General Electric challenges tax value of Appliance Park - WDRB 41 Louisville News

General Electric challenges tax value of Appliance Park in Louisville

Posted: Updated: Oct 9, 2013 04:52 PM EDT
General Electric Co. is challenging the fair-market value of its massive Appliance Park General Electric Co. is challenging the fair-market value of its massive Appliance Park

LOUISVILLE, Ky. (WDRB) -- General Electric Co. is challenging the fair-market value of its massive Appliance Park campus in southeast Louisville -- a move that could cut the company's property tax bill by nearly half.

At stake is about $200,000 in annual revenue for taxing districts like Jefferson County Public Schools, Louisville  Metro government, the commonwealth of Kentucky, and the Okolona fire department, according to a WDRB.com analysis based on last year's tax rates.

The challenge comes amid a renaissance in jobs and investment at Appliance Park, for which GE has separately been promised more than $20 million in taxpayer-funded economic development incentives from the state and Louisville Metro government.

Jefferson County Property Valuation Administrator Tony Lindauer argues Appliance Park's land and buildings are more valuable now that GE has invested $800 million in recent years and added 3,000 jobs since 2010, according to the company's figures.

The PVA raised the park's assessment from $30.9 million -- its taxable value since at least 2007 -- to $41.9 million as of Jan. 1, 2013. The change means higher property taxes for GE beginning with this year's tax bills, which will be mailed to property owners throughout the county next month and are due by Dec. 31.

But GE says Appliance Park -- which is actually broken into 24 parcels taxed separately -- is worth only $22.6 million, according to documents filed with the Kentucky Board of Tax Appeals.

"GE Appliances disagrees with the County PVA's increase to Appliance Park's assessed property values," GE spokeswoman Kim Freeman said in an emailed statement. "We have filed the appeal and as part of that process will engage a credentialed professional appraiser to demonstrate the appropriate taxable value of the land and buildings."

Freeman declined to comment further until the case is heard by the board of tax appeals.

A successful appeal would reduce GE's annual property tax payments to about $238,000, from about $440,000, according to WDRB.com's analysis, which assumes no change from 2012 tax rates.

Lindauer said the re-assessment was prompted by improvements at the park, particularly the permits GE took out to add a data center.

Lindauer said it will be up to the Kentucky Board of Tax Appeals to sort out the dispute in the coming months.

"Right now we are stuck on our figure, and they (GE) are stuck on theirs," he said.

But Lindauer said it's "possible" he could ask the appeal board for a lower assessment than his current $41.9 million after he and his staff toured Appliance Park on Tuesday and saw the condition of some of the buildings.

"The buildings are still the same, but they invested in the line and in people; that is where their investment is," Lindauer said, summarizing GE's representations to his office.

Worker payroll and factory machinery are taxed separately from land and buildings, which are at issue here.

About 6,000 people work at Appliance Park, and estimates of its footprint range from 770 acres (Louisville Metro government) to 900 acres (GE). The park has six factory buildings -- five of which currently house production lines -- and a large warehouse in addition to ancillary buildings, Freeman said. (Map of Appliance Park's location).

In 2009, GE decided to breathe new life in the 1950s-era factory.

After a major overhaul and wage concessions by the park's unionized workforce, GE began making GeoSpring hybrid water heaters in February 2012. It was Appliance Park's first new product line in more than 50 years, according to the company.

That was followed  last year by a new French-door refrigerator operation; the first phase of production of a new dishwasher model; and a new line for high-efficiency top-loading washers. Finally, GE began making a frontload washer and matching dryer earlier this year.

The state and metro government have promised GE substantial taxpayer-funded incentives in exchange for the reinvestment and new jobs.

In 2012, Kentucky approved GE to receive $20.5 million from the state coffers over a 10-year period, assuming GE maintains its projected jobs and investment. The state had originally offered $10 million in 2009, but the deal was sweetened as GE upped its ambitions for Appliance Park.

In 2009, the Metro Council unanimously passed an ordinance creating a special tax-increment finance district for Appliance Park. The arrangement allows GE to keep 80 percent of the new Metro government occupational taxes generated by the addition of workers at the park, up to $2.5 million over 10 years.

GE activated the agreement this year and will begin receiving the money starting next year, according to David Morris, deputy director of the Louisville Metro Department of Economic Growth & Innovation.

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