Mariposa board hears dispute over whether National Park Service expenses reduce Yosemite Hospitalitytaxable value

The Mariposa County Board of Equalization on May 7 heard a multi-hour bifurcated valuation hearing over the taxable possessory interest created by Yosemite Hospitality's concession contract at Yosemite National Park.

The dispute centers on whether expenses the National Park Service (NPS) incurs to operate and maintain the park should be deducted from the franchise fees that Yosemite Hospitality pays to NPS when calculating the value of the taxable possessory interest as of the base valuation date, March 1, 2016.

Why it matters: the deduction could materially reduce the amount of property tax Yosemite Hospitality owes on the possession interest created by the concession contract at Yosemite. Under the parties'stipulation the case is being valued by the income approach using economic rent (the percentage franchise fee paid to NPS). The applicant argues Rule 21 and related guidance require deduction of any government landlord expense that is necessary to maintain the income stream; the assessor says many NPS actions are government services or capital projects that should not be deducted as operating expenses.

What happened at the hearing

Yosemite Hospitality (the applicant) presented testimony and exhibits, including a company witness and valuation experts from VersaTax. Nick Sponaugle, identified as vice president of operations for Yosemite Hospitality, described the concession operations that generate revenue (lodging, rafting, shuttles, retail, fuel, employee housing) and said the concessionaire's ability to earn that revenue depends on park-wide services such as bear management, trail maintenance, road plowing (Badger Pass), river clearance for rafting and shuttle bus service. "I work for Yosemite Hospitality in Yosemite National Park," Sponaugle said…