- The Washington Times - Sunday, July 3, 2011

Senate Majority Leader Harry Reid, long accustomed to getting public officials to do what he wants, has run into a stumbling block with a local Arizona official.

The Nevada Democrat has not been able to persuade Mohave County Assessor Ron Nicholson to lower the value on 160 acres of vacant land Mr. Reid owns in Bullhead City, Ariz. — certainly not as much as the senator wanted after the assessment, like others, skyrocketed in 2010.

Mr. Reid saw the land’s value triple from $479,430 in 2009 to $1.46 million in 2010 — raising his property taxes, as a result, from $5,523 to $14,707. In the past, Mr. Reid has described the Bullhead City property, which he has owned since the early 1980s, as being nearly worthless, “a losing proposition” and a cash drain.

For his part, Mr. Nicholson, a Republican, lowered the value of Mr. Reid’s property for 2011 to $683,866 as part of a countywide revaluation after the collapse of Arizona’s real estate market, and the assessment will be $464,250 for 2012, records show.

“We work them all the same,” said Mr. Nicholson. “No one gets preferential treatment.”

Bullhead City, with more than 40,000 residents, is located on the Colorado River about 70 miles south of Las Vegas, directly across from Laughlin, Nev., which — unlike Arizona — has a host of glitzy riverfront casinos and hotels. Laughlin is home to fewer than 7,500 residents.

Like other property owners in Bullhead City and Mohave County in northwest Arizona, Mr. Reid saw his assessment jump because of an earlier huge spike in real estate values in the area. The real estate market has since collapsed. Mr. Nicholson initially had raised the value on Mr. Reid’s property to $2.33 million for 2010 but reduced it after the senator filed an appeal.

“It is not worth nearly that much,” said Jon Summers, Mr. Reid’s spokesman. “In fact, this is the same property Sen. Reid literally tried to give away but could not. The property includes a ‘wash’ and is not considered” suitable for development.

Mr. Summers said Mr. Reid could not explain the hike in value and referred The Washington Times to the assessor’s office “for their explanation of the unorthodox tax valuation system.”

“I felt it should have been a lot lower than it was,” said Gary Lott, a real estate appraiser and property-tax agent Mr. Reid hired to file a protest. He said that while they won “a substantial reduction,” the final assessed value was much higher than where it had been in 2009.

Mr. Nicholson, who is required by state law to assess property based on its marketable value, said he did not hear personally from Mr. Reid or his staff about the 2010 assessment hike.

Mr. Reid and other Mohave County property owners saw their assessments jump for 2010 because of record high sales prices in the area several years before. Because of the way properties are assessed in Arizona, the values for 2010 were based on sales from 2 1/2 years earlier at the “highest part of the market,” said Mr. Nicholson.

He said there was “enormous speculation” of the market in Mohave County in 2007 and the first half of 2008 and, by law, those sales were used for the 2010 assessments, which were proposed in early 2009. But because the real estate market crashed, Mr. Nicholson said, land in Mohave County lost 45 percent of its value, mirroring Las Vegas and Maricopa County, which includes Phoenix.

Mr. Lott likened real estate taxes in Arizona to a “roller-coaster ride,” adding that they “go way up and way down.” He said some buyers who paid top dollar a few years ago and whose sales caused the assessments to go through the roof are now in foreclosure.

Mr. Reid has seen those ups and downs in Bullhead City firsthand. He and a longtime friend, Clair Haycock, bought the 160-acre parcel between 1979 and 1982 for $240,000 or $1,500 an acre. Mr. Reid had a five-eighths interest and Mr. Haycock three-eighths. A few years later, Mr. Haycock transferred his interest to his company’s pension plan, of which he was the trustee.

In the early 1990s, Mr. Reid and Mr. Haycock agreed to sell the 160 acres to California investors for a little more than $1.34 million — about $8,400 an acre. The buyers, who wanted to develop a mobile-home park, paid a fraction of the price in cash and provided a note secured by a mortgage for the balance. The buyers defaulted a few years later, and Mr. Reid and the Haycock pension fund took the property back.

Mr. Reid and Mr. Haycock attempted to sell or develop the property without success and, they said, it became a cash drain. At one point, Mr. Reid offered to give it to a developer who turned it down. When the Haycock pension fund wanted to sell its interest in 2002, Mr. Reid paid the fund $10,000.

Mr. Reid has said the property basically cannot be developed.

Mr. Nicholson, who has personally inspected the property, thinks it can be developed, but acknowledged that it has “special challenges.” He said it has a giant ravine in its center, which is not buildable. As a result, he said his office gave a large part of the property a 40 percent topography adjustment.

“The other issue is there is no road to it,” said Mr. Nicholson, who thinks the property still has value.

In 2005, Mr. Reid helped secure an $18 million earmark to build a second bridge over the Colorado River between Bullhead City and Laughlin. The proposed bridge sites were several miles from his property, but some Bullhead City property owners and local officials said at the time a new bridge would increase land values in the then-booming commuter town.

Mr. Reid’s office later said his “support for the bridge had absolutely nothing to do with property he owns” and that local residents requested the bridge, which would benefit Nevada. Laughlin’s casinos and hotels employ Bullhead City’s casino and hotel workers, and a new bridge would give Laughlin residents easier access to Bullhead City’s hospital and shopping.

While residents on both sides of the river have pushed for a second bridge to help ease the traffic on the existing bridge, which is near the casino district, construction has been stalled for years as government agencies debate proposed sites and funding. The Federal Highway Administration is deciding whether to approve or reject the latest proposed site. Once a site is approved, local governments have to figure out how to come up with the rest of the money to pay for the $55 million bridge.

And while the assessment hike cost Mr. Reid money, it did have another unintended effect on Mr. Reid’s personal finances — it made him look wealthier than the year before because he uses the assessor’s number to value the land on his required personal financial-disclosure reports.

As a result, the media reported that Mr. Reid’s wealth had grown in 2010, in large part because he said on his financial-disclosure reports that the 160 acres were worth between $1 million to $5 million, compared with $250,000 to $500,000 in 2009.

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