Published October 10. 2012 4:00AM Updated October 10. 2012 6:42PM
Groton — A group of Groton Long Point homeowners has banded together to file a class-action lawsuit, claiming the town unfairly and illegally inflated property values, resulting in higher taxes.
At the heart of the suit is a 35 percent "adjustment factor" added to assessments in Groton Long Point, boosting home values by 14.6 percent compared to the prior year.
"The assumption that residential buildings in Groton Long Point are worth 35 percent more than comparable structures elsewhere in the town … is arbitrary, unreasonable and without foundation in fact," the suit states.
The new assessments came as the result of townwide revaluation last year. The result was a drop in land values everywhere in town except in Groton Long Point, where values rose by 5.1 percent, according to the suit. Likewise, residential home values dropped in all but a few areas across town, including Mystic Village, Center Groton and Mumford Cove.
The town hired Tyler Technologies Inc. to conduct revaluation for the tax year starting Oct. 1, 2011. After that was done using a "cost basis valuation method" to determine values, the tax assessor used a "manual override" to increase the values in Groton Long Point by 35 percent, the suit alleges.
At the 60 East Shore Drive home of John and Mary Tuohy, property was initially assessed at $245,467, a figure that rose to $331,380 after the 1.35 adjustment factor was applied. The Tuohys are two of 10 people named as plaintiffs.
In total, adjustments resulted in a $32 million jump in Groton Long Point property values over what Tyler determined, adding $700,000 in taxes levied against property owners. Increases in other areas of town were small by comparison: Old Mystic-River Road increased by 3.8 percent, Center Groton by 1.6 percent and Mystic Village by 0.3 percent.
Timothy Bates, of the Hartford firm Robinson & Cole, claims the application of the adjustment factor to one portion of town and not others violates the law. He said it is unusual for a town to apply this type of adjustment without allowances for differences in the individual properties. The basis for the 35 percent figure was a central unanswered question when the suit was being prepared, he said.
He further argues that one reason for the increase in values is that certain properties were excluded from the calculations - including estate sales, foreclosures, short sales and sales that were followed by renovations. In other areas of town those were not excluded when assessing values of properties, the suit claims.
The suit was filed by owners of five Groton Long Point properties - one on Burrows Street, one on Beach Pond Road and three on East Shore Drive - on behalf of all property owners in Groton Long Point, a borough-like political subdivision of the town that includes about 620 properties.
The town and Tax Assessor Mary Gardner are named as defendants. Gardner declined to comment on the advice of the town attorney.
Groton Long Point homeowner Jack Sebastian said his name is not on the suit, but he supports the effort to challenge the town.
"It's the right thing to do," Sebastian said. "This was done illegally by arbitrarily adding this percentage. Property (values) are not supposed to be determined by a number that's fudged by the assessor."
The suit asks the court to void the 35 percent increase, immediately reduce property values, reimburse homeowners for any tax overpayments and pay attorney costs.
Bates said the town has yet to reply to the suit, which was filed on Sept. 11. The town council was expected to meet with the town attorney behind closed doors on Tuesday.