Tax Settlement Expected

September 27, 1994|By Lorraine Mirabella | Lorraine Mirabella,Sun Staff Writer

Developers of the HarborView condominium tower overlooking the Inner Harbor expect to settle soon a dispute with the state that would lower the Key Highway property's assessed value by $21 million.

The settlement, which would resolve one of three appeals that HarborView Properties Development Co. has made to lower its state property tax bill, could save the project nearly a half-million dollars a year.

The case involves the value of the land surrounding the 248-unit high-rise. HarborView also has appealed $17.1 million of the state's $18.9 million valuation of the tower -- the first of six proposed high-rises in what developers envision as a $600 million, self-contained waterfront village, one of the city's biggest private residential developments.

"We are hopeful that errors will be fixed and the whole thing will be resolved," said Stuart Hettleman, HarborView's executive vice president. "The state was under a lot of pressure to get this done under a certain time frame and made some mistakes."

In establishing a value for the land surrounding the high-rise, state assessors mistakenly included a waterfront promenade and other public areas near the tower in a $26.4 million value given part of the site for the current tax year, said Owen Charles, head of the city's tax office within the state's Department of Assessments and Taxation.

After HarborView questioned the value and the state discovered its error, Mr. Charles said, the state offered to reduce the $26.4 million to less than $6 million, the value that has been assigned to an underground garage. The garage will serve as the base for a second tower, which developers plan to start building next year.

Mr. Hettleman said his company was studying the state's offer and declined to comment further.

To establish a property's value, assessors typically review breakdowns of the property's subdivisions and assign values based on plans for the sites. Areas used by the public, or shared by tower residents, should not have been included in the assessment, Mr. Charles said.

State assessors said they stand by the existing tower's value. They determined the value before the end of July, based on expected sales prices of the 248 condominiums -- excluding units that already had sold. Taxes on those units are paid individually by their owners. The values of properties are further adjusted to take into account situations such as vacancies in office buildings or slow sales in residential buildings.

While these latest two appeals could be settled quickly, a third appeal has moved more slowly.

The developer first appealed an assessment when the 42-acre former shipyard site was divided into seven lots in 1991. HarborView won a $4.1 million reduction on a $15 million assessment from the Property Tax Assessment Appeals Board, and the state appealed the ruling to the Maryland Tax Court. That case is pending.

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