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Medical Center Wins Tax Appeal – Los Angeles Business Journal

A major medical center in Los Angeles has emerged victorious against a multi-million-dollar tax dispute against the county’s assessor’s office.

The Los Angeles Downtown Medical Center, a hospital largely committed to serving the city’s homeless and disadvantaged communities located at 1711 W Temple St. in Historic Filipinotown, acquired its property via a court ordered bankruptcy sale for $36 million in 2019.

However, following the acquisition, the Los Angeles County Assessor’s Office – a subsidiary responsible for assessing all unsecured property owned by businesses in Los Angeles – appraised the property at $114 million, over three times the actual amount paid, potentially subjecting the hospital to an annual tax increase of nearly $850,000.

“Los Angeles Downtown Medical Center plays a crucial role in providing health care solutions to the city’s underserved, including mental health patients and the homeless population in downtown Los Angeles,” Wes Nichols, founder and chief executive of Paramount Property Tax Appeal, who represented the hospital in its appeal against the assessment, said.

“An adverse judgment, imposing hundreds of thousands in added annual capital expenditures, affects their capacity to deliver essential services,” he said.

The 2019 sale of the property was conducted on the open market through a series of bankruptcy proceedings against its previous owner, which explained the low buying cost.

The property tax assessment should have reflected the purchase price paid on the open market, Nichols said. However, the assessor valued the property under foreclosure guidelines, which jacked the price up.

“By enrolling the property under foreclosure guidelines at more than three times what was paid for, the assessor made the investment unfeasible,” Nichols said. “We were able to show that the open market transaction and a verified depreciation of the property reflected the true value.”

All in all, the hospital went up against the assessor’s office in a property tax hearing which resulted in a new assessment value of $44.5 million, a significant reduction of nearly $70 million.

“This outcome will allow us to allocate more resources where they are needed most, directly benefiting our patients and the city we serve,” Vicki Rollins, president of the downtown medical center, said on the victory.

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