Evergreen, Cascade challenge tax bills
The Evergreen Aviation & Space Museum and Captain Michael King Smith Educational Institute, which carry tax-exempt 501(c)3 status, are contesting the county’s $29 million valuation of their Wings & Waves Waterpark. They argue the water park should carry the same exemption as the rest of the museum complex as an educational institution, thus should not be taxed at all.
Meanwhile, Cascade Steel Rolling Mills is contesting the state’s $60 million valuation of its McMinnville steel mill, arguing that $40 million would be more accurate in today’s market. It suggests it should be taxed at the lesser figure, reducing its bill by one-third.
Highly specialized industrial facilities, like paper mills, sawmills and steel smelters, are assessed by the state. More conventional brick and mortar structures are assessed locally by county appraisers.
Industrial plants often appeal the state’s determinations, and Cascade Steel has done so multiple times in the past.
Assessor Scott Maytubby said Evergreen sought a 100 percent educational exemption, but he settled on 5 percent. In his estimation, the park is 95 percent recreational, he said, so should be subject to taxes on most of the value of its land and buildings.
Evergreen is being represented in its appeal by former legislator and Republican gubernatorial candidate Kevin Mannix, who has maintained a private legal practice for more than 25 years. “There is a question about the state statutes as they relate to museums, and we are working on clarification from the courts,” he said.
At the water park, Mannix said, “There is a significant education program going on regarding the dynamics of water in the environment and water safety for young people.” In Evergreen’s view, he said, that purpose warrants an exemption.
The parties are in dispute not only on this year’s tax bill, but on tax bills for the two previous years as well. Evergreen has not paid property taxes on the complex’s water park component since its opening, and apparently doesn’t intend to until the issue is resolved.
However, Mannix said the museum and county have been maintaining a constructive working relationship as they await clarification in the courts. “We’ve been developing a cooperative relationship with the county as we go through the process of trying to establish the appropriate tax exemption status as to property taxes for an organization which is nonprofit and which provides public education services,” he said.
If the steel mill prevailed, and the state lowered its assessed value to $40 million, that would cut county tax collections by $333,000. The largest loser would be the McMinnville School District at $59,000, following by the county at $56,000 and city of McMinnville at $38,000.
Even more is at stake in the water park dispute.
The difference this year between a 5 percent exemption and 100 percent exemption is estimated to run about $325,000, according Maytubby.
The districts would take hits in the same proportion as they stand to take in the steel mill dispute, should the mill prevail.
Settlements could fall somewhere in between in both cases. So only the potential impact can be computed at this point.
Maytubby said he usually set the money aside as a protective measure in cases like that of Cascade Steel, but HB2569, enacted in 2011, gives him an even better option. It allows him to simply issue Cascade a deferred billing credit, so the money remains with the mill until resolution is reached.
He said the law requires him to pay 12 percent back interest on awards stemming from appeals, and it’s impossible in today’s market to earn nearly that much on money you have in your possession.
Maytubby said that served to place a lot of pressure on the county and state, as it put time squarely on the appellant’s side. He said the change puts the parties on an even footing.
Evergreen is pointed toward a resolution in court, while Cascade has expressed a willingness to seek a mediated settlement. So far, hearing dates have not yet been set in either case.