Last Friday’s auction result could mean lower taxes for most of the commercial property in West Wendover.
Last week the long defunct Rusty Palms was purchased at auction by former Wendover, Utah mayor and entrepreneur Steve Perry for $450,0009 see related story this page). According to the most recent valuation from the Elko County Assessor’s office the property had a valuation of $815,000 for both property parcels that make up the Rusty Palms.
The bargain will first of all have an immediate impact on the property’s own tax assessment which barring any immediate major improvement cannot be much more the $450,000 auction price.
The secondary impact could however be much greater in two distinct ways. The most expensive property zoning in West Wendover is for casino/commercial like the Rusty Palms. Since the property sold for just 55 percent of the country’s valuation other property owners could ask for a re-valuation of their own parcels and while it is unlikely that anyone would see a 55 percent reduction in property taxes, a reappraisal could see a significant drop in property values across the board. The last time there was such a readjustment in property values came during the sell off of the bankrupt StateLine properties in 2003.
Valued at $83 million before it declared bankruptcy the StateLine properties ultimately sold for $56 million in 2003. As a result the $900,000 bill in arrears property taxes was slashed to $500,000.
The loss of back taxes was not the worst part of the revaluation while the West Wendover and Elko County also saw declines of current property tax revenue when commercial property owners either sought redress to their own property tax bills or expected property tax increase simply did not take place.
While Elko County dependent on property tax for 10 to 15 percent of it total budget was able to weather the reduction without any major budget cuts the same was not true for West Wendover.
With a much smaller tax base and an economy totally dominated by the gaming industry West Wendover was forced to cut its budget as well as put off projects it had thought it could begin.
The loss in public revenue was also accompanied by recession in the private sector which further reduced tax revenue.
But while the public purse may become shallower in at least the short run a dramatic drop in property values could be just what endeavor needs to get the border town out of its decade long plus no growth funk.
Wendover has not seen a new major casino since 1986 and while there has been some commercial growth the pace of growth has been nowhere near the breakneck pace it was in the 1970’s, 80’s, or 90’s when the border town earned the crown as the fastest growing city in the state.
Much of the reason for the stand still according to developers is that land was over priced by real estate speculation.