BANGOR, Maine — Hollywood Casino is appealing the city’s denial of its request to cut the taxable value of its Bangor gaming operation by $36.8 million.
“By filing this appeal, we are moving forward with the next step in the process,” casino spokesman Dan Cashman said Thursday. The casino had a deadline of July 5 to file its appeal of the city’s decision.
The Bangor Board of Assessment Review now has 60 days to hold a hearing on the matter, according to City Assessor Phil Drew.
If the casino succeeds in the appeal, its taxable property value would drop from $98.18 million to $61.38 million, forcing the city to refund $876,849 of the $2.6 million in property taxes already paid by the casino for the 2014 tax year.
That would exceed the $322,150 the city has reserved to cover tax abatements and write-offs.
According to Cashman, casino officials enlisted international auditing firm Ernst & Young after they learned the city’s assessed value of the gaming venue was going up again.
Public records show Bangor increased its assessed value of the casino property from $94.75 million in the 2013 tax year to $98.18 million in 2014. That equaled a $71,217 property tax increase for the casino.
Cashman said an assessment conducted by Ernst & Young found a “significant difference in valuation for the property.”
“The owners of Hollywood Casino are appealing the decision because of improper valuation techniques used in determining the valuation, such as the inclusion of intangible property, most notably the gaming license,” Cashman said.
Drew declined to comment on whether intangibles were included in his calculation Thursday, saying he would save his responses for the hearing.
The casino filed its abatement request on Jan. 9, including in its request three property tax transfer forms in which the casino property was transferred between subsidiaries of Penn National Gaming Inc. on Oct. 25, 2013.
Each of those forms showed the casino’s value at the $61.38 million valuation sought in the abatement request.
Drew denied that request May 6, arguing property transfers between related companies do not represent true market value.
He also noted the casino was insured for $93.5 million and that another casino-commissioned assessment by the global professional services firm KPMG valued the properties at $108.43 million as of Nov. 1, 2013.
Cashman said in an email to the Bangor Daily News that KPMG’s assessment included the value of intangibles — mainly the gaming license, which he said should not be included — and the insured value did not take into account depreciation or softness in the economy.
The City Council has approved the hiring of Portland attorney William Dale at an estimated cost of $20,000 in order to fight the abatement request.
“This is a big abatement they want. This isn’t pocket change for any of us,” Councilor Pat Blanchette said in April.
The latest abatement request marks the second time Hollywood Casino has sought to reduce its property taxes paid to the city.
In 2010, the casino disputed the city’s 2009 assessment of the 10 newly build casino and related buildings on the basis of construction costs.
While the casino sought a $55 million assessed value, the city eventually agreed to reduce its valuation from $100.7 million to $84.55 million, garnering a $307,101 tax abatement.
Follow Evan Belanger on Twitter at @evanbelanger.