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."