CAPE-Represented Appraiser wins 8-year battle for LA County

Supervising Appraiser Richard "Jerry" House works in the highly specialized field of appraising the value of hotel properties for the Los Angeles County Assessor's Office.

A recent Superior Court decision demonstrated the need for absolute precision in House's skills and clear application of the laws on the valuation of large scale properties, such as hotels.

In 2005, when the Glendale Hilton hotel was sold to a new owner, House was assigned the task of appraising the hotel property.  Using a direct capitalization technique, also called the 'Rushmore method', House calculated an estimated value for the hotel of $76.3 million.  That amount was later reduced by $2.5 million to account for the city's redevelopment agency participation.

The new property owner, Eagle Hospitality Properties Trust, Inc (Eagle) claimed that a portion of the property price -- up to 40% -- was for the acquisition of "business enterprise value".  Eagle wanted the property appraisal, and the subsequent property tax bill, reduced by that amount.

House and his colleagues at the Assessor's Office Major Properties Division disagreed.    At stake were millions of dollars in property tax revenues for the County.  If Eagle were to be successful in reducing the appraised value of the hotel, every large scale hotel property in the County would line up for a similar reduction.

In December 2006, the Los Angeles County Assessment Appeals Board (AAB) decided in favor of House and his methodology.  In February 2009, the LA Superior Court reversed the AAB decision.  But in March 2011, the state Appellate Court reversed the Superior Court decision, stating that the lower court had reviewed only a 'fragmented' picture of the issues.

In March 2012, the Superior Court reviewed the entire case and upheld the decisions of the AAB and the Appellate Court.  And finally, in September 2013, the state Appellate Court upheld the Superior Court/Trial Court decision and orders for publication.

Each of the hearings pitted a long list of high-powered industry lawyers and experts against House, his Assessor colleagues, and representatives from the Los Angeles County Counsel's office in a 'David and Goliath' battle.  Along with Jerry House, Appraiser Specialist and longtime Assessor Representative James Jochimsen, and Deputy County Counsel Albert Ramseyer assembled and presented evidence to the AAB and the Courts leading up to the final decision.

In the end, it was the abilities of House and his team to justify his methodology that established a fair and accurate valuation for the Hilton Hotel property.  The Court decision now stands as the precedent for future large-scale luxury hotel appraisals.

Supervising Appraiser Richard "Jerry" House.