Board of Assessment Appeals No. 57632.
Letofsky & Dombrowski, Inc., Steven F. Letofsky, Frisco, Colorado, for Petitioner-Appellant.
John W. Suthers, Attorney General, Claudia Brett Goldin, First Assistant Attorney General, Robert H. Dodd, Jr., Senior Assistant Attorney General, Denver, Colorado, for Respondent-Appellee.
JUDGE TERRY. Casebolt and Vogt[*], JJ., concur.
[¶1] Petitioner, The Village at Treehouse, Inc. (the Village), appeals an order of the Board of Assessment Appeals (BAA), which found that the development rights the Village had acquired to build new condominium units constituted a taxable interest in real property for ad valorem tax purposes. As an issue of first impression, we decide that such development rights are taxable, and therefore affirm.
[¶2] The material facts in this case are not disputed. The Village paid more than one million dollars to purchase the development rights from the Treehouse Condominium Association, Inc. (the HOA). The development rights gave the Village the right to construct up to nineteen condominium units at the Treehouse Condominiums, a complex that was originally built in the 1970s in the Wildernest subdivision in Summit County, Colorado.
[¶3] The development rights were created by an amendment to the Treehouse Condominiums' declaration in 2006 and conveyed to the Village by the HOA in 2008 in a document entitled " Warranty and Assignment of Supplemental Development Rights" (the Assignment). Since the date of the Assignment, four units have been constructed, incorporated into the Treehouse Condominiums, and placed on the tax rolls. The Village conveyed a fee interest in those units and kept the proceeds from their
sale. It retained the development rights to the remaining fifteen units, and those rights cannot expire.
[¶4] For the 2009 and 2010 tax years, the Summit County Assessor created a separate tax schedule for the development rights and assessed the Village. After the Village requested an abatement and refund of the tax, the assessment was cancelled, and the Summit County Board of County Commissioners approved the cancellation.
[¶5] Pursuant to sections 39-1-113 and 39-2-116, C.R.S. 2013, the Property Tax Administrator (Administrator) was required to review the abatement and refund of the property taxes because they were in excess of $10,000. After review, the Administrator denied the refund, and the Village petitioned the BAA to reverse the Administrator's decision. The BAA held a hearing and issued a written order upholding the Administrator's decision. The BAA concluded that the development rights were " permanently and irrevocably severed" and constituted taxable interests in real property for ad valorem tax purposes. This appeal followed.
[¶6] The Village argues that the development rights conveyed to it by the Assignment are not taxable because (1) they are not interests in real property; (2) they are already included in the value of the Treehouse Condominiums common elements; and (3) taxing them would violate the unit ...