Board lowers Studio 6/Studio 6–type hotel assessment to $3 million after owners' testimony

The Bannock County Board of Equalization set the assessed value of a Chubbuck motel parcel (RPRCIGP000201) at $3,000,000 after hearing testimony from the property owners and the assessor about falling revenues and valuation approaches.

Owners Jay Aurora and Tejas Chaudhry said they purchased the property a couple of years ago and saw top-line revenue decline from roughly $1,100,000 at acquisition to about $750,000 in the most recent year. They asked the board to consider lower valuation to reflect the decline in net operating income.

The assessor explained the office's methodology: a cost approach was used as a primary check and an income approach was considered. After removing business personal property, the assessor said the real-estate portion of the sale price two years earlier equated to about $3,000,000. The assessor also described an income approach that — using only the most recent year's revenue and standard expense and cap‑rate assumptions — would yield roughly $2,600,000; the assessor said a three‑year revenue average is commonly used to smooth short-term declines.

Assessor staff described industry norms heard from hotel operators in the region: expense ratios around 72 percent and cap rates in the 6–8.5 percent range; the office said it had used a conservative 8 percent cap rate in prior hotel assessments. Commissioners told the owners the assessor could return with an income‑approach analysis using a three‑year revenue trend to test whether that method would justify a lower assessment.

After discussion, a commissioner moved to set the assessed value at $3,000,000. The board approved the motion by voice vote. The board said a written decision will be mailed and reminded the owners of appeal rights.