The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Saturday, June 17, 1995                TAG: 9506170378
SECTION: LOCAL                    PAGE: B3   EDITION: FINAL 
DATELINE: CHARLOTTESVILLE                    LENGTH: Medium:   99 lines


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.

In South Hampton Roads, nine courses have $28.85 million worth of property deferred for tax purposes for an annual tax savings of $337,745.

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 get land valued at more than $1 million knocked off the local tax rolls.

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 fetch 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.''

Brent Frank, an appraiser for the city of Staunton and a former golf professional, said his local government voted to do away with land-use tax breaks 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 member-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.

Country Club of Virginia manager Skip Harris contends his course in Henrico County deserves the tax break because it provides green space that the legislature considers valuable to everyone.

Even though nonmembers can't simply walk onto the course, they can enjoy its beauty from the road, Harris said.

``Who is to say what pleasure people get when they drive past the golf course to work and see the grass and trees rather than bricks and mortar?'' ILLUSTRATION: BREAKS FOR LOCAL COURSES

Hampton Roads cities that allow private golf courses to use a

loophole in state tax laws and cut their property tax bills, and the

clubs to which the tax breaks apply. The value of property deferred

for tax purposes and the annual tax savings are included. MO

denotes members-only clubs; others allow access to the public.


Greenbriar Country Club (MO). $4 million; $51,702.


Elizabeth Manor Country Club (MO). $2.5 million; $32,939.


Cedar Point Country Club (MO). $2.05 million; $21,130.

Virginia Beach

Honey Bee Golf Club, Cypress Point Country Club, Hell's Point

Golf Club, Stumpy Lake Golf Course, Princess Anne Country Club (MO)

and Cavalier Country Club (MO). $20.3 million; $231,974.