From the Coastal Dispatch
OCEAN CITY – Local residents and visitors to the resort from all over the country are bemoaning the potential loss of the landmark Trimper’s Rides brought on by staggering property tax increases, but hope remains the historic amusement park on the Boardwalk could be saved if the assessment can be overturned on appeal.
It remains to be seen if the Trimper’s Board of Directors can be successful in its attempt to appeal the most recent assessment of the property’s value, which increased by 163 percent in three years from $29.6 million to $77.9 million, but there will be ample opportunity for the owners to make their case.
State Director of Taxation and Assessment for Worcester County Robert Smith said this week the Trimper’s have appealed the most recent assessment and his office would go to great lengths to ensure it is accurate.
“We’re going to carefully review the Trimper property from every angle,” he said. “We’re going to compare it with other properties, we’re going to compare it with the market and we’re going to revisit every line of the assessment,” he said. “That would be done for any property owner who files an appeal.”
Smith could not elaborate on the details of the Trimper assessment because it is currently under appeal, but he did say his office would not hesitate to make the appropriate adjustments if and when any errors were found.
“If we find an error, we’ll be glad to correct it, just as we would with any property that is re-evaluated,” he said.
It remains uncertain why the assessed value of Trimper’s Rides has skyrocketed in the last three years when the use of the property has remained relatively unchanged for decades, but it is not because the assessment office bases new values on what a property could become in the future. Smith said it was a misconception property assessments are based on what could be the “highest and best use” of the land.
Trimper Vice President Doug Trimper said the assessment office made its latest determination of the value of the property based on an erroneous vision of what it could become in the future if the park ceased to exist.
“In spite of a glut in the Ocean City condominium market, assessments are based on a ‘what if’ mentality,” he said. “Ground level, single-story businesses cannot compete with government-imposed airspace assessments of stacked condos on property.”
However, Smith reasserted the assessed values of a property are based strictly on its current use and no consideration of what the property could become is factored into the equation.
“We don’t assess property on the ‘what if,’ we assess property based on what is on the property at the time of the assessment,” he said. “We may privately consider what the best and highest use could be, but it is not a determining factor in the final assessment of a property.”
Detractors of the assessment process point out the intended or unintended side effect of exorbitant increases is forcing property owners to cave in to developers looking to gobble up land for redevelopment because they can no longer afford the taxes. In the Trimper’s example, property taxes have increased by $500,000 in three years, forcing company leaders to consider abandoning the park after 120 years and weighing whether to sell or develop the property.
Smith, however, dismissed the notion his office is speculating on the potential value of a property when preparing an assessment.
“I’ve heard it said we are basing the assessments on the highest and best use of the land, but that’s simply not the truth,” he said. “Now someone might recommend the best use of that land is condos and that might be true in some examples, but we’re not in the recommendation business. We’re in the numbers business.”
Doug Trimper has said his family business is faced with the decision to raise prices to offset the staggering increase in property tax or consider selling off the property for some other future use. Given the reported amount of red ink flowing in the company’s books, Trimper’s Rides is leaning toward the latter unless they get some sort of relief.
“This is not just about us surviving, it is all business in the area, and all visitors, too,” he said. “Who wants to pay ridiculous prices for Boardwalk items jacked out of sight by extreme taxes or extreme rent from owners paying extreme taxes, just so that developers can stack more condominiums?
Some have suggested the assessment office is forcing property owners’ hands by making recommendations on what the best and highest use of their property is, but Smith said his office does nothing of the sort, intentionally or unintentionally.
“The assessment office has never recommended to a property owner what to do with his or her property in any situation, including the Trimpers,” he said. “We’re not in the business of making recommendations on the best use of the land. We simply assess the value based on what is already on the ground.”
Smith reasserted his office does not give any consideration to potential future development of a property when preparing its assessment. He cited the current real estate and condominium climate in the resort to illustrate his point.
“We know condos are the big thing in Ocean City right now,” he said. “As of today, there are 11 new condos registered to be built in Ocean City. What does that tell us? Is the market good or is the market bad? We don’t know. We simply follow the market, we don’t set the market.”
Resident property owners in Worcester County and Ocean City are protected from exorbitant tax increases based on assessments by the Homestead Cap, which limits the amount of tax increase regardless of increases in the assessments. However, no such cap is afforded local owners of commercial properties. Smith said the idea has some merit for locally owned commercial property, but does not currently exist.
“I’m sure it has been discussed, but that would have to be a legislative change,” he said. “It would be problematic because local commercial property owners likely also live here and they wouldn’t be able to use the cap for both their home and their business. I don’t think they could have it both ways.”
The highest and best use argument transcends the debate about the assessment for Trimper’s and there are many examples all over the county where the same debate can be applied.
For example, if a property owner owns 30 acres of beautiful waterfront land in Worcester County, but only has his or her house on it, the assessment reflects the market value of the house and the land itself. It is not based on what the property could become, it is assessed on what it is at the time of the assessment.
“In that example, even if we determine there are 20 buildable lots on that 30-acre property and they could be sold for $90,000 based on market value, we don’t assess that property for $1.8 million, we assess it based on the condition of the property at the time,” he said. “Now if the property owner went to the county planning office and submitted plats for 20 home sites, that would change everything.”
