Tax dispute over JW Marriott headed for trial

A decade-old dispute over the assessment of Indianapolis’ largest hotel is headed for trial after the Indiana Tax Court declined to enter summary judgment for either the owner of the downtown JW Marriott or the Marion County assessor.

The case of Convention Headquarters Hotels, LLC v. Marion County Assessor, 19T-TA-21, involves Indianapolis’ blue glass giant, which sits on more than four acres of land in the city’s central business district and is owned by Convention Headquarters Hotels LLC.

Two years after Convention HQ broke ground on the hotel in 2008, the Marion County assessor used a “percentage complete” factor to value the partially complete improvements made to the structure, including the hotel building itself and the enclosed skywalk, at $71,716,700. An assessed value of $15,270,400 was assigned to the land.

Convention HQ protested the 2010 assessment. After the Marion County Property Tax Assessment Board of Appeals failed to act on its protest more than six years later, Convention HQ sought review with the Indiana Board of Tax Review pursuant to Indiana Code § 6-1.1-15-1(o).

After the maximum time elapsed with still no final determination from the Indiana board, Convention HQ appealed to the Indiana Tax Court, alleging that the 2010 assessment of its partially complete hotel violated the Equal Protection and Due Process clauses of the 14th Amendment, its civil rights pursuant to 42 U.S.C. § 1983 and the Property Taxation and Equal Privileges and Immunities Clauses of the Indiana Constitution. It also argued that its land assessment contravened Indiana’s market value-in-use standard.

The assessor denied Convention HQ’s allegations and instead filed a counterclaim asking to raise the 2010 assessment, but the Tax Court bifurcated the parties’ claims, staying all proceedings on their valuation claims until the constitutional claims were fully resolved. Both parties eventually moved for partial summary judgment on various claims, which the Tax Court denied in an Aug. 5 order.

The court first addressed Convention HQ’s argument that the assessor had treated its partially complete hotel differently than he treated similarly situated properties in violation of the Equal Protection Clause. Specifically, Convention HQ argued that seven buildings in Marion County ranging from 40% to 85% complete were assigned assessed values between $411,200 and $80,165,500 on six separate assessment dates. However, the remaining partially complete buildings contained no indication in the “% Comp” column that the building was less than 100% complete, contained no sketches of any portion of a partially complete building and indicated a building value of zero.

But even if Convention HQ’s inference from its evidence was reasonable, the Tax Court held that the hotel owner was not entitled to summary judgment because the assessor designated two affidavits by a Level III certified assessor-appraiser and commercial and industrial valuation analyst “that raise a genuine issue of material fact whether all the similarly situated properties were actually assessed.”

 “This averment, as well as the related averments in his second affidavit, albeit thin on detail, directly contradict Convention HQ’s inference that the Assessor did not assess all the commercial properties’ partially-complete buildings for assessment dates from 2006 through 2019,” Judge Martha Blood Wentworth wrote. “… Therefore, the Court finds that the Assessor has raised a genuine issue of material fact for trial on the equal protection claim… .”

Wentworth ruled similarly on Convention HQ’s due process claim, concluding that whether the assessor assessed some, but not all, of the commercial properties with partially complete buildings is a genuine issue of material fact that must be resolved at trial.

“… (A)s the Court has found for each of its other constitutional claims, there is a real dispute about whether Convention HQ’s property was assessed and other similarly situated properties were not,” Wentworth wrote. She added that it was “premature for the Court to consider whether there are inherent differences between Convention HQ’s property and other similarly situated properties or whether preferential treatment is uniformly applicable and equally available to all those similarly situated.”

As for the arguments raised by the assessor, Wentworth concluded the assessor had not shown he was entitled to summary judgment as a matter of law on Convention HQ’s two Indiana constitutional claims.

It also found the assessor was not entitled to judgment on its motion to dismiss Convention HQ’s 42 U.S.C. § 1983 claim on the basis that it was time-barred, under absolute immunity and on its assertion that Convention HQ did not meet the Monell v. Dep’t of Soc. Servs. of New York, 436 U.S. 658, 694 (1978), pleading requirements for bringing a Section 1983 claim.

“In light of the disposition of the issues set forth above, the Court denies each party’s motion for partial summary judgment,” Wentworth concluded. “Under separate cover, the Court will schedule a case management conference with the parties to discuss the issues remaining for trial.”