Western

By Cris O’Neall, Esq. of Greenberg Traurig LLP With the number of public-private partnerships for constructing public facilities on the rise, communities across the country wrestle with the question of how to treat such arrangements for ad valorem property tax purposes. In most instances, private developers and taxing entities take opposing positions on the issue. Public-private joint ventures have become a popular strategy to achieve community objectives through collaboration with private developers. To construct a particular facility, a municipality or other government will typically provide subsidies or other financial incentives to encourage participation in the project by a private-industry partner or partners. These subsidies, which may come in the form of grants or tax credits, often lead to property tax contention. Some taxing authorities include the subsidies or tax benefits granted to the private developer in the taxable assessed value of the real property. In contrast, private developers view such subsidies or benefits as tax-exempt intangible property that should not be included in assessed values. Here are a few common incentives and their property tax implications: Low-Income Housing Subsidies The treatment of federal subsidies for operation and construction of low-income housing became an early battleground in the ongoing conflict over …