North Elba, Lake Placid school district settle W’face Lodge tax case
By CHRIS KNIGHT, Enterprise Senior Staff WriterArticle Photos
LAKE PLACID - The town of North Elba, the Lake Placid Central School District and Essex County will refund $1.35 million in taxes to the owners of the Whiteface Lodge to settle a lengthy dispute over the assessed value of the resort.
The town council and the school board voted unanimously to approve the settlement at separate meetings Tuesday night. The move comes just before the case was scheduled to go to trial.
David Murphy of Latham, the attorney who handled the case for the town and school district, told the town board Tuesday that the town's appraisers had put the value of the Whiteface Lodge and all 94 of its condominiums at between $42 million and $46 million. The Lodge's experts had estimated its value was $19 million to $32 million.
Those values were substantially below the town's assessments of the property, which ranged from $74 million to $112 million over the last five years.
"Both appraisers were telling us these assessments were excessive by a significant amount," Murphy said.
After what Murphy described as "extensive and very arduous negotiations," lawyers from both sides agreed to set the value of the property at $40 million. The current owners bought the property for $60 million in 2007.
As part of the deal, the town, county and school district will have to refund a portion of the taxes they collected from the resort and the condominium owners over the last three years. That means the town and county will each have to pay back $245,000. The school district's share is $860,000. That's about 6 percent of the town's $3.8 million 2010 budget and about 5 percent of the school district's current $15.7 million budget.
The settlement also includes several concessions by the Lodge's owners. They agreed to drop lawsuits challenging the property's assessed value in 2005 and 2006, Murphy said, and the taxing municipalities won't have to pay interest on the refunds.
"That was a significant concession because the interest totaled over $400,000," Murphy said.
Another term of the settlement agreement gives the town the right to adjust the property's assessed value should the resort sell for more than $40 million in the next three years.
Murphy said that stipulation was included because of some "uncertainty" surrounding the property.
"There have been a lot of things said about this property on and off the record around town and, quite frankly, no one seems to know what the present owners' plans are," he said. "That's one reason why we wanted that provision."
Overall, Murphy said it was a "very good" settlement. Had the town and school district lost the case at trial, their tax refunds could have totaled $3 million.
"It's a financial hit to this community," Murphy said. "But at this point we know we'll have a stable value there, and we can move forward."
The town board approved the agreement unanimously.
"It sounds like we made the best of a difficult situation," said Councilman Bob Miller.
Supervisor Roby Politi said the town's assessors don't have the expertise to put a value on such a "specialized" property, which includes timeshare units, common areas, commercial features and other amenities.
"In all fairness to the assessors, it was a very difficult appraisal problem," Politi said.
As part of the settlement, which still needs to be approved by Essex County State Supreme Court Judge Robert Muller, the tax refunds will have to be made within six months.
Interim school district Superintendent Ernie Witkowski called the settlement "the best possible deal." The school board also approved the agreement unanimously.
"No one's really happy about this whole situation," Witkowski said this morning. "But we worked it out."
Witkowski said getting the Lodge's owners to waive the interest they were due and drop the 2005 and 2006 lawsuits were key parts of the settlement.
Asked where the district will find the $860,000 it has to pay back, Witkowski said it will likely use $240,000 that had been set aside in a reserve account for tax cases and borrow the rest.
Politi said the town will consider using its end-of-the-year fund balance or borrowing money to pay back its $245,000 share.
Politi said the town is also nearing settlement agreements on two other assessment challenges involving condominiums that are part of the Whiteface Club and Resort. Their tax refunds could amount to $25,000 each for the town and county, plus $48,000 for the school district, Murphy said.
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Damp saluted
Tuesday night's meeting was the last regular board meeting for Councilman Chuck Damp, who decided not to seek re-election this year. He'll be replaced by Derek Doty, a former councilman who ran unopposed for the seat in November and has been sitting in on board meetings over the last few months.
Politi said Damp, who owns Wilkins Insurance, has been a dedicated and trusted member of the town board.
"It has been an honor to have you on this board," he said. "You made it so much easier for me because of your insight on insurance issues and your analytical thinking."
Damp thanked Politi and the other members of the board.
"I very much enjoyed working with you all," he said.
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Contact Chris Knight at 891-2600 ext. 24 or cknight@adirondackdailyenterprise.com.
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MommiePatriot
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12-09-09 7:37 PM
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Wow - Look at the budgets...all Taxpayer Funded. Town Budget = $3.8 Million and School Budget = $15.7 Million currently. With Albany starting the cuts in Aid, they'll be looking for alot more of our Hard Earned Dollars shortly.
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TourPro
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12-09-09 2:07 PM
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Property tax is an archaic method of funding government. Totally a conflict of interest when the one getting paid gets to "assess" the value. Easiest solution: When local government "declares" the value of a property, the property owner should have the option to immediately sell it to them for that amount. I'll bet those assessments would drop a tad.
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cantankerous
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12-09-09 11:35 AM
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Had to make up the revenue somewhere...Especially when gave all your buddies tax brakes..Politi, Lussi, Weibrecht...etc.
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datainttoobadnow
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12-09-09 11:17 AM
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IT GOES BOCK FURTHER THAN THE ACCESSORS, YOU CAN BLAME THIS ONE ON THE CUT THROAT BARILES.
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Afinehowdoyoudo
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12-09-09 10:43 AM
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who are the incompetent assessors in North Elba who caused all of this?
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