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SUIT: HALT COMMERCIAL PROPERTY-TAX COLLECTION

Sept. 5, 2001 – An attorney for a downtown Charlotte Amalie property owner has asked U.S. District Judge Thomas Moore to order a stop on all collections of commercial property taxes in the territory until the Tax Assessor's Office reappraises the properties in accordance with nationally accepted standards.
Attorney Jim Derr, who represents Berne Corp. and B&B Corp., the owner of several parcels along Kronprindsens Gade, filed the motion under seal in District Court on Wednesday.
The motion is a request for the court to enforce provisions of a settlement reached last December between the corporations and the V.I. government, Derr said. That agreement called for the Tax Assessor's Office to reappraise commercial property based on actual value.
It also specified that a special master would be assigned to ensure that the appraisals would be done according to guidelines outlined in the Uniform Standards of Professional Appraisal Practice, according to court documents. The parties later agreed on appraiser Joe Hunt of Chapel Hill, N.C., to serve in this capacity.
Hunt is required to report back to Moore every six months on whether the reappraisals are being conducted according to the standards.
But the reappraisal of properties has not been done, Derr said on Wednesday, and this led him to ask the judge to halt all collections of commercial property taxes. Derr said he expected that a court hearing would be scheduled soon, at which time Hunt and Tax Assessor Roy Martin could report to the judge on the status of the reappraisals.
The motion asking for the collection of commercial property taxes to be halted was filed under seal because portions pertain to a confidential part of the settlement agreement, Derr said. But he said he was free to discuss other parts of the motion covering the reappraisal of commercial properties.
The corporations sued Martin and the V.I. government last year, claiming that the appraisal of their properties was based on what it would cost to replace structures, rather than on the actual value of the properties, which is required by the V.I. Code. In hearings and documents pertaining to that lawsuit, an independent appraiser said the government's valuation of the Berne properties was vastly inflated, leading to far higher property taxes than would otherwise be owed.
In those court hearings, Moore heard evidence suggesting that the assessor's office had appraised many commercial properties in the territory using the same approach. That evidence led to the agreement calling for the assessor's office to reappraise all commercial properties — not just those owned by Berne Corp. — in accordance with the accepted practices.
Meantime, other commercial property owners also are filing federal lawsuits against the assessor's office, based on the same claims laid out in the Berne suit.
On Aug. 31, attorney Chad Messier filed suit on behalf of the owners of Bluebeard's Castle, the Elysian Beach Resort properties, and two parcels identified in court papers as "The Beach Club" properties, an apparent reference to Bluebeard's Beach Club, formerly known as Limetree Beach Resort. Those properties had a total assessed value in 2000 of about $98 million, which led to a tax bill of nearly $750,000.
In that lawsuit, Messier states that his clients' properties also were assessed based on replacement cost, rather than actual value. He noted that the assessor's office was bound by the settlement agreement to reassess commercial property according to the uniform guidelines, and under the eye of the special master, but that the office had not done so.
The owners of property at Buccaneer Mall on St. Thomas and an apartment rental unit in Orange Grove on St. Croix, also have filed suit based on similar arguments, Derr said.
District Court officials said they did not know when a hearing on the Berne case would be scheduled.

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