The Indiana Tax Court dealt a win and a loss to a county and a casino that were arguing over how much a gambling resort was worth during the Great Recession.
Belterra Resort Indiana and the Switzerland County Assessor offered different appraisals valuing Belterra’s casino property during 2009 through 2014. The Indiana Board of Tax Review sifted through the different approaches and methodologies taken by the resort’s appraisers and the county assessor.
At the conclusion, the board found the total real property value of the resort was $98.5 million for both 2009 and 2014.
Both the county assessor and Belterra appealed.
The Tax Court affirmed in part and reversed in part in Switzerland County Assessor v. Belterra Resort Indiana LLC, 49T10-1705-TX-00009. In reviewing the arguments, the court restated the issues as whether the Indiana Board erred when it rejected the resort’s hotel valuation and adopted the county’s going concern valuation.
The court affirmed the Indiana Board’s decision that Belterra’s valuation of its hotel is not supported by the evidence. In particular, the appraisal of the resort’s hotel did not make any adjustment for the differences in physical attributes, amenities and business models. The record shows the appraiser relied on income and expense data from a Kentucky Ramada Inn and a Kansas Hampton Inn and did not consider the difference in services provided between those two hotels and the hotel at Belterra.
However, the court reversed the Indiana Board’s adoption of the county’s going concern valuation.
Belterra asserted the market conditions declined during the recession and, as a result, its resort suffered declining earnings before interest, taxes, depreciation and amortization (EBITDA). The Switzerland County assessor countered by presenting an analysis by an independent appraiser who projects the resort’s EBITDA would grow through the recession.
Contending the casino’s own projections indicate it did not believe the economy was as turbulent as it later claimed, the county said the market value-in-use of the resort’s real property was $134.3 million in 2009 and $127.0 million in 2014. Belterra said the assessment should have been $44.4 million in 2009 and $48.7 million in 2014.
In rejecting the county’s claims, the tax court noted, in part, the assessor’s own evidence showed a lower growth in retail sales and population in the resort’s service area and that Belterra’s gross gaming revenue shows the resort was not increasing its market penetration rate.