Valley Falls Manor Hosts Tax Dispute, Rare Court Appeal

by Arkansas Business Staff  on Monday, Jan. 6, 2014 12:00 am  

A property tax dispute between the Pulaski County assessor and Steve and Missy Wortman has developed into a serial debate. County officials and the Wortmans can’t even agree on the size of the monster house in question, which has been the subject of controversy before.

The county places the square footage at 14,500 SF, while a survey by the Wortmans calculates the figure at 12,200 SF.

The Pulaski County Assessor’s Office revalued the house and land in the gated Valley Falls Estates neighborhood at $3.2 million this year.

The Pulaski County judge affirmed that appraisal despite the owners’ contention that the property is worth $2.2 million.

The difference between the two numbers represents about $13,200 in annual property taxes.

The Wortmans took their case to the county judge after first appealing it to the Pulaski County Board of Equalization.

The disagreement takes on an added mathematical twist because the 3-acre residential spread is listed for sale at $4.2 million.

The asking price includes about $250,000 worth of furnishings.

Steve Wortman, president of Little Rock’s Kaufman Lumber Co., couldn’t be reached for comment.

During the appeals process, the Wortmans have opted not to attend any of the meetings in person. Their representative has been Little Rock attorney Dick Downing.

“I think the assessor’s office staff believed that it was time to adjust the value of the house, and they were simply unwilling to hear anything to counter their position,” Downing said.

He said the county’s valuation started just shy of $3.1 million when it was before the board of equalization and increased it to $3.2 million after that.

The appraisal controversy over the west Little Rock mansion entered the rare third level of the appeals process on Nov. 27.

The Wortmans appealed the $3.2 million valuation to Pulaski County Circuit Court, and the case was assigned to Judge Jay Moody. The administrative record of the case has yet to be filed, and a hearing date has yet to be set.

“It’s the only one that went that far,” said Joe Thompson, chief administrator for the Pulaski County Assessor’s Office. “We had an extremely light appeal season.”

The Pulaski County Board of Equalization heard appeals of valuations on 647 properties, divided between 477 residential parcels and 170 commercial during 2013. That appeals tally represents only 0.3 percent of the 171,456 residential and commercial parcels on the county tax rolls.

That volume compares to 2012, a reappraisal year that produced 5,016 appeals.

The valuation of the Wortman home was only one of five property tax disputes that weren’t resolved at the Board of Equalization level and were appealed to Pulaski County Judge Floyd “Buddy” Villines.

The county’s $3.2 million appraisal of the Wortman home was affirmed by Villines on Nov. 13.

“There wasn’t anything that was compelling that said the county assessor was wrong,” Villines said. “If you’re going to overturn that process, you have to have something. With the information that was presented, I couldn’t do that.”

The doubling in value of the property on the tax rolls is tied to the rehabilitation of the home, which was completed in 2013.

The mansion was the subject of a lawsuit filed by the Wortmans in December 2009 against its builder, Rick Ferguson. The dispute ended with a mid-trial settlement in January 2011.

The settlement included Ferguson giving the Wortmans four undeveloped residential lots in the Bella Rosa Estates neighborhood of west Little Rock. The property was sold in two February 2013 transactions totaling $349,000.

The Wortmans were seeking more than $6 million in damages from Ferguson and his Rick Ferguson Inc., Pinnacle Precast Co. and VFE Inc. for alleged major construction flaws.

The couple’s accusations against Ferguson and his business entities included breach of contract, implied warranty of inhabitability, negligence and deceit.

Ferguson denied those allegations and declined to take back what then was described as a $3.6 million property.

The disagreement followed a breakdown in the business relationship between Ferguson and Steve Wortman and an unwinding of their mutual investments.

The Assessor’s Office cut the Wort-mans slack on the valuation of the upscale residence until its alleged construction deficiencies were cured. The property was carried on the tax rolls at about $1.6 million. The current valuation of the land alone is $800,000, according to the assessor.

“We’ve had that property at a lower value because of all the problems they had,” Thompson said. “But this year we put on the books for the full value we think it is.”

The size of the home is an ongoing controversy that remains unresolved. The Assessor’s Office made efforts to verify the square footage with an inspection of the home.

“They’ve never let us into the house,” Thompson said. “We’ve scheduled to do a walk-through with them three times. But they’ve always had a last-minute conflict when it was time to do it.”

Points of contention in the differing valuation positions include the 2,250-SF finished basement and an enigmatic upper room.

“Anecdotally, we’ve heard it is an office area, a man cave or something,” Thompson said. “But it can only be accessed by elevator. We were originally told it doesn’t exist. Because of the accessibility, the building code doesn’t allow it to be lived in, so it’s counted as storage area. They call it storage area.”

The haggling over valuation started in July with the Wortmans initially trying to lower the total living area to 10,000 SF.

During a phone call, Steve Wortman tried to convince the assessor that some of the second-floor space designated as living area was actually vaulted ceiling area above the first floor.

Building plans conflicted with that math. Without an interior inspection of the house, the assessor’s configuration of space remains the official square footage count.

Downing believes the back-and-forth haggling over comparable residential valuations and on-again, off-again walk-throughs of the Wortman home produced more grist to the ongoing dispute with county officials.

“I think they didn’t like it, and as a result, that added to their argument against Steve’s valuation,” he said.

If the appeals effort goes beyond circuit court, the next stop would be the Arkansas Supreme Court.



Please read our comments policy before commenting.