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appealhearingtestimonycorporationnonprofit

appealtestimonycorporationnonprofit

Related Cases

Sahalee Country Club, Inc. v. State Bd. of Tax Appeals, 108 Wash.2d 26, 735 P.2d 1320

Facts

The Sahalee golf course, owned by a nonprofit corporation with 500 members, occupies approximately 212 acres and consists of 27 championship-quality holes. It is surrounded by a residential community of about 500 homes, with no ownership rights granted to lot owners over the course. The King County Assessor appraised the fair market value of the course at approximately $3.3 million, but the Board of Equalization initially valued it at zero due to claimed financial losses and restrictions on use. After a two-week hearing, the Board of Tax Appeals determined the value to be $3.1 million, leading to the appeal.

The Sahalee golf course is owned by Sahalee Country Club, Inc., a nonprofit private corporation with 500 shareholding members. The club itself consists of a golf course, club house, parking lots and other improvements. It occupies approximately 212 acres on a plateau east of Lake Sammamish. The course consists of 27 holes and is of championship quality. In fact, Golf Digest each year recognizes Sahalee as one of the best 100 courses in the country.

Issue

Did the Board of Tax Appeals err in valuing the Sahalee golf course at $3.1 million, given the restrictions on its use and its alleged unprofitability?

Rule

Real property must be valued at its true and fair value in money, interpreted as fair market value, which considers the benefits and burdens of property use.

The starting point for real property valuation is RCW 84.40.030, which provides that all real property 'shall be valued at one hundred percent of its true and fair value in money and assessed on the same basis unless specifically provided otherwise by law.'

Analysis

The court applied the rule of fair market value by examining the evidence presented, which showed that despite restrictions and claims of unprofitability, the Sahalee golf course retained significant market value. The court noted that the property had been used as collateral for a loan and that expert testimony indicated potential interest from investors, which contradicted the claim for a zero valuation.

The record clearly shows that Sahalee has market value despite the restrictions and the questionable profit history. First, similarly restricted golf courses around the western United States had significant market values. Second, a 'sophisticated lender' took the property as security for a $925,000 loan in 1969. Third, expert testimony established that investors would be interested in the property if it were listed for sale.

Conclusion

The court affirmed the Board's decision, concluding that the Sahalee golf course had a fair market value of $3.1 million.

The Board's decision is affirmed.

Who won?

The Board of Tax Appeals prevailed because the court found substantial evidence supporting the valuation of the golf course at $3.1 million, despite the club's arguments for a zero valuation.

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