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Settlement agreement reached between Solano County Assessor and Genentech on years-long assessment appeals
September 8, 2021
SOLANO COUNTY – Over two decades in the making, Solano County Assessor Recorder Marc Tonnesen is pleased to announce the Solano County Assessment Appeals Board reached a settlement agreement between Genentech and the Solano County Assessor’s Office. The settlement agreement of $7.67 billion for the final group of assessment appeals covers the years between 2010 – 2020.
Although this amount represents $2.14 billion, or 22 percent, less than the original County assessed value of $9.815 billion dollars for the Vacaville plant over the past 11 years, Tonnesen says he is satisfied.
“Considering the high value of this facility, the evidence for the “opinion of value” of each party and complex nature of the assessment, this is a fair settlement for the County and Genentech,” Tonnesen said. “The settlement also avoids a potential costly and lengthy court battle between the parties.”
This settlement concludes all the assessment appeals filed by Genentech for its Vacaville facility, dating back to 1997. The Solano County Auditor-Controller will release the nearly $40 million held in an impound account to cover the Assessment Appeals Board’s decision. A portion of that money will be refunded to Genentech, with the rest distributed to the County and affected local taxing jurisdictions.
By law, the assessed value is the taxable value of a property against which the tax rate is applied. In most cases, the taxpayer’s “opinion of value” indicated on the assessment appeal application form has little bearing on the assessed value or taxes collected unless the assessment appeals board decides otherwise.
As was done with this most recent group of assessment appeals, prior settlements were broken into groups of years with similar circumstances, such as facility useability and market value. In Genentech’s case, portions of the facility were being kept out of productive use and the real estate market condition was greatly depressed during the Great Recession, contributing to the lower tax amount.
It is common for these types of appeals to end up in the court system, such as the case of Proposition 13, which ended up in the California and Federal Supreme Courts. By law, a party who is dissatisfied with the local appeals board decision may appeal it to a higher superior court. The court may reverse the appeals board decision on legal issues, and remand, or send the case back, to the appeals board with instructions to resolve it to a point where no issue of value remains.
Genentech is the second largest private sector taxpayer in Solano County, and their years-long appeal proved to be a large and complex appeal case. It is important to note that Genentech has unique qualities, including that facilities are built and occupied by the drug manufacturer.