BLJ Client Wins Tax Appeal in Oregon Supreme Court

A Bend business will pay less county property taxes after lawyers at Bryant Lovlien and Jarvis challenged
its assessment. The taxpayer also received a refund for several years of overpayments, 12% interest on
those overpayments, and reimbursement of $243,000 in legal fees and costs.

Deschutes County and the State of Oregon sought to value the Riverhouse Convention Center for the
2008-09 tax year at $16,700,000 relying solely on the cost approach to valuation. The State and County
attempted to justify its application of the cost approach asserting that the convention center is an
“especial” property with no market value of its own that confers a benefit upon the adjacent hotel
property owned by the same principals.

BLJ lawyer Mark Reinecke argued to the Oregon Tax Court in Salem that the property is not an especial
property and that the valuation should reflect the then current market conditions using the income
approach to real property valuation. The income approach valued the property at $2,668,000; more
than $14,000,000 less than the County’s assessment.

The Oregon Tax Court agreed with the taxpayer and set the value at $2,668,000. BLJ sought
reimbursement of attorney fees asserting that the County and State argument that the especial
property rules were applicable was not objectively reasonable. The Tax Court agreed and ordered the
State to pay taxpayer’s attorney fees. The State and County appealed to the Oregon Supreme Court
which recently affirmed the Tax Court valuation finding that the County and State failed to successfully
challenge the Tax Court determination that taxpayer provided “the only credible appraisal.”

Trial witnesses for the taxpayer included: Wayne Purcell, Matthew Mintier, Don Palmer, David Perkins,
Grant Norling, Oran Teater, Brian Fratzke, and Brett Evert. Todd Liebow assisted as well. BLJ lawyers
besides Mark Reinecke that represented the taxparyer included: Danielle Lordi, Neil Bryant, Jeremy
Green, and Melissa Cobb (now with Foster Pepper in Spokane, Washington). The Oregon Supreme
Court’s Opinion can be found at this link: http://www.publications.ojd.state.or.us/docs/S062829.pdf

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