The owner of the Hilton Minneapolis hotel and convention center has urged the Minnesota Supreme Court to uphold a tax court ruling that significantly lowered the property’s taxable value, including a reduction of roughly $70 million in one assessment year.

In a statement of the case filed Tuesday, property owner JPMC 2018-MINN SS TRA LLC argued that the Minnesota Tax Court acted properly when it reduced the hotel’s valuation for tax years 2017 through 2020. The tax court’s October order rejected the valuation approach used by Hennepin County and instead adopted a different method presented by the property owner.

The dispute centers on how the hotel’s income should be treated for tax purposes. The tax court agreed with JPMC’s use of the “parsing income” method, which separates income derived from food and beverage operations and other business activity from the underlying real estate value. The court declined to accept the county assessor’s use of a management fee model that incorporates franchise and management services into the property’s taxable value.

In its filing, submitted by attorney Thomas R. Wilhelmy of Ryan Law Firm PLLC, JPMC said the tax court correctly concluded that the county’s assessment overstated the property’s value.

“This conclusion falls squarely within the jurisdiction of the tax court, since it is reasonably supported by the evidence at trial,” the filing said. “There is no factual or legal basis to reach any definite and firm conviction that a mistake was committed.”

Under the tax court’s order issued Oct. 17, the Hilton Minneapolis valuation for 2017 was reduced from $154 million to $83 million. The court also lowered the assessment from $116 million to $89 million for 2018, from $116 million to $99 million for 2019, and from $119 million to $105 million for 2020.

Hennepin County appealed the decision in December, arguing that its assessment method properly accounted for the value of brand affiliation and professional hotel management. The county maintains that management and franchise fees reflect real economic value tied to the property.

In its appeal, the county said the tax court erred by fully adopting the owner’s valuations and failing to adequately distinguish between income attributable to tangible real estate and income generated by intangible business operations.

The county also warned that the ruling effectively undermines a 2023 Minnesota Supreme Court decision in Bloomington Hotel Investors LLC v. County of Hennepin, which approved the use of the management fee method in hotel valuation disputes.

Attorneys for Hennepin County and JPMC did not respond to requests for comment. The City of Minneapolis also declined to comment.

Hennepin County is represented by Jeffrey M. Wojciechowski and James A. Mogem of the Hennepin County Attorney’s Office. JPMC is represented by Thomas R. Wilhelmy of Ryan Law Firm PLLC.

The case is County of Hennepin v. JPMC 2018-MINN SS TRA LLC, case number A25-2133, before the Minnesota Supreme Court.