Courtyard by Marriot owners ask Anchorage Assembly for tax relief for fire damage

Fire crews put out flames on the under-construction Courtyard by Marriott Jan. 26.

ANCHORAGE (KTUU) - The company that owns the under-construction Courtyard by Marriott Hotel that burned down in Jan. 2019 is asking the Municipality of Anchorage for tax relief presently unavailable under current tax code.

Ric Marko with Affinity Hospitality, the company that owns the land where the hotel is being built, says the building itself was valued at $5.5 million shortly before it burned down. They are currently paying taxes on that value, which Municipal Assessor Jack Gadamus says add up to just over $90,000.

Marko says they filed for an appeal of the assessed property value in February, but were declined because of current tax code which calculates property values on Jan. 1 of every year. Marko says Affinity Hospitality should not have to pay taxes on a building that only existed for a fraction of the year.

“That building existed for the first 25 days of the year,” Marko told the Anchorage Assembly Tuesday. “The rest of the year, essentially, it doesn’t exist.”

Municipal Attorney Rebecca Windt Pearson says the administration could make an exception to current code, which only allows for disaster relief for residential properties. It would have to be introduced as an amended ordinance, which if adopted would be retroactive, meaning commercial buildings that have burned down in the past would be eligible for tax relief.

Several Assembly members expressed a willingness to work with Marko to change existing code.

According to IRS form 4684, a tax exception can be made for business or income-producing properties suffering casualty loss.

"Casualty loss can result from the damage, destruction, or loss of your property from any sudden, unexpected, or unusual event such as a flood, hurricane, tornado, fire, earthquake, or volcanic eruption," according to the IRS.

"If your property is business or income-producing property, such as rental property, and is completely destroyed, then the amount of your loss is your adjusted basis."

California followed these IRS regulations in a disaster relief resource guide for businesses impacted by the Camp and Woolsey fires in Nov. 2018. It said business owners "usually qualify for a casualty loss deduction" in the event of a sudden or unexpected damage to property.

The City and Borough of Juneau's code for tax adjustments on properties affected by disasters follows a similar outline:

(a) Reassessment of property damaged by disaster: An owner of any taxable property within the City and Borough, or any person liable for the taxes on the property, whose property was damaged by a disaster, may apply for reassessment of that property under this section. In addition, the assessor may initiate reassessment where the manager determines that within the current assessment year taxable property located in the City and Borough was damaged by a disaster.

(b) For purposes of this section, "disaster" means the occurrence or imminent threat of widespread or severe damage, injury, loss of life or property, resulting from an incident such as storm, high water, wind driven water, tsunami, earthquake, volcanic eruption, landslide, mudslide, avalanche, fire, flood, or explosion.

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