The Davenport Hotel has filed suit against Spokane County, claiming its 2002 property-tax assessment on the historic downtown landmark is too high.


The county last July assessed the value of the hotels main towernot including the Pennington wing or parking garageat $24 million, up from about $4 million the previous year. Spokane developers Walt Worthy and his wife, Karen, bought the hotel and began refurbishing it in 2000.


The taxable portion of the 2002 assessed value of the main hotel building is about $19.4 million, because of a tax reduction available to developers who rehab historic properties. Therefore, the Davenports tax bill this year, which is based on last years assessment, is $283,000 for that main building.


The Davenport is assessed separately for the newly constructed Pennington wing, which had a 2002 valuation of $2.6 million, resulting in a tax liability of about $35,000, and for the parking garage, which is valued at $1.7 million for a tax bill of about $25,000, according to the Spokane County assessors office. Walt Worthy says he doesnt dispute those assessments.


The Davenport contends in its complaint, filed June 19 in Spokane County Superior Court, that a more fair assessment of the main hotel tower last July would have been about $11 million. Under that scenario, the taxable value of the hotel would be about $6.7 million, after deducting the historic-rehab benefit, which is based on money spent to that point by the Worthys as well as by the hotels previous owners, Davenport Sun International Hotels & Properties Inc.


They assessed the hotel at what I feel is an exorbitant amount of money, Worthy says. He points out that at the time the assessment was made, about two weeks after the hotel opened, five of the hotels 13 floors remained unfinished.


Its like you selling two-thirds of your house, he says. Nobodys going to give you very much money for two-thirds of your house.


Now that the rest of the hotel is completed, the 2003 valuation undoubtedly will be higher, Worthy says.


For now, he says, the Davenport paid its 2003 first-half property taxes under protest.


Worthy acknowledges that the assessors office informed him by mail last year of the big jump in the hotels valuation, but the letter arrived at his other office in the Rock Pointe Corporate Center, rather than at the hotel, and didnt get proper attention. Because of that, he missed a 30-day window to appeal the valuation to the countys Board of Equalization. Later, the board refused to hear his appeal because it was so late, Worthy says. That left us no option but to sue the county, he says.


Spokane County Assessor Duane Sommers says hes sorry (Worthy) missed the date to go before the local Board of Equalization, but the county never received a change-of-address form directing it to send the assessment to the hotel rather than to Rock Pointe, which the Worthys also own. Whats more, Sommers says, really, quite a few months passed before Worthy contacted his office about the assessment.


Hes a businessman, hes got property, and hes gone through the process of the board of equalization before, Sommers says.


Worthy says he hopes the two sides will come to an agreement about the Davenports assessed value before the matter goes to trial, but Sommers says he thinks thats unlikely.


I think were so far apart now, I dont see us stipulating (agreeing) to $6 million, and he doesnt want to stipulate to $24 million, Sommers says.


Alternately, he says Worthy could just pay the taxes this year because next year, even greater historic-rehab credits kick inbased on the additional money spent on the renovationwhich could reduce the hotels taxable value by about $27 million.


That will just about wipe out his tax bill next year, Sommers predicts.


Worthy counters that by accepting what he regards as an unfairly high valuation on the hotel for 2002, hell be laying the groundwork for even higher valuations by the county this year and in the future based on the completion and operation of the entire structure.


Its not like were trying to get out of paying taxes, he says, adding that business is good at the hotel. I want to pay our fair share, but thats all I want to pay.


At its current assessed value, the Davenportincluding the Pennington wing and the parking garageis valued at $28.3 million. Thats more than the DoubleTree Hotel Spokane City Center and the Red Lion Hotel at the Park combined, which together would be valued at about $26.5 million, figures from the assessors office show.


Each of those hotels has more rooms than the Davenport, Worthy points out.


How can we come in with an unfinished hotel and pay more (than those two combined)? he says. As far as fairness is concerned it certainly doesnt hold water.


Sommers says the two older hotels are assessed using an income approacha method that wasnt available last year at the Davenport.


(Worthys) statement is probably right, he probably is paying more, Sommers says, but were really mixing apples and oranges.