Silver Mountain Resort appeals assessed property value

By CHANSE WATSON

Managing Editor

WALLACE — The current owners of Silver Mountain Resort and representatives with Shoshone County will begin a roughly weeklong process on Feb. 27 to determine just how much the resort and its properties are worth. This determination will ultimately influence how much money Silver Mountain will pay in taxes every year.

The popular ski and snowboard destination made headlines over a year ago when the longtime owners, Jeld-Wen Holdings Inc., sold the resort to Kenmore, Wash., businessman and Eclectic, LLC manager, Tryg Fortun. According to a federal Securities and Exchange Commission filing, Fortun picked up the property for $5 million. Contrary to the sale price though, the Shoshone County Assessor has assessed Silver Mountain Resort to be worth approximately $22 million. These are two very different figures that would set two very different tax rates for the resort to pay.

After purchase in October 2016, Fortun appealed the county assessor’s appraised value on July 10, 2017, essentially asking the county to lower the value of the property. The Shoshone County Board of Equalization decided to uphold their assessed appraised value.

At the beginning of that appeal meeting, Peter Smith, a lawyer that represents the Silver Mountain property owners, laid out his client’s case.

“All these assets that were included in the appeal were purchased under one purchase price of $5 million, and thats our position as to what the fair market value of those assets are,” he explained. “The reason we feel that it is the fair market value is because that’s what it sold for at an arm’s-length transaction on Oct. 20, 2016.”

Smith and Fortun made it clear several times throughout the meeting that the deal with Jeld-Wen was an “arm’s-length” transaction, meaning that both parties involved were acting in their own self-interest and were not subject to any pressure or duress from the other party or a third party.

The SCBOE disagreed.

“That $5 million sale does not present market value,” Shoshone County Assessor Jerry White stated. White and SCBOE argued that the former owners were under pressure to sell the property, explaining why Fortun was able to acquire the resort for less than the assessed appraised value. This essentially means that instead of being classified as an arm’s-length transaction, they believe the sale of Silver Mountain would be classified as a “distressed sale.”

While Jeld-Wen owned the property, the company paid taxes on the county appraised value of approximately $22 million and never appealed the decision.

Fortun believes that this was because Jeld-Wen wanted to sell the property, so they never contested the high assessed value in an effort to attract buyers.

SCBOE on the other hand believes that Jeld-Wen never challenged the assessed value because they believed that the appraisal was accurate.

“…In the past when Jeld-Wen owned it, they never appealed their value because it was more in-line with that appraisal,” White said.

When weighing the options toward the end of the appeal meeting, Shoshone County Commissioner Mike Fitzgerald simplified the two view points.

“I’m seeing two very different approaches to estimating this cost,” he explained. “I’m seeing one that’s actually looking at a value based on a history” — the county’s approach — “then your method” — referring to Fortun’s approach — “is actually using this singular method, which is the purchase of the property and pro-rated based on the different parts and pieces of how they break up.”

When Fortun purchased Silver Mountain Resort, this included all of its associated properties (IE the Silver Rapids Indoor Water Park and Galena Ridge Golf Course) in addition to the mountain and its amenities. Though both sides do not see eye-to-eye on the value of the resort, they do have similar reasons for holding their ground and both involve the community.

“Tax appeals involving large differences of opinion in value are significant,” Fitzgerald said. “Appeal decisions impact revenue that is vital to the county and the local municipalities — in this case, the city of Kellogg.”

SCBOE believes that a decrease in the tax revenue from Silver Mountain would negatively affect the services that Shoshone County, the city of Kellogg and the various districts (IE water, sewer, etc.) provide to residents.

Fortun argues from a community stance as well, stating that the money he wishes to save in taxes could be used to improve the resort and in-turn, Kellogg.

“There’s many things that we can do to create a better experience for everyone that comes to Silver. Better skiing experience, better restaurant experience, better lodging experience, better golfing experience. We need to get to a point where we have that better skier experience (so) more people come, and those more people will allow store fronts in Kellogg to reopen again.”

Speaking about what can be done to bring more people to town, he added, “I think an integral part of that is what happens at Silver. We need to have a better experience so we have more people there, we can pay our employees better, and I think the economy of Kellogg will be greatly impacted.”

Since the SCBOE decided to uphold their appraisal, Fortun and Silver Mountain have now appealed to the Idaho State Board of Equalization.

This appeal hearing will be Tuesday morning at the Shoshone County Sheriff’s Office in Wallace and it is open to the public.