By C.J. Barbre
At the July 12 Tulare County Board of Supervisors meeting item 30 on the agenda was "Review and action regarding the Verified Claim for Refund of Property Tax - Console Foods, Inc." Assistant Assessor/Clerk-recorder Roland Hill said he was not prepared to introduce the item.
County Administrative Officer Brian Haddix explained that the item pertains to claim of refund on property taxes with Console Foods and Tulare County. Edward "Mort" Console, owner of the defunct Console Foods, filed for a $582,439.05 tax refund June 2004, arguing that the property had been overvalued by millions of dollars.
"We see no valid reason to justify such a refund," Hill told the board. He said in 1997 the property was valued at $1.8 million including $1.75 million for the buildings and an additional $50,000 for the parking lot only. Hill said there was no personal property or equipment included in the original sale as it was real estate only at that time.
"In 1999 Console failed to file. Because of this, an estimated tax was filed based on real value according to Proposition 13," Hill said.
Hill said that although Console's opinion of value for the property for fiscal 2000/2001 was $8.2 million, the property was appraised in July 1999 by independent fee appraiser, Palmer and Hinton, hired by Console. The appraiser arrived at a market value estimate of $16.9 million for real and personal property.
Meanwhile, Hill said, "Console's opinion of value for the personal property for the Assessment Appeals action was $5.7 million. Console's opinion of value for the same personal property for this Claim for Refund of Taxes action, for the same time period is nearly $2 million less at $3.8 million." He said the assessment of 2002/2003 was adjusted due to a change in ownership on June 6, 2003.
Hibernia Bank of Louisiana had granted Console Foods a $10 million USDA guaranteed loan, which opened in January 1999 and closed six months later. Owner Mort Console blamed USDA for reducing the loan guarantee amount to $7.9 million leaving them with insufficient working capital.
Hibernia had the First Deed of Trust. In the March 17, 2004 issue of the Lindsay Gazette, former Console Chief Financial Officer Dick Peterson told the Gazette that Hibernia had foreclosed on the property which was sold at public auction on the Tulare County Courthouse steps. "Mort Console bought it back and owns the plant as an individual, not a corporation," Peterson said. The facility which originally housed Lindsay Olive Growers and had set vacant since 1992, was purchased by Console in 1997. In its latest incarnation, it became Lindsay Foods, LLC, still a frozen food processing facility, but now a limited liability company instead of a corporation, of which Mort console is chairman of the board. The say they are currently shipping 800,000 pounds of frozen spinach and greens to buyers weekly.
"In 2003/2004 Console finally filed. To date Console has not filed any appeals until this refund action," Hill told the board.
A lien against the personal property assessment date was Jan. 1, 2003. Hill said they had done the right thing given the information they had. The Assessment Appeals Board had already waived the 10% non-file penalty fee.
District 3 Supervisor Phil Cox asked if property bought at foreclosure for pennies on the dollar consequently had its value reduced. Hill said the value of property was based on the appraised price and not the price paid at time of sale.
Next David Lensing with Capital Management, Inc. a mergers and acquisitions outfit out of Memphis,Tenn. took the podium as a representative of Console Foods. He said that president of Lindsay Foods, Paul Black, a CPA by training, "went to the assessor's office on July 1 and found he was not allowed to copy an internal memorandum in the file and was told by Mr. Hill that memorandums are not subject to copy." Lensing said that allowed him to ask for a continuance. He said the memo was made available to the board of supervisors on June 1, 2004. "So we request the document."
Lensing said they were prepared to go forward today, but wanted the memo for purposes of appeal. He added that the original file was about six inches thick on July 1 and was "much smaller" now.
The board agreed to continue the hearing to Aug. 16.
In the March 2004 story in the Lindsay Gazette, the former payroll clerk for Console Foods said they expected Lindsay Foods to hire 500 people in six months, or by September 2004. In the July 20, 2005 Valley Voice, a front page story reported that "Lindsay Foods is up and running with 180 jobs." It went on to say Lindsay Foods plans to add a second shift by September which would double the number of employees to 360.
Mort Console said at this point they are only operating a few days a week. He said everybody is trying to tie the tax refund to Lindsay Foods. "If I get a tax refund it's for overpayment by Console Foods. It has nothing to do with Lindsay Foods."
"We've accommodated Console Foods greatly," Hill said. "They do not have a legal stand to get these dollars back."