SANTA CLARA (KPIX 5) — Santa Clara County Tax Assessor Larry Stone filed a lawsuit in Superior Court on Monday in an attempt to reverse a decision that awarded a $36 million property tax refund to the 49ers.
Stone is suing the Appeals Assessment Board and named the 49ers as a respondent over the boards November 2018 ruling that determined the 49ers were only responsible for 50% of their property tax bill for the $1.2 billion Levis Stadium, retroactive to August 2014. That resulted in an immediate $36 million refund, as well as $6 million tax cut every year going forward.
Stone said the 49ers appealed the tax bill last year on the basis that the NFL season is only six months long, and that non-football events, such as concerts, soccer game, and private corporate events, are managed by the 49ers.
The San Francisco 49ers control that stadium 12 months a year. To say that theyre only responsible for the property taxes for half of that year is just unbelievable to us, said Stone.
The $36 million refund meant the Santa Clara Unified School District had to refund $13 million, West Valley College refunded $3 million, Santa Clara County gave back $5 million and the City of Santa Clara gave back $3 million.
The City believes Assessor Stones position for the appeal is strong and will correct this flawed outcome, resulting in the County Assessors original assessment being restored, according to a statement from the City of Santa Clara.
Stone said it took his staff months to perform the calculations and make sense of the multiple LLCs and intertwined partnerships that are tied to Levis Stadium. He also said that the assessment appeals board, who approved the tax refund, likely got “confused” at the complexity of the appeal.
I think the assessment appeals board couldnt arrive at a decision and they threw up their hands, said Stone.
Stone added that his office requested the Final Findings of Fact,” a report that is typically released shortly after the assessment appeals board makes rulings. The report explains the rationale and decision making process. But months after the initial request, Stone has not yet received the report, but he’s been told it will come July 1.
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We havent received the Final Findings of Fact from the Assessment Appeals Board, and I think probably because they cant justify it, said Stone.
Stone plans to ask the judge to remand the ruling back to an appeals board for yet another reassessment. If the $36 million refund is overturned, the 49ers could be required to give back the money.
This decision sets a troubling precedent that is legally incorrect and must be reversed, said Santa Clara County Counsel James R. Williams.
Communities spend hundreds of millions of dollars to build stadiums to attract professional sports teams. But when the owners of these teams fail to pay their fair share of property taxes, they are taking away money from local schools, police and firefighters, and other valuable services that our communities need, Williams said in a statement.
The 49ers released a statement, saying, We are aware of the assessors decision to appeal the independent appeals boards decision regarding possessory interest tax.
SAN JOSE — Santa Clara County Assessor Larry Stone is suing an assessment board that gave the 49ers a multimillion-dollar property tax break he says shortchanged local governments and school districts.
Stone filed a lawsuit Monday challenging the assessment appeals board’s decision to slash the 49ers’ annual property tax bill for Levis Stadium by $6 million and give the football team an immediate refund of $36 million — retroactive to August 2014 — from the Santa Clara Unified School District, city of Santa Clara and other government agencies that are supposed to get a cut of the revenue.
This (appeals board) decision sets a troubling precedent that is legally incorrect and must be reversed, County Counsel James R. Williams, who filed the suit on behalf of Stone, said in a written statement.
Communities spend hundreds of millions of dollars to build stadiums to attract professional sports teams. But when the owners of these teams fail to pay their fair share of property taxes, they are taking away money from local schools, police and firefighters, and other valuable services that our communities need, Williams added.
Hardest hit by board’s decision was the Santa Clara Unified School District, which refunded the team $13 million in property tax revenue. The county gave back $5 million and the city of Santa Clara and West Valley Community College each returned about $3 million.
“The City believes Assessor Stones position for the appeal is strong and will correct this flawed outcome, resulting in the County Assessors original assessment being restored,” according to the city’s statement.
In a brief statement, 49ers spokesman Rahul Chandhok said the team is “aware of the Assessor’s decision,” but declined to comment further.
The decision to cut the teams annual property taxes for the use of Levi’s Stadium in Santa Clara from $12 million to $6 million was made by one of three county assessment appeals boards, which have the power to change the county assessors professional appraisal of a property’s value, and consequently, the amount of taxes that must be paid on it.
At the center of the dispute between Stone and the appeals board is whats known as possessory interest, or the extent to which the 49ers privately benefit from using tax-exempt Levis and how much the team should pay in property taxes for that benefit.
The appeals board concluded that possessory interest in the stadium — and the taxes paid on it — should be split 50-50 between the city and the 49ers; Stone argues the team should pay 100 percent.
The assessor points to the value the team receives from controlling the stadium and booking events there year-round, including facilities such as a restaurant, team museum, store and private clubs within the stadium.
The boards decision ignores many of the 49ers valuable rights and instead simply splits the value of the stadium exactly in half between the 49ers and the public authority—a position for which neither side argued, that no data supported, and that no lawful valuation method can justify, Stone said.
It’s the first time since he became assessor in 1994 that Stone ever challenged a decision by an assessment appeals board in court, according to deputy county assessor,David Ginsborg.
The assessment board’s 10-page preliminary ruling in November triggered a six-month deadline for Stone to file the appeal by the end of May.