County Lowers Assessments by Record Amount : Property: Thousands of homeowners and businesses win adjustments for lost value. Move means $20-million drop in tax revenue.

Los Angeles County granted a record $2 billion in reduced property tax assessments during the past year to thousands of recession-battered homeowners and businesses, officials said Monday.

More than 17,000 homeowners and about 1,000 businesses took advantage of a state law that allows landowners to appeal for lower taxes if the value of their properties have fallen, said Kenneth P. Hahn, county tax assessor.

In all, the reassessments mean a loss of $20 million in taxes that would have gone to county and city governments, school districts and community redevelopment areas. Among those saving on their tax bills are about 1,000 owners of property damaged or destroyed in the rioting.

“We want people to pay their taxes, but only their fair share of taxes,” said Hahn, who has repeatedly encouraged property owners--particularly those with riot damage--to apply for the tax breaks. “It’s a public service, and I’m a public servant.”

The crush of applications represented a huge increase from the previous year, when just 4,297 homeowners and 79 businesses won $250 million in reduced property tax assessments, Hahn said. And last year’s figures were considerably higher than those posted in the 1980s, when a booming land market kept values rising in virtually every corner of the county.

Still, the total value of land and buildings countywide rose by about 2.6% to $465 billion this fiscal year, up from $453 billion the previous year. Fueling the overall upward trend were sales of properties listed on county tax rolls below their actual market value. When such properties are sold, Hahn explained, they are assessed for tax purposes at the new, higher value.

But for those who believe that their property has lost value, the rush is still on to sign up for tax relief. And some of the county’s most prominent establishments--and at least one of its richest individuals--are seeking a break.

Among those feeling the greatest pinch are owners of hotels, which have suffered worse declines in value than other businesses, Hahn said.

The Sultan of Brunei, reputed to be the world’s richest man, is seeking a 25% reduction in the assessed value of his Beverly Hills Hotel--from $128 million to $96 million--according to county records. If successful, the sultan would save about $320,000 a year in taxes.

Other hotels seeking property tax reductions include the Beverly Wilshire, Century Plaza, Ritz-Carlton Marina and Ritz-Carlton Huntington. The establishments’ owners include Metropolitan Life Insurance, developers Ray Watt and Jona Goldrich and the German airline Lufthansa.

Others in a good position to win a reduction in tax assessments were those who bought property near the market’s peak in late 1989 and early 1990, said Joel Fox, president of the Howard Jarvis Taxpayers Assn.

County records of those who have won reductions were not immediately available. But records of those with pending applications showed claims of properties losing from 1% to 97% of their value.

Under terms of California’s landmark Proposition 13, properties are assessed for tax purposes at the time of purchase and reassessed only by the value of added improvements. Additionally, there is an automatic annual increase of not more than 2%, based on changes in the Consumer Price Index. That increase has been assessed every year but one since Proposition 13 was approved by voters in 1978.

On Monday, union officials urged the County Board of Supervisors to give the reassessments greater oversight. Maria Elena Durazo, president of Local 11 of the Hotel Employees & Restaurant Employees Union, asked supervisors to close what she said was a loophole for big companies.

Supervisor Gloria Molina requested that the chief administrative officer compile a report on the fiscal impact of the reassessments.