The owner of the North Suffolk Hilton Garden Inn, Harbour View Hotels, has filed a real estate assessment lawsuit against the city of Suffolk. The city now faces potentially three suits claiming unfair assessments.

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Suit claims inflated Hilton assessment

Published 9:24pm Monday, February 11, 2013

Yet another lawsuit seeking a refund on real estate taxes and a “fair” assessment has been filed against the city of Suffolk, this time involving a prominent commercial property in North Suffolk.

Harbour View Hotels, owner of the Hilton Garden Inn on Harbour View Boulevard, filed the suit with the Circuit Court last Friday.

The property was over-assessed by $4,081,200 this fiscal year and in 2011-2012, when the city assessment was $13,381,200, and by $2,820,000 in 2010-2011, when the city assessment was $12,120,000, the company claims in a court filing.

“The city of Suffolk … assessed (the property) at more than its fair market value, and levied real property taxes based upon the erroneous assessments,” the filing says.

Harbour View Hotels, which has paid taxes on the property for 2010-2011 and 2011-2012 but owes the city $134,124.66 for the fiscal year ending in June, requests a tax refund of $117,539, plus interest and court costs, the filing says.

The filing claims that a real estate appraising and consulting service, contracted by Harbour View Hotels’ first mortgage lender, BB&T, valued the property at $9.3 million.

BB&T subsequently sold the underlying note secured by the property for “substantially less than $9.3 million,” the filing says.

“The fact that it (BB&T) sold the note for even less than $9.3 million adds to the argument that it (the property) was over-assessed,” said Mark Bowman, an attorney on the case for Harbour View Hotels.

In potentially three suits, the other two involving residential parcels in the Governors Pointe and Pitchkettle Estates subdivisions, the city now faces a combined tax-refund bill of $251,316.41.

Each suit claims the city’s assessing methods are flawed, and that assessments have not been reduced to reflect the distressed market.

In the Hilton case, the city used “a standardized and arbitrary methodology which did not include consideration of the peculiar characteristics of the property or the economic conditions affecting the property (and similar properties) … and which methodology, among other things, assessed the value … an amount in excess of the fair market value,” the filing claims.

Harbour View Hotels made “diligent efforts” to bring the assessment error to the attention of the city, which “refused” to correct the assessment and “continued to repeat the error in every subsequent assessment,” the filing claims.

Spokeswoman Debbie George stated Monday that the city is yet to be served with the lawsuit. She previously has said that the city does not comment on pending or potential litigation.

The city does not have an incentive agreement with the North Suffolk Hilton Garden Inn, George added. The city does have such an arrangement with the downtown Hilton.

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