Are Milwaukee County taxpayers subsidizing an elite private country club?
Some people think so, citing what they call a generous assessment of the Milwaukee Country Club in River Hills.
The village reassessed all of its property this year -- the first time in a decade. The country club, on 196 acres bisected by the Milwaukee River and consistently ranked among the top 100 courses in the nation, was valued for tax purposes at $4.94 million. That's up 20% but still lower than all but one other area country club, and still well below its 1991 assessment of $6.18 million.
Robert Chernow, a Milwaukee stockbroker and former member of the River Hills Board of Trustees, calls it an outrageous inequity, and his complaints have drawn the attention of village, county and state officials.
-- The state Department of Revenue intends to conduct a field review of all the commercial property in River Hills, said Eva Robelia, a department spokeswoman. The results should be ready by April, she said. But besides Milwaukee Country Club, the only other commercial properties in the village are a portion of University School of Milwaukee and River Tennis Club.
Robelia said because commercial property constitutes only about 2% of the village's total assessed property, the state's appraisal would not trump the current assessment but would be a second opinion.
-- County Treasurer Dorothy Dean is asking area legislators to change the law to allow her to challenge assessments that she thinks are too low. If Milwaukee Country Club is under-assessed, she said, other county property owners all pay a little more to make up the difference.
"It's not a lot of money, about a nickel for the average homeowner in Milwaukee County," Dean said. "But it's a question of fairness. It just isn't fair."
-- The Village Board itself may seek an outside analysis of the assessment -- if the four members of the board who are not Milwaukee Country Club members can all be present for a quorum to approve it.
Alan Marcuvitz, a real estate lawyer who represents both municipalities and golf courses, and who was hired by the village to review the case, said the debate over country club and golf course assessments is occurring all over the state.
"The highest and best use for these properties was once as golf courses or country clubs," Marcuvitz said. "Urban sprawl has pushed the value up, and that may no longer be the case."
Marcuvitz also said simply comparing clubs isn't the best measure because of the varied locations, amenities and income.
Timothy Frautschi, a lawyer representing the Milwaukee Country Club, said its drop in value since 1991 stems from years of over-assessment. "We believed the assessment was still too high, but it was a compromise," he said.
More than a decade ago, Frautschi successfully argued the club was paying too much in taxes.
The assessed value dropped from $6.184 million to $4.9 million in 1992; and again in 1994 to $3.8 million.
In a presentation to the River Hills Review Board, Frautschi argued in the '90s that the country club land would be worth significantly less as a residential subdivision because it would yield only 35 lots in a village where a 5-acre minimum is standard. Each would sell for $100,000. The value of the clubhouse and other amenities should be ignored and the cost of their demolition subtracted from the assessment. The club's appraiser set the value of the property at between $3.3 million and $3.8 million.
Village Assessor Thomas Bailey agreed.
Marcuvitz was hired by the village to review the matter, and he said Bailey didn't have the authority to throw out the $6.182 million assessment. The Glendale assessor was hired for a third opinion, and he essentially agreed with Bailey.
Bailey, still the River Hills assessor, declined to discuss the current valuation with a reporter.
This year's 20% increase for the Milwaukee Country Club was the average for all commercial property in Milwaukee County, River Hills Village Manager Tom Tollaksen said. Residential property in the village increased more than 40% on average over the same decade. Tollaksen said the average home value in the village is now $758,200.
River Hills President Bob Brunner said he expects the Board of Review to issue a report to the Village Board after it meets Sept. 1. The Board of Review can ask for another appraisal, but the trustees would have to approve spending for it.
"All of us want to have fair and accurate appraisals for the entire village," Brunner said.
Three of the seven trustees -- Richard Glaisner, William Stevens and Randall Perry -- would have to recuse themselves from a vote on the matter because they are Milwaukee Country Club members.
National and regional trends have worried owners and managers of golf courses and country clubs across the country, said George Saites, Milwaukee Country Club's general manager for 34 years.
They've argued that the economic downturn since Sept. 11, 2001, and changing demographics -- a younger generation wanting to spend more leisure time with their children -- has hurt business.
He would not disclose membership numbers or costs.
But he said Midwest golfing was down 20% last year and is expected to be down another 14% this year.
Kathleen Isleb, the Wauwatosa assessor, said assessors all over the state are being pressured to downgrade the valuations of country and golf clubs.
"Our state association recently had guest speakers from the golf industry," Isleb said. "They gave a number of different approaches for reducing golf course assessments. We weren't buying it."
The $5.9 million assessment for the Blue Mound Country Club in Wauwatosa is comparatively low for a couple of reasons, she said. The club is older and does not have a pool or tennis courts, factors contributed to a membership decline, she said.
Source: Milwaukee Journal Sentinel (Wisconsin)