April 10--NASHUA -- The city lost its court challenge brought by the owners of the Radisson Hotel and now will have to cut a tax refund check to the company.

A Hillsborough County Superior Court judge in March ruled in favor of AFP 105 Corp., and then on Monday dismissed the city's motion for reconsideration.

The city assessed the hotel at nearly 46 percent more than its true value, according to the ruling of Judge Jacalyn Colburn.

Colburn ordered the city to reimburse the company for taxes based on the over-assessment plus interest.

David Fredette, the city tax collector and treasurer, wasn't immediately available to comment on how much the city owed or whether it's yet been paid.

At a hearing in February, attorneys for the city defended the assessment of the hotel as fair market value. In 2010, the city assessed the hotel at $10.7 million for the building and $5.4 million for the land, for a total assessment of $16.1 million. A year later, in 2011, the hotel was assessed slightly lower at $10.6 million, while the value for the land remained the same.

Based on city assessments, the hotel owners paid $319,682.43 in taxes in 2009, $329,037.72 in 2010, and $335,798.90 in 2011, according to city tax records.

AFP's assessor, Wesley Reeks, of Bedford, placed the fair market value for the total property far lower, at $6.7 million for 2009, $4.9 million in 2010, and $5.8 million in 2011.

In its motion asking the court to reconsider its ruling, city attorneys argued that Colburn interrupted the testimony of AFP's assessor three times to explain that she "had extensive professional experience as a real estate broker before her career commenced as an attorney and as a judge," according to court documents.

Colburn's statement "impressed upon the parties and the witnesses that she was not a layperson without experience in appraisal and evaluation matters," the city argued.

The comment seemed to indicate that the assessor's "expert testimony on his valuation methodologies was not necessary," according to the motion.

In denying the motion, Colburn wrote that "far from excusing either party from the need to present expert testimony, the trial judge's comments were provided as a courtesy to both parties simply to alert them that the Court was not completely unfamiliar with the real estate industry."

With castle-like turrets easily visible from the F.E. Everett Turnpike at the state line, the Radisson sits on 16 acres at 11 Tara Blvd., off Spit Brook Road.

AFP Corp.'s parent company, United Capital based in Great Neck, N.Y., bought the Radisson for $5.5 million in a foreclosure sale in 2007. It closed briefly under its previous owner, Southern New Hampshire Hospitality, based in Portsmouth.

The hotel remains open and is being remodeled, AFP's attorney said at the hearing.

The entire hotel industry was hurt by the economic downturn, and the Radisson has capacity above what it can fill, what's called functional obsolescence in the hotel industry, the attorney said in arguing the hotel wasn't worth the figure set by the city for tax purposes.

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