Hearing opens Monday on Chevron’s $58 million property tax appeal

Chevron will present its case for a $58 million tax refund before an appeals board on Monday, as the company seeks to prove that it overpaid property taxes on its Richmond refinery between 2007 and 2009.

The hearing before the County’s Assessment Appeals Board – which listens to the cases of property owners who believe that the county has overvalued their land and thus charged too much in taxes — represents the next step in a four-year battle. Chevron believes the county has overvalued its Richmond refinery by nearly $2 billion per year, a company spokesperson said in an email.

If the company succeeds in its appeal, it would create a “brutal situation” for the county and cities, Richmond Mayor Gayle McLaughlin said.

“The city of Richmond stands to lose millions of dollars if this appeal is approved,” McLaughlin said, adding that the city would have to cut services to pay back the money.

County Assessor Gus Kramer, who has held the position since 1995, called the case a “phenomenon.”

“It is record setting,” he said. “It’s the largest appeal we’ve ever had.”

Chevron first appealed its property taxes in 2007, claiming that the County Assessor had overvalued the refinery from 2004-2006. The company asked for a refund of nearly $60 million from Contra Costa County, its cities, and its school, water and fire districts. In 2009, the Appeals Board ordered the county to refund about $18 million. In 2010, Chevron sued for more. That suit is currently before the Contra Costa Superior Court.

Chevron has also appealed its taxes for 2007-2010, and a spokesperson said in an email that the company is now deciding whether to appeal its 2011 taxes. The Assessment Appeals Board limits appeals to three-year increments, so on Monday the board will begin considering Chevron’s appeal for 2007-2009.

Chevron says that it was forced to appeal when the County raised its property taxes in 2004.

“We find it unreasonable that the County Tax Assessor determined that the total value of refinery property subject to tax more than doubled from $1.8B in 2003 to $4.8B in 2006,” Chevron said in a statement emailed to Richmond Confidential.

In 2003 — the last year that the County and Chevron agree on — the Assessor declared that the property was worth $1.9 billion. In 2004, the Assessor raised the value to $3.5 billion, and then to $4.8 billion by 2006.

Chevron argued in its last appeal that the property was actually worth $431 million in 2004, and $900 million in 2006. The Appeals Board’s 2009 ruling declared both Chevron’s and the Assessor’s numbers “unreasonable” and valued the property at about $2.2 billion each year.

The county stands by all of its original assessments, Kramer said.

“I don’t have an axe to grind with Chevron,” he said. “For God’s sake, my dad used to work for them. We all own stock in them.”

Kramer said that the refinery made major upgrades between 2002 and 2006 and took in record profits, and the value of the property increased accordingly. “Come on, just pay your fair share,” he said.

The Assessment Appeals Board is made up of five members, each appointed by a county supervisor, and the appeals board clerk chooses three members to hear each appeal. In this case the three will be Arthur Walenta, who was appointed by Richmond Supervisor John Gioia, and will chair the hearing; James Giacoma; and Clark Wallace. Wallace was on the board that heard the 2004-2006 appeal.

The hearing begins on Monday at 9 a.m. and is expected to run for five weeks. Most sessions will be open to the public and held at the board’s chambers at 651 Pine Street in Martinez.