The Gaylord Rockies, a sprawling resort and convention center near Denver International Airport, is worth $400 million more than its owner claimed it was worth and must pay significantly higher property taxes accordingly, a state court ruled Thursday.
In a unanimous opinion, a three-judge panel of the Colorado Court of Appeals determined Adams County and a state assessment board did not err when they valued the massive, 1,500-room resort at $676 million. The hotel’s owner, Nashville-based Ryman Hospitality Properties, had argued the property should be valued at $270 million.
The Gaylord opened in 2018. In addition to the large number of rooms, it also has 500,000 square feet of convention and meeting space, five restaurants, a full-service spa, several pools, a lazy river and more on 80 acres west of DIA in Aurora.
For its first property tax year in 2019, the Adams County assessor valued it at $676 million. The resort’s owner appealed that assessment to the county’s board of equalization, the Colorado Board of Assessment Appeals and finally, last year, to the Court of Appeals.
The question before the court was whether the county and CBAA used the wrong methodology when calculating value. The county’s approach, which the CBAA approved of, was to determine its total value and then subtract management fees, franchise fees, furniture, fixtures and equipment. That method is common in Colorado, according to the appeals court.
The Gaylord’s owner believed a different methodology should have been used. Its preferred approach subtracts the same fees and items as the county’s, as well as all income from the resort’s restaurants, spa and gift shops. That income comes from business activity, not real estate, and should not be included in the property value, it argued.
“We are not persuaded,” Judge Christina Gomez wrote Thursday. Judges Elizabeth Harris and Neeti Pawar concurred.
In their 32-page opinion, the three judges determined that their “role is limited to determining whether (the Gaylord) has shown that the BAA abused its discretion” and issued an arbitrary ruling that is contrary to state law and unsupported by the facts.
“It has not done so,” they ruled.
An attorney for the Gaylord, Michael Miller with the Denver office of Spencer Fane, declined to comment on the decision Thursday, saying, “I haven’t had a chance to discuss it with my client or review it in any depth.”
Adams County and its attorney did not respond to a request for comment or questions about how much money the resort must now pay in property taxes.