High court ruling in Petrogas lawsuit could mean millions in taxes for Whatcom County
Whatcom County has won a lawsuit that could mean $10 million or more in back taxes from a Cherry Point petrochemical company.
In a one-sentence decision issued late Wednesday, the state Supreme Court upheld an appellate court ruling from November 2022 that said Petrogas Pacific must pay taxes as set by the Whatcom County Assessor’s Office.
“It is ordered: That the petition for review is denied,” the justices said.
Assessor Rebecca Xczar told The Bellingham Herald that she was “delighted” by Wednesday’s ruling.
“This effect of the court decision will require Petrogas to pay the back tax owed on the difference in value plus interest. This will benefit all property owners in Whatcom County next year who have been paying more tax because Petrogas has been paying a reduced amount,” Xczar said in an email.
Total amounts have yet to calculated, but Xczar told The Herald in 2022 that the amount could be $10 million or more.
Petrogas’ parent company AltaGas didn’t comment directly on the court action.
“We are aware of the ruling and are reviewing it at this time,” its media relations department said in an email.
In all, the Petrogas holdings in dispute include a 35.7-acre site on Unick Road and a 6.3-acre site on Mountain View Road in the Cherry Point industrial zone, plus physical assets and improvements made to the site that Petrogas West bought in 2014 for a combined $242 million from Chevron USA, according to Xczar and records at the assessor’s website.
Included in the deal was a pier, which is sometimes called a wharf in official documents, in 2016 for $122 million.
In its lawsuit, Petrogas Pacific LLC and Petrogas West LLC were challenging Whatcom County assessments that included the value of an aquatic lands lease.
All five taxable assets are treated as a single “going concern,” but Petrogas was challenging only the value of improvements and the pier, Xczar said.
Value of the pier includes intangible assets such as a Department of Natural Resources permit to dock large vessels, and Xczar said Petrogas doesn’t want to be assessed for the value of that permit.
The Cherry Point location is the only LPG terminal on the U.S. West Coast, according to Petrogas’ website.
“They are claiming that the facility should be valued much less than what they paid for it,” Xczar said at an Aug. 5, 2022, meeting of the County Council finance and administrative services committee.
Xczar was elected in 2019 and has pursued the case as it has progressed against Petrogas Pacific and Petrogas West.
Affected taxing districts include Washington state, Whatcom County, county roads, flood-control zone, Cemetery District No. 7, Conservation Futures, Fire District No. 7, rural library, Port of Bellingham, Ferndale schools and Whatcom County EMS.
