Gary mayor: Majestic tax ruling faulty
By Carole Carlson email@example.com/302-0949 December 18, 2013 4:08PM
Entrance to Majestic Star casinos in Buffington Harbor. | Archive~Sun-Times Media
Updated: December 18, 2013 10:49PM
GARY — Mayor Karen Freeman-Wilson said Wednesday that a federal ruling calling for the city and county to pay Majestic Star Casino a $7.4 million property tax refund should evaluated and appealed.
Of the $7.4 million, Freeman-Wilson said the city and Redevelopment Department refund would total between $5.5 million and $6 million. The rest would be owed by the Gary Community School Corp. and Lake County. An appeal must be filed within 30 days.
“We are weighing our options of whether to proceed to the 3rd Circuit (U.S. Court of Appeals) to continue the appeal or to seek federal mediation,” Freeman-Wilson said.
“The sum and substance of the argument is why would you insure something for more than its worth?” Freeman-Wilson said, referring to a technical argument over the method used to value Majestic’s two gaming boats.
U.S. District Judge Leonard P. Stark, in the U.S. District Court in Delaware, affirmed a ruling Dec. 10 by a bankruptcy court that sided with the casino. Majestic Star argued the county assessor overvalued the casino’s two boats moored at Buffington Harbor in Gary. The time period of the assessments was from 2006 to 2010.
“It doesn’t mean the end of the line,” said Freeman-Wilson. “The county has indicated they would fund the appeal, but if they decide not to fund it, I think we would agree to pursue it. I think it’s worth it to us.”
The county argued the bankruptcy court used inaccurate values on the gaming boats. The county’s position is that the properties are worth about $55 million, instead of the much lower 2007 valuations of $6.29 million for Majestic Star I and $5.58 million for Majestic Star II.
The county maintained the casinos should have been assessed by the bankruptcy judge at market value instead of the “salvage value” method used by the Delaware bankruptcy court judge.
If the ruling stands, Wayzata Investment Partners LLC would be the beneficiary of the refund since it now owns Majestic Star, which filed bankruptcy in 2009.