This may be the worst story I have ever had to bring to the readers.

For years many have wondered how it is possible that Loudon County government is not swimming in money. For a decade or more, Loudon County has been one of the fastest growing counties in the state. We have seen unprecedented growth and development, and even with one of the lowest tax rates in the state, we should have been raking in millions in new revenues each year. Yet that doesn't seem to have been the case. After months of investigation, the story you are about to read may help explain a big part of the problem. This one is bad.

During his time in the mayor's office, Doyle Arp has cost the Loudon County tax payers hundreds of thousands of dollars in needless law suits, remodeling the county office building and putting family members on the county payroll. It now appears that Mr. Arp may have cost Loudon County hundreds of thousands in lost tax revenues with artificially low property appraisals for some of his developer friends. 

Of all the recent growth in property values, nowhere has that been more evident than in Rarity Bay. Since the Tennessee Real Estate Assessment web site came online a few years ago, I’ve kept a close eye on appraisals in Rarity Bay, Rarity Pointe, and other developments and the Rarity lots always seemed low compared to the other waterfront communities. Recently, however, I happened to notice a huge jump in some of the Rarity Bay appraisals, which struck me as odd given that the next scheduled reappraisal isn’t until 2009.

Phone calls, followed by a written request for information to the Assessor’s office, helped me peel back the onion. Click here to see my written request and Assessor Chuck Jenkins’ response.

In his reply, the Assessor says he considers the recent increases to be “corrections,” not reappraisals, which makes them permissible under state law. Jenkins says the corrections were necessary in order to restore the initial 2005 reappraisals on these properties.

Why was this necessary? To make a very long story short, the public records reveal that Arp effectively erased the reappraisal increases on 179 properties owned by Tellico Lake Properties, RB XI LLC, and WFD Inc – all companies owned or controlled by developer Mike Ross. The reductions ranged from $10,000 to as much as $300,000 per lot. In some cases the new values were cut in half. Arp must have done this sometime in late spring of 2005--after the reappraised values had been finalized, entered into the state database, and the reappraisal notices mailed (which explains why those original values still show up in the record). By comparing a list of ’05 appraised values to the list of recently corrected appraisals, we can now see the extent of Arp’s actions: a write-off of more than $11.6* million in appraised value to Loudon County.

While enjoying the obvious benefits of skyrocketing values, it seems the one down side for the developer was the resulting high property tax bills on his remaining unsold lots. That’s where Mr. Arp comes in.  Meanwhile, on comparable lots that Ross had already sold to private owners, the 2005 reappraisal values were left untouched.

What Arp has been doing to the tax payers of Loudon County is unthinkable. The practice is known as "Developer Discounting." Is it illegal? I have no idea. Is it unethical? You better believe it. By slashing appraisals on Mike Ross's Rarity Bay high end properties, Mr. Arp has cost the county tens of thousands of dollars annually in lost property tax revenues and shifted the tax burden onto you and me.

Bare in mind, this was a $11.6* million loss to the county in appraisals and this was just in one subdivision, one developer and just 179 lots.

And given what we now know, who knows how many times this sort of thing has happened during Arp's twenty plus years in the assessor's office. It could take Jenkins and his entire staff years to unravel the mess left behind by Arp.