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Court rules 21 Seattle property owners owe city $16M in taxes

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(The Center Square) – A number of downtown Seattle property owners owe the city a collective $16 million in taxes after a Washington Court of Appeals ruling.

Downtown property owners are subject to a local improvement district tax that go toward improvement projects near the Seattle waterfront.

Property owners within the Seattle Waterfront district area contribute to a portion of the area’s improvement costs. They pay an annual assessment payment based on a $1,000 assessment paid over 20 years at a 3.8% interest rate.

According to the Waterfront Seattle website, the total payment from 2022 through 2041 would be approximately $1,586 based on a $1,000 annual assessment for a property owner within the district.

Twenty-one property owners went to court to argue their share in taxes should be lowered. Last March, a King County Superior Court judge ruled that the City of Seattle must refund $16 million in assessments to the property owners who protested.

In turn, Seattle City Attorney Ann Davison appealed the lower court ruling.

The Washington Court of Appeals announced its reversal of the King County Superior Court’s decision on Tuesday. In a statement, the court concluded that the superior court made a mistake in determining that the assessments were founded on a fundamentally incorrect basis and that they were arbitrary and capricious.

“We hold that the city’s [local improvement district] assessments were not calculated on a fundamentally wrong basis and that the city council did not act arbitrarily or capriciously in adopting the [local improvement district] assessments,” the court stated.

The city’s Waterfront Local Improvement District funds approximately $739 million for Seattle’s central waterfront construction through 2024 when it is expected to be completed.

“This will allow the city to collect the needed funds for the project,” Davison said in a statement.

The 21 property owners now have 20 days to file a motion for reconsideration or 30 days to file a petition for review by the Washington Supreme Court.