PORT ANGELES — Clallam County is refunding Interfor U.S., Inc., about $240,000 after the company challenged its assessed property valuations for 2021-2023.
While the county is writing the check, Administrator Todd Mielke said each of the taxing districts which have already collected their portion of Interfor’s payments will have to pay the county back. That likely will happen in the form of deductions from future property tax income, he said.
In 2021, 2022 and 2023, Interfor, a lumber company that owns a saw mill in Port Angeles, challenged the county’s property assessments of $67.5 million, $58.7 million and $61.7 million, respectively, for its 18.53-acre property located at 243701 U.S. Highway 101.
The 2021 challenge was set to go before the state Board of Tax Appeals (BTA) in December, Mielke said. Before that occurred, however, Interfor requested a mediation session between the company and the county.
Through the full-day mediation, Mielke said the parties reached a “global settlement” that set the property’s assessed value at $54,700,010 for all three years. Additionally, since Interfor notified the county that it planned to challenge this year’s assessment, the agreement also set the value for 2024 at about $54.7 million.
Interfor also agreed to withdraw its lawsuits for these assessments and release all rights to challenge these specific assessments again.
Although the county now has to refund some funds to Interfor, Mielke said going to court likely would be more expensive.
“Litigation costs tend to be high whenever you go into court,” Mielke said during the commissioners’ work session on Tuesday. “We do believe that this is in the best interest of the taxing districts.”
Since Interfor challenged three separate years and had plans to challenge this year’s assessed value, Mielke said there could have been four separate litigations.
That would drive up the costs “for everybody involved,” he said.
Already, Mielke estimated the county has spent about $110,000 “in just trying to understand a very complex issue.”
Costs included a tax assessment appeal specialty attorney, a mediator and a special witness, Mielke said.
Due to the agreement, nine taxing districts will be on the hook for refunds of various dollar amounts: about $79,000 from the Port Angeles School District; $61,000 from the state; $27,000 from Clallam County Fire District 2; $21,000 from the county road fund; $21,000 from the county general fund; $9,000 from Hospital District 2; $8,000 from the North Olympic Library System; $3,000 from the Port of Port Angeles; and $500 from the Conservation Futures Fund.
“I think, in the grand scheme of what they get from taxes, these are relatively small numbers,” Mielke said.
In total, the county collected about $1.8 million in property taxes from Interfor between the three contested years. The agreed-upon refund is about 13 percent of that.
In the end, Mielke said, “I think we got a fair settlement.”
Interfor has a history of challenging its Port Angeles property assessments. It challenged its 2019 and 2020 assessed values, both of which were set about $67.7 million.
In Interfor’s opinion, the assessment for those years should have been $33.2 million for 2019 and $36.9 million for 2020, according to BTA documents.
After an informal hearing, the BTA set the assessment values at $58 million for 2019 and $60 million for 2020, according to the documents.
Mielke, who joined the county last year, said he was not sure how much the county refunded Interfor because of that decision, nor what litigation costs the county incurred.
The assessed values of two adjacent parcels, also owned by Interfor, have not been challenged throughout this process.
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Reporter Emma Maple can be reached by email at emma.maple@peninsuladailynews.com.
