Walt Disney World had sued Orange County Property Appraiser Rick Singh for inflating the values of the resort hotels and parks. The court did find that the value of Disney’s Yacht and Beach Club was inflated and they sided with Disney.
According to the Orlando Sentinel, courts determined that “Singh’s office improperly inflated the value of Disney’s Yacht & Beach Club Resort, a luxury hotel with an annual property tax bill of more than $4 million.”
When Singh took office in 2012 new appraisers were brought it to reassess properties. They used an assessment method called the “Rushmore Method.” It’s a widely used assessment method, but there are different variations that can be used. When it was applied it caused Disney’s Yacht and Beach Club values to more than double.
This of course led Disney to sue.
“So Disney sued, arguing that Singh’s office overstated the value of its hotel property by illegally including the value of intangibles, like the Disney brand. Two industry groups that Disney helps fund — the Florida Restaurant & Lodging Association and the Central Florida Hotel & Lodging Association — wrote legal briefs in support of the company.”
The courts decided that the property appraisal methods used by Singh’s office were illegal under Florida law. Now Disney is disputing the set property value of 10 other property resorts.
This will likely case many other hotels to challenge their appraised values, especially now that businesses have been hard hit with the COVID-19 shutdowns.
According to Michael McElveen, a commercial appraiser in Tampa: “It’s huge. I would imagine every hotel in the resort area of Orlando will be filing that appeal.”
Now, this is going to potentially hurt revenue for cities, counties and school districts as most of their revenue comes from property taxes.
I’m not going to try to claim I know the law here, but if the issue was that the Disney brand shouldn’t be a parameter of an assessment how can Disney use their “brand” to charge ridiculous rates for rooms on property. That is often the reasoning behind their higher rates so I can see why that could be counted into the value for taxes. They tout their brand value during the shareholder meetings and often use “the brand” as a reason why they are still valuable for stocks. But that should only be counted when they can leverage it for gain.
Also, if it’s true that the industry groups that defended the Walt Disney Company received funding from Disney, that makes their statements feel to me like a possible conflict of interest. But I digress. Disney won the lawsuit, because they usually do, and now it’s likely that many more will also dispute it. Since the precedent has been set, the people that will ultimately pay for it are the citizens.
But I bet the Disney resort room rates won’t decrease when the taxes do.
What do you think? Comment and let us know.
Source: Orlando Sentinel