Property owners on Greenings Island, an offshore chunk of Southwest Harbor, earned a reprieve Thursday when the Maine Supreme Judicial Court decided against the town in a case that sets a precedent for dozens of others who have contested the assessor’s shoreland valuations.

The issue is of considerable interest as increasing numbers of property owners on Maine’s 3,500 miles of tidal coastline balk at local attempts to capture revenue that reflects the skyrocketing prices such land is fetching.

Jean Harwood, a trustee of Cranberry Point Realty Trust, controls just over 29 acres on Greenings Island and had challenged a 68 percent increase from one year to the next in the land’s assessed valuation.

The court, sitting as the state’s Law Court, decided in a case called Southwest Harbor vs. Harwood that Harwood’s $240,000 abatement of her 1997 property taxes is valid.

Bill Dale, Harwood’s Portland-based lawyer, said the decision sets a precedent for dozens of shoreline land owners who have contested Southwest Harbor assessor Tom Edwards’ 1997, 1998 and 1999 valuations of their properties.

The Cranberry Point Realty Trust was assessed at $823,300 in April 1996. One year later, using Edwards’ new formula, its value was estimated to be 68 percent higher, at $1,389,700.

Communitywide, the increases in property valuation have ranged from 30 percent to more than 500 percent in the 1990s, according to a group fighting the increases, the Association of Concerned Taxpayers.

Numerous lawsuits have been filed over the assessments, and in 1999, Greenings Island residents mounted a failed campaign to secede from Southwest Harbor in response to the increases.

However, Law Court justices determined Thursday that the tax increases did not reflect an accurate valuation, vacating a March Superior Court judgment and supporting the tax abatement granted by the local appeals board during the summer of 1999.

Thursday’s decision relies on the same evidence that appeals board members used in their original unanimous votes to grant the 1997 tax abatements to four Greenings Island property owners.

At Harwood’s 1999 appeals board hearing, Dale introduced the example of Jarvis Newman, who bought two lots on the island in 1996, paying a fair market value of $730,000. Six months later, the town assessed his property at $883,200 for the purpose of determining his 1997 taxes.

A 17 percent increase in such a short period was deemed unreasonable, so the appeals board decided that Southwest Harbor had erred in its assessment of Greenings Island property. All property on the island was valued using the same formula. Thus, each landowner was entitled to a property tax abatement, the board said.

“We scaled them all back as if Newman’s property was assessed at 100 percent of its market value,” said Jim Geary, chair of the Southwest Harbor appeals board.

Edwards had based his valuations on the 1996 sale of a different piece of property – a small cottage that sold for $730,000 though the town had valued it at only $460,000. To Edwards, this indicated that Southwest Harbor was not collecting sufficient property tax from the island.

Properties on Greenings Island are particularly difficult to value because property sales – which are typically used by assessors to determine fair-market property value – are rare, Edwards told the Bangor Daily News last year.

The 1996 sale that Edwards used to make his assumptions was the first piece of Greenings Island property sold to a nonresident of the island since 1889, he said. And Greenings Island lacks the amenities of similar islands, like electricity and ferry service, so property values from nearby Cranberry Isles are not a fair comparison.

Despite Edwards’ reasoning, the Law Court agreed with town appeals board members that his valuation was “manifestly wrong” as defined in a 1988 case.

Instead, property values should be determined – as the appeals board recommended – using the Newman sale as a guide.

Dismayed by the lower court’s reversal, Geary was pleased to hear that the Law Court had validated his board’s unanimous decisions.

“We probably had 40 or 50 hours of public hearings. I thought we had exhausted the issues,” he said. “As a resident and a taxpayer, I’m very pleased.”

And more than 70 shoreline property owners in Southwest Harbor with abatement requests waiting at all levels of community and legal adjudication may well view Thursday’s decision as a good omen in their own battles for reimbursement.

Three property owners want to follow Harwood in seeking 1997 tax relief from the Law Court, and all 14 of the property owners on Greenings Island plan to file 1998 abatement requests now that Harwood’s has been granted by the high court, Dale said.

Additionally, 67 landowners along the shore of Southwest Harbor’s mainland were denied 1999 tax abatements by Southwest Harbor’s appeals board following, and essentially due to, the Superior Court’s denial of the Harwood tax abatement, Geary said.

Each hopes his or her case will follow Harwood’s lead.

In fact, Dale argued his second case against Southwest Harbor for a Greenings Island property owner in the state supreme court Wednesday. Because the issues nearly mirror the Harwood case, Dale anticipates a similar ruling.

“Since it was the same law, the same facts, one surmises it will be decided in the same way,” Dale said.