Walt Disney World Resort recently won a decisive legal victory against the Orange County tax appraiser’s office. The new legal determination could potentially save both Disney and other major hotel-resort company owners millions of dollars in taxes.
The lawsuit between the Disney company and Orange County Property Appraiser Rick Singh has been ongoing for several years. Now the appellate court determined that Singh’s office improperly inflated the value of Disney’s Yacht & Beach Club Resort and other Disney World resorts.
The court issued their decision on June 19, 2020. However, the legal decision will go beyond the Disney-owned resorts. That’s because the court declared the entire method that Singh had used to appraise the Disney property — a method that is widely used by other property appraisers — is illegal under Florida law.
Now, experts predict that Disney and other hotel companies, whose finances have been crushed by COVID-19, will seize on the ruling and use it to push for lower tax assessments on scores of other properties. Disney alone is already challenging the appraisals for more than 10 other hotels.
The Disney case dates back more than five years, when Singh first brought in new appraisers to reevaluate different classes of property. They reasoned that properties, such as resort-style hotels, at Disney World and Universal Orlando, were under-assessed in the past. At least that’s what their office believed.
Singh’s staff redid the values for a number of hotel properties using something known as the “Rushmore” method. “The majority of counties rely upon some version of it, depending on the type of hotel at issue,” said Loren Levy, an attorney who represents a number of county property appraisers, including Osceola County’s. Under Singh, the new approach led to some dramatically higher assessments. The assessed value of Disney’s Yacht & Beach Club, for instance, more than doubled, to nearly $340 million.
But the appellate court went much further than simply addressing Singh’s appraisal of the Yacht & Beach Club. The Orange County court declared that the Rushmore method itself illegal. They contend that the method overstated the value of hotel property by illegally including the value of intangibles, such as the Disney brand.
“Rushmore is essentially dead for use by property appraisers,” said Jennifer Dixon, an appellate attorney at the Lowndes law firm who represented the Central Florida Hotel & Lodging Association in the case.
Ultimately, Disney expects to see reductions for their resort property taxes. “We are pleased that the court concluded that the method used by the property appraiser violated Florida law,” Disney spokeswoman Jacquee Wahler said in a prepared statement. “We look forward to a reassessment of our properties consistent with Florida law and the court of appeal’s ruling.”
Source: Orlando Sentinel
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