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Posted on Aug 19, 2015

Gorge venue owners seek open space tax benefit

GEORGE — Owners of the Gorge Amphitheatre say a large chunk of their property that serves as a world-class concert venue also benefits the public with its open space, views and an undeveloped riparian buffer.

Owners Istar Blues LLC, and managers Live Nation have asked Grant County commissioners to find that more than half of its land qualifies for an open space tax classification, relieving them from paying a large part of an estimated $918,000 owed to the county for back taxes, interest and penalties.

The issue arose this year after newly elected Assessor Melissa McKnight discovered during a routine audit of tax classifications in the Quincy area that the land was being taxed as agricultural property, and had been since before Istar bought it in 2003.

When the county notified the owners, they first asked McKnight to waive the back taxes and penalties, and when she refused, they turned to county commissioners.

Commissioners on Monday will continue a public hearing on the matter. The public hearing is at 3 p.m. Commissioners will take public comments on the issue at the hearing.

“We requested that some of the property, not all of it, be classified under the open space category, because it’s meeting the definition of open space. It has great views, public enjoyment and the protection of a riparian area,” said David Bricklin, a Seattle attorney representing the owners.

The two parcels they’re seeking to put in open space add up to 111 of the company’s 194 acres, and includes the stage area. An estimate from the assessor’s office shows back taxes, interest and penalties on those two parcels total about $536,000, with the majority of it — $446,750 — owed in back taxes and interest.

McKnight says she doesn’t think the property qualifies as open space, which can apply when the land’s primary use is to promote wildlife or conserve soil or wetlands, or offer another conservation benefit to the public.

“There’s certain criteria they have to meet, like allowing the public to come and have things like a viewing platform, and some educational things, or promoting wildlife preservation and soil conservation,” she said.

She said she refused the company’s request to waive back taxes after meeting with the state Department of Revenue and determining they don’t legally qualify for any of the reasons for waiving it. “I have certain rules I have to follow. If I waived it for them, I’d have to waive it for everyone else,” she said.

And, she added, it’s not fair to other taxpayers. “All those people in that taxing district pay extra so they can have that exemption,” she said.

Bricklin said the amphitheater’s owners believe the land does qualify, and that the amphitheater’s owners should not be required to pay for a mistake that he claims the county made.

“The error was on their part, not on our part,” he said. “And if the error is their’s, there’s no back taxes, etc.” he said.

He said when the current owners bought the property for $8 million back in 2003, they filled out a form indicating they would like the property to remain under the agriculture classification. The owner also checked a box that it was being used for commercial purposes, he noted.

“We didn’t hide anything. We were forthright and honest,” he said. “If that was a mistake at the time, it was their mistake, not ours.” And by law, he said, that means the company should not pay back taxes or penalties.

Bricklin said he couldn’t speak to the owners’ financial ability to pay the tax. But, he said, managers of the property have been making costly upgrades in water facilities, sanitation and emergency medical facilities. “I know from my involvement with management, there is not an open tap from headquarters,” he said. “The local guys have to make their case every year, and it’s not going to make it any easier if they put a million dollar tax bill on top of it.”

McKnight insists it was not a county error. She said the form was an affidavit that the company filled out and signed, attesting to the fact that the land would be used for agriculture.

“This is a CFO from a multi-billion dollar corporation, and they signed that,” she said, adding, “They knew about it, and never when they received bills did they say, ‘Why are we getting this?’”

The assessor said commissioners do have the power to override her decision. But, she contends, even if they do forgive back taxes and penalties, the county does not even have a public benefit rating system, so the Gorge Amphitheatre will be required to pay full commercial-rate taxes in the future.

McKnight said the amphitheater property isn’t the only discrepancy she’s found in the Quincy area. Another large error, she said, was discovered in Crescent Bar, where condominium owners have never been on the tax rolls, while the mobile homes there have. The area may have been overlooked because it’s on Grant County PUD land. “But they’re supposed to be paying taxes on the improvements,” she said.

The Assessor’s Office had to create 102 parcels and work with the PUD to get ownership information so they could be billed for their property, she said.

— By K.C. Mehaffey, Wenatchee World