Developer files suit over taxes

By Steve Hansen

QCS Managing Editor

Quay County owes a local resort and residential community more than $216,000, according to a recently filed lawsuit.

Twelve Shores LLC, the developer of 12 Shores golf club resort and residential community, has filed a suit against the county in the Tenth Judicial District Court, saying the county overbilled it for 2013 property taxes by an amount that is one-and-a-half times more than the amount that 12 Shores says it should pay.

If successful, the suit could double the blow to the county’s property tax base that occurred due to bankruptcy for Ute Lake Ranch, a property adjoining 12 Shores.

The devaluation of Ute Lake Ranch accounted for most of the about $18 million in taxable property value reduction the county has experienced in the fiscal year that began July 1, according to a report that County Assessor Janie Hoffman delivered to the Quay County Commission on March 10.

The net devaluation of property since the fiscal year began last July totaled nearly $14.6 million, offset by increases in the value of other properties of about $3.5 million. The net figure represents about 8 percent of the county’s total land valuation for the current fiscal year.

If the 12 Shores’ lawsuit prevails, the county’s taxable property value could shrink by another $18 million.

Hoffman and county attorney Bridget Jacober both declined to comment on the suit.

Tim Van Valen, the plaintiff’s attorney, could not be reached.

County Manager Richard Primrose said, however, that the state tax code includes a “compensating tax,” an excise tax imposed on businesses, that can help protect the county’s tax income from a steep, sudden change in property values.

According to the New Mexico Tax and Revenue Department’s website, the compensating tax “is deposited in the Tax Administration Suspense Fund at the state treasury. After necessary refunds and interest are paid, the state distributes 10 percent of receipts to the Small Cities Assistance Fund and 10 percent to the Small Counties Assistance Fund.”

The 12 Shores suit alleges the county overvalued the development’s golf course and improved homesites, but mostly, the 307 acres of unimproved property on the 12 Shores site.

The county valued the property at more than $18 million.

However, the developers say that in today’s depressed market, the property is now worth only about $500 per acre, the going rate for pasture land, not the $59,000 plus per acre at which the county assessed it as future home sites.

At $500 per acre, the total value of that 307 acres would be only $153,500. The total difference in 12 Shores’ appraisal and the county’s is just over $17 million.

In all, the 12 Shores suit alleges, the county owes the developer the refund of more than $216,000. If correct, that would mean 12 Shores was charged 2.5 times more than it should have been in county property taxes.

Like the Ute Lake Ranch development, the 12 Shores development’s plans ran aground with the collapse of real estate markets nationwide in 2007, according to the lawsuit.

The lawsuit said the 12 Shores development has not sold a single home since 2007. With the market essentially non-existent, 12 Shores had the property reappraised in 2011. That reappraisal established the property values 12 Shores applied in the lawsuit, but county officials have retained earlier appraisals in compiling 12 Shores’ tax bill.

 

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