SPECULATOR - It looks as if Oak Mountain LLC owes seven months worth of property taxes on Oak Mountain Ski Center here.
Barry Baker, director of Hamilton County Real Property Tax Services, says Oak Mountain LLC was supposed to start paying taxes when it signed a sale agreement with the Hamilton County Industrial Development Agency Aug. 3, 2012 and up to when a payment in lieu of taxes agreement went into effect March 1 of this year.
According to Baker, "2013 town and county tax bills were issued for the [two] Oak Mt. properties Jan. 1. These bills included pro-rated taxes for the remainder of the 2012 tax year based on the effective date of the installment sale agreement, Aug. 3, 2012. These taxes remain unpaid."
Baker says a PILOT agreement was filed with the Town of Lake Pleasant assessor in February, effective March 1 for this year's July 1 Final Assessment Roll. "This will then be applied to the 2013-14 school taxes and the 2014 town and county taxes," he said.
Hamilton County Treasurer Beth Hunt says county and town taxes totaling $11,996 plus penalties and interest had not been paid as of last week. "The 2012 school taxes must have been paid," Hunt added, "since they were not re-levied onto 2013 taxes."
Oak owes no taxes to the Village of Speculator.
IDA SAYS NO
The IDA does not believe any taxes are due. It approved a PILOT agreement with Oak Mountain LLC in September of 2012.
In February Executive Director Ann Melious informed the board there was no need for a PILOT, because the IDA still owns the property and is a non-taxable entity.
"The IDA was advised by counsel [Kara Lais] that IDA-owned property is not subject to taxation," explained Chairman Brian Towers. "The current structured transaction with Oak Mountain does not change this exemption."
"When they take ownership, they will start paying taxes," Melious said.
Oak Mountain LLC -- Kevin and Elizabeth O'Brien and their son and daughter-in-law Matt and Laura O'Brien -- has an installment sale agreement with the IDA under which it will actually purchase the property Aug. 3, 2014.
"The sale will be a separate transaction, taking place when the investment conditions of the agreement have been fulfilled," according to Melious.
"An installment sale agreement is neither a sale nor a lease," Melious says. "It is an economic development project instrument."
BAKER: NO CHOICE
Baker says the IDA is wrong.
In general, Baker wrote in a letter dated March 12, under Real Property Tax Law "after the filing and attesting to the Final Assessment Roll on July 1 [of each year] a municipal assessor is legally prohibited from making changes, alterations or corrections to the assessed or taxable values on the roll."
An exception is when property receiving wholly or partially tax-exempt status is transferred after taxable status date to a non-exempt owner. Real Property Tax Law requires a pro-rata tax be imposed in this case.
"This was the case with Oak Mountain," Baker wrote. Once the assessment roll became the tax roll, "there was simply no other action that the assessor or Board of Assessment Review could take with regard to [Oak Mt.] in this assessment cycle!"
Baker says the property was transferred with the installment sale agreement. The IDA insists it was not.
"The law is well settled that a purchaser in possession under a contract of sale (title being retained in the seller notwithstanding) is deemed to be the owner for purposes of taxation," Baker wrote.