Reid meets his match in Az. land-as­sess­ment feud

The Washington Times Weekly - - Politics - BY CHUCK NEUBAUER

Se­nate Ma­jor­ity Leader Harry Reid, long ac­cus­tomed to get­ting pub­lic of­fi­cials to do what he wants, has run into a stum­bling block with a lo­cal Ari­zona of­fi­cial.

The Ne­vada Demo­crat has not been able to per­suade Mo­have County Asses­sor Ron Ni­chol­son to lower the value on 160 acres of va­cant land Mr. Reid owns in Bull­head City, Ariz., cer­tainly not as much as the sen­a­tor wanted af­ter the as­sess­ment, like oth­ers, sky­rock­eted in 2010.

Mr. Reid saw the land’s value triple from $479,430 in 2009 to $1.46 mil­lion in 2010, rais­ing his prop­erty taxes, as a re­sult, from $5,523 to $14,707. In the past, Mr. Reid has de­scribed the Bull­head City prop­erty, which he has owned since the early 1980s, as be­ing nearly worth­less, “a los­ing propo­si­tion” and a cash drain.

For his part, Mr. Ni­chol­son, a Repub­li­can, low­ered the value of Mr. Reid’s prop­erty for 2011 to $683,866 as part of a coun­ty­wide reval­u­a­tion af­ter the col­lapse of Ari­zona’s real es­tate mar­ket, and the as­sess­ment will be $464,250 for 2012, records show.

“We work them all the same,” said Mr. Ni­chol­son. “No one gets pref­er­en­tial treat­ment.”

Bull­head City, with more than 40,000 res­i­dents, is lo­cated on the Colorado River about 70 miles south of Las Ve­gas, di­rectly across from Laugh­lin, Nev., which, un­like Ari­zona, has a host of glitzy river­front casi­nos and ho­tels. Laugh­lin is home to fewer than 7,500 res­i­dents.

Like other prop­erty own­ers in Bull­head City and Mo­have County in north­west Ari­zona, Mr. Reid saw his as­sess­ment jump be­cause of an ear­lier huge spike in real es­tate val­ues in the area. The real es­tate mar­ket has since col­lapsed. Mr. Ni­chol­son ini­tially had raised the value on Mr. Reid’s prop­erty to $2.33 mil­lion for 2010 but re­duced it af­ter the sen­a­tor filed an ap­peal.

“It is not worth nearly that much,” said Jon Sum­mers, Mr. Reid’s spokesman. “In fact, this is the same prop­erty Sen. Reid lit­er­ally tried to give away but could not. The prop­erty in­cludes a ‘wash’ and is not con­sid­ered” suit­able for de­vel­op­ment.

Mr. Sum­mers said Mr. Reid could not ex­plain the hike in value and re­ferred The Wash­ing­ton Times to the asses­sor’s of­fice “for their ex­pla­na­tion of the un­ortho­dox tax val­u­a­tion sys­tem.”

“I felt it should have been a lot lower than it was,” said Gary Lott, a real es­tate ap­praiser and prop­erty-tax agent Mr. Reid hired to file a protest. He said that while they won “a sub­stan­tial re­duc­tion,” the fi­nal as­sessed value was much higher than where it had been in 2009.

Mr. Ni­chol­son, who is re­quired by state law to as­sess prop­erty based on its mar­ketable value, said he did not hear per­son­ally from Mr. Reid or his staff about the 2010 as­sess­ment hike.

Mr. Reid and other Mo­have County prop­erty own­ers saw their as­sess­ments jump for 2010 be­cause of record high sales prices in the area sev­eral years be­fore. Be­cause of the way prop­er­ties are as­sessed in Ari­zona, the val­ues for 2010 were based on sales from 2 1/2 years ear­lier at the “high­est part of the mar­ket,” said Mr. Ni­chol­son.

He said there was “enor­mous spec­u­la­tion” of the mar­ket in Mo­have County in 2007 and the first half of 2008 and, by law, those sales were used for the 2010 as­sess­ments, which were pro­posed in early 2009. But be­cause the real es­tate mar­ket crashed, Mr. Ni­chol­son said, land in Mo­have County lost 45 per­cent of its value, mir­ror­ing Las Ve­gas and Mari­copa County, which in­cludes Phoenix.

Mr. Lott likened real es­tate taxes in Ari­zona to a “roller­coaster ride,” adding that they “go way up and way down.” He said some buy­ers who paid top dol­lar a few years ago and whose sales caused the as­sess­ments to go through the roof are now in fore­clo­sure.

Mr. Reid has seen those ups and downs in Bull­head City first­hand. He and a long­time friend, Clair Hay­cock, bought the 160acre par­cel be­tween 1979 and 1982 for $240,000 or $1,500 an acre. Mr. Reid had a five-eighths in­ter­est and Mr. Hay­cock three­eighths. A few years later, Mr. Hay­cock trans­ferred his in­ter­est to his com­pany’s pen­sion plan, of which he was the trustee.

In the early 1990s, Mr. Reid and Mr. Hay­cock agreed to sell the 160 acres to Cal­i­for­nia in­vestors for a lit­tle more than $1.34 mil­lion, about $8,400 an acre. The buy­ers, who wanted to de­velop a mo­bile-home park, paid a frac­tion of the price in cash and pro­vided a note se­cured by a mort­gage for the bal­ance. The buy­ers de­faulted a few years later, and Mr. Reid and the Hay­cock pen­sion fund took the prop­erty back.

Mr. Reid and Mr. Hay­cock at­tempted to sell or de­velop the prop­erty with­out suc­cess and, they said, it be­came a cash drain. At one point, Mr. Reid of­fered to give it to a de­vel­oper who turned it down. When the Hay­cock pen­sion fund wanted to sell its in­ter­est in 2002, Mr. Reid paid the fund $10,000.

Mr. Reid has said the prop­erty ba­si­cally can­not be de­vel­oped.

Mr. Ni­chol­son, who has per­son­ally in­spected the prop­erty, thinks it can be de­vel­oped, but ac­knowl­edged that it has “spe­cial chal­lenges.” He said it has a gi­ant ravine in its cen­ter, which is not build­able. As a re­sult, he said his of­fice gave a large part of the prop­erty a 40 per­cent to­pog­ra­phy ad­just­ment.

“The other is­sue is there is no road to it,” said Mr. Ni­chol­son, who thinks the prop­erty still has value.

In 2005, Mr. Reid helped se­cure an $18 mil­lion ear­mark to build a sec­ond bridge over the Colorado River be­tween Bull­head City and Laugh­lin. The pro­posed bridge sites were sev­eral miles from his prop­erty, but some Bull­head City prop­erty own­ers and lo­cal of­fi­cials said at the time a new bridge would in­crease land val­ues in the then­boom­ing com­muter town.

Mr. Reid’s of­fice later said his “sup­port for the bridge had ab­so­lutely noth­ing to do with prop­erty he owns” and that lo­cal res­i­dents re­quested the bridge, which would ben­e­fit Ne­vada. Laugh­lin’s casi­nos and ho­tels em­ploy Bull­head City’s casino and ho­tel work­ers, and a new bridge would give Laugh­lin res­i­dents eas­ier ac­cess to Bull­head City’s hos­pi­tal and shop­ping.

While res­i­dents on both sides of the river have pushed for a sec­ond bridge to help ease the traf­fic on the ex­ist­ing bridge, which is near the casino district, con­struc­tion has been stalled for years as gov­ern­ment agen­cies de­bate pro­posed sites and fund­ing. The Fed­eral High­way Ad­min­is­tra­tion is de­cid­ing whether to ap­prove or re­ject the lat­est pro­posed site. Once a site is ap­proved, lo­cal gov­ern­ments have to fig­ure out how to come up with the rest of the money to pay for the $55 mil­lion bridge.

And while the as­sess­ment hike cost Mr. Reid money, it did have an­other un­in­tended ef­fect on Mr. Reid’s per­sonal fi­nances, it made him look wealth­ier than the year be­fore be­cause he uses the asses­sor’s num­ber to value the land on his re­quired per­sonal fi­nan­ciald­is­clo­sure re­ports.

As a re­sult, the me­dia re­ported that Mr. Reid’s wealth had grown in 2010, in large part be­cause he said on his fi­nan­ciald­is­clo­sure re­ports that the 160 acres were worth be­tween $1 mil­lion to $5 mil­lion, com­pared with $250,000 to $500,000 in 2009.

A tax he doesn’t care for: Reid

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