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Four Casinos Have Taxable Value Reduced

LAS VEGAS -- Four of six Las Vegas casinos will pay less in taxes after the assessed value of their properties was reduced by a total of $94.5 million Monday.

The Clark County Board of Equalization granted reductions to the Riviera, Barbary Coast, Fitzgerald's and the Plaza, but not as much as any of the hotels requested.

The board rejected arguments made by the Fiesta East in Henderson and Four Queens to leave the hotels' "intangible assets," such as name recognition and popularity, out of the assessment.

Property taxes are calculated based on the values annually set by the county. The values can be appealed to the Board of Equalization.

Some 33 casinos have done just that, and hearings continue Wednesday. If the casinos were to receive the breaks they requested, local governments would lose taxes on about $2 billion in property value. The cuts ultimately would have affected schools and services like police and fire.

The board Monday:

-Turned down Fiesta East's request that its appraised value of nearly $63 million be slashed to $23 million.

-Rejected Four Queens representatives' request that the county's appraised value of $46.7 million be reduced to $28 million. The board went with the county's recommendation.

-Compromised on Fitzgeralds' request to reduce the value from $28 million to about $14 million, setting the value at $20 million.

-Set the value of the Riviera at $147.5 million, down from $203 million. The Riviera had appraised its value at $118.5 million.

-Adjusted the value of the Barbary Coast to $30 million from $33 million. The hotel had sought to set it at $25 million.

"This is prime, prime land," board member Tio DiFederico said of the Barbara Coast. The owners "chose to build it."

-Reduced the valuation of the Plaza hotel downtown to $32 million from $58.9 million.

The reductions that were allowed were mostly due to arguments that business has slowed since the Sept. 11 terrorist attacks and properties aren't worth what they were previously.

But the board's Monday hearing was dominated by a debate over the "intangible assets" argument, a relatively new approach.

Fiesta East, formerly the Reserve, and Four Queens raised the question, if assets like name recognition and popularity are intangible, how can a value be placed on them?

"That's the argument to be sure," James Howard, chairman of the county's Board of Equalization, said. "But it's not an argument I feel comfortable with addressing with this board."

Board members said until a judge settles the question, they will continue to consider the value of property with intangibles included.

Reno-based real estate appraiser William Kimmel, who argued on behalf of Stations Casinos, said after the meeting that he stands by his argument that intangibles should not be included in the value of taxes like property tax. But board members called the idea "revolutionary" and said there is no method to figure out the value without the intangible assets.

"As tragic as Sept. 11 was, we hate to change the methodology to appraising these hotels," said Deputy District Attorney Mike Davidson, who was acting as counsel for the board.

Board member Jared Shafer, the county's public administrator, grilled Kimmel on why Station Casinos would buy the Reserve for $66 million in January 2001 if owners didn't believe that was what it was worth.

"Your client paid $66 million," Shafer told Kimmel. "Don't you think that's what he thought it was worth?"

Kimmel said what Station paid might not have been the true value on the market, but the Station Casinos desperately wanted out of Missouri and wanted to control the casinos in the Henderson area.

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