LOUISVILLE, Ky. (WDRB) – Jefferson County Public Schools is in line to receive about $700,000 in additional property tax payments each year from Louisville-based Churchill Downs Inc. after a dramatic bump in the tax value of the company's iconic racetrack at 700 Central Avenue.
The move was prompted by a 2018 WDRB News story, which highlighted that the official value of the 140-acre racetrack property -- $20.4 million -- hadn’t changed since 2002 despite hundreds of millions of dollars Churchill Downs spent on additions and renovations.
Regular homeowners usually get higher values – and thus, higher taxes – over time, especially if they add on to their homes or build a garage.
On Friday, Jefferson County Property Valuation Administrator Colleen Younger’s office raised the racetrack’s tax value to $117.2 million.
If Churchill Downs accepts the new value, it would result in the company paying about $850,000 in taxes to JCPS for the Central Avenue property annually beginning this year, up from about $148,000 before the change, according to a WDRB analysis based on 2018 tax rates.
Churchill Downs has about a month to dispute the new $117 million value. A company spokesman said he was unable to immediately comment for this story.
After WDRB News published the story last year, officials from PVA, JCPS and Churchill Downs met privately and agreed that the PVA office would update the tax value of the racetrack property, said Jason Hancock, the PVA's director of valuation.
Churchill Downs provided construction blueprints and other information to help the PVA set the assessment, Hancock said.
Like any other property owner, Churchill Downs can appeal the $117.2 million value if it’s unhappy with the result. “The ball’s in their court,” Hancock said.
‘A real anomaly’
The tax situation for the racetrack is different from most other pieces of real estate in Jefferson County.
It’s actually Metro government – not Churchill Downs – that owns the racetrack and dozens of smaller properties east and west of the racetrack.
A 2002 bond deal with the old City of Louisville calls for the racetrack to be government-owned property until 2032, when it reverts to Churchill Downs.
While no taxes are owed on government property, Churchill Downs agreed in 2002 to make special payments to JCPS so that the school system wouldn’t be deprived of tax revenue from the track during the term of the 30-year deal.
The payments are equal to the taxes Churchill Downs would have owed to the school system had the racetrack remained taxable property.
The school district receives by far the largest share of local property taxes, which also go to city and state government.
The problem is that former PVA Tony Lindauer’s office treated the racetrack like other government property, leaving the $20.4 million assessment in place over the years despite inflation and Churchill Downs’ significant investments to improve the facility.
Lindauer said last year that his office didn’t know there were practical consequences to the track’s tax value because no one informed them about the agreement between JCPS and Churchill Downs for the special payments.
“I don’t know how we would treat it differently,” Lindauer said at the time, calling the situation “a real anomaly.”
Lindauer also noted that JCPS never raised an issue with the racetrack’s value, which it could have disputed under the agreement with Churchill Downs.
Asked for comment on Friday, JCPS spokeswoman Renee Murphy said district officials were unaware of the change in the racetrack’s assessment. The school district’s chief financial officer said last year that it’s not JCPS’ job to value real estate for tax purposes.
Younger, who was Lindauer’s chief of staff and has worked in the PVA office since 2011, was elected in November to replace Lindauer.
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