Assessment board denies Grand Campus exemption

This from the Richmond Register:

If the Madison County Board of Assessment Appeals’ denial of tax exemption for the Grand Campus student housing complex holds, Eastern Kentucky University will have to pay a large property tax bill each year to local taxing entities.

In a decision sent to the university Monday by certified mail, the assessment board upheld Madison County Property Evaluation Administrator Billy Ackerman’s denial of tax exemption for the property.

By 3 p.m. Tuesday, EKU had not received the letter, according to a university spokesperson, and no statement would be issued until officials have a chance to review the decision.

The board conducted a public hearing late Friday morning and then deliberated behind closed doors that afternoon.

The Richmond Register obtained a copy of its decision Tuesday through an open records request.

The assessed value of Grand Campus is $26 million. Under 2014 rates, it would pay $253,760 to local taxing entities, with $156,260 going to the county school district.

Taxes also would be owed to the Madison Fiscal Court, the city of Richmond, the county library board, health board, ambulance board and cooperative extension board.

In its decision, the assessment board cited the state’s 2010 Property Tax Exemption Guide which states,
“If there is any doubt that an exemption should apply, then the doubt should be resolved in favor of not applying the exemption.”

To satisfy the statutory requirement that it follow the “advice” of the state Revenue Department in questions of tax exemption, the board noted it conducted a telephone conference call with David Gordon, executive director of the Revenue Depart-ment’s Office of Property Valuation, and Bethany Rice, an attorney for the department. However, neither would offer more than an “opinion” on the issue, leaving the assessment board without a “judicial determination,” its statement noted.

A review of the Grand Campus lease, which requires the university to pay any property taxes levied on the facility, “closely resembles a standard commercial triple net lease,” the board stated in its unanimous decision. “It appears that Grand Campus LLC did not intent to transfer ownership beyond a leasehold interest.”

If it wants to continue its appeals, the next step is for the university to go before the state Board of Assessment Appeals, according to Ackerman. After that, interested parties can take the case to the courts.

The taxes are not collected while the case is under appeal, Ackerman said Friday.