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trialzoning

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Twin Lakes Golf and Country Club v. King County, 87 Wash.2d 1, 548 P.2d 538

Facts

The Twin Lakes Golf and Country Club owned an 18-hole golf course that was assessed a value of $660,600 by the King County Assessor for tax purposes. The golf course was part of a planned unit development (PUD) and was subject to zoning and conveyance restrictions that limited its use and required it to remain as common open space. The club had consistently operated at a financial loss, with annual losses ranging from $22,331 to $44,734, and the property had no buildings or structures, consisting only of fairways, greens, and sand traps.

The Twin Lakes Golf and Country Club was incorporated in 1966 and since then consistently has incurred losses from the operation of the clubhouse, the golf course, and other club facilities. Primarily as a result of the club's lack of income and because of a lack of data on comparable sales of golf courses, the assessor computed and determined the value of the realty by the cost approach, I.e., cost of reproduction, appraisal method.

Issue

Whether the golf course has a 'fair market value' for tax assessment purposes given the zoning and conveyance restrictions and its history of financial losses.

The dispositive issue is whether the golf course has a ‘fair market value’ for tax assessment purposes. The property is encumbered with both zoning and conveyancing restrictions regarding use and nonalienation of the realty, and has a history of operating at a substantial, apparently unavoidable, financial loss every year.

Rule

For property tax purposes, the market value of realty is measured by considering the benefits to be garnered from its use and the burdens placed on it, including zoning restrictions and financial performance.

RCW 84.40.030 establishes the standard of valuation. It provides, in part: All property shall be valued at . . . 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 by examining the significant restrictions on the golf course's use due to zoning and conveyance limitations, which rendered the property a servient estate for the benefit of the residential lots in the development. The court noted the golf course's consistent financial losses and concluded that these factors collectively indicated that the property had no fair market value for tax purposes.

We are persuaded that the trial court properly concluded (1) that the golf course had no fair market value as of January 1, 1972, and (2) that the taxes in question should be refunded.

Conclusion

The court affirmed the trial court's decision that the golf course had no 'fair market value' as of January 1, 1972, and ordered the refund of the taxes collected.

The judgment of the trial court should be affirmed. It is so ordered.

Who won?

Twin Lakes Golf and Country Club prevailed in the case because the court found that the golf course's use restrictions and financial losses negated any fair market value for tax assessment.

The trial court found and concluded: (1) These restrictions encumbered the property and made the realty a servient estate for the benefit and use of all lots in the development and substantially and adversely affected the value of the golf course.

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