County appeals state's Silver Mountain value decision

By CHANSE WATSON

Managing Editor

WALLACE — The saga between Shoshone County and Silver Mountain Resort ownership regarding the resort’s true property value will continue on, as the Board of County Commissioners have elected to appeal the decision handed down by the Idaho Board of Tax Appeals.

The BTA announced on May 1 that the disputed resort properties in total are worth $6,310,000 — far south of what the Shoshone County Assessor appraised them at in 2017.

County representatives had 10 days from the announcement date to decide if they were going to appeal the state appraisal and variety of factors were considered during that time.

Commissioner Mike Fitzgerald explained that the BOCC, with the assistance of the city of Kellogg, “evaluated the pros, cons and risks associated with going to District Court. These items included, but were not limited to: venue, sale type and considerations, appraised values, lost revenues, cost to litigate and public perception.”

The dispute over Silver Mountain’s value began right after the resort was sold by longtime owners, Jeld-Wen Holdings Inc., in October 2016 to its current owner, 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 argues that the resort is worth approximately $23 million. These two very different values would set two very different tax rates for the resort owners to pay.

Fortun appealed the County Assessor’s appraised value on July 10, 2017, essentially asking the county to lower the value of the property to what he initially paid for it. Other than a few select parcels of land where an agreement was made, the Shoshone County Board of Equalization decided to uphold their assessed appraised value on the resorts main properties. These properties include the Ski Resort, Silver Rapid Water Park, Galena Ridge Golf Course, Shoshone House Apartments, Morning Star Lodge, two condominium units in Morning Star Lodge, a commercial lot on Wildcat Way and some other vacant land.

Following the SCBOE decision, Fortun and Silver Mountain then made an appeal to the BTA. Unhappy with the result of that appeal, the county is now challenging the BTA’s ruling.

The county’s stance since the beginning was a decrease in the tax revenue from Silver Mountain will negatively affect the services that Shoshone County, the city of Kellogg and the various districts (i.e., fire, water, sewer, etc.) provide to residents.

“The decision to take the matter to District Court is not about Shoshone County verses Silver Mountain with respect to business, operations and community participation,” Fitzgerald said. “The county views Silver Mountain as a productive business — contributing to our local economy, providing employment, attracting visitors and investors and setting an example as a community leader.”

“The decision is about getting the fair and equitable value on Silver Mountain’s properties,” he added.

If the BTA value is upheld by the courts, BOCC estimates cuts in funding would include:

- Shoshone County — $65,934.10

- County Road and Bridge Department — $4,287.11

- Kellogg School District — $95,117.78

- City of Kellogg — $94,482.01

- West Shoshone Hospital District — $18,647.74

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

The stance of Silver Mountain and its owners is similar to Fitzgerald’s comments on how the county views the resort.

When the BTA decision was announced, Silver Mountain General manager Jeff Colburn was pleased with their findings and explained that the lower tax rate would allow the resort to grow and in-turn, help the community.

“We’ve got a lot of things in the works. We’re working on some master plans and trying to get the big picture put together,” he said. “In order to grow a business, you have to spend money and we’re trying to figure out where we want to spend it and how to make this thing grow and have the Valley grow at the same time.”

Back in July 2017 at the county appeal meeting, Fortun echoed Colburn’s point that the money Silver Mountain would save in taxes would help expand and maintain the resort. This in turn would be a positive for the community and its growth.

“There’s many things that we can do to create a better experience for everyone that comes to Silver,” he said. “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.”

Moving forward with the District Court appeal, the county’s strategy is to build a legal team by hiring outside counsel with expertise in real estate/property/resort valuation and appeals. This team will also work with impacted entities such as the city of Kellogg, Kellogg School District, Fire District No. 2 and the West Shoshone Hospital District.

The county will receive financial assistance from the Idaho Association of Counties Litigation Fund to help pay for the upcoming legal battle.

Fitzgerald says that the team “will allow for negotiation if it proposes itself, and let the District Court determine an appropriate value.”

Representatives with Silver Mountain declined to comment on the county’s decision to appeal.

The Shoshone News-Press will continue to follow this story as it develops. For more background information, check out our first story on this topic, titled “Silver Mountain Resort appeals assessed property value,” and our second story, titled “State decision made on Silver Mountain Resort value,” on shoshonenewspress.com.