THE JAMAICA BAY INN is one of several Marina del Rey leaseholders that had their tax value assessments lowered without authorization in the middle of the last decade, says the county assessor’s department.

A Marina del Rey restaurant owner is disputing that the possessory tax rate he paid six years ago was improperly reduced, despite what representatives of the county assessor’s office have stated publicly.
Lee Spencer, the owner of the Warehouse restaurant on Admiralty Way, contends the tax value rate that he was assessed for the years 2006 and 2007 were fair and should not have been considered unusually low by the assessor’s office.
“I think they were all legitimate reductions,” Spencer said.
The years in question, according to the assessor’s office, were improperly adjusted, as were several other Marina properties over an eight year period.
Spencer’s claims come after an Argonaut story last month that identified eight Marina parcels that paid less tax than they should have for certain years last decade. An appraiser stands accused of illegally lowering properties while he was a member of the possessory unit of the assessor’s office.
The reductions were discovered last year and an internal investigation showed they were done without the office’s consent, said Louis Reyes, a spokesman with the county assessor’s office.
“The (assessor’s) department discovered Marina properties with their values lowered without authorization and were not included in the county’s tax assessment roll for a period of years,” Reyes said.
Reyes said all of the Marina properties that had their tax values lowered were under the purview of former county appraiser Scott Schenter, who was working in the possessory properties department when the unauthorized reductions occurred.
Schenter was arrested in May on 60 felony counts, including falsifying records and illegally lowering property values by $172 million. He has pleaded not guilty.
The Warehouse’s taxable value assessment dropped to $803,000 in 2006 and $972,000 in 2007 from $2,521,682 in 2005. According to the assessor’s office, the two-year reductions were unusually low and were done without the consent of the assessor.
Spencer believes many of the Marina parcels, which are owned by Los Angeles County, are “way overvalued” and because he and many other lessees do not own their businesses’ buildings, there is no incentive to make improvements without a long-term lease. In addition, the lessees must pay the county a percentage each month, regardless if the restaurant has not had a profitable month.
“If you have an unsellable asset, how much possessory interest do you really have?” he asked.
Patricia Younis of the Bridge Group worked with the Warehouse over a period of years to secure a more favorable tax values rate for the Warehouse, Spencer said.
The owner of the Warehouse said he paid Younis a minimum of $2,000 but the rate would be less if the tax bill was eventually reduced.
The Bridge Group is an Oxnard-based company that is involved in activities currently including commercial real estate tax appeals and appraisal management, among other interests.
It is not uncommon for businesses and homeowners to petition the county for adjusted rates after they receive their tax value assessments.
But Reyes said the Marina property reductions were far lower than any appraiser would have given, as well as being unauthorized.
Spencer thinks the fluctuation in his tax value assessments are the product of the state of the economy as opposed to an artificial lowering allegedly by a wayward appraiser.
“The county has big years and off years,” he said. “When there’s a (financial collapse), I think they try to make a little bit up through (the tax assessments).”
Reyes declined to comment on Spencer’s assertion, but did say those who dispute their tax bills have options at their disposal.
“Any owner or leaseholder who disagrees with their evaluation can apply for a ‘decline and review’ which many property owners do,” Reyes added.
In 2006, according to Spencer’s adjusted property tax records, a notation under a line entitled special information states “correction to roll bill.” That year, the restaurant’s prior assessed value was listed at $2,048,237 with $523,878 in land improvements but with the “correction” it dropped to $403,000 in value as well as for land improvements.
Schenter transferred from the possessory property department after the 2007-08 fiscal year.
Reyes said Schenter’s alleged actions were discovered in 2011, and after he was confronted he chose to resign earlier this year.
Seven other Marina properties had their tax values lowered over a five year period, tax records show. Along with the Warehouse, the Commodore Club and its two parcels, Tony P’s Dockside Grill, the Cheesecake Factory, Tahiti Marina Apartments and The Jamaica Bay Inn paid rates that were considerably lower than they should have during the mid-2000s because the tax value on the parcels was reduced. All are what are known as possessory properties, in which a taxable possessory interest occurs when a person or entity leases, rents, or uses real estate owned by a government agency for its exclusive use.
The Commodore Club is the lessee of the parcel where the Warehouse sits, Spencer explained. Its office and restaurant are considered separate parcels. The club is one of several master leaseholders in the Marina, and Los Angeles County owns the land on which the parcels are located.
In addition to Schenter being charged with numerous felony counts, his former boss, John Noguez, is also facing indictment. Noguez, the county assessor, was arrested last month on charges of misappropriating funds and bribery. Schenter alleges Noguez asked him to lower the residential property values on behalf of the assessor’s campaign contributors, a claim that Noguez, who was elected in 2010, has denied.
The Marina parcels that were improperly adjusted have been forwarded to District Attorney Steve Cooley for his review.
Spencer said the properties in the Marina are declining assets and he hopes to secure a new long-term lease when his comes up for renewal in 2020. He hopes to give the Warehouse a major overhaul, but is reluctant to do so until he can acquire the lease. In the meantime, he insists the two-year period when his tax value dropped precipitously was fair.
“Any reduction that (the county) thinks is unfair is illusory,” he asserted.
Younis did not return calls for comment. §