Tax exemption for golf course may be restored

Friday, May 21, 1999 | 10:59 a.m.

A privately run Las Vegas golf course that lost its property tax exemption two years ago could have it restored under a bill that is awaiting approval by the state Senate.

Assembly Bill 668, which passed the Senate Taxation Committee Thursday, would restore the tax exemption to Angel Park Golf Club. Based on its current taxes Angel Park operator OB Sports of Minneapolis would save at least $180,000 next year.

The Angel Park course, opened in a city park in 1989, and all other privately run golf courses on public land in the county were exempt from property taxes until 1992. But the Clark County district attorney's office that year issued an opinion that eliminated the exemption, Clark County Assessor Mark Schofield said.

Angel Park protested its property taxes for 1993 through 1995, but its appeals were denied by the state Board of Equalization because it didn't file the protests in a timely manner, said Bob Ostrovsky, a lobbyist for the golf course.

Ostrovsky said the protests arose because Angel Park's original agreement with the city included a provision that the golf course operator wouldn't have to pay property taxes.

"The whole deal was struck with that in mind," he said. "The property taxes upset the financial structure of the deal."

In 1996 lawyers representing the Angel Park course convinced the district attorney's office to restore its tax exemption on grounds that it was located in a park, Schofield said. Angel Park's restored exemption was to last only one year, however.

Schofield and fellow members of the Nevada Assessor's Association believed the Angel Park exemption wasn't fair to operators of other golf courses on public land. In 1997 the association convinced the Nevada Legislature to rescind Angel Park's exemption.

The association came back to the Legislature this year with AB 668, which would have exempted Angel Park and three other golf courses on public land from property taxes as long as they met certain conditions. In addition to the Angel Park Golf Course the provision would have benefited the Las Vegas Municipal Golf Course, Desert Pines Golf Course and Desert Rose Golf Course.

$230,951 tax bill

The four courses paid $422,354 in property taxes last year. Angel Park paid the largest tax bill at $230,951. It is also the largest of the four operations with two 18-hole courses and a nine-hole course for a total of 45 holes. The other golf courses have a single 18-hole layout.

Desert Rose, operated by American Golf, paid $45,404 in property tax last year. Las Vegas Municipal Golf Course, run by Jim Colbert Golf Inc., paid $48,733. Desert Pines, run by Billy Walters' SWG Limited, was assessed $97,266 in property taxes.

Schofield said the assessors' turnabout decision to support a tax exemption for all four courses was prompted by a complaint from Walters. The Desert Pines operator said he learned that Angel Park's operator was planning to seek the property tax exemption again this year for itself. Walters complained that the tax break would give Angel Park a competitive advantage and Schofield agreed, which led to the introduction of AB 668.

In order to qualify for the tax exemption the assessors wanted the golf courses to establish a percentage of tee times for local residents and also charge them reduced fees. Schofield said all four courses agreed to those provisions.

"We tried to do it to benefit the local residents and treat all golf courses the same," Schofield said.

Ostrovsky said he didn't hold it against Walters for also attempting to be included in the tax break.

"You can't fault him for trying," Ostrovsky said.

But the Assembly amended the bill so that only Angel Park would get the tax exemption. The Senate Taxation Committee has agreed to that amendment. Schofield said he felt it was an "oversight" that the Assembly restored the exemption only to Angel Park because it once again creates inequity.

He tried unsuccessfully to convince the Senate Taxation Committee to restore the tax exemption for the other three courses.

Phil Green, project manager for the Angel Park Golf Course, said the course won't be getting off free with the tax exemption. In lieu of paying property taxes the course would have to pay an annual land license fee that was negotiated when OB Sports signed its 50-year Angel Park agreement with the city in 1989.

The fee would be used to pay for improvements benefiting areas of the park other than the golf course. Next year that fee would be $50,000, and would increase to $65,000 a year in 2001, $80,000 annually beginning in 2004, and $95,000 a year beginning in 2009.

However, the golf course would pay more in fees if those base figures were exceeded in any year by 3 percent of its gross revenue. Green declined to reveal Angel Park's current revenues but said the 3-percent provision is bound to kick in once OB Sports retires the long-term debt it incurred by building the course.

Under its agreement with the city, OB Sports was required to pay the land license fee only if it exceeded the amount paid in property taxes. But its property taxes have always been higher than the fees it would have been required to pay.

Park makes difference

Ostrovsky said that the course should be treated differently for tax purposes because it is in a park. In addition to the golf course the park has a jogging track, picnic tables, tennis courts and swings.

Ostrovsky said the other three courses sought to gain the parks benefit contained in AB 668, even though they are not in parks.

Schofield said he doesn't buy Angel Park's argument, however.

"If it were a public park, could you have a picnic on the ninth hole?" he said. "The answer is 'no.' "

Walters also doesn't buy Angel Park's argument. He noted that his Desert Pines course was built on the city's former Nature Park. He argued that the Angel Park course was no more a "park" course than his own.

"I didn't hire a lobbyist," Walters said. "I didn't think I needed a lobbyist. I got caught with my pants down, so to speak."