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Casino Assessment Situation Discussed By Conference Board

By Staff | Feb 14, 2008

The ongoing dispute over the valuation assessment for the Wild Rose Casino and Resort was discussed during the annual meeting of the Palo Alto County Conference Board on Tuesday, The board also gave its approval of the proposed budget for the Palo Alto County Assessor’ 2008-2009 fiscal year during the gathering.

The Conference board is comprised of the five Palo Alto County Supervisors, along with representatives of the four school districts in the county and the mayors of the various communities in the county. For Tuesday’s session, four mayors, three school board members and all five supervisors were on hand, along with members of the Emmetsburg City Council, members of the Palo Alto County Gaming Development Commission and representatives of the Wild Rose Casino and Resort.

The discussion was part of Assessor Lois Naig’s annual report on the year’s activities of the office. Naig gave a brief review of the history of the assessment for valuations of the Wild Rose facilities, starting with construction in 2005. After an initial valuation was placed on the property, Wild Rose officials protested the valuation to the county’s board of review, but their appeal was denied. An appeal was made to the district court, where an out-of-court settlement was reached for the 2006 valuation.

“In 2006, the property was up and running for seven months before the next assessment came out,” Naig reported. “They protested that valuation to the Board of Review, which was denied, and they went on to file with the Property Assessment Appeals Board. We had our hearing January 23 and I’m waiting for a decision on that. Final attorney’s briefs are due at the end of February and we’ll see what their decision is on that.”

At that point, Emmetsburg Mayor John Schad addressed the meeting.

“As a member of this board I wanted to get this information to all the Conference Board members, that we have received a fax from the casino executives saying that they have decided that they will no longer invest in Palo Alto County,” Schad said. “The fax is very explicit. It states that they’re not going to improve the country club, may even sell off what they own there, they’re not going to build the condominiums – many millions of dollars of valuation lost there, they’re selling off the apartments they have here in town and the gist of it is that until Lois Naig changes her opinion and way of doing things, there will be no more investment in Palo Alto County by Wild Rose executives.”

Schad added, “This is a serious problem for Emmetsburg right now. It’s a serious problem for all of Palo Alto County as we go into the future.”

According to information supplied by Schad, the difference between what the Wild Rose contends should be its valuation and the valuation proposed by Naig is a difference of about 15 percent of the total revenues coming out of the casino, including payroll for roughly half of the casino’s employees.

“What I was hoping we could do, and I know we can’t take a vote on it, we can’t do anything directly, except perhaps to express our concerns, like I’m doing, to Lois that there is more money to be had for Palo Alto if we treat the casino better,” Schad said. “They’re our Mothership, they are the ones that are really bringing in an awful lot of jobs and revenue to our community, and to make them mad over a small amount of money doesn’t, to me, or to a lot of people here, make a lot of sense.

“ I don’t know if we need to carry it any further, Lois, but I wanted to get it in the record of this meeting that there is some dissention and maybe there’d be a better answer than to go after a high assessment,” Schad added.

Schad pointed out that the Northwood casino, which has four times the business and floor space, cost $29 million to build and was assessed at $15 million.

“We have a very high assessment,” Schad declared. “No one else in the entire state of Iowa is as high as we are. By coming down that few thousand dollars, we can make this casino much happier and we can hope to recoup, and I don’t know that we can do this, but I hope that we can recoup some of the lost opportunities.

Naig reminded the group that the Iowa Code requires the assessor to assess at 100 percent of full market value.

“Right now, it’s at the Property Assessment Appeals Board to make that decision what value I put on it and when I get that decision, that’s going to be the value I put on it,” Naig answered.

“For those of you who haven’t seen the memo, it’s devastating to Emmetsburg, it really is” Schad replied. “I don’t think that we’re gaining, I mean we’re losing ground fast here because we’re just planting our feet, rather than saying ‘OK, look we can make this better’ and I think it’s important that everybody here on this board understand where we are. We have the opportunity to fix this.

Nancy Umstead, West Bend-Mallard School Board representative, noted that a couple of years earlier, Naig had indicated an outside appraiser would be used to put a valuation on the facility. “Has that been done and what were the results?

Naig replied that the outside appraisers were the ones who came up with the valuation that was being used.

Schad elaborated, noting that two appraisers had been hired, one by Naig on behalf of the county, and the other by the casino. The casino’s appraisal came in at around $13 million, and the appraisal by the county’s firm came in around $21 million. “That’s the differential that we have that’s making the problem.

When asked how Naig chose the county’s appraisal firm, the Assessor replied that the firm that was hired, the firm had done the appraisals on the other three casinos licensed at the same time that the Wild Rose was licensed.

“The Property Assessment Appeals Board has all four of those appraisals from that appraiser,” Naig added, “not just ours, but all the others to see if we’re in line.

Naig was asked if the assessment could be changed from what the state board determines.

“I would say that would be law from them,” Naig replied. “That would be their decision, and I would say that should be what it should be. That’s why this neutral party is going to make this decision for us.

Schad pointed out that the ruling would only apply to the 2007 tax valuation. “What’s 2008? 2009? because we’ve already fought this battle twice and I can see the point of the casino executives saying, ‘Why fight it?’ If we can come up with something and go to them and say ‘Look, this is what we think is fair, would you guys agree to this?’ and then we would have a half-way course in the future that wouldn’t put us at odds with them every year.”

Following the discussion, the Conference Board voted to begin work on the Geographic Information Service project that Naig and various county offices have been earmarking money for over the past few years.

The board also reviewed Naig’s proposed budget for the upcoming 2008-2009 fiscal year, and noted that the overall budget rose 2.83 percent over the current year, from $251,043 to $258,136. Salaries for the staff of the Assessor’s office were increased by 2.8 percent, the same amount as other courthouse officials. However, the board members noted a decrease of $1,000 for insurance costs. On a motion by Supervisor Jerry Hofstad, the budget was approved on a unanimous vote.