By JEFF SCHULTZ
The Porter County
Property Tax Assessment Board of Appeals Tuesday heard Porter hospital’s
appeal of its $242.8 million assessment.
have appealed the County Assessor’s $242.8 million March 1, 2013 assessment
on the 430,000 sq. ft. Porter Regional Hospital at 85 E. U.S. Highway 6,
The appeal filed in
November contends that the hospital should be assessed at $39 million
including the $1.7 million in assessed value for the land according to state
The higher figure
set by the County Assessor is based on work by an outside appraiser.
for the hospital, Donald Feicht of Uzelac & Associates of Valparaiso, said
the appeal was made because Assessor Jon Snyder did not use the state’s
assessment model contained in the most recent real property assessment
“We don’t know what
(Snyder’s) methodology was,” said Feicht.
Snyder has called
the hospital “a unique property” and contends that the Indiana Department of
Government Finance gives county assessors the choice of appraisal methods in
order to come up with a “fair and equitable assessment.”
Feicht said both
the 2002 and 2012 real property assessment manuals mention that full line
hospitals are to be assessed as general office. However, data for cost
models related to actual construction costs for hospitals was not included
in the tables for office buildings, Feicht said.
In other materials
given as evidence to PTABOA President Joe Wszolek and Vice-president Vicki
Urbanik, Feicht included a copy of a letter he received from DLGF Assessment
Division Director Barry Wood who said he was unsure as to why specific cost
models for hospitals were not included in the DLGF’s manual and suggested
that medical office cost models could be a closer assessment model for
said the assessment manual indicates that true tax value does not mean the
same as fair market value and that an assessment under the guidelines is to
be the correct and true tax value.
that’s Snyder’s appraisal was “unauthorized and beyond the scope he is to do
with the assessment guidelines.”
Snyder said the
appraisal done by Jack Poteet of the Kansas-based Hospital Appraisal
Services used three standard approaches recommended by the DLGF to get the
market in-use value Ð the cost approach, the sales-comparison approach and
the income approach. All three arrived within 1 percent of the same value of
each other, Snyder said.
The manual on the
three standard approaches also mentions that standard appraisal and
valuation published by the Appraisal Institute and the International
Association of Assessing Officers are acceptable for determining the market
value-in-use, Snyder said.
To complete the
appraisal, Snyder had filed a petition for a writ of production of books and
records with the Porter County Circuit Court and told the PTABOA the copy of
the appraisal given to them contained confidential information.
accepting the $39 million assessment over the $244.5 million value offered
by Poteet would be “an injustice” suffered by the taxpayers since the
county’s overall tax value continues to drop.
Feicht said he has
looked at the property record cards of roughly 20 hospitals in Indiana and
Snyder is the only assessor in Indiana who deviated from the state manual in
configuring a value.
“On the other side
of the coin, maybe (Snyder) is doing it the right way,” Wszolek told Feicht.
Feicht if it was Snyder’s methodology or his assessment he was specifically
contesting. Feicht replied the appeal is the result of Snyder not following
the state’s guidelines.
Porter had appealed
tax values on 11 properties for 2013 but decided to withdraw all but the
U.S. 6 property.
In November, Porter
attempted to withdraw its 2012 assessment for Porter Regional Hospital but
was not able to do so given the timing before the PTABOA board got to review
There it said that
the Assessor’s Office was correct in assessing the amount at $34 million
because it was using the state’s manual guidelines. At the March 1, 2012
assessment date, the hospital was said to be 90 percent complete.
Wszolek and Urbanik assigned a new 2012 assessment at $117 million which
they believed to be the market-in-use values based on the construction costs
reported on the hospital’s tax abatement the County had on file. Porter’s
CEO at the time Jonathan Nalli signed the abatement form indicating the cost
to construct the new hospital was $130 million.
Porter ended up
appealing the PTABOA’s new assessment this past month to the Indiana Board
of Tax Review which will hear the case in Porter County.
Snyder said the
true value of the hospital is expected to be discussed at the Porter County
Council meeting this Thursday when the Council questions hospital officials
as to when the 10-year tax abatement is supposed to begin.
Wszolek said the
PTABOA board has 120 days maximum to make its decision on the hospital’s