Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, June 13, 1995 TAG: 9506130087
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: DAVID REED ASSOCIATED PRESS
DATELINE: CHARLOTTESVILLE LENGTH: Long
Forty golf courses, including some of Virginia's wealthiest country clubs, have received millions of dollars in tax breaks under a program conceived to protect family farms and open spaces from development.
Letting private, members-only courses use a loophole in Virginia's law to trim their tax bills may be illegal, said one county property assessor. Allowing such breaks for private courses that are open to the public is improper, said a professor who helped tailor the rule.
A statewide survey by The Associated Press found that 18 counties and seven cities are deferring property valued at $42 million from being taxed, allowing the golf courses to save $453,000 on their annual tax bills.
Twenty-one public-access courses and 19 private clubs open to members only receive tax breaks, including the prestigious Country Club of Virginia in suburban Richmond and Princess Anne Country Club in Virginia Beach. Both the clubs have land valued at more than $1 million knocked off the local tax rolls.
In Roanoke County, Hunting Hills Country Club, a members-only course, and the private Hanging Rock Golf Club and Brookside courses apply for the tax savings. They save a total of $16,550 on property valued at $1,464,600.
In Franklin County, the private Chestnut course and the Waterfront and Water's Edge members-only courses save a total of $3,096 on property valued at $515,134.
The loophole is a little-known provision in the land-use law the General Assembly approved in 1971. It allows local governments to tax certain land according to its value in producing crops and timber rather than the price it would bring on the open market. It was crafted to help farmers keep their land when urban sprawl drives up the value of real estate.
State regulators added the open-space provision ``to preserve scenic natural beauty and open spaces'' where development pressures could turn the green space into subdivisions and shopping centers.
Virginia Tech agricultural economist Paxton Marshall said golf courses became eligible in 1975 after the General Assembly let state agencies set the program guidelines. Marshall helped the agencies develop those guidelines.
``It is a condition of use-value assessment for open space that the land be accessible to the public or devoted to a public use,'' Marshall said.
Several assessors didn't know golf courses were in the open-space program until they looked it up.
In Virginia Beach, City Manager James Spore said he was unaware that four public-access courses and two country clubs receive $231,974 in tax breaks a year. ``I've been here four years and it's never come up.''
Some localities have deemed members-only courses ineligible; others have excluded all golf courses, even though they are expressly allowed in the open space provision when they are operated ``as a public service.''
Chesterfield County Assessor William Diggs argued that it is illegal for private courses to be in the tax-relief program because it shifts a portion of the tax burden to the public.
``All properties are picking up a share of the cost,'' said Diggs, a former president of the Virginia Association of Assessing Officers. ``When you do that, you are expending public funds for private use, in my opinion, and that's a no-no in the commonwealth.''
Members of Albemarle County's Board of Supervisors say the program would give the fashionable, private Farmington and Glenmore country clubs tax breaks totaling more than $60,000 a year, and they oppose it.
Albemarle County Attorney Larry Davis has advised the supervisors to grant tax breaks for the courses. ``To carry the argument to the logical extreme, no private farms would be eligible because you can't just walk out on their land.''
Nevertheless, the supervisors have scheduled a public hearing Wednesday on their proposal to do away with the open-space program to keep the two courses from getting tax breaks.
Brent Frank, an appraiser for Staunton and a former golf professional, said his local government voted to do away with land-use tax breaks altogether beginning in 1997.
Frank said golf courses don't need the tax break and localities don't, either, because the use of the land is unlikely to change.
``A golf course is most profitable staying as a golf course,'' Frank said. ``Golf courses are cash cows.''
The average profit of members-only country clubs in the United States last year was $118,000, and $144,000 on public-access courses, according to the National Golf Foundation.
Virginia Beach Assessor Jerry Banagan said the tax break on public and private courses provides a public service by helping maintain green space and aiding the local tourism industry.
Advocates for the golf course tax break say it is needed to keep developers' bulldozers at bay.
Shannon Green, a public-access golf course beside Interstate 95 in fast-developing Fredericksburg, will close this summer and be turned into a commercial complex.
by CNB