Resort's excess tax valuation may cause ripples in budget
A judge's finding that the Westin Innisbrook Resort was overvalued by as much as $9-million a year will slash $1-million in revenue.
By AARON SHAROCKMAN
Published February 20, 2004
PALM HARBOR - A Pinellas-Pasco Circuit Court judge has ruled that the county's premier golf resort was overtaxed for the past six years, a decision that will trim more than $1-million from county coffers.
Pinellas property appraisers overvalued the Westin Innisbrook Resort by as much as $9-million a year, Judge James Case has ruled, adding that the resort's appraisal was flawed.
Case's Feb. 6 decision means Innisbrook's owners, Golf Host Resorts Inc., will save $1.2-million in disputed property taxes from 1998-2002. It's small consolation for Golf Host, which already is buried under $80-million in debt and in the process of relinquishing the golf resort.
Property Appraiser Jim Smith said he is dumbfounded by Case's ruling. He said his office will appeal.
"After reading the judgment, I didn't know I was in the right courtroom," Smith said. "When we left the trial, I thought it was done. I thought it was over - for us."
Case's 10-page ruling said Smith's appraisers determined the resort's value using an incorrect formula. Property appraisers based Innisbrook's tax value on the projected number of rounds on the resort's four golf courses.
But since Innisbrook is a private resort open to members and their guests, property appraisers overestimated the number of rounds played each year.
"These projections could only be achieved if the courses were open to public play," Case wrote.
Case also ruled that appraisers double-taxed many of the resort's condominiums, which are privately owned and rented out as part of an agreement with owners.
County appraisers contended that Golf Host owed more than $2.2-million in back taxes since 1998. Case's ruling cuts those debts by more than half. The company now owes the county $953,684.94.
Rob Kelley, an attorney representing Golf Host, said his clients are satisfied with the outcome.
"We think our position that we had been voicing since 1998 has been vindicated by this decision," Kelley said. "Naturally, we would like this trial to mark the end of this dispute. Golf Host would rather manage its property than litigate its tax assessment in court."
At the 845-acre resort, Golf Host is mired in financial misfortune.
Since 1998, Innisbrook has accumulated losses close to $44-million, according to required filings with the Securities and Exchange Commission.
In that same time, room bookings have fallen off by more than 35 percent and Golf Host Resorts has defaulted on $80-million in loans. The lender, Golf Trust of America, is in the process of taking over the resort in lieu of loan payments.
That company had planned on seizing ownership of Innisbrook by the end of 2003, but pushed back plans because of continued poor revenue projections.
It's now unclear when the resort might change hands.
Golf Host had been paying about half of its property taxes since 1998, when it took control of the resort. The company paid taxes on what it thought the property was worth. The property appraiser, however, sued the company for back taxes in 1998.
After years of legal wrangling, the case came to trial last November.
"I thought our side laid it out very clear, very plain," Smith said. "I hate to be in court, but when we're right, we got to do it."
