A woman walks down to the grand room in the lobby of the Gaylord Rockies Resort and Conference Center in Aurora during the opening on Dec. 18, 2018. It is Colorado’s largest hotel. (RJ Sangosti, The Denver Post)
A trial playing out this week in a Brighton courtroom will determine whether Colorado’s largest hotel, and Adams County’s top taxpayer, is worth $745 million or $475 million.
The Gaylord Rockies Resort & Convention Center has 1,500 rooms, half a million square feet of convention and meeting space, five restaurants, a full-service spa, several pools and a lazy river on 80 acres west of Denver International Airport. And it plans to expand by adding 450 rooms and another 74,000 square feet of indoor water park, pending government approval.
The sprawling hotel opened in 2018. It has had tax-related tiffs with Adams County since.
For its first property tax year, 2019, the county’s assessor valued it at $676 million. Its owner, Ryman Hospitality Properties, appealed that decision to a county board, a state board, the Colorado Court of Appeals and the Colorado Supreme Court. It lost every time.
That last loss came in June 2023. Within a few months, it was again suing over a valuation.
“The assessor improperly valued the property and, as such, the (Adams County) Board of Equalization erred in upholding that valuation,” Ryman alleged last November.
So, during the first four days of this week, lawyers for Ryman and the county will make their case before District Court Judge Arturo Hernandez, who will decide the dispute. Their arguments will center around two competing methodologies for calculating a hotel’s value.
The county’s approach, commonly known as the “Rushmore” method, is to determine a hotel’s total value and then subtract management fees, franchise fees, furniture, fixtures and equipment. Ryman prefers an approach that subtracts those same fees and items, as well as all income from the resort’s restaurants, spa and gift shops. That revenue comes from business activity, not real estate, and should not be included in property value, Ryman believes.
To date, Colorado courts have taken no issue with Adams County’s use of the Rushmore method. In September 2022, the Court of Appeals wrote that “although it has been subject to criticism,” it has also “been widely accepted by courts and assessment jurisdictions.”
Ryman points to a recent decision out of Florida, where Disney challenged the Rushmore method being applied to one of its hotels. Last week, a court sided with Disney.
“Courts have begun rejecting the Rushmore method,” Ryman’s lawyers wrote in a legal brief.
The company and county both have experts lined up to testify about why their preferred method of valuation is correct. A general manager at the hotel and Adams County Assessor Ken Musso, along with members of his staff, could also be called to the witness stand this week.
A woman walks down to the grand room in the lobby of the Gaylord Rockies Resort and Conference Center in Aurora during the opening on Dec. 18, 2018. It is Colorado’s largest hotel. (RJ Sangosti, The Denver Post)
A trial playing out this week in a Brighton courtroom will determine whether Colorado’s largest hotel, and Adams County’s top taxpayer, is worth $745 million or $475 million.
The Gaylord Rockies Resort & Convention Center has 1,500 rooms, half a million square feet of convention and meeting space, five restaurants, a full-service spa, several pools and a lazy river on 80 acres west of Denver International Airport. And it plans to expand by adding 450 rooms and another 74,000 square feet of indoor water park, pending government approval.
The sprawling hotel opened in 2018. It has had tax-related tiffs with Adams County since.
For its first property tax year, 2019, the county’s assessor valued it at $676 million. Its owner, Ryman Hospitality Properties, appealed that decision to a county board, a state board, the Colorado Court of Appeals and the Colorado Supreme Court. It lost every time.
That last loss came in June 2023. Within a few months, it was again suing over a valuation.
“The assessor improperly valued the property and, as such, the (Adams County) Board of Equalization erred in upholding that valuation,” Ryman alleged last November.
So, during the first four days of this week, lawyers for Ryman and the county will make their case before District Court Judge Arturo Hernandez, who will decide the dispute. Their arguments will center around two competing methodologies for calculating a hotel’s value.
The county’s approach, commonly known as the “Rushmore” method, is to determine a hotel’s total value and then subtract management fees, franchise fees, furniture, fixtures and equipment. Ryman prefers an approach that subtracts those same fees and items, as well as all income from the resort’s restaurants, spa and gift shops. That revenue comes from business activity, not real estate, and should not be included in property value, Ryman believes.
To date, Colorado courts have taken no issue with Adams County’s use of the Rushmore method. In September 2022, the Court of Appeals wrote that “although it has been subject to criticism,” it has also “been widely accepted by courts and assessment jurisdictions.”
Ryman points to a recent decision out of Florida, where Disney challenged the Rushmore method being applied to one of its hotels. Last week, a court sided with Disney.
“Courts have begun rejecting the Rushmore method,” Ryman’s lawyers wrote in a legal brief.
The company and county both have experts lined up to testify about why their preferred method of valuation is correct. A general manager at the hotel and Adams County Assessor Ken Musso, along with members of his staff, could also be called to the witness stand this week.
