BELLINGHAM - Property owners who claim they were unfairly taxed have filed a lawsuit against the Chuckanut Community Forest Park District, Whatcom County and Bellingham, alleging the park district was illegally formed.
The park district was created by voters in February 2013 to institute a tax levy to pay for part of a city-owned property sometimes called Chuckanut Ridge or the 100-Acre Wood. Of the 3,794 ballots submitted by park district voters in that special election, 51.7 percent were in favor of creating the park district, which encompasses most of southwestern Bellingham.
The city purchased the wooded 82-acre property for $8.23 million in 2011, partly with Greenways levy money and park impact fees. The property sits southeast of Fairhaven Park and 16th Street and west of 24th Street and the Interurban Trail.
The park district placed a tax levy on properties in the district to pay for $3.2 million of the cost of the city's purchase. The levy charges 28 cents per $1,000 of assessed value. That's $70 per year for a home assessed at $250,000.
Plaintiffs John and Mary Ferlin of Ferlin Family Trust, J & M's LLC, Brooks Manufacturing and Roosevelt Land Company, allege that placing a tax for a public park on a small segment of the city is illegal, according to documents filed in Whatcom County Superior Court Tuesday, July 29.
"Imposing this tax has spread the cost of this park on a small segment of the city," said Pete Dworkin, the plaintiffs' attorney. "If a park benefits the whole area, taxation and fees must be imposed as an ad valorem tax across an entire area unless it falls within a special segment."
Based on Whatcom County Assessor's data, the Ferlins and their corporations within the district owed a combined total of $890.98 for the levy this year.
The lawsuit alleges "the Park District was formed, and subsequent Levy passed, not for park purposes, but merely as a tool to enable the City to repay the Loan with property tax revenues the City would not otherwise have been able to collect unless it imposed a City-wide ad valorem property tax increase."
The lawsuit also takes issue with a January 2014 agreement between the city and the park district that requires the district to dissolve itself within a year if and when the city asks it to do so.
"You would think if you're going to maintain the park, the district would be in perpetuity," Dworkin said. "This shows that it really was just a financing tool. We believe that's an improper purpose for creating a park district."
The city attorney's office declined to comment on the ongoing litigation. An attorney for the park district did not return a phone call requesting comment.