within larger 35-acre parcels at Storm Mountain.

The process became more complicated in the wake of a 2011 amendment of a state law that was intended to redistribute the overall tax burden more equitably by removing ag tax subsidies from residential home sites in rural subdivisions where grazing leases can become a means to avoid higher tax rates traditionally imposed on residential property.

The new bill left ag status intact on home lots whose occupants actively are engaged in agriculture.


Assessor’s dilemma

County Commission Chairman Doug Monger recalled Tuesday that he served on a statewide task force that analyzed an earlier, failed version of the new sate law and was concerned when that group was unable to come up with a framework for valuing rural estate lots. The problem, Monger said, is that Routt and other counties do not permit the sale of one-acre lots like the building sites at Storm Mountain that are part of legal 35-acre lots.

“I was skeptical when the task force couldn’t figure out how to value that,” he said.

When Peterson revalued the one-acre building sites at Storm Mountain for tax purposes as if they were stand-alone lots, values went from several thousand dollars at ag rates to $1.4 million based on Peterson’s conclusion that the large majority of the value in each privately owned 35-acre plot was concentrated in the home site.

A home in Storm Mountain Ranch sold for $3.375 million in autumn 2013, and the original 35-acre building lots sold for upwards of $2 million in the late 1990s.

Assistant County Attorney Erick Knaus said Tuesday that the difficulty Peterson was confronted with in assigning value to a property for which there are no comparable sales led him to the methodology of valuing the home sites as the only build-able lot within each 35-acre parcel.

Jones seemed to empathize with that argument: “In my view, the General Assembly … intended that the residential footprint of an otherwise agricultural lot be classified, and hence valued, as a stand-alone residential parcel. Therefore, I would remand the case to the BAA to consider the Routt County Board of Commissioners’ evidence in light of that requirement.”

Ultimately, the appeals court judges concluded that the BAA had shown no evidence to support their decision to value the building site at 1/35 of a 35-acre parcel.

And they also rejected the county’s rational of valuing the building sites as stand-alone lots without taking into account the strengths of each lot.

“On remand, the assessor should apply an accepted market approach to determine the actual value of each footprint. It should explain its methodology for reaching that conclusion, and it should give consideration to each parcel’s unique characteristics and location,” the court concluded.

To reach Tom Ross, call 970-871-4205, email tross@SteamboatToday.com or follow him on Twitter @ThomasSRoss1


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