The Kramer Avenue landslide on Tuesday wiped out a house and much of the road. Three people are missing and presumed dead. (Rachel Waldholz, KCAW)

The Kramer Avenue landslide on August 18th wiped out Christine McGraw’s house and much of the road. The road has since been cleared and the area temporary blocked off for further development. (Rachel Waldholz, KCAW)

A Sitka property wiped out by last year’s deadly landslide is still taxable, at least according to city code. The Sitka Assembly met Monday (5-2-16) as the Board of Equalization, to hear an appeal from the owner of a home on Kramer Avenue. The home was demolished in the August 18th landslide, killing three men working on the subdivision.

Downloadable audio.

The question at the center of the appeal is a confounding one: does land have value if a landslide went through it? During an appeal before the Board of Equalization, Chris McGraw said no. “Paying property taxes on a piece of property that you’ll never live on and never use is difficult for [Christine McGraw],” he told KCAW.

Christine was traveling during the appeal, so her ex-husband Chris represented her before the Board of Equalization.

Christine bought the land – Lot One in the North Woodbury Subdivision – for $110,000 in 2014 to build a home. It was partially complete when the landslide hit, killing two construction workers painting inside and the city’s building inspector. Speaking on Christine’s behalf, Chris McGraw said, “She lost her house and it was not insured and so it is a significant financial loss on her part.”

Here’s the tricky part about this case: Sitka does not have anything in code about how to adjust value after a natural disaster, which left Assessor Wendy Lawrence in a tough spot. She told that Assembly that in previous Sitka landslides, property values were seldom adjusted, and dropped 20 to 30% at most. The Kramer slide is a unique case. Lawrence said, “This was an unprecedented event. We didn’t have loss of life in the prior, I realize that. But I have to have a standard procedure to evaluate everyone.”

Without a legal compass in Sitka, Lawrence followed Juneau’s Mass Wasting Ordinance for landslides, which advises property values be reduced by 50%. The Assembly approved. And when the January 1, 2016 assessment rolled around, Lot 1’s new value was $52,700. The McGraws think it should be zero.

Chris McGraw told the Assembly, “In August you,  couldn’t find a buyer anywhere that would pay $5 for that property. So if what we’re going by is fair market value and you’re not going to be able to sell that property for years to come – 10, 20 – then it has no value.”

Saying that is one thing, but proving the land would flop on the market is a different story. In these appeals, the burden of proof is on the petitioner, not the assessor. And the McGraws didn’t bring any factual or written evidence that the land could not be sold, because Christine hasn’t put the property up for sale. Four parcels in the vicinity have sold since the landslide.

Basically, the argument Lot 1 would have no buyer – for even building a storage shed – needed more proof. Mayor Mim McConnell said, “If you have anything in writing, someone who looked at it and said ‘No, I’m not going to buy that,’ that would be some evidence that we could accept. You’re asking us to take your word for it, but we need to have some evidence.”

On those grounds, the land’s value was upheld at $52,700, which means Christine McGraw will have to pay $312.60 on property taxes.

As the Board of Equalization, the Assembly is bound by pretty strict legal standards. But Hunter lamented this is the way it has to be. “It’s a really awkward situation because we’re kind of stuck by code and the process we’ve created. It’s going to require a change to Sitka General Code in order to change this,” he said.

Hunter added that next year, when the Board meets, he hopes Christine McGraw will have more evidence. Chris McGraw said the same. After the meeting, he told KCAW, “You know my hope is for next year, now that they have the hazard assessment, they may reevaluate those parcels up there.”

The two other parcels damaged by the Kramer Avenue landslide belong to Andrew Friske and Scott McArthur. On January 1st, the city prohibited construction in the area, until an engineer does a hazard assessment. And those findings may be the key to truly valuing the land for what it’s worth.

The other case before the Board of Equalization proved that you can be the world’s second-largest airline and still get your taxes wrong.  DAL Global Services LLC, doing business as Delta Airlines, eventually withdrew its appeal after realizing that it was simply confused over who owned what.  

The problem arose when DAL Global Services filed their property tax return and listed a disabled passenger ramp as their only asset, with a depreciated value of $1,862.

When Sitka’s assessors inspected the Delta section of airport, they saw a lot more: kiosks and office equipment, signage and bag rollers, and a variety of computer technology. They said that passenger ramp was worth nearly twice that amount. The department force-filed for $89,700.

Delta planned to challenge that assessment, until they realized those assets – which were owned by DAL – had been accidentally overlooked by both companies. 

Paige Brown is Delta’s property tax manager, based in Atlanta. Brown told KCAW this kind of mix-up is rare and attributes it to the fact that Delta is brand new to Rocky Gutierrez airport. “We’re really sensitive to the communities we serve. They are the lifeblood – not only the employees, but also our passengers and we want to make sure we abide by everything. We want to be a good partner with the City and the Borough of Sitka.”

Assessor Wendy Lawrence e-mailed KCAW and said, “Delta is quite conscientious about working with us in the community and worked with us on getting things straightened out and set up so that this won’t happen next year.”

Now that it’s been ironed out, Brown said Delta and DAL will file separately in the future.