Tax deal will cost area $31,000 in revenue

The County Board of Supervisors on Sept. 20 approved lowering the 2011 property tax assessment for the Valley Verde Center shopping area on Duval Mine Road by $1.2 million, a decision that will cost local and county taxing districts $31,000.

The board approved a settlement for the 2011 tax year rather than fight it out in the Arizona Tax Court, where the property owner had filed suit. The settlement followed a July 14 decision by the State Board of Equalization that lowered the assessment for the 2012 tax year and applied the SBE outcome to 2011, Pima County Assessor Bill Staples said.

Staples said the problem began after the former Kmart building was purchased and upgraded by CJR Investments in 2003, led by Gary Heinfeld. Staples said the assessor’s office made a mistake in not monitoring town building permits closely and should have increased the assessment from $2 million in 2006 or 2007, but instead raised the figure to $6.9 million in 2011, a time when many property values were dropping because of the recession.

“They did extensive work in 2005, ’06, and ’07. We should have adjusted the value then, but it took us until 2011. It took folks’ breath away. They did have a successful appeal in the state board of equalization for 2012, and they did file a lawsuit for 2011,” Staples said.

“We agreed to the value established at the state board for 2012. We agreed with that value for 2011, so it’s a one-year loss of tax revenue that the county board approved,” Staples said.

The SBE online docket information says the property owner provided sales data of comparable properties to support a reduction from a full cash value of $5,389,785 to $4,200,000. As a commercial property, its assessment ratio is 19.9 percent, so the tax rates are applied against a value of $834,960.

The combined tax rate on the assessment reduction yields about $31,000, which would have been split among the Sahuarita Unified School District, Pima County government, Pima Community College, Green Valley Fire District and smaller entities.

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