Eight Marina del Rey businesses paid lower tax rates for several years in the previous decade with- out the knowledge or authorization of Los Angeles County tax officials, The Argonaut has learned.
Tahiti Marina Apartments, the Jamaica Bay Inn and restaurants, the Warehouse, Tony P’s Dockside Grill and the Cheesecake Factory are included in a number of properties that received substantial re- ductions on their tax assessments, for several years in some cases, according to the county assessor’s office.
“The (assessor’s) department discovered Mari- na properties with their values lowered without au- thorization and were not included in the county’s tax assessment roll for a period of years,” Louis Reyes, a spokesman for the assessor’s office,
wrote in an email to The Argonaut. Scott Schenter, an appraiser in the county’s
Culver City office, was arrested in May on 60 fel- ony counts, including falsifying records and ille- gally lowering property values by $172 million. He has pleaded not guilty.
Schenter worked in the possessory properties department at the assessor’s office and the Marina properties, as well as others on the Westside, were under his purview, said Reyes.
According to the assessor’s website, when a person or entity leases, rents, or uses real estate owned by a government agency for its exclusive use, a taxable possessory interest occurs. The taxa- tion of this interest is similar to the taxation of owners of privately owned property. However, a
holder of a possessory interest frequently pays significantly less property tax than the private owner of a similar property.
Law enforcement authorities allege that the lowering of prop- erty values on residences and commercial property on the Westside forms the centerpiece of a scheme crafted by county Assessor John Noguez to reward his campaign contributors for their assistance during his 2010 race.
The tax reductions on the Marina properties, which are owned by Los Angeles County, have been forwarded by the as- sessor’s office for review to county District Attorney Steve Cooley, who for several months accused the assessor of wrong- doing.
Noguez was arrested Oct. 23 on several felony counts, includ- ing bribery and misappropriation of funds.
The Commodore Club and its three parcels in Marina del Rey also had its values lowered for a period of years.
Schenter alleges that Noguez asked him to lower the values of several properties, a claim that the assessor has denied. The ap- praiser told the Los Angeles Times in April that he had re- duced the tax values of several wealthy Westside homeowners who had contributed to Noguez’s campaign.
Reyes said Schenter’s alleged actions were discovered in 2011, and after he was confronted he chose to resign earlier this year.
The unauthorized Marina tax deductions occurred before Noguez, who has been with the assessor’s office for nearly 30 years, was elected assessor.
From 2003 until 2009, Tony P’s on Admiralty Way received a substantial reduction in its prop- erty tax. In 2001, the popular seafood restaurant was assessed at a rate of $1,865,000, accord- ing to tax records obtained by The Argonaut. Beginning in 2003, the tax value was lowered by nearly two thirds to $624,000 for two years, and to $535,000 in 2005. The parcel was then lowered to $341,000 for three consecutive years in 2006-08. Schenter worked in the posses- sory department during these years, said Reyes.
The county was able to re- cover the accurate tax assess- ments from 2005 to 2008 but not from 2003 and 2004. “We were not able to correct (for 2003 and 2004) due to the four-year limit,” Reyes said.
After more than a four-year period has transpired, the county cannot recoup lost property tax revenue, Reyes said.
Anthony Palermo, the proprietor of Tony P’s, acknowledged that he learned his tax value had taken a precipitous drop several years ago but pointed out that he also repaid back the taxes that he owed. Palermo said he hired an expert who sought a more fa- vorable property tax rate, as many businesses owners do within the county.
“We hired someone for that,” he said. “You hire people to see if they can get a better (rate).”
Reyes said it is not uncom- mon for residents to seek reduc- tions in their taxes. “Generally, property owners will hire experts to work with our office to seek adjustments on their properties,” he confirmed.
“But these reductions are very unusual and very signifi- cant,” Reyes added.
The nearby Warehouse res- taurant had been assessed as high as $2,521,682 for tax pur- pose in 2005. But over the next two years, its tax assessment was slashed to $803,000 in 2006 and $972,000 in 2007.
The Cheesecake Factory on Via Marina had an assessed value of nearly $1.9 million in 2002 but it dropped to $465,000 for four consecutive years begin- ning in 2003, county records show. The parcel went back up to more than $2 million in 2007, the year Schenter was trans- ferred from the possessory unit.
“The Cheesecake Factory did not have any involvement in, nor did we benefit from, any reas- sessments obtained on our Mari- na del Rey restaurant during the period in question,” said Debby Zurzolo, general counsel of The Cheesecake Factory Incorporat- ed. “The Cheesecake Factory subleases this site and does not have the right under its sublease to apply for or control reassess- ments.”
The Tahiti Marina apartment complex’s assessed value dropped from $25 million in 2001 to $13 million in 2003. It has not changed since, records show.
Reyes believes Schenter’s al- leged conduct is not indicative of a widespread problem within the assessor’s office. “(Schenter’s) unauthorized changes of tax values is very un- usual and not reflective of the appraisers in our office,” he ac- knowledged.
The controversy surrounding Noguez lasted for several months before his arrest and cast a pall over the county Board of Supervisors. The only supervisor who did not support Noguez in his 2010 campaign was Fifth District Supervisor Michael An- tonovich.
In the wake of the scandal surrounding Noguez, he decided to take a leave of absence June 1.
“In the interest of restoring public confidence in the profes- sionalism, integrity and impar- tiality of the assessor’s office, I intend to take a leave of absence from my duties as assessor,” he wrote in a letter to the supervi- sors. “I do not take this decision lightly. It is my sincere hope that the leave of absence will allow the assessor’s office to adhere to its mission during this important time.”
The supervisors appointed Department of Beaches and Har- bors Director Santos Kreimann June 19 as Noguez’s replace- ment while the assessor is on leave.
“Restoring the public’s trust is the most important thing,” Krei- mann said in an exclusive inter- view with The Argonaut. “There are a lot talented people in the organization and I’m going to be asking a lot of questions over the next several weeks and months.”
Kreimann also continues to
serve as Beaches and Harbors di- rector.
If convicted, Schenter could be sentenced to 33 years in pris- on.
Noguez has been in jail on $1.2 million bail since his arrest. He was slated to appear in court Nov. 7.§