West Tisbury Assessors Return to Tax Board

by IAN FEIN

The sense of deja vu was unmistakable at the Massachusetts Appellate
Tax Board in Boston this week.

West Tisbury assessors and their attorney were back before the tax
board on Tuesday to defend the values they had placed on north shore
properties near Paul's Point.

But instead of the previous high-profile appeal filed by resident
William W. Graham - who challenged the town's methods in
calculating a $51 million assessment for his 235 acres - the case
this week centered on a smaller property next to Mr. Graham's that
recently changed hands.

After advertising their eight-acre property on the open market for
more than four years, Dr. Timothy and Ellen Guiney this summer sold
their West Tisbury cottage and home to a neighbor for $7.5 million. The
Guineys are challenging their fiscal year 2005 assessments, in which the
town valued the property at more than $10 million, and have also filed a
subsequent appeal of their 2006 taxes.

"As Your Honor can see, there's a significant difference
between the sale price and the assessment," attorney William
Carroll, who is Mrs. Guiney's brother, told the tax board chairman
on Tuesday. "Our case is straightforward, from our perspective, in
that the sale is the best proof of the fair cash value of the
property."

But assessors' attorney Ellen Hutchinson questioned whether
the sale to a neighbor represented market value, and argued that the
transaction was too far from the January 2004 assessment date to
determine whether the assessors were right or wrong.

"That sale, as you well know, is two and a half years after
the assessment date," Ms. Hutchinson said. "We believe that
is too far out in time to be relevant for an estimate of fair market
value."

The attorneys did not finish arguments during a full day of
testimony on Tuesday, and the hearing was continued until today, when
the town is expected to finish its defense.

However long the Guiney case runs, it is unlikely to match the
Graham hearing, which, with 36 days of testimony spread out over four
months in the summer of 2005, grew to become the longest residential
property tax appeal in the history of the commonwealth. The case gripped
the town of West Tisbury, attracted attention from state officials and
assessors, and also had a lasting impact on the tax board, a
quasi-judicial state agency that hears and decides tax appeals. Tax
board chairman Anne Foley was forced out by colleagues after presiding
over the controversial Graham case, and her replacement, chairman Thomas
W. Hammonds Jr., heard the Guiney arguments this week.

The tax board this summer ruled in favor of the assessors in the
Graham matter, although the findings of facts that lie behind the
decision have yet to be issued. Once that happens, Mr. Graham has vowed
to take his case to the Massachusetts Appeals Court. Meanwhile, three
days after the tax board issued its decision in the Graham case, the
Guiney property next to Mr. Graham sold at a price $2.5 million below
its assessed value.

Ostensibly, the Guiney case should have no legal effect on the
pending Graham appeal. A Guiney decision is not expected until spring at
the earliest, and the tax board is expected to release its findings of
fact from the Graham ruling sometime next month. But it was clear on
Tuesday that tax board officials and town assessors are aware of the
obvious overlap between the two cases, and the possible conflicts that
could arise from contradictory decisions.

The facts in the cases are largely the same, and a key question
centers on how assessors should compare the Guiney and Graham parcels to
other nearby waterfront properties that sold in recent years for
eight-figure sums. Town assessors used those prices to justify steep
increases in values throughout the Paul's Point area, while
attorneys for Mr. Graham and the Guineys argued that the sales are not
comparable.

Edgartown appraiser Rita Spence, who town assessors hired as an
expert for the Guiney case, testified on Tuesday that the Paul's
Point neighborhood was one of the most exclusive on the Vineyard; she
appraised the Guiney property accordingly at $8.9 million.

But Island real estate agents Robert and Patti Kendall, who brokered
two other Paul's Point sales of more than $11 million each and
tried unsuccessfully to sell the Guiney property for more than four
years, testified that the Guiney property failed to fetch as much as
other properties in the neighborhood because it had less beach frontage
and the home was set much further back from the shore.

"The others that sold would be considered unique, triple-A,
first-tier waterfront," Mr. Kendall testified on Tuesday.
"When you're showing [the other properties to buyers], you
get people's mouths to drop open. When you show them [the Guiney
house] back here, the reaction is totally different."

Like the Graham case, the Guiney case this week also questioned the
market relevance of purchases by three brothers of the Ziff family, who
in recent years bought five contiguous parcels around Paul's Point
for a collective $56 million. Mr. Kendall testified that one Ziff
brother paid more than $1 million above the asking price of a parcel he
had brokered. During cross-examination Dr. Guiney also characterized the
Ziff purchases as non-comparabale.

"I don't think they had anything to do with the
market," said Dr. Guiney, a well-known cardiologist who divides
his time between Martha's Vineyard and Massachusetts General
Hospitals. "It was a bunch of guys with boatloads of money willing
to pay whatever they wanted to pay."

Although the Graham and Guiney appeals both challenge town
assessments, the legal arguments in the two cases are entirely
different.

The Guiney tax appeal rests on a single factor: the actual sale
price of their property.

By contrast Mr. Graham, absent market data, explored the methods and
conduct of town assessors and their third-party consultant during the
2002 townwide revaluation. Attorneys for Mr. Graham claimed that
assessors undermined the integrity of their valuation system by
intentionally manipulating property data, including one change to a
waterfront parcel near Paul's Point that tripled other property
values in the area.

The Guineys in their case did not probe assessors' methods,
but they did point to the dramatic change in property values as a
turning point in their land ownership. After the 2002 revaluation, the
Guiney assessment more than tripled, from $2.2 million to $7.9 million,
and their property taxes more than doubled, from $16,000 to $37,000. By
2005 assessors had raised the value again to $11.2 million, and the
corresponding tax bill had climbed to more than $50,000.

Dr. Guiney testified this week that the 2002 revaluation forced them
to sell their West Tisbury home because they could no longer transfer
the property to their children in a manner where they could afford the
taxes. The Guineys placed the north shore property on the open market in
February 2002, and in the fall of 2003 bought a home in the Chilmark
section of Seven Gates Farm.

Ms. Hutchinson in her cross-examinations this week questioned
whether the circumstances of the Guiney sale - namely, that the
Guineys were eager to sell the property and that it went to a neighbor
- disqualified it from market consideration. She also suggested
that the Guineys turned down previous offers closer to $9 million, but
Dr. Guiney testified that he received no formal signed offers for the
property until May 2006, when he reached an agreement with his
purchasing neighbor after an afternoon of negotiations.

Even though the sale took place more than two years after the
assessment date, the Guineys argued that the sale represents the best
evidence of value because the property was continuously and actively
marketed for more than four years with no other serious offers. The
property at one point was listed by seven different brokers and was
shown in Island publications as well as larger markets such as the New
York Times, Wall Street Journal and International Herald Tribune.

Ms. Hutchinson used the advertisements to challenge the credibility
of Mr. and Mrs. Kendall, who marketed the property as premier oceanfront
but testified that was not top tier. The Kendalls explained that they
use advertisements to attract potential customers, and Dr. Guiney in his
testimony made light of the alleged contradiction.

"By the way," Dr. Guiney said as an aside to the tax
board chairman. "They're not under oath when they write
those ads."