The Okanogan County Board of Equalization on Sept. 25 lowered the assessor's valuations for five parcels tied to the resort identified in filings as Sun Cove Resort (also referred to by county staff as Wanaka Lake Resort), after hearing testimony from the property owner and the assessor's appraiser.

The board said the assessor's income analysis and some recorded property characteristics did not justify the assessor's higher values and adopted lower values calculated by the board using the evidence introduced at the hearing.

Owner and petitioner Kareem Dares told the board he and his wife bought the business "as a passion project" and that operating income this season and prior years left the business at a loss. "The top line revenue for 2024 was at a $128,000," Dares said when explaining cash flow and why he argued the assessor's valuation overstated market value.

The assessor's appraiser disputed Dares's cap-rate choice and income adjustments. The appraiser said his income approach produced a cap rate of about 7.03% for 2022 and 5.32% for 2023 based on net operating income, and he told the board those figures aligned with local market indicators the department uses. "I come up with a 7.03% and a 5.32% cap rate," the appraiser said.

Board members debated which items of operating income and expense to include. Assessors exclude some tax and accounting deductions by Department of Revenue guidelines; Dares argued the appraiser's NOI omitted management compensation and other cash costs that matter to buyers. "The numbers that have been provided do not include any labor," Dares said.

After deliberation the board overruled the assessor for BOE 25-042 and set a new total value of $100,400 for that parcel; it set 94,200 for BOE 25-043, 145,000 for BOE 25-044, 138,000 for BOE 25-045 and 233,700 for BOE 25-046. The board recorded unanimous "aye" votes to adopt the revised totals for the parcels in question.

The hearing record includes documentary income and tax returns for 2021'24, the parties' testimony on seller financing terms and note rates (petitioner said some seller financing carries 5.5% and 9% components), and the assessor's calculation sheets. The board's decision notes the income approach and the assessor's stated property characteristics as the bases for changing values.

The board clerk told parties they will receive written decisions by mail and that appeals from the BOE decision go to the Washington State Board of Tax Appeals. "You will receive a written copy of the decision by mail," Chairman Terrence Flanagan told the petitioner at the start of the hearing.

The county will send the party notices and the revised assessed values to taxing districts and property owners as required by law.