San Mateo County will give Genentech $26.5 million in property tax credits to settle a long-running legal dispute, but the two sides still disagree about how the biotech heavyweight has been taxed for the past decade.
On Wednesday, a Superior Court judge signed off on the settlement between the county and Genentech — the Peninsula’s largest payer of property taxes — resolving claims from a 2006 lawsuit that the company paid excess levies from 1990 through 1999.
For a table of the highest payers of San Mateo County property taxes in the 2008-09 tax year, click on the photo to the right.
Genentech agreed to take the credits over six years, starting with $7 million in the 2011 and 2012 tax years, rather than an immediate refund, which officials said will spread out the revenue hits to public agencies. For every dollar of property taxes, 45 cents goes to schools, 24 cents to cities, 22 cents to the county and 9 cents to special districts.
Meanwhile, the South San Francisco company is still challenging taxes it paid from 2000 up through the present. Genentech has filed appeals every year since 1990 disputing the methods the county used to assess its estimated $3 billion worth of property for tax purposes.
Attorneys for the county hope the $26.5 million settlement will help build momentum toward working out the other claims, which have not been heard by the assessment appeals board.
“You’d like to think we’ve been able to agree to some things, so maybe we can keep agreeing to things,” Chief Deputy County Counsel Lee Thompson said.
A Genentech spokeswoman said the company was pleased with the settlement and “[looks] forward to continuing cooperation with county officials.”
“Genentech is the single largest payer of property tax in San Mateo County, and like any other taxpayer, we simply want to pay the amount of tax that is legally owed,” company spokeswoman Nadine O’Campo said in an email.
The $26.5 million in tax credits, and the roughly $20 million in property taxes Genentech paid in 2010, are less than 1 percent of the $1.35 billion in property taxes the county collected last year.
In the early 1990s, there were few guidelines for how to assess the value of biopharmaceutical facilities such as those owned by Genentech, which was founded in 1976 and is a pioneer in the industry, said Terry Flinn, a special assistant to county Assessor Mark Church.
The state has issued more guidelines for the biotech industry, but the two sides still disagree on the proper way to evaluate the Genentech’s labs, offices and other properties.