Weeks after settling a lawsuit over the county’s assessment of real estate values at Western Refining’s old Yorktown Refinery, the company has served the county with notice that it intends to litigate an appeal of county assessments for machinery and tools taxes.
According to the appeal, the county — which assesses the value of certain machinery and tools used in industrial and commercial operations in the county — overassessed the value of the machinery and tools at the Yorktown Refinery. Furthermore, the appeal says the county continued to tax Western Refining despite the fact the company shut down operations at the Yorktown Refinery in September 2010.
When news broke of both appeals — the real estate assessments and the machinery and tools assessments — a dollar figure of up to $7.8 million was floated as the potential cost to the county. That came from an email accidentally released to a York County citizen who filed a Freedom of Information Act request. Barnett said the $7.8 million represents a worst-case scenario. The bulk of the $7.8 million figure is tied up in the machinery and tools assessment appeal.
John R. Walk of Richmond-based law firm Hirschler Fleischer filed in December 2012 the machinery and tools assessments appeal for tax years 2010 and 2011. The appeal was not active, however, until it was served on the county in December. The York County Board of Supervisors voted in November to approve a $55,000 settlement in a lawsuit over real estate tax assessments and Western Refining.
The county assessed the value of machinery and tools at the refinery at $96,144,520 for tax year 2010, according to the appeal. The county assessed another $10,490,920 for pollution control equipment. For 2011, the county assessed the value of machinery and tools at the site to be $99,102,285. Those assessments, according to the appeal, are “clearly erroneous and in excess of fair market value.”
The appeal asks for the York-Poquoson Circuit Court to nix the assessments and reassess the proper rates for both years. The company believes it was improper for the county to assess any machinery and tools taxes for 2011 as it had already shut down operations at that point. It also wants the county to consider an assessment performed by Western Refining, which it says the county refused to consider.
York County Attorney James Barnett responded to the service of the appeal last month with a motion to dismiss the entire case.
“In short, Western wants the court to accept its now unverifiable allegations without the court having an ability to review the machinery and tools as it existed on the effective dates of the pertinent tax years 2010 and 2011,” Barnett wrote.
In his motion, he outlined a number of issues the county has with the allegations from Western Refining. For example, the company did not properly inform the county that operations were suspended in September 2010. Barnett said in the motion there is a code requirement in Virginia law for companies to provide written notice by April 1 of the preceding tax year. Barnett also notes much of the machinery and tools in question have been sold and removed from the site, making it difficult to assess their value.
On the subject of the assessment from Western Refining, Barnett said the county never received the requested information it needed to consider the appeal.
Barnett also takes issue with the fact that Western Refining did not ask for specific damages in the appeal.
The matter still faces a lengthy series of events before it gets its day in court. Barnett’s motion to dismiss the case must be addressed by a judge. If it moves forward, the two sides will have to hash out their cases in discovery before settling on a trial date in the future. The possibility of a settlement also exists.
The refinery is now known as the Yorktown Terminal. Plains All American Pipeline purchased the facility in December 2011 and modified it to function as a terminal for oil. The company has spent $110 million improving the facility since it purchased it for $200 million from Western Refining.
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