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Roque Island Gardner Homestead Corp. v. Town of Jonesport

Supreme Court of Maine

July 11, 2017


          Argued: February 6, 2017

          John B. Shumadine, Esq. (orally), and Peter L. Murray, Esq., Murray, Plumb & Murray, Portland, for appellant Roque Island Gardner Homestead Corporation.

          Erik M. Stumpfel, Esq., and Jonathan P. Hunter, Esq. (orally), Rudman Winchell, Bangor, for appellee Town of Jonesport


          HJELM, J.

         [¶1] Roque Island Gardner Homestead Corporation ("RIHC") appeals from a judgment entered in the Superior Court (Washington County, Stokes, J.) affirming the Town of Jonesport Board of Appeals's denial of RIHC's request for a municipal tax abatement for 2014. RIHC argues that evidence presented to the Board compels the conclusion that the Town's valuation of its property was unjustly discriminatory because the assessment rate for island structures-such as those on its land, Roque Island-is higher than for structures located on the mainland. Because the record does not compel the conclusion that the rate differentiation is unjustly discriminatory, we affirm the judgment.

          I. BACKGROUND

         [¶2] The Board of Appeals held a two-day hearing on RIHC's application for an abatement of its 2014 municipal property tax.[1] At the hearing, the Board was presented with the following evidence.

         [¶3] RIHC, a nonprofit entity organized under Maine law, owns the entirety of Roque Island, which is located in the Town of Jonesport. The property consists of 1, 242 acres of land, with five houses and numerous outbuildings. Roque Island is a homestead that has been owned by the same family since the early 1800s.

         [¶4] In 2010, the Town hired a certified private assessor and evaluator to conduct a revaluation of all properties in the Town. The private assessor used "TRIO, " which is State-approved assessment software, to develop property valuation formulae. The TRIO formulae, which are differentiated by neighborhood, calculate separate land and building values for a given parcel. Those values are combined to determine a total assessed value for the property.

         [¶5] The calculations are a function of the character of the neighborhood where the property is located, so that, for example, the land values of shorefront property on the mainland are subject to a multiplier to reflect the greater market value of waterfront real estate. In contrast, land values for island properties are calculated at a lower rate because those parcels are not benefitted by certain services that mainland properties receive. Conversely, building values on islands are subject to an "economic obsolescence factor" of 200%-resulting in a greater assessed value than a comparable mainland structure would have-because of the additional cost of building on an island.[2]

         [¶6] The Town assessor testified that the 200% multiplier is used to determine the assessed value of island structures due to higher construction costs on islands, which results from the expense of transporting materials and workers-something she had confirmed through communications with building contractors, who reported that they double their regular charges for island construction. The assessor further testified that she had learned from other municipal assessors that although other municipalities might not use an economic obsolescence rate as Jonesport does, they employ other valuation techniques that result in higher assessments for island structures.[3]

         [¶7] Due to an oversight by the Town assessor's office, the economic obsolescence factor originating with the 2010 revaluation was not fully applied to the assessment of the structures on Roque Island until the 2014 tax year. When the Town then applied the factor to the Roque Island property, its total valuation increased by 52% from the previous tax year. RIHC sought an abatement from the resulting property tax increase, and when that application was constructively denied, it appealed to the Board. See supra n.l.

         [¶8] On that appeal, RIHC contended that the 200% economic obsolescence factor for island buildings constituted unlawful discrimination and sought an abatement of $1, 305, 150 from the 2014 building valuation assessment of $2, 609, 846, which would result in a property tax reduction of nearly $20, 000. After deliberations during the public hearing, which was held in July and September 2016, and in a written decision, the Board denied RIHC's abatement application. The Board concluded that once the 2010 revaluation formulae were applied to the Roque Island property for the 2014 tax year, RIHC's "buildings were now being taxed consistently with other buildings on islands." The Board further found that although "there are no ...

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