West Tisbury Landowner Tells Tax Board Town Valuations Rooted in Faulty System

By IAN FEIN

West Tisbury resident William W. Graham testified in a legal hearing last week that town assessors overvalued his land by more than $30 million, a figure that resulted in an alleged overpayment of more than $300,000 in property taxes for 2003 and 2004.

"Basically, everywhere I look around me - whether across from James Pond or behind my back fence - assessors say that property values plummet. And I know that's not the case in the real world," Mr. Graham told the chairman of the Massachusetts Appellate Tax Board in Boston. "What I've always been looking for is to have my lots treated as they are - interior lots treated as interior lots, not beach front. In general, I'd like to be treated fairly."

The remarks came during the sixth week of the ongoing tax hearing. Mr. Graham, who owns 235 acres on the North Shore in West Tisbury, is challenging his tax assessments for the years 2003 and 2004. The outcome of the case has potentially far-reaching implications for the town.

From the witness stand last week, Mr. Graham took the board through a long list of comparable properties for each of his seven lots, and proposed remedies to the values the town placed on his land by changing certain aspects of the town's assessments that his attorneys claim were incorrect.

The revised assessments would put the total value of Mr. Graham's 235 acres at Mohu off Lambert's Cove Road at just over $20 million. The town in 2003 and 2004 assessed his land at more than $50 million, charging him over a half-million dollars in property taxes.

Attorney Ellen Hutchinson, representing the West Tisbury assessors, challenged Mr. Graham's authority to speak about changing specific details on the assessments. Taxpayers have the right to offer their opinion of value, Ms. Hutchinson said, but the board does not expressly grant them the right to give an opinion of how assessments should have been calculated.

"Mr. Graham is not an assessor, he is not an appraiser, and he does not have the ability to come in and testify to this information," Ms. Hutchinson said. "This is not an estimate of fair market value based on his knowledge of comparable lots. This is based on analysis of how the mass appraisal was done in West Tisbury."

Mr. Graham argued that he had the ability to testify about the mass appraisal system, which is the method used by assessors to determine property values for an entire town.

"I know these lots and this area exceptionally well. I'm very familiar with the land and values," he said. "I have also had quite an intensive two-year course in assessing. I noticed the court has been educated as we go along here, and when I began this process in 2003 I had to do it myself. Boy, do I know it."

Tax board chairman Anne Foley, who is presiding over the case in her first hearing as a commissioner, challenged Ms. Hutchinson on her attempted distinction.

"Does the statute not say that assessments should approach - if not be - fair market value?" Chairman Foley asked. "How else would Mr. Graham be able to determine fair market value? It's the same as an assessment," she said before overruling Ms. Hutchinson's objection.

During an exchange between the chairman and attorneys on both sides about the admissibility of certain information from 2002, attorney Richard Wulsin, who represents Mr. Graham, said he is trying to follow more than one theory in the case - not only that the town overvalued Mr. Graham's properties, but also that flaws exist in the assessors' methods.

Under Massachusetts law, a taxpayer must prove at least one of those theories to win a case at the appellate tax board.

"There are layers upon layers here, your honor, in terms of history and legal theories. It's very difficult to talk about all of them at the same time," Mr. Graham told Chairman Foley in response to the exchange. "These are the values I was looking at when I decided to file for abatements in 2003. I was seeing something really wrong with the system that produced these values."

Mr. Graham has now testified four full days, and will take the stand again today for cross-examination, as the hearing enters its seventh week. His attorneys, who have introduced more than 200 pieces of evidence, are expected to rest their case sometime this week. Ms. Hutchinson will then begin the town's defense.

With the board scheduled to take another two-week break in July, it now appears the hearing will continue well into August. It began on May 3.

Tax board employees said the Graham case is the longest residential property tax appeal hearing in the board's history. They also said it is the most expensive residential property assessment ever challenged.

From the witness stand last week, Mr. Graham continued a slide show presentation of aerial photographs from West Tisbury. At one point Chairman Foley asked him to clarify his description of one private north shore beach as more desirable than another.

"It's all relative, your honor. These are all fabulous properties, and anyone would be delighted to have them," Mr. Graham said. "Sometimes it's hard to compare these properties without sounding silly."

He also challenged the assessors' determination that waterfront properties along Lambert's Cove should be valued at less than half those near Paul's Point because of their proximity to the town beach.

"The town beach is still great - it just has people on it. For these values to make sense, they would have to be next to something awful - not a beautiful beach with people on it," Mr. Graham said. "Are there differences? Sure, but to me within a much smaller range than the town's designation of neighborhoods. There ought to be sensible and consistent relationships between these properties, and there isn't."

During his presentation, Mr. Graham showed a number of properties on the south shore of West Tisbury that were valued significantly lower than those in his neighborhood near Paul's Point. Assessors valued a 50-acre lot on the Atlantic Ocean near Big Homer's Pond at $5.4 million, while Mr. Graham's 50-acre lot on the north shore along James Pond is assessed at more than $16 million.

The slide show also included photographs of the 80-acre waterfront property near Mr. Graham's land that has become a central focus of the case. Mr. Graham's attorneys claim that assessors altered the property record of the 80-acre lot - changing the excess acreage from having ocean frontage and a water view to having neither - to justify higher values for surrounding parcels.

The aerial photographs note the property rises as it extends back from the water and apparently offers water views from much of the parcel. The photographs also show extensive clearing on the property. The timing of that clearing has now come under scrutiny.

Chairman Foley asked Mr. Graham a series of specific questions about the views and clearing. His answers directly contradicted the earlier testimony of an appraiser hired by the town to revalue the property. The appraiser testified last month that she visited the nearby property in the spring of 2001 and saw both the house and extensive trees along the driveway.

Mr. Graham told Chairman Foley that an older house on the property had been demolished by the middle of 2000 and that the clearing began earlier that year.

Chairman Foley also asked Mr. Graham a series of questions about the abatement hearing held in May 2003 between him and West Tisbury assessors. Assessors lowered the value of his properties from $57 to $51 million after the hearing, but did not grant him credit for extensive wetlands on his land that he showed them in surveying maps.

Chairman Foley asked Mr. Graham what arguments he presented at the abatement hearing.

"The general arguments made here are the same as the arguments there," Mr. Graham said. "With the exception that at that time we were still assuming good faith of the assessors."