Industrial park owner John Hern scored a $71,000 reduction in his property tax appraisals from the Kootenai County commissioners in mid-July, just a week before a judge erased a $495,000 environmental fine.
Hern filed eight property tax appeals with the Kootenai County Commission and won reductions in three of the cases. He is appealing the others to the Idaho Board of Tax Appeals.
This year’s property tax rates have not been set. Based on last year’s rates, Hern will save about $2,800 in property taxes on his various Kootenai County properties.
Hern declined comment.
Hern and his family gave $800 to Commission Chairman Dick Compton’s 1994 campaign, but nothing in 1996. Hern gave Commissioner Ron Rankin $100 in 1996 and the two men attend the same church.
Rankin earlier denied that has any sway.
“There’s absolutely no correlation whatsoever,” Compton said. “If you look at all of the people who have contributed, and who got reductions, you will see no pattern.”
There are plenty of big contributors who have applied for tax breaks, and various permits and been turned down, Compton said. “When people come through the courthouse door they are treated equally, Republican or Democrat, supporter or non-supporter.”
In addition, Hern has two lawsuits against the county over earlier tax appraisals. “I guess if he thought he was getting a great deal, he wouldn’t be suing us,” Compton said.
This is not the first time Hern has received help from the commissioners. The commissioners brought pressure to bear on the Panhandle Health District last winter after a judge fined Hern $495,000 for refusing to install a septic system or properly store hazardous chemicals at the 32-acre industrial park. The property includes Hern’s ironworks foundry, a metal-coating business, a fertilizer company and a road oiling company.
Commissioner Rankin filed an affidavit urging District Judge Craig Kosonen to reduce that fine.
There’s nothing amiss, Compton said. “We made him clean up that area like you can’t believe,” he said.
“We got crossways on the Panhandle Health suit because we were co-plaintiffs on the original suit and he had satisfied every requirement” of the agency, Compton said. “Then all of a sudden he got hit with a $490,000 fine and that seemed a little strange.”
That fine was levied in November 1996 because of Hern’s “intransigent refusal to comply with the most basic, fundamental requirement … continuing despite the onset of litigation,” District Judge Craig Kosonen said. Kosonen reversed himself in mid-July, forgiving the fine and assessing Hern $19,975 in legal fees.
Hern told the court that means the entire affair cost him $75,000, including legal fees and the cost of fixing sewer problem.
Hern has said there is no environmental damage to his property. But for the past three years, he has argued that his battle with Panhandle Health has stigmatized his property. In 1995, for example, Hern told the state Tax Appeals Board a lawsuit filed by the Panhandle Health made his property “unmarketable, somewhat like a Superfund site,” according to a transcript before the Tax Appeals Board.
The transcript said: Hern “intended to use the rental income from the buildings for his retirement, but since the publicity, one renter has left, and he has been unable to rent any more space. A new building has been standing empty for quite awhile.”
The “stigmatized” property argument was used again in 1996 and this year to try to persuade taxing authorities to reduce his assessment.
Meanwhile, the dearth of tenants may be disappearing. Just last week, Hern applied for permits for three new metal buildings.
Each building, valued at $27,000, will cover 1,500 square feet and be rented out, according to the Kootenai County Building Department.
The commissioners refused to reduce Hern’s tax appraisal based on the stigma argument. They did, however, knock $56,000 off of the valuation of his 30 buildings.
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