BANGOR, Maine — Officials for Hollywood Casino, which is claiming the city overvalued its Bangor properties by $36.8 million, made little effort to win its tax appeal before the Bangor Board of Assessment Review on Wednesday.
Instead, Jonathan Block, an attorney for the casino, said they were still in the process of getting a new appraisal that would be presented when the casino appeals to the Maine State Board of Property Tax Review.
“We will be dealing with that at the next level. I’m sorry to disappoint you if you were wanting to get into it, but we’re just not at the point where we can do that,” he said.
Casino officials chose not to submit an appraisal by the international auditing firm Ernst & Young, which reportedly showed the property’s value at $61.38 million compared with the city’s assessed value of $98.18 million for the 2014 tax year, according to casino officials.
Block said that appraisal, which covered all Penn National properties, was not done for tax purposes.
Without an appraisal to consider, the board voted 5-0 to reject the casino’s appeal, finding the gaming outfit had not provided sufficient evidence to show the city’s assessment substantially overvalued the property or was conducted in a manner that was manifestly wrong.
The casino has 60 days to appeal the decision to the state board of property tax review.
In an opening comment to the board, Block laid out the casino’s argument in the dispute, arguing the city’s assessed value of the casino should not include the value of the casino’s gaming license.
Under state law, only real and personal property can be taxed. Intangible properties such as intellectual property or various licenses should be excluded from taxation unless they are inextricably tied to the property.
Block argued the gaming license should be excluded in the casino’s case, because the license cannot be transferred to another entity in the event Penn National sells the casino.
He also argued that softness in the economy and increased competition has made the casino property less valuable.
“The bottom line is that the supply of casinos is exceeding the demand,” he said.
William Dale, an attorney for the city, did not deny the city’s valuation included the gaming license.
Instead, he noted that in both cases regarding the taxation of intangible property — one regarding a hydroelectric dam between Waterville and Winslow and another regarding a housing development in Augusta — the state supreme court has ruled against the taxpayer.
The dispute seems destined to go all the way to the Maine Supreme Judicial Court, he said.
“The question is what about here? And I think the answer is going to be whatever the majority vote of the Maine supreme court, the seven justices, what they say,” he said.
The board will meet Thursday to vote on a written decision reflecting its decision to deny the casino’s appeal of Assessor Phil Drew’s denial in May.
Board members appeared unconvinced by the casino’s arguments regarding the gaming license.
“Isn’t the main function of this facility a casino, and therefore, wouldn’t this gaming license be inextricably intertwined with its use?” said board member Ezra Willey during discussion.
They also appeared unconvinced by arguments related to increased gaming competition and softness in the economy.
“Does that set a precedent that every time a new business starts selling coffee we should then reduce the value of other coffee shops?” said Chairwoman Marianne Lynch.
If the casino succeeds in its efforts, the city will be forced to refund $876,849 of the $2.6 million already paid by the casino for the 2014 tax year.
The refund would exceed the $322,150 the city has reserved to cover tax abatements and write-offs.
Follow Evan Belanger on Twitter at @evanbelanger.