By Dave Davis
For Variety

THIS is the first installment in a series detailing how successive GovGuam administrations and legislatures have manipulated real estate tax roll information to the advantage of those in power — public malfeasance at a level sufficient to make your eyes water.
The most recent island-wide real estate appraisal occurred 14 years ago, in 1993. At that time, Department of Revenue and Taxation records listed an aggregate appraised property value in Guam of $4,255,669,000. Following that appraisal, and effective with the 1995 tax year, the aggregate appraised property value in Guam was adjusted upward to $10,058,407,000: an overnight increase of approximately 148 percent. Two major contradictory forces have been at work since that 1993 assessment.
In furtherance of local political objectives, and to maintain federally regulated borrowing power within artificially inflated property value parameters, “book” values have continued to climb to the current $11 billion-plus figure. Concurrently, actual market values declined precipitously for several years before leveling off. Nick Captain, well respected in the appraisal business and owner of the firm that performed the 1993 appraisal, said that residential property values declined approximately 27 percent between 1999 and 2003, and that property values in Tumon had declined by as much as 90 percent.
In January 1994, Mr. Captain presented recent sales data to the Guam Chamber of Commerce listing several large properties that had recently changed hands: the PDN building, Nimitz Towers, Gun Beach, two large land parcels and the Hilton, Tropicana, and Palmridge hotels. The actual total sell price for the seven properties was $55,210,000. The total appraised value as listed on the tax rolls was $206,952,871, representing an over-valuation of nearly $152 million, or 275 percent. The trend was essentially consistent for property values of all types over approximately a decade.
Bankruptcies and foreclosures increased sharply, as did home purchases, due to low interest rates and depressed prices. Guam’s public debt also increased, and now approaches $600 million. Standard and Poor’s recent downgrade of Guam’s bond rating is a direct reflection of the risk inherent in lending to a government that has been mismanaged for so long that major financial collapse and reconstruction may be necessary to eventually return it to a position of fiscal responsibility.
There’s overwhelming evidence that values now reflected on tax rolls do not, in fact, bear a reasonable relationship to the actual fair market value of properties. Guam law that requires triennial property appraisals has been ignored for the past 12 years, and little valid or verifiable basis exists for the property values now on government books. The administration, however, would have us believe that Guam real estate is now worth more than $11 billion, up significantly from even the “bubble” values of the early ‘90s, despite clear signals from the real estate industry that property values are substantially less than when last professionally appraised.
The Guam Board of Equalization, apparently without explanation or justification or professional appraisal input, somehow derived that $11.3 billion value. Now, today, is again a time of financial peril for Guam taxpayers, as Governor Camacho embarks on yet another odyssey to borrow the Golden Fleece.
Meanwhile, we await the next development from the Guam Supreme Court on the property valuation and taxation issue, after the U.S. Supreme Court dumped it back in their lap for more homework.
Be informed, be aware of what the administration, the legislature and the judiciary are about to do, and be prepared to resist further attempts to burden us with crushing debt.