The Irvine Co. Tax Battle at a Glance
April 15, 1983: Developer Donald Bren announces that he has purchased controlling interest in the Irvine Co., Orange County’s largest landowner with more than 68,000 acres, for $518 million. It is the largest single real estate transaction in California history. July 28, 1983: County Tax Assessor Bradley Jacobs says he has begun reassessing the Irvine Co. properties--2,200 separate parcels of land--under terms of Proposition 13, which says that the sale of real estate establishes new market and appraised values for the property. July 23, 1984: New property tax statements for 1984-85 are delivered to the Irvine Co, revealing that the assessor has increased the appraised value of the huge landholding to $3.2 billion, triple the $1.1 billion assessment used to compute the previous year’s taxes. Irvine Co. official vow to appeal, saying their new tax bill would be $51 million, compared with $19 million the previous year.
Sept., 1984: Irvine Co. appeals the new appraisal, claiming its property cannot be worth more than $1.2 billion based on the price Bren paid for his stock. In a series of transactions since purchasing control of the company in April, 1983, the developer by now has increased his ownership to 89% of the company. Sept., 1985: An agreement between the tax assessor and the Irvine Co. sets the value of the company’s most heavily developed parcels at $1.02 billion. The agreement covers less than 25% of the company’s land, but most of what remains in dispute is undeveloped. This agreement, and the subsequent sale of some of the company’s land, lowers the Irvine Co.’s property tax bill for 1985-86 to $47.4 million. The taxes are paid under protest, with the disputed amount placed in an escrow account. August, 1986: With the county’s legal bill already topping $1.2 million for outside attorneys to prepare the tax assessor’s case against the Irvine Co., Jacobs asks the Board of Supervisors for $700,000 more.
Oct. 16, 1986: An unexpected agreement resolves the two-year-old battle when the assessor and the Irvine Co. agree that the company’s land holdings should be assessed at $2.5 billion. The company’s 1986-87 property tax bill should be about $32 million and it will receive a refund of about $30 million for excess taxes paid in the past two years.
