The owner of the 22,045-acre Elk Mountain Ranch, who is suing for $7.75 million in damages from four corner-crossing hunters, paid property taxes last week based on a ranch value that’s about 35% of what he claims in court the ranch is worth.
Ranch owner Fred Eshelman paid $60,973 in property taxes on Dec. 5 and Dec. 8 based on the county assessor’s “market value” of $10.9 million, a computation from records shows. Eshelman claims in a trespass lawsuit the property is worth $31.3 million.
Based on that $31.3 million figure, Eshelman’s civil trespass suit against four Missouri hunters seeks up to $7.75 million for a 25% diminution of the ranch’s value. Using a ladder to climb over two fence posts, the men passed through the airspace above a corner of his property in 2020 and 2021, without setting foot on his land, according to a civil suit in Wyoming’s U.S. District Court.
That makes Eshelman’s court claim for the ranch value 2.86 times higher than the county’s value on which he paid taxes. Seen another way, the county’s market value is about 35% of what Eshleman states in court the ranch is worth.
Carbon County Assessor Renee Snider set the ranch value according to what state law says is a “preferential assessment of agricultural land … based on the land’s productive capability.” In his civil suit, Eshelman and his Iron Bar Holding’s LLC base the ranch value on an independent 2017 appraisal.
It shouldn’t be surprising that a real estate appraiser would value a ranch higher than a county assessor, Snider said. The state’s agricultural assessment laws require that, she said.
“It will always be much higher,” she said of a realtor’s estimate of market value. “You should not be surprised,” she said, to see an appraisal that’s more than what’s listed as market value on tax rolls.
Git along little dogies
Every state taxes agricultural land differently than other types of real estate, according to experts at The Ohio State University. Tax breaks are given for various reasons including to maintain the economic viability of farming, remove development incentives, protect environmental benefits and tax ag land according to its cost of services.
Owners of agricultural land in Wyoming submit a signed, notarized application seeking to qualify a parcel for agriculture status. If approved, “it lowers the land value to a much less value,” Snider said.
Each year the Department of Revenue sets production values for various classes of agricultural properties. The annual update for all county assessors sets values, for example, for irrigated hay lands differently from dry crop land or upland pastures.
The system is based on “what type of land that actually is [and] what they’re using it for,” Snider said.
Assessors apply those values to the various acreage to come up with a “fair market value” or “fair value” for the property. That label is different on valuation notices from different counties and the amount listed may not represent what a piece of property would sell for.
“The market value is not the true market value of what that land could sell [for],” Snider said of the assessors’ “fair market value” or “fair value” listing.
David Divis, the president of the Wyoming County Assessors’ Association, agreed that confusion may surround the term “market value” used on property valuation and tax notices for agricultural land.
“Market value is really a poor term for that parcel type, because that value we come up with for tax purposes is going to be nowhere near what that property is worth,” Divis, assessor for Sweetwater County, said in an interview. “The term is misleading.”
Assessors’ “fair market value” or “fair value” for residential property is much closer to sales prices than that set for agricultural property, Divis said. For residential property, “that market value should be … right at 95% or 96%” he said.
“Market value [on] the assessor’s side for agricultural property does not reflect the purchase price an owner could expect to get on the market — or even a ballpark amount of what the property is worth,” Divis said.
Wyoming will be your new home
On the Elk Mountain Ranch, all but about 6 acres are classified as agricultural property. The ranch is the site of eight houses that have plumbing, according to Carbon County property tax records.
Assessor Snider placed a market value of those residential improvements at a total of $9.5 million, according to WyoFile calculations made from her records of nine Elk Mountain Ranch parcels. The assessor apparently derives the bulk of that value from an imposing seven-bath, 9,451-square-foot house that records say was built in 2007. The structure, listed in property documents as a two-story house, also has a 4,720-square-foot basement and built-in garage.
That means the agricultural value of the remaining 22,039 acres on tax rolls is $1.37 million or about $63 an acre, according to WyoFile calculations.
To compute the amount of tax due on Elk Mountain Ranch the assessor multiplies the “fair market value” by the “level of assessment” — 0.095 — to arrive at the assessed value of the property. At Elk Mountain Ranch, this produces an assessed value for the whole property of $1,038,984, according to WyoFile calculations.
To figure a tax payment, assessors multiply the assessed value by the mill rate. In Carbon County last year the mill rate on Eshleman’s property that includes the trophy home amounted to 58.5 mills.
Ultimately in 2022, Iron Bar Holdings paid $60,973.49 on property with an assessed value of just over $1 million.
Any free-market assessment of Elk Mountain Ranch’s value — such as that used in Eshelman’s lawsuit — would have to consider that the property is constrained by a conservation easement that prohibits its subdivision. That easement could affect the sales price of the ranch but apparently has little or no effect on its agricultural value.
The North Carolina pharmaceutical businessman bought the property in 2005 with the conservation easement in place after the ranch had been listed for sale for $19.9 million.
Eshelman’s trespass lawsuit, which is expected to go to trial in federal district court in Cheyenne next summer, claims the corner crossers diminished the ranch’s value by between 10% and 25%. A Carbon County jury last spring found the four hunters not guilty of criminal trespass in a separate misdemeanor trial that lasted three days.
The hunters crossed from one piece of U.S. Bureau of Land Management property to another at the common corner with two pieces of Elk Mountain Ranch land, all arranged in a checkerboard pattern of land ownership. The hunters crossed at a U.S. Geological Survey property-corner monument without setting foot on Elk Mountain Ranch land.
In doing so, the Carbon County prosecutor and now Eshelman contend, the men trespassed because they passed through airspace above the private property. Eshelman’s attorneys did not answer an email seeking comment for this story.