The Department on Revenue and Taxation has received three proposals for islandwide real property appraisal and evaluation services, according to acting DRT Director Marie Lizama. DRT is unable to disclose any information contained in the proposals until after a proposed contract has been awarded, and the date to award will depend on how long it takes to complete the evaluation and negotiation process, Lizama said.
However, Krystal Paco-San Agustin, the governor's spokesperson, said the procurement cannot continue until the attorney general “resumes his Organic Act (of Guam) responsibility of representing the government agencies conducting the procurement.”
The AG withdrew his office's representation of agencies under investigation by the office, which includes DRT, due to conflict issues raised by defense counsel in ongoing corruption cases. Attorney General Douglas Moylan said his office will continue to review and approve procurement and government documents, just not as legal counsel for government entities. But the governor's office said that was illegal.
Gov. Lou Leon Guerrero has now filed a request for declaratory judgment at the Supreme Court of Guam regarding the AG's withdrawal. The case remains ongoing.
Meanwhile, the purpose of the appraisal and valuation is to develop schedules describing the market value for real property on Guam, with the market value date for the project being Feb. 1, 2025.
“The market value shall be represented in a per-unit price, e.g. dollar value per square foot for undeveloped land in a certain village, or per square foot for residential or commercial buildings. Categories for market value will include, at a minimum, residential (single and multifamily), commercial, agricultural, religious, hotels, government, properties and undeveloped land on Guam. Value schedules shall also account for depreciation of property value as appropriate,” request for proposal documents stated.
DRT is required by law to re-ascertain the value of real property on Guam every five years, with the new valuation to be used as the basis for the island's real property tax assessment.
If the five-year revaluation is not done, then the last completed valuation supplemented by annual adjustments shall be the property tax valuation.
Concerns
News of the upcoming islandwide real property revaluation drew concern from Pacificnesian Equities LLC, a Guam cooperative, and the Micronesian Climate Change Alliance. The organizations wrote to the governor's office, certain senators and DRT officials on March 29 requesting a pause on the valuation procurement.
The groups say they are concerned about a real estate firm being contracted to perform the revaluation, stating that such firms have a high potential incentive to ensure that the revaluation of properties will be at the higher end.
Their letter went on to ask a number of questions, including whether a higher-priced revaluation would have a cascading effect on the real estate industry; whether it would result in more Indigenous landowners losing homes due to an inability to keep up with increased taxes; whether land would likely be sold more to foreign investors; what impacts would there be to the ecosystem; and if that could exacerbate homelessness and landless situations on Guam.
“This is an urgent matter that must be paused and further looked into. It appears that DRT is essentially giving taxpayer dollars to enrich a real estate firm to mark up the prices of real property so that more Indigenous and local people are forced to sell their land, potentially allowing for the same real estate firm that received the million-dollar contract the opportunity to make more profit by helping to sell more land,” the letter from the organizations stated.
“There may be better ways to generate revenue that prevent increases in home and land value such as potentially taxing big businesses and big military contractors that make large profits from our island beauty. How would it be if the revaluation was done by a government agency instead? … Could this protect us from having to use additional public funds towards a higher profit margin that real estate firms require? Please pause the call for bids and revaluation and thoroughly look at the implications of awarding the bid. We must stop any increase of the cost of real property that threatens to displace our Indigenous and local communities while benefiting foreign investors and real estate firms,” the letter added.
