Property taxes are a large portion of annual dues
One of the obligations Disney Vacation Club members have is to pay annual dues to cover the operating costs and upkeep of their resort. Real estate taxes (ad valorem property taxes) make up a large portion of the annual dues – in the range of 20-30% of the dues for a resort.
Property taxes are a primary source of revenue for local governments. They’re also a significant expense for real estate owners, year in and year out.
Battles over property assessments
Property taxes are based on the assessed value of a real estate parcel, and a property tax rate. The Orange County appraiser determines property assessments.
Over the years, there has been a never-ending battle over how much taxes the theme parks and resorts should pay. Trying to get land values reduced is not new for businesses, including theme parks. Every time the assessed values have risen, Disney has challenged the increases in assessed values of their properties. Some companies have filed lawsuits year after year.
In the past, these differences in opinion over assessed valuation have been resolved through creative tactics or negotiations. Traditionally, the parks have gotten tax bills totaling tens of millions of dollars lowered through appeals to a property value adjustment board or negotiations with county officials.
The prior Orange County Appraiser, Bill Donegan, favored negotiated settlements. “My goal was always to come to a consensus because when you go before a judge … you don’t know what he’s going to do,” Donegan said. “We tried to come up with a compromise that both of us can live with. … I tried like heck to stay out of court.” The end result was the county’s value adjustment board reduced the assessed values.
Orange County Appraiser more willing to fight?
Rick Singh, who was re-elected last year to a second four-year term as Orange County Appraiser, calls that attitude playing “the game, Let’s Make a Deal.” Singh has been with the property appraiser’s office for about 20 years, working his way up in the agency, rather than coming in the side door via a career in politics.
Singh takes a different approach than his predecessors. Rather than basing assessments on what the multi-billion-dollar corporations have been paying, or would like to pay, he employs the latest technologies to make property value assessments efficient and accurate. And doesn’t avoid challenging the way things have always been.
Singh explained that the real issue here isn’t how high he values them now, but how low they were assessed before he took office.
“Let’s put things into historical perspective. I am the first state certified, qualified appraiser in the history of the Orange County office”, said Singh. “I look at this with a professional appraiser’s eye. Perhaps it has never been looked at with the eyes of an appraiser. This office has been functioning in a level of what I consider to be unconscious incompetence. They didn’t know that they didn’t know. I’ll give you a great example; when the entire theme park of Magic Kingdom is assessed less than the Dr. Phillips Performing Arts Center, that’s a problem. The entire theme park, the land, and all the improvements. Picture that for a minute, and that speaks volumes.”
Singh said his methods for assessing properties are no different than those of his predecessors — except when looking at resorts and hotels. Then, he considers their income statements and the local “bed tax” paid by hotel customers, which he said his predecessor didn’t use. Income isn’t considered when assessing theme parks.
“It’s a matter of being fair and equitable,” Singh said. “If the single mother who is working two jobs has to be held accountable to pay her fair share, so should everybody else.”
Singh said he is more willing than his predecessors to fight in court rather than reach a compromise. “Some entities are not going to be happy because they’ve been getting away with murder,” Singh said.
Under Singh, appeals to the value adjustment board have generally been unsuccessful, and Singh said he is more willing to fight disputes in court than predecessors. He noted some companies have filed lawsuits year after year.
Disney sues over property tax assessments
Walt Disney Parks and Resorts are suing over their property tax assessments from 2016, calling them “excessive.” Disney filed nearly a dozen lawsuits at the end of last month in Orange Circuit Court, arguing the assessments by Orange County Appraiser Rick Singh exceeded their properties’ fair market value and incorrectly “included the value of certain intangible property in the assessments.”
“The increases in the assessments of our property are unreasonable and unjustified,” a Disney spokesperson said in a statement. “Similar to other property owners in Orange County, we have no choice but to take action to dispute these errors by the property appraiser. We look forward to presenting our case in court.”
Singh vowed to fight them in court at the time, saying, “We hold their feet to the fire.”
Disney is asking for “proper” fair market and assessed values to be determined so it can receive a new tax bill in addition to reimbursement for courts costs.
Will DVC Members see annual dues rise?
The difference between Singh and prior Orange County Appraisers, is that Singh doesn’t look to be backing down. Singh could just be posturing for his constituants and may still decide to settle as his predecessors have done. We don’t know if a settlement is likely, or what decision a judge may issue on the matter.
Could DVC members see large increases in their annual dues as a result? Only time will tell. We have seen the annual dues for Disney’s Copper Creek Villas & Cabins have the highest taxes per point of all the other resorts.