The news media and political blogs have been fascinated with Mitt Romney’s La Jolla beach-front property. The home’s enormous price tag, acrimony from his neighbors and a detailed look into Mitt’s repeated attempts to get tax cuts on the 12 million dollar property have all fanned the flames of controversy. Now that this issue is largely passed out of the news cycle, let’s look beyond the headlines and opinion-pieces and focus on the facts behind the hoopla about Mitt Romney’s La Jolla mansion.
How Ann and Mitt Romney Saved $109,000 in San Diego Property Taxes
Mitt Romney paid $12 million for the three-bedroom Spanish-style La Jolla villa in 2008. The beachfront property has open views of the ocean and sits at the end of a quiet on a one-way street. Former residents include first woman mayor of San Diego, Maureen O’Connor, and actor/activist Richard Gere.
The Romneys paid cash for the house and immediately applied for property tax relief. Real estate attorneys hired by Mitt Romney waged a months-long campaign with the San Diego County tax assessors’ office to reduce the annual property tax bill.
The property was initially assessed by the County at $12.24 million in 2009. The Romneys asked for it to be reduced to $6.8 million, claiming that the home lost about 45% of its value since its purchase seven months ago. Thirteen months later they hired San Diego attorney and lobbyist Matthew Peterson, who filed an amended appeal asserting that the decline in the home’s value was a more reasonable 27.3%, putting it at $8.9 million.
A new appeal was filed for the 2010 tax year, this time Peterson had the help of La Jolla property appraiser John Streb. They were now asking the assessed value of the house to be dropped down to $7.5 million, or 38.7% lower than the 2009 valuation.
The San Diego County Assessment Appeals Board, for its part, agreed that the value of the Romney property had dropped since 2008, but did not agree with the $7.5 million figure claimed by Romney’s appraiser. The Board retroactively lowered the 2009 assessment to $11.4 million, decreasing Romney’s property tax burden from $134,909 to $125,291 for that year. They then reduced the 2010 assessment to an even $10 million, lowering that year’s tax bill to $110,180 from $134,535.
For the 2011 tax year the San Diego County tax assessor’s office lowered the property’s assessment even further to $8.7 million, bringing the property tax down to $96,843. This $8.7 million valuation of the Romney home will likely stay the same for 2012 according to Jeffrey Olson, a division chief with the San Diego assessor’s office. It also should be pointed out that Romney’s attorneys did not have to file for reassessment in 2011, as the county is legally obligated to automatically reassess a property once its value has been reduced.
All told, Romney’s efforts in reassessing their home’s value have saved them $109,000 in property taxes over four years. Their attorney’s fees came to $22,000 (source: Politico). Even if the Romneys had never applied for reassessment of their property, San Diego County would have likely done it for them anyway; the County Treasury Office takes a proactive approach to assessing real estate values since the real estate bubble burst in 2008. More than 250,000 homes in San Diego County have been reassessed at lower values since the housing crash, both at the owner’s request and through the county assessor office’s own initiative.
La Jolla has 7,764 registered Republicans and 7,024 Democrats – as politically diverse as it gets, but many of Romney’s closest La Jolla neighbors in the quiet Dunemere Drive alcove are not happy about their street’s new high-profile resident. Many object to the ambitious renovation plans for the Romney house, which they fear will completely shut down their little street for hours each day. They also resent the heightened security presence on their street and the increased media attention.
The Romney property is described in the New York Times as a 3,000 sq. foot, 3 bedroom, 5 bathroom house with vaulted ceilings, a 20-yard lap pool and Jacuzzi under a Torrey pine, a wraparound deck on the second level and a lawn that slopes down to the beach. While all that sounds great on paper, a previous owner of the house stated that the house is actually quite small, limited to two bedrooms and a combination bedroom/den, and is in need of a lot of work. The house, as it currently stands, is not suitable for Mitt Romney’s large family of 5 children and 18 grandchildren.
Renovation plans indicate that the new house will increase space up to 11,000 square feet and even includes a multi-storey four car garage with an elevator to move cars up and down. Yes, this is the infamous Romney $55,000 car elevator that made headlines on the campaign trail earlier this year. The home currently has a smallish two car garage, with some additional street parking available.
Romney’s La Jolla attorney Matthew Peterson, who lobbied for the reassessment of the property value, is also helping get the extensive home renovation plans approved through various San Diego city officials. San Diego’s Development Services Department project manager Michelle Sokolowski states that because of the enormous scope of the renovation project it could be years before Romney acquires all the necessary permits to needed begin construction.
Sources: NYTimes, Politico, LATimes