Court rules for county in $19.5 million Summerlin tax assessment case

CARSON CITY — The Nevada Supreme Court has sided with the Clark County assessor in a property tax dispute over the value of improvements at Sun City Summerlin.

The order reverses a lower court decision upholding a state Board of Equalization determination that the improvements were worth only $2,500 instead of $19.5 million set by the assessor’s office.

In the unanimous decision dated March 25, the court found that the state board assigned a nominal value to the improvements after determining they had no marketable value. But the court said the board did not take into consideration the replacement cost of the improvements.

The state board clearly erred by ignoring other workable valuation methods, the court said.

The lower court decision favoring the state board, which hears appeals from county equalization boards, was appealed by the Clark County assessor and the county equalization board.

The assessor’s office argued before the Supreme Court that the state board “simply pulled a value out of thin air without any statutory or factual basis.”

At issue were five parcels that include clubhouses, recreational centers, parking lots and a maintenance facility.

The state board set the value at $500 per parcel, even though panel members “admitted they had no knowledge of the value’s correctness,” the court said, reversing Clark County District Court Judge Joanna Kishner’s 2010 decision.

Clark County Deputy District Attorney Paul Johnson said an opposite decision could have meant the loss of significant property taxes to the county because other associations would have sought to make the same argument for nominal value.

But the reversal means that homeowners in the association will have to continue to pay a minimal amount, about $5 per year each, to cover the taxes on the improvements, he said.

Johnson called the state board decision an aberration, and said the court order means past practice for valuing such parcels will continue.

Since the lower court decision was stayed pending the appeal, the taxes have been paid all along, Johnson said.

Contact Capital Bureau reporter Sean Whaley at swhaley@reviewjournal.com or 775-687-3900. Follow him on Twitter @seanw801.