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Omaha, Nebraska Hotels' Tax Valuations Rise as Occupancy Falls;
29 Hotels File Protests with the County

By Tom Shaw and Chip Olsen, Omaha World-Herald, Neb.McClatchy-Tribune Regional News

Jul. 22, 2009--With empty rooms and no end to the recession in sight, Douglas County hotel operators thought things couldn't get much worse.

Then came word from the County Assessor's Office: Property valuations on hotels and motels are shooting up this year.

The Assessor's Office changed valuations on 62 hotels and motels, mostly increasing their valuations. Twenty-nine properties filed protests with the county last month.

Consultant Monte Bowman, who represents 16 of the protesting properties, said the increases were unwarranted.

Bowman pointed to the valuation for the Kelly Inn at 108th and L Streets, which rose from $1.77 emillion to $5.18 million -- nearly tripling the tax value. That would lead to an annual property tax increase of almost $70,000 at current tax rates.

The typical valuation increase was 25 percent.

"It's not exactly a smart time to do it," Bowman said. "I can understand in a prosperous year, but going after them in a bad year?"

The Omaha Convention and Visitors Bureau reported this spring that occupancy rates at hotels in Douglas County were down 10 percent from last year. The recession has prompted leisure and business travelers to cut down on trips.

Barry Couch, chief deputy county assessor, said he understands that the increases come at a bad time for the industry. Last year, he said, would have been a better time to raise the valuations.

But the office has to follow market trends, Couch said, and sales records show that prices for hotels and motels have gone up in recent years.

"We've got a lot of sales," he said. "Motels typically turn over."

Even with the higher valuations, the Assessor's Office said, some properties are still valued below their recent selling prices. Officials said valuation increases on other hotels reflect substantial renovations in recent years.

The city-owned Hilton Omaha was not reassessed this year. Its valuation remained at $58.2 million, the highest of all Omaha hotels.

In addition to considering sales and improvements, appraisers can factor in income when considering protests on commercial properties. Couch said he invited protesting hotel owners to provide occupancy rates and business income information.

Independent appraisers hired by the county to review protests, called referees, are not finished making recommendations to the Douglas County Board. The board is scheduled to vote next month on the protests.

Bowman addressed the County Board on Tuesday about how the county handles protests. He asked the board to prevent financial information submitted by hotels and motels from becoming public. He said such information would give other hotels an unfair competitive advantage.

County Board member Mike Boyle said he'd like to see the county consider keeping that financial information confidential. But Diane Carlson, a deputy county attorney, told the board that state law favors public disclosure of such information.

Contact the writer:

444-1149, tom.shaw@owh.com

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Copyright (c) 2009, Omaha World-Herald, Neb.

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