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HomeMy WebLinkAboutNNS Tax Refund Request - CH Hotel Associates, Ltd. - 4-3-95 - IX-B +` , LAW OFFICES COLEMAN, GLEDHILL & HARGRAVE ALONZO BROWN COLEMAN,JR. A PROFESSIONAL CORPORATION GEOFFREY E.GLEDHILL C O N F I D E N T I A L DOUGLAS HARGRAVE 129 E.TRYON STREET' P.O.DRAWER 1529 KIM K.STEFFAN HILLSBOROUGH,NORTH CAROLINA 27278 Attorney-Client Privilege JANET B.DUTTON (919)732-2196 DOUGLAS P.THOREN FAX(919)732.7997 SAMUEL ELY COLEMAN March 2, 1995 Moses Carey, Jr. , Chair Bill Crowther Alice Gordon Stephen Halkiotis Don Willhoit Orange County Board of Commissioners Post Office Box 8181 Hillsborough, North Carolina 27278 RE: Tax Refund Request - Chapel Hill Hotel Associates, Ltd. Dear Board Members: This letter is intended to supplement the action agenda item abstract concerning the tax refund/release request of Chapel Hill Hotel Associates, Ltd. This refund/release request is a decision item for your March 8, 1995 meeting. Under the so-called "Machinery Act, " the law which provides for the listing, appraisal and assessment of property and collection of taxes on ,property, there are three opportunities each calendar year for local administrative decisions changing the appraised value of property for that year. The Tax Assessor has the power, for good cause, to change the appraisal of any property subject to assessment. This power must be exercised by the Tax Assessor prior to the first meeting of the County Board of Equalization and Review. N.C. Gen. Stat. S 105-296 (i) . The County Board of Equalization and Review, during the time that it meets each year, has the power to increase or reduce the appraised value of any property that, in the Board's opinion, is listed and appraised at a figure that is below or above its real value in money according to the then adopted schedule of values . This power can be exercised by the Board of Equalization and Review on its own initiative, presumably as the result of some reason for a change in appraised value being brought to its attention by the Tax Assessor, or at the request of a taxpayer. N.C. Gen. Stat. 5 105-322 (g) (1) & (2) . After the County Board of Equalization and Review has adjourned, the Board of County Commissioners has the power to appraise or reappraise property when the Tax Assessor reports to the Board that, since Board of Commissioners Page 2 March 2, 1995 adjournment of the Board of Equalization and Review, facts have come to his attention that render it advisable to raise or lower the appraisal of a particular piece of property. This power of the County Commissioners does not authorize appraisal or reappraisal because of events or circumstances that have taken place or arisen since the day as of which the property is listed and can only be exercised if the Board of Equalization and Review could have made a decision on the matter had the same facts been brought to its attention while it was in session. N.C. Gen. Stat. S 105-325 (a) (6) . There are further limitations on the power of the County Commissioners to change appraised values . The most important of those limitations is discussed later in this letter following the point where it relates the facts to the law. Another of those further limitations is contained in N.C. Gen. Stat. S 105-380 . That statute says, in pertinent part, that the County Commissioners are prohibited from releasing, refunding or compromising all or any portion of the taxes levied against any property within its jurisdiction except as provided in the Machinery Act. Taxes that have been released, refunded or compromised in violation of the Machinery Act are deemed to be unpaid and are collectible against the taxpayer and they may be recovered from any member or members of the governing body who voted for the release, refund or compromise by civil action instituted by any resident of the taxing unit and when collected from a board member or from board members are paid to the taxing unit. The cost of bringing such an action including reasonable attorneys fees are paid by the board member or members to the person bringing the action in the event the tax is recovered. Relating all of the above to the facts in this case leads me to conclude the following: 1. The February 20, 1991 letter to John Horner from Roland Gammon on behalf of Chapel Hill Hotel Associates, Ltd. put the Tax Collector on notice that there was a reduction in the size of the land in question as the result of a NC DOT highway project. The Tax Collector passed this letter to the Tax Assessor and the Tax Assessor, acting under the power of N.C. Gen. Stat. § 105- 296, reduced the assessed value of the property in question for 1991 based on the reduced size of the property. There is nothing in the February 20, 1991 letter that put anyone in County government and particularly the Tax Assessor on notice that the parcel size reduction affected the value of the residual parcel. 2 . The October 19, 1992 letter to the Tax Collector from Mr. Gammon on behalf of Chapel Hill Hotel Associates, Ltd. , which Board of Commissioners Page 3 March 2, 1995 letter was provided to the Tax Assessor by the Tax Collector, did put the Tax Assessor on notice that the parcel of land remaining after the NC DOT road project was, in value, affected by the size reduction caused by the road project. However, that letter did not get to the Tax Assessor in time for him to take action under N.-C. Gen. Stat. S 105-296 and it did not come to him in time for the Board of Equalization and Review to take action under N.C. Gen. Stat. S 105-322 . The Board of Equalization and Review adjourned in 1992 prior to October 19 , 1992 . The only remedy available to correct the 1992 tax valuation of the land in question was for the Tax Assessor to have brought the matter to the Board of Commissioners in 1992 and for the Board of Commissioners to have acted on it pursuant to N.C. Gen. Stat. S 105-325 . However, the Tax Assessor did not bring the matter to the Board of Commissioners for its consideration in 1992 . And, each of the three statutes authorizing relief from appraisal decisions authorize a valuation change as to current year valuation only. There is no authorization in the Machinery Act to make appraisal changes for prior years . The relief requested by' the taxpayer is being brought to the Board's attention for action in response to the April 20, 1994 letter from Mr. Gammon on behalf of Chapel Hill Hotel Associates, Ltd. This April 20, 1994 letter can be treated, and I recommend that it be treated by the Board, as a "statement of defense" being asserted by the taxpayer to the enforcement of the collection of the tax assessed for 1991 and 1992 . North Carolina General Statutes S 105-381 authorizes a taxpayer to assert any valid defense that it has to the enforcement of the collection of a tax. The valid defenses include: tax imposed through clerical error; an illegal tax; a tax levied for an illegal purpose. The taxpayer, as I interpret its April 20, 1994 letter, is alleging a clerical error in the handling of its request for tax relief. It is my view that there is statutory authority for the release of a portion of 1992 taxes resulting from the recalculation of the value of the parcel remaining after the NC DOT project because the Board of Commissioners could have granted this relief in 1992 had the matter been brought to the Board's attention in 1992 following the October 1992 request made by the taxpayer. The fact that the taxpayer's request was not brought to the Board in 1992 can be considered a clerical error and provides a basis for release of the 1992 taxes . On the other hand, the 1991 request of the taxpayer for an adjustment in value based on parcel size only, which adjustment was made by the Tax Assessor, in my opinion did not put the Tax Assessor on notice that there was a need to reevaluate the residual parcel. Thus, there was nothing for the Tax Assessor to act on with respect to the 1991 request except for a size reduction adjustment and, Board of Commissioners Paige 4 March 2, 1995 there is no basis for the Board of Commissioners to make an adjustment for the 1991 taxes now because there is no clerical error or other statutory basis for a release or refund under N.C. Gen. Stat. §§ 105-380 and 105-381. Finally, the taxpayer's chief lament as expressed in correspondence and in meetings among County staff, the taxpayer and myself is that there was no communication between him and the Tax Assessor's office which communication, had it occurred, the taxpayer thinks, could have avoided this matter being where it is now and perhaps could have resulted in correction of the value of its property in 1991. As to that, I can only say that the Tax Assessor's file is not helpful . The 1991 valuation change that was made by the Tax Assessor would have generated a new assessment notice. There is no hard copy of this notice on file and the computer file "copy" of that notice is apparently either gone or no longer retrievable. And, all of the correspondence appears to have flowed between the Tax Collector and the taxpayer. On the other hand, the Tax Assessor as a matter of course provides notices to taxpayers whenever there is a valuation change. Presumably, the 1991 valuation change notice was sent to Chapel Hill Hotel Associates, Ltd. Very truly yours, COLEMAN GLEDHILL & HARGRAVE, P.C. XrGeey E. Gledhill GEG/lsg xc: John Horner John M. Link, Jr. Kermit Lloyd Rod Visser V 1sg\home3\board11.1tr v White Oak Properties, Inc. 20 February 1991 PMSW k Gaamncm John T. Horner Orange County Tax Collector 208 S . Cameron St . P .O. Box 8181 Hillsborough , N. C . 27278 Re : Attached tax bill Dear Mr . Horner : Please change your records to indicate a new mailing address for C.H. Hotel Associates : 21 Glenwood Avenue , Suite 207 Raleigh , N. C . 27603 Also , a significant portion of this property was taken by the State of North Carolina via condemnation action on or about November 19th , 1990. I trust your records and billing for 1991 will reflect this reduction in value of our real property . According to the State ' s condemnation filing , 13, 800 square feet was taken from the smaller tract , #703897 , and 132 , 600 square feet from the larger tract , #730666. Thank you . D Regar s 7 G. Ro nd Gam on, III tyY j 00 7— General Partner 2 // 3` � � _ 0V ! ✓ C .H. Hotel Associates , Ltd . - , LM y ?� GRG/mf •Twenty-one Glenwood Ave., Raleigh, North Carolina, 27603 • Telephone 919-821-4665 ORANGE COUNTY DEPARTMENT OF REVENUE 208 SOUTH CAMERON STREET HILLSBOROUGH, NORTH CAROLItiA 2'278 JOHIi T. ER Ph: Hillsborough 732-8181 i-R ne October 15 , 1992 Chapel Hill 967-9231 Mebane 22"-2031 Durham 688-7331 C H Hotel Associates Limited Partnership Attun: Roland Gammon 21 Glenwood Ave . Raleigh, N . C. 27603 Dear Sir: This is to advise you that taxes assessed against the property described below and listed in your name for the year(s) 1991 are past due and remain unpaid. These taxes , with penalties , interest and costs constitute a first lien upon the real estate described below. You will take notice that unless the amount shown below is paid within thirty days from the date shown above , it will be my duty to docket a judge- ment in the office of the Clerk of Superior Court of Orange County and cause execution to issue thereon for the sale of the property described as provided by law. AMOaTT OF TAX, PENALTIES AND INTEREST S 5,132.68 Tax Map 126 Block E Lot 1 Tract # 743116 It will not be possible for me to give you further notice before proceeding as indicated above. If judgement is docketed or execution is placed in the hands of the Sheriff, additional cost will be added. I trust that you will attend to the payment of the amount due prompt- ly and avoid added expenses to you or the loss of your property. "ncer y, John T. Horner Director of Revenue Tax Division JTH/rwt Copy to The Village Bank 77 S. Elliott Rd. Chapel Hill, N. C. 27514 Nations Bank Atten: Dan Amesbury GTW 4-6B 901 W. Trade St . Charlotte, N C 28255 White Oak Properties, Inc. ., Professional Golf Course Brokers G. Roland Gammon President 19 October 1992 John T . Horner , Director of Revenue Tax Division Orange County Department of Revenue 208 South Cameron Street Hillsborough , N. C. 27278 Re : Your attached letter dated 15 October 1992 Dear Mr . Horner: I received the above-referenced letter earlier today. I have had no contact from your office since I paid the 1990 taxes on 20 February 1991 . As you may or may not be aware , a significant portion of this tract was taken by the State of North Carolina in a condemnation action on 19 November 1990 (copy of that action enclosed) . I note that C. H. Hotel Associates paid $5 , 341 . 38 in taxes in 1990 for the full tract. After the condemnation, there was less than one-half of the original tract remaining ( DOT taking map enclosed) . Further, that portion which remained had very restrictive access , being limited to only a single driveway access on Columbia Street. Equally, the resultant site had extremely difficult topography. The State took the perimeter area that was much flatter and convenient to development leaving the very steep draw in the middle of the site ( topographic map enclosed) . Lastly, the site was significantly damaged by the intrusion of the former Roper tract which the State had earlier purchased. In it' s before-condemnation condition, thi's inset tract had only minimal impact on the Columbia Street frontage of the larger tract . Following the taking , and with the controlled access imposed on the site , there is very little that can be done with the balance of the site , hence it has little residual value . I would contend that the resultant parcel , in fact, . has a value of less than $ 100 , 000 as it remains following condemnation. I note from your letter that the 1991 taxes are $5 , 132 . 68 . I don' t recall that any taxes have been paid on the tract for 1991 , but there must surely be an error in your calculations . The State took the property in 1990 . I wrote a letter to your office sometime in the early part of 1991 alerting you to the taking action. There is some tax due on Twenty-one Glenwood Ave., Raleigh, North Carolina 27603 • Telephone 919-821-4665 the remaining tract owned by G.H. Hotel Associates , but not nearly the amount which had been charged before the taking and the resultant damages . . Before proceeding with your threatened action, I would respectfully request that you more carefully reassess the property in light of what it' s proper tax value would have been on January 1 , 1991 . If I can provide you additional information in this endeavor, please let me know. Thank you. Regards , I G. Roland Gammon, III Managing General Partner G .H. Hotel Associates , Ltd. GRG/mf Enclosures White Oak Properties, Inc. G. Roland Gammon President 20 April 1994 Ruby Tilley Orange County Department of Revenue PO Box 8181 Hillsborough, NC 27278 Re: CH Hotel Associates, Ltd. Dear Ms. Tilley: I received your telephone call earlier in the week. I had been engaged in some research on this matter and find it now appropriate to respond. I refer you to my earlier letter of 29 November 1993 (copy enclosed). I still feel quite strongly about the points that I raised in that letter. I contend that your department failed to act in a fair and equitable manner in correctly revaluing the subject property in the 1991 tax bill. The department subsequently failed to correct its assessment errors in 1992. Accordingly, this partnership has been billed an excessive and unfair amount of property taxes for 1991 and 1992. Please note the following: 1. Approximately one-half of the property was taken by NCDOT condemnation action on November 19, 1990. 2. I wrote John Horner on 20 February 1991 (copy enclosed) reminding him of the taking and asking that he be sure that our 1991 tax bill accurately reflect the diminishment in value that would arise from that taking. In that same letter, I notified him of a different mailing address. We have never received any notice of revaluation of this property at any time. Twenty-one Glenwood Ave., Raleigh, North Carolina 27603 • Telephone 919-821-4665 f 3. I received no answer to my letter to Mr. Homer. The partnership also did not receive a 1991 tax bill although I had earlier notified Mr. Horner of our correct address in my 20 February 1991 letter. My next correspondence from your department was a 15 October 1992 notice of past due taxes (copy enclosed). 4. Upon receipt of the 15 October notice, I promptly responded to Mr. Horner in a letter dated 19 October 1992 (copy enclosed). In that letter, I questioned why I had not heard from your department and why the taxes were so high. We did not receive a 1992 tax bill during this time. 5. Shortly after Mr. Horner received my letter a gentlemen in your department (I believe his name was John Smith, but I can't be sure.) called to say that based upon my letter, he would conduct a bit of research into my concerns. I never heard anything else from your department until I received a Judgment for Taxes dated 3 February 1993 (copy enclosed). 6. I promptly responded to you by telephone and was told that the matter was an assessment not a tax matter and that I should correspond with Kermit Lloyd, County Assessor. Accordingly, I wrote Mr. Lloyd on 24 February 1993 (copy enclosed) in an effort to have me concerns addressed. 7. On 25 March 1993, I wrote Mr. Homer another letter (copy enclosed) still asking to understand why we were being billed such high taxes when half of our property had been taken. 8. Mr. Lloyd responded to me in a letter of 9 April 1993 (copy enclosed). Not content with his response, I wrote him back on 13 April 1993 (copy enclosed). I never received any more correspondence from him following my request for further assistance. 9. One 2 June 1993, I received a Tax Foreclosure notice from your department (copy enclosed). i 10. I wrote my 29 November 1993 letter which was never answered, although I did receive a letter from you dated 6 December 1993 (copy enclosed) saying my letter was being forwarded to the Assessor's office. I never heard from them. In the absence of your department's willingness to correct the errors in your 1991 and 1992 tax billings, I respectfully request an opportunity to have my appeal heard before the Orange County Commissioners. I realize that state statutes establish specific time limits for appeals of tax bills. I realize also that the state statutes provide further means of redress in the event of clerical or otherwise error. In this particular instance, I believe that departmental error is sufficient grounds for my claim to be both heard and supported. The trail of the past few years correspondence clearly demonstrates my continued efforts to seek fair and equitable treatment and your department's continued unwillingness to properly investigate the valid items of concern that I had raised and to accordingly act upon them until well into 1993 after which time we had been improperly billed for an excessive amount of taxes for 1991 and 1992. Thank you. R g d , G. and on, III M aging General Partner CH Hotel Associates, Ltd. GRG/mf Enclosures White Oak Properties, Inc. .. ,j G. Roland Gammon President 11 May 1994 t' It � John Horner Orange County Revenue Collector PO Box 8181 Hillsborough, NC 27278 x.,A.. Kermit Lloyd Tax Supervisor PO Box 8181 Hillsborough, NC 27278 Re: My letter of 20 April 1994 Dear Mr. Horner and Mr. Lloyd: .I wrote the aforementioned letter to Ms. Ruby Tilley who I understands works in Mr. Homer's office. On the day after I mailed it, Mr. Horner kindly called me to acknowledge receipt and to me that the matters of my concern were more appropriately addressed by Mr. Lloyd's department. Accordingly, Mr. Homer told me he was passing my letter along to Mr. Lloyd on that day, April 21 st. As of today, I have received no further response. Like many letters prior to it, this letter sought relief from what I considered to be inequitable assessment of my partnership's property. Unlike my earlier letters, in the absence of your departments' willingness to address my concerns, I requested an opportunity to discuss my concerns before the county commissioners. Twenty-one Glenwood Ave., Raleigh, North Carolina 27603 • Telephone 919-821-4665 Gentlemen, I have contended that one of the consistent threads throughout this entire matter has been your departments' unwillingness to consider and to respond to my correspondence. Had the matter been fairly and properly addressed when I first wrote Mr. Horner on February 20, 1991, I would not have been subjected to the continued necessity to seek redress. Instead, as before, three weeks have now passed and my correspondence remains apparently ignored. On behalf of the partnership, I have retained the services of a Raleigh attorney, Jack Nichols, who is also a Wake County commissioner. With his assistance, we have weighed a number of options to try to solve this matter. At the present time, we have elected to try this one final time to encourage you to focus on our concerns and seek a fair and equitable solution without proceeding to other legal or political steps. I would sincerely appreciate your assistance in this regard. Thank you. Regar G. and G Managing Gene al Partner CH Hotel Associates, Ltd. GRG/mf cc: M. Jackson Nichols