The monograph “The Valuation of Hotels and Motels” by Stephen Rushmore, published by the American Institute of Real Estate Appraisers in 1978, posited the first accepted methodology for separating out income attributable to business (“intangible asset”) and income attributable to personal property from the entire income stream of a lodging facility.  The procedure, which to this day continues to reflect the thinking and actions of hotel sector market participants, has been termed the “Rushmore Approach” within the property tax arena. 

On June 19th, 2020, The Florida Fifth District Court of Appeal issued a flawed decision that could result in far reaching implications relative to the market valuation of hotel properties throughout the U.S. The Case (No. 5D18-2927), Rick Singh, As Property Appraiser (“Appraiser”) vs. Walt Disney Parks and Resorts US, Inc., et al. (“Disney”), involved a tax appeal of the 2015 assessment of the Disney Yacht & Beach Club Resort in Orlando, FL. The appellate court reversed the trial court’s assessment of property value based upon lack of evidence; however it did uphold the lower court’s decision to reject the valuation methodology (Rushmore Approach) utilized by Rick Singh, As Property Appraiser (Orange County Property Appraiser) in connection with its assessment of the Disney Yacht & Beach Club Resort.  The appellate court ultimately agreed with Disney and the lower court by categorically rejecting the challenged assessment methodology utilized by Rick Singh, As Property Appraiser in its valuation of hotel properties. Although utilized by other Florida County Property Appraisers, the appellate court opinion declared that “the Rushmore Approach violates Florida law because it does not remove the nontaxable, intangible business value from an assessment.”

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