Silver Mountain property value decision pushed into 2020

WALLACE — It appears that the legal journey to determine Silver Mountain Resort’s value is going to extend into the new year, as the trial that was supposed to settle the matter ended on Thursday with no decisive answer.

Held at the Shoshone County Courthouse in Wallace, legal teams from both Shoshone County and Silver Mountain squared off in a lengthy valuation trial over the past four days and presented their arguments to Judge Richard Christensen for him to determine a final number.

Representing the petitioners — Shoshone County — during this trial were Attorney Richard Smith and County Prosecuting Attorney Keisha Oxendine. On the respondent side — Silver Mountain — was Attorney Peter Smith and Silver Mountain owner, Tryg Fortun.

The originally planned five-day trial was cut short and ended on Thursday after Judge Christensen asked both sides if they wished to submit written closing statements to him instead of making them then and there.

“Both sides agreed that was best due to the complexity of the appeal involved, the properties and the unanticipated change in testimony that occurred during trial,” Oxendine explained.

The unanticipated change in testimony Oxendine referred to occurred on the third day of the trial when Silver Mountain’s General Manager, Jeff Colburn, and hired assessor, John Arnie, took the stand.

“During the course of cross-examination and actually during direct examination by Peter Smith of Silver Mountain’s expert, John Arney, resulted in Arney producing new schedules in which he admitted that he had done the calculations incorrectly to arrive at his own values. That resulted in him increasing the values of both the properties associated with the ski resort and the properties associated with the water park significantly.”

After reworking his figures, Arney adjusted his initial total property valuation of approximately $6 million to about $8 million.

Monday was the first day of the trial and saw county assessor Jerry White and county contracted assessor Kenneth Voss take the witness stand. Each of the witnesses did their own evaluations of the Silver Mountain properties and came up with numbers significantly higher than both the state of Idaho and Fortun. White was the one who came to the county’s original valuation of $22 million. Voss was later hired by the county to do his own assessment and he determined that the combined properties were worth approximately $16 million.

Both sides spent much of the day asking White and Voss about their qualifications and how they came to their decisions regarding specific Silver Mountain properties.

The complete list of witnesses called to the stand included Fortun and Karey Scholey, a consultant that worked for both the resort and the former owners, on Tuesday; Colburn and Arney on Wednesday; and Peter Butler, a business valuation expert, and appraiser Mark Richey on Thursday.

The two sides now have until Jan. 20, 2020, to submit their closing statements to the judge. It is estimated that a decision will be made in March 2020.

The whole legal battle first began in July 2017 when Fortun appealed the county assessor’s appraised value of his newly acquired property — essentially asking the county to lower the value of the property.

The Shoshone County Board of Equalization heard Fortun and his lawyer state their case in February 2018, but ultimately decided to uphold their assessed appraised value.

Fortun, who purchased Silver Mountain Resort in October 2016 from longtime owners, Jeld-Wen Holdings Inc., is arguing that the value of Silver Mountain should be based on the $5 million price that he paid to acquire the property. Contrary to this sale price though, the Shoshone County assessor assessed Silver Mountain Resort (and its associated properties) to be worth approximately $22 million.

These two very different figures set two very different tax rates for the resort to pay.

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

Following the Shoshone County Board of Equalization’s decision to uphold Assessor Jerry White’s valuation, Fortun appealed to the state to make their own determination.

On May 1, 2018, the Idaho Board of Tax Appeals concluded that the disputed resort properties in total were worth $6,310,000 — far south of the county’s number.

Within 10-days of the state’s announcement, county representatives decided to appeal the $6,310,000 valuation and take the dispute to the courtroom, which is where it has been this week.

The properties initially involved include the Ski Resort, Silver Rapids Water Park, the different parts of 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. While agreements have been reached on a few of the properties, most of them are still being argued over.

The county’s stance since the beginning of this disagreement is that a decrease in 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 stance of Silver Mountain and its owners is that the money they will save in taxes can go toward improving Silver Mountain and, in-turn, help the community.

The Shoshone News-Press will continue to follow this story as it develops. For more background information, check out our previous stories on www.shoshonenewspress.com.