Resort tax settlement ready for commissioners’ approval
A court settlement that slashes the taxation value of the central chunk of Nemacolin Woodlands Resort & Spa by 45.6 percent is slated for approval by the Fayette County commissioners at their next set of meetings, according to the county’s chief assessor. Already approved by the Uniontown Area School District and the Wharton Township supervisors, the deal cuts the assessed value on the 877-acre core of the mountain resort by $29.5 million, or from $65 million to $35.4 million.
James A. Hercik, CPE, said that although the school district and its attorney took the lead in the appeal case, the county and municipality have agreed in principle to support the brokered settlement.
“The commissioners have basically agreed to it, but they haven’t had any formal meetings lately. We’ve had our last couple meetings canceled, postponed and moved to other dates,” said Hercik. “It’s going to be on the next agenda (March 18) to publicly vote on, but it has (already) been sent on to the court of common pleas for the judge’s review.”
Judge John F. Wagner Jr. must approve the deal, said Hercik, who added of the court-negotiated settlement, “The judge just has to sign off on it.”
The imminent move means that all three real estate taxing bodies – the county, the township and the school district – will lose a combined $416,116 in yearly revenue based on current millage rates. The school district will see a drop of $331,423, from $728,136 to $396,713; the county will see a drop of $74,425, from $163,512 to $89,087; and the township will see a drop of $10,268, from $22,559 to $12,291.
According to Hercik, the negotiated reduction pertains only to the central section of the sprawling resort, which contains its hotel complex, spa, golf course, horse riding stables and ski slope. The $3,579,130 combined assessed value on 10 other Nemacolin parcels will remain unchanged, he said. Those properties will generate an extra $40,086 for the school district, $9,001 for the county and $1,242 for the township.
Hercik said the school district took the lead in filing the appeal against the resort properties because it had the most to lose financially, with the county agreeing to “sit in the wings” in a secondary position.
In the end, said Hercik, the resort’s attorneys trumped the school district’s attorneys because state case law supports the concept that resort properties can appeal assessed values based on the income approach, which is another way of saying cash flow.
Construction permits and other documents could probably easily substantiate the higher value placed on the resort under the cost-to-build approach. But since the income, or cash flow, approach is a legally viable way for businesses to file an appeal, Hercik said the resort held the upper hand.
Although a business can appeal its assessed value based on how much money it earns, that same method isn’t available to homeowners. Under state law, a person’s income or financial situation cannot be a factor in setting property values for taxation.
Another twist to the court settlement concerns the fact that the school district and the county plan to give Nemacolin tax credits in coming years, so the resort can recoup a portion of the taxes it overpaid in 1999, 2000, 2001 and 2002 while the case was under appeal.
Hercik said the school district owes the resort approximately $1 million and plans to cover that obligation by issuing a tax credit for each of the next eight years, while the county owes a little more than $200,000 and plans to issue a tax credit for each of the next four years.
The township held its potential financial payback in an escrow account and plans to make a lump sum payback of the full amount it owes, said Hercik.
Nemacolin Woodlands developer Joe Hardy is reportedly planning to seek a GOP nomination for county commissioner in the May primary election. The filing deadline for all candidates is Tuesday.