ABERDEEN LINKS, LLC,	)
	)
Complainant,	)
	)
v.	)		Appeal Number  00-10113
	)
MAURICE M. GOGARTY, ASSESSOR,	)
ST. LOUIS COUNTY, MISSOURI,	)
	)
Respondent.	)

DECISION AND ORDER

HOLDING

Decision of the St. Louis County Board of Equalization reducing the assessment made by the Assessor, SET ASIDE, Hearing Officer finds true value in money for the subject property for tax year 2000 to be $699,000, assessed value of $132,810.

Complainant appeared by Counsel, Richard Sherman, Manchester, Missouri.

Respondent appeared by Counsel, Paula J. Lemerman, Associate County Counselor.

Case heard and decided by Chief Hearing Officer, W. B. Tichenor.

ISSUE

The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2000.

SUMMARY

Complainant appeals the decision of the St. Louis County Board of Equalization which reduced the valuation of the subject property. The Assessor determined an appraised value of $1,951,105 (assessed value of $370,710, as residential property). The Board reduced the value to $994,684 (assessed value of $188,990, as residential property). A hearing was conducted on May 1, 2001, at the St. Louis County Government Center, Clayton, Missouri.

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

Complainant's Evidence

Complainant offered into evidence the following exhibits:

Exhibit A - Appraisal report on the subject property by Matthew E. Burghoff, MAI, SRA, Missouri and Illinois Certified General Appraiser.

Exhibit B - Survey of subject property.

Exhibit C - Written direct testimony of Matthew E. Burghoff.

Mr. Burghoff testified in response to cross-examination by Respondent's Counsel, to questioning by the Chief Hearing Officer and in redirect by Complainant's Counsel. Tr. 3 - 45. Mr. Burghoff's opinion of value for the subject property as of January 1, 2000, was $600,000. Exhibits A, B and C were received into evidence.

Respondent's Evidence

Respondent offered into evidence the following exhibits:

Exhibit 1 - Appraisal report on the subject property by Donald Marcks and Linda Stojan.

Exhibit 2 - Written direct testimony of Donald Marcks.

Exhibit 3 - Written direct testimony of Linda Stojan.

Exhibit 4 - St. Charles County Map.

Exhibit 5 - Warranty Deed on subject property.

Exhibit 6 - Sales Contract, dated March 1, 1999, on subject property.

Exhibit 7 - Deed of Trust on subject property.

Exhibit 8 - 1999 Income Tax Partnership Return.

Exhibit 9 - 2000 Income Tax Partnership Return.

Mr. Marcks testified in response to cross-examination by Complainant's Counsel, to questioning by the Chief Hearing Officer and in redirect by Respondent's Counsel. Tr. 46 - 72. Mr. Marcks'  opinion of value for the subject property as of January 1, 2000 was $1,000,000. Exhibits 1, 2, 3 and 4 were received into evidence. Exhibits 5, 6, 7, 8 and 9 were objected to, objection was sustained and the exhibits were excluded from evidence and not considered in rendering the decision as to value of the subject property. Counsel for Respondent was permitted to make an offer of proof, relative to this exhibits. See, Exclusion of Exhibits, infra, pp. 2-3.

FINDINGS OF FACT

1. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.

2. The subject property is located at 4111 Crescent Road, in the Eureka area of an unincorporated area of St. Louis County, Missouri. Exhibit A, p. 3; Exhibit 1, p. 3. It is identified by locator number 27U410026. Exhibit 1; Complaint for Review of Assessment. The property as it existed on January 1, 2000, consisted of 152.14 acres of raw ground with some preliminary infrastructure and improvements related to an ongoing development as a golf course. Exhibit A, p. 3 & Exhibit B. More specifically, the raw, undeveloped land was improved by some clearing and rough grading and a drilled well, with equipment and related irrigation piping related to the well/watering system. Tr. 41, Lines 14-19; Exhibit A, pp. 15 & 35.

3. The subject property is wholly located inside the 100 year flood hazard area of the Meramec River. Additionally, roughly 40% of the site is located within the floodway of the Meramec River. The portion of the subject located in the floodway cannot be altered to be raised out of the floodway or floodplain. This limits the overall use and potential of the property to secondary and/or agricultural or recreational uses as planned. This is a significant negative impact for all uses. Exhibit A, p. 14; Tr, 7, Line 15 - Tr. 8, Line 20; Exhibit 1, p. 12.

4. The sales comparison approach is the appropriate methodology to utilize in valuing the subject property. Exhibit A & Exhibit C, Q & A 15; Exhibit 1 & Exhibits 2 & 3, Q & A 35.

5. The contributory value of the clearing, rough grading and the well and related irrigation equipment as of January 1, 2000, was $75,000. Exhibit A, p. 36.

5. The value of the subject land as of January 1, 2000, was $624,000.

6. The true value in money of the subject property as of January 1, 2000, was $699,000, assessed value of $132,810, as residential property.

CONCLUSIONS OF LAW

Jurisdiction

The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious. Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, RSMo. The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious. Section 138.431.4, RSMo.

Board of Equalization Presumption

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization. Hermel, Inc. v. STC, 564 S.W.2d 888, 895 (Mo. banc 1978); Chicago, Burlington & Quincy Railroad Co. v. STC, 436 S.W.2d 650, 656 (Mo. 1968); May Department Stores Co. v. STC, 308 S.W.2d 748, 759 (Mo. 1958).

Standard for Valuation

Section 137.115, RSMo 2000, requires that property be assessed based upon its true value in money which is defined as the price a property would bring when offered for sale by one willing or desirous to sell and bought by one who is willing or desirous to purchase but who is not compelled to do so. St. Joe Minerals Corp. v. State Tax Commission, 854 S.W.2d 526, 529 (Mo. App. E.D. 1993); Missouri Baptist Children's Home v. State Tax Commission, 867 S.W.2d 510, 512 (Mo. banc 1993). It is the fair market value of the subject property on the valuation date. Hermel, supra, at 897.

Complainant's Burden of Proof

In order to prevail, Complainant must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 1999. Hermel, supra, at 897. Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. See, Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact. The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief. Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).

Weight to be Given Evidence

The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled. The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide. St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad, supra.

Trier of Fact

The Hearing Officer as the trier of fact may consider the testimony of an expert witness and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances. The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert's testimony and accept it in part or reject it in part. St. Louis County v. Boatmen's Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).

Opinion Testimony by Experts

If specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert on that subject, by knowledge, skill, experience, training, or education, may testify thereto.

The facts or data upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing and must be of a type reasonably relied upon by experts in the field in forming opinion or inferences upon the subject and must be otherwise reliable, the facts or data need not be admissible in evidence. Section 490.065, RSMo; Courtroom Handbook on Missouri Evidence, Wm. A. Schroeder, Sections 702-505, pp. 325-350; Wulfing v. Kansas City Southern Industries, Inc., 842 S.W.2d 133 (Mo. App. W.D. 1992).

Classification of Golf Course Land

Land used as a golf course is classified as residential real property and assessed at 19% of true value in money. Sections 137.016.1(1) & 137.115.4(1), RSMo.

DECISION

Hearing Officer Finds Value

The valuation methodology appropriate to address the appraisal problem in the present appeal is agreed by both Complainant's and Respondent's experts to be the sales comparison approach. The appraisal problem relates to valuing what is essentially raw, undeveloped land. The only improvements in place as of the January 1, 2000, tax date being some small amount of clearing and grading and the drilling of an irrigation well, with some supporting piping. To arrive at a determination of value, evidence as to undeveloped land values of comparable properties is necessary. For this particular valuation exercise, neither the cost or income approaches are appropriate.

The experts placed before the Hearing Officer what they each deemed to be appropriate comparable properties for purposes of valuing the subject. A total of ten separate properties were analyzed by the experts. Complainant's appraiser relied upon a total of seven sales to arrive at his opinion of value. Respondent's appraisers utilized three sales to form their conclusion of value.

The ten properties, with their relevant characteristics, can be summarized in the following listing. CP = Complainant's sale comparable. RP = Respondent's sale comparable. Acreage has been rounded to nearest whole acre. Location indicates approximate miles from the subject, as calculated by the Hearing Officer.

Mr. Burghoff arrived at a per acre value of $3,500 for the subject property based on the sale properties he deemed comparable for purposes of his valuation. Various adjustments were made to the comparables to account for differences between each sale property and the subject. These adjustments included alterations to sale prices based upon time of sale, location, size, access, visibility, topography, permitted uses, utilities, development potential, flood plain and floodway, and other factors as each was applicable to a given sale property. Exhibit A, pp. 31 - 35.

Mr. Marcks and Ms. Stojan arrived at a .15 cents per square foot value or $6,534 per acre value for the subject based upon their analysis of the three sales presented in their appraisal. Adjustments were made for time of sale, size, location/floor area and access to utilities as these factors were applicable to a given sale comparable. Exhibit B to Exhibit 1.

As in any appeal, where valuation rests on appraisals presented by differing appraisers, the Hearing Officer observes strengths and weaknesses in each presentation. In particular, in a case such as the present appeal, where both parties rely upon the sales comparison approach, but utilize completely different sales comparables, the Hearing Officer generally will find strengths and weaknesses with individual comparables. The persuasiveness of any given sale for purposes of comparability to arrive at value will vary based on any number of factors.

The Hearing Officer may feel that certain factors exist which simply negate, in his mind, the asserted comparability of a given property, if that was the only property presented. However, a property may have some factors of comparability which another property does not and vice versa. Such is the case in the circumstances presented with these ten sale properties.

Distance From Subject

Giving consideration to the distance from the subject, Complainant's comparables 1 and 2 would be closest, followed by Respondent's comparables 1 and 2. Complainant's comparable 5, Respondent's comparable 3 and Complainant's comparables 3 and 7 would be the group of properties next closest, with Complainant's comparables 6 and 4 being the properties located the greatest distance from the subject. However, even Complainant's comparables 6 and 4 are not located such a great distance from the subject as to render them not comparable. Other factors related to location, such as the general type of growth and development in proximity to the subject and the growth and development in proximity to comparables 4 and 6 provide general similarities which still render these properties comparable under the location factor. The use of sales in St. Charles and Jefferson County by Complainant's appraiser did not render those individual sales non-comparables on that factor alone for the purpose of making a determination of value for the subject property. The location of such properties in areas experiencing growth and development similar to that in the general area of the subject provides a sufficient basis for comparability with adjustments as deemed required by the expert. Exhibit A, pp. 32-33.

Date Of Sale

The date of sale of Complainant's comparable 6 and Respondent's comparable 2 is generally beyond the time frame one would generally like to see used for purposes of comparison, however, the size of Complainant's comparable is quite close to the subject, being only 35% larger than the subject. The comparability in size, with the adjustment for age gives strength to this sale. Exhibit A, p. 32. All the other comparables presented by both Complainant and Respondent sold in a time frame clearly relevant for a 2000 valuation.

Complainant's Comparable 7

The size of the various comparables is another factor to be considered in analyzing the two appraisals. The size of Complainant's comparable 7 weighs heavily against its comparability. Furthermore, the unadjusted per acre price of this property is the lowest of all of Complainant's comparables and indicates that other factors which had a negative impact on this property were at play in the sale of this property. The fact that the entire property is located within the floodplain or floodway of the Meramec River is the single factor which gives some degree of weight for comparability to this property.

Respondent's Comparable 2

In like manner, the size of Respondent's comparable 2 is such that its comparability is brought into serious doubt. The property is only half the size of Complainant's comparable 7 or less than 8% the size of the subject property. The size factor coupled with the 1990 date of the sale renders this sale not comparable for purposes of this appraisal problem.

Complainant's Comparable 1 and Respondent's Comparable 1

Complainant's Comparable 1 (32.83 acres) and Respondent's Comparable 1 (31.77 acres) are virtually the same size. However, both are only 20 to 22% the size of the subject. Both sold at a time relevant for purposes of this appraisal, Complainant's 1 having sold in December, 1999, and Respondent's 1 having sold in November, 1997. The sale date of December, 1999, is, of course, the more relevant sale date. From a locational standpoint Complainant's comparable is superior to Respondent's. Respondent's comparable is located in a more developed area, closer to I-270 than both the subject and Complainant's comparable. Between these two sales, Complainant's property provides a stronger basis for consideration in arriving at value. The fact that this property is located less than a quarter of a mile outside the St. Louis County boundary line does not in any way render the sale as not comparable.

Complainant's comparable 1, being one of two properties within approximately five miles of the subject, provides a good indicator as to a cap for the value of the subject property. Comparable 1 sold for $5,483 per acre just one month prior to the appraisal date for the subject property. Given the fact that the subject is approximately 4.6 times larger than the comparable, it would generally be understood that the larger tract of land would have a value per acre less than the smaller tract of land. The unadjusted sales price of Complainant's comparable 1 provides a substantial and persuasive indicator that rebuts the comparability of Respondent's comparable 1, with an unadjusted sales price of nearly $22,000 per acre, for purposes of this appraisal. Respondent's comparable was to be developed as a residential subdivision (Tr. 62, Line 17 - Tr. 63, Line 9). This factor, along with its far superior locator, also weigh against relying on this sale for purposes of this valuation.

Complainant's Comparables 2, 4 and 5

Complainant's expert utilized sales of three properties which were significantly larger in size than the subject. These three sales were 851, 367 and 700 acres in size respectively (Comps 2, 4 & 5). These three comparables, because of their size, are appropriate to be considered since each could more than accommodate the development of a golf course.

Comparable 2 provides relevant information for addressing the valuation problem in this appeal because of its proximity to the subject. This 851 acre tract is made up of three adjacent or contiguous sites. No information was given as to the size of the individuals smaller tracts which made up the entire 851 acre parcel. The sales value would need to be adjusted due to the larger size in this instance, therefore, the $2,985 per acre sales price effectively establishes a floor for the subject property's value.

Comparable 4 is closer in size to the subject and was also to be part of a golf course development. The development of this comparable also was to involve a planned development of 476 single family lots plus 57 townhouse or high density residential units. Accordingly, this sale represents an unadjusted per acre value at the upper end for value. Clearly the per acre value reflects that approximately 60% of this property would be developed for residential living, since only approximately 150 acres would be required to support the golf course development. Coupled with the per acre value for Complainant's comparable 1, a significant downward adjustment would be required for this comparable. Also, the fact this comparable was not negatively impacted by floodplain and floodway as the subject would require a further downward adjustment.

Comparable 5 is approximately 4.6 times the size of the subject. Its per acre value of $1,250 is only 42% of the per acre value of comparable 2 which is located much closer to the subject than comparable 5. Therefore, comparable 5 falls under the per acre floor value established by comparable 2 and would require an upward adjustment. Furthermore, this tract was purchased for agricultural and recreational purposes, which is reflected in its lower per acre value than comparable 2. This factor also weighs in for the per acre value being adjusted upward.

Complainant's Comparable 3

This comparable, based on the size factor (155 acres), is the most comparable to the subject of any comparables presented. It was purchased for the development of an 18 hole golf course. The unadjusted per acre value ($15,956) is nearly 3 times greater than Complainant's comparable 1 which is approximately 22% the size of this comparable. The fact that this property, at the time of sale, was adjacent to residential ground owned or optioned to the grantee leads to the conclusion that the per acre value was influenced by this element, since much of this tract would have been available for residential development. A significant downward adjustment would be warranted for this factor. Only 58% of this property was located in a floodplain, as compared to the entirety of the subject being in a floodplain and floodway. This difference would require a further downward adjustment.

Complainant's Comparable 6 and Respondent's Comparable 3

These two comparables are nearly identical in size (205 and 210 acres respectively) and are therefore only about 35% larger than the subject. Both sites are located in floodplains. Complainant's comparable is approximately twice the distance (22 miles) from the subject as is Respondent's comparable (12 miles). Comparable 6 is used as a sod farm and is generally agricultural land. Comparable 3 was a sale under threat of condemnation. The unadjusted per acre value for Respondent's comparable ($10,710) is 1.95 times larger than the per acre value of Complainant's comparable 1, which establishes the ceiling for the unit value based on the record in this appeal. Even after the adjustments made by Respondent's appraiser, the per acre value of this comparable still exceeds the per acre value of the 33 acre tract represented by Complainant's comparable 1. The unadjusted value of complainant's smaller comparable weighs against reliance on Respondent's comparable 3 in determining value.

Conclusion of Value

Taking all of the various factors and elements addressed above as they relate to the individual sales properties presented by the experts for both Complainant and Respondent, the Hearing Officer is persuaded that the evidence presented on behalf of Complainant is substantial and persuasive to establish value. Mr. Burghoff concluded upon a range of value from $3,000 to $7,500 per acre after adjustments to each of his seven comparables. The Hearing Officer, having calculated certain adjustments to Complainant's comparables 2 and 6 and giving some weight to the unadjusted value for Complainant's comparable 1 as the ceiling unit value, finds a more appropriate range of value to be $3,360 to $5,500 per acre.

Time of Sale Adjustment

Mr. Burghoff applied a 5% annual adjustment to account for time of sale. Exhibit A, p. 32. Since comparable 1 sold in December, 1999, the Hearing Officer determines that no time of sale adjustment is necessary for this sale.

Comparable 2 sold in June, 1997, therefore a time adjustment of 12.5% would be appropriate. This results in an increase in the per acre value of $373 ($2,985 x .125 = $373).

Comparable 6 sold in April, 1992, therefore a time adjustment of 38% is to be made. This results in an increase in the per acre value of $991 ($2,609 x .38 = 991).

Accessibility Adjustment

Mr. Burghoff also made a 10 - 30% adjustment to account for locational differences as they would relate to ingress and egress, visibility and accessibility, since the subject is located approximately one mile off of Interstate 44. Comparable 1 provides similar accessibility to I-44 as the subject, although it may be slightly inferior. However no adjustment is deem warranted for this factor.

Comparable 2 has direct frontage access from Hornecker Road and Old Route 66 Road (Business I-44). An adjustment of 10% to account for the subject's slightly superior access to I-44 is warranted. This would result in an additional $298 ($2,985 x .10 = $298) in the per acre value.

Comparable 6 has no frontage or reasonable interstate access and therefore calls for a 30% adjustment. This adds $782 ($2,609 x .30 = $782) to the per acre value.

Adjusted Values

Comparable 2 reflects an indicated per acre value of $3,660 ($2,985 + $373 + $298 = $3,656 or $3,660) accounting for the time of sale and accessability adjustments.

Comparable 6 reflects an indicated per acre value of $4,380 ($2,609 + $991 + $782 = $4,382 or $4,380) accounting for the time of sale and accessability adjustments.

Comparable 1, as discussed above, establishes a per acre cap of approximately $5,500. However, due to its significantly smaller size than the subject, there would need to be a negative adjustment made to account for this difference. In like manner an upward adjustment in the per acre values would need to be made for both comparables 2 and 6. Complainant's appraiser made adjustments to reflect differences in size (Exhibit A, p. 34) however, no detail was provided as to a percentage or dollar adjustment which was made for this factor. Such information would have been helpful in reviewing and addressing this aspect of the appraisal problem.

The Hearing Officer's analysis of comparables 1, 2 and 6 has resulted in indicated values of $5,500, $3,660 and $4,380, respectively. These three adjusted values provide substantial and persuasive evidence to establish value. Any adjustment relating to size would reduce the per acre value indicated by comparable 1 and increase the values indicated by comparables 2 and 6. Nevertheless, the indicated value would still lie within the range from something more than $3,660 to something less than $5,500.

One further adjustment to address the floodplain and floodway factor would also be appropriate. There is insufficient data on the record to provide the Hearing Officer with specific percentages which might be appropriate to each comparable. However, such an adjustment would require a further reduction for comparable 1. A slight downward adjustment might also be called for to comparable 2, since only part of it is located in a floodplain area. Comparable 6 is located entirely within a floodplain, but does not share the negative influence of a floodway with the subject. A small downward adjustment to comparable 6 could also be justified.

The Hearing Officer gives some weight to each of these adjusted values and recognizes that adjustments for size and floodplain/floodway would also be appropriate. Giving consideration to all these factors, the Hearing Officer settles on a per acre value for the subject of $4,100. This results in a value for the land of $624,000 ($4,100 x 152.14 = $623,774, rounded to $624,000).

Complainant's Appraisal

The Hearing Officer takes this opportunity to address some weaknesses in Mr. Burghoff's appraisal. The noting of these is weaknesses is not intended to imply that these constitute fatal deficiencies to this appraisal. As set out above, Mr. Burghoff presented sufficient data relative to the comparables to permit the Hearing Officer to evaluate the appraisal and arrive at a conclusion of value.

The element which the Hearing Officer would have liked to have seen within the appraisal would have been more specific discussion or illustration as to adjustments made to each of the sales. A sales grid is not always required, but it may add to the appraisal presentation. The lack of a sales grid to show specific adjustments does not necessarily take away from the appraisal. In the present case, the appraiser elected to discuss in a general narrative format (Exhibit A, pp. 30 - 36) the various adjustments which were required for the appraisal problem.

The Hearing Officer recognizes that individual appraisers have different styles as to how they present data relating to adjustments. This appraisal would have been strengthened, however, in the eyes of the Hearing Officer if Mr. Burghoff had been more specific in his narrative relating to adjustments. Simply by way of example, the appraisal would have benefited and the Hearing Officer would have been better informed had a discussion been presented which identified the percentage adjustments to comparable 1 for its smaller size and for the floodplain/floodway factor. If the appraiser felt an adjustment for accessibility/visibility was warranted for this comparable such information could have also been presented. Similar treatment for each of the sale properties and the differing factors for which adjustments were required would have made for an appraisal which would have given more insight into the appraiser's process of arriving at value. This ultimately would result in a more effective presentation.

The Burghoff appraisal provided substantial and persuasive evidence upon which a determination of value could be made. Had a more specific and detailed narrative been presented, the Hearing Officer might have simply been persuaded that the $3,500 per acre concluded value proposed by Mr. Burghoff was appropriate.

Respondent's Appraisal Unpersuasive

Respondent's appraisal was found to be unpersuasive either to sustain the $994,684 value determined by the Board of Equalization or to establish the $1,000,000 value advocated by Mr. Marcks and Ms. Stojan. The significantly smaller size of comparable 1, its general location and the sales price for Complainant's comparable 1 rebut the comparability of this sale for purposes of this appraisal problem. Accordingly, it was not found to be probative relative to the issue of value.

In like manner, Respondent's comparable 2 is not sufficiently comparable due to the combination of factors relating to its size, age of sale and location closer to the I-270 corridor. Respondent's sale 3 was sufficiently comparable based on size, date of sale and general distance from the subject. However, in light of the sales data present in Complainant's appraisal, the Hearing Officer was not persuaded that appropriate adjustments were made to this comparable.

Respondent's appraisers elected to calculate a per square foot sales value and make adjustments on that basis in performing their appraisal. The Hearing Officer feels that when valuing a parcel the size of the subject, the more appropriate unit of comparison would be per acre value, instead of per square foot value. However, this is a matter of personal preference for the appraiser.

In reviewing Respondent's sales grid it is noted that the adjustments made were based on percentage adjustments to the per square foot sales value. (Exhibit B to Exhibit 1) However, the percentage adjustments simply do not calculate as shown when applied to individual per square foot sales prices of the three comparables.

According to the sales grid, comparable 1 sold for 50 cents per square foot. Marcks and Stojan made a net minus adjustment of 32% to the sales price to arrive at their adjusted price per square foot. The adjusted price per square foot is shown to be 18 cents. However, 32% of .50 cents is 16 cents (.50 x .32 = .16), not 32 cents. Therefore the adjusted per square foot sales price of comparable 1 should have been 34 cents (50 - 16 = 34). When the 34 cents per square foot amount is multiplied times the subject's square footage shown by Respondent's experts (6,665,987 x .34 = $2,133,115.84), the indicated value for the subject property is $2,133,115 or more than $14,000 per acre, not the $1,199,877 which would be the calculated value for the subject relying on this comparable. The other evidence on this record contradicts and weighs against such a per acre value.

This same pattern of adjustments is followed for each of the other two comparables. In each instance, the appraisers have simply subtracted the total net percentage adjustment from the per square foot sales price, instead of multiplying the net adjustment factor times the per square foot sales price and then subtracting that product from the per square foot sales price. If it is assumed that the appraisers made percentage adjustments and intended to show them as adjustments on the sales grids in cents, instead of percents, this also raises problems.

For example, the adjustment for time of sale to comparable 2 is shown as a positive or upward adjustment of 24%. In other words, an upward adjustment of 4 cents (.18 x .24 = .043). If it is assumed the appraisers intended this to be 24 cents instead of 24%, the result is that the appraisers are showing the sale to be adjusted upward to 42 cents (.18 + .24 = .42). This would mean that the actual percentage adjustment would calculate to 233% (.42/.18 = 2.333) for this one factor.

It has been the experience of the Hearing Officer that adjustments made by appraisers in appraisal problems such as this will be made as percentage adjustments rather then cent adjustments to per square foot sales prices. Therefore, if the adjustments made on Respondent's sales grid are treated as percent adjustments, as given, the adjusted square foot values would be 34, 18 and 22 cents for the three sales properties, which will not support the Marcks/Stojan conclusion of an estimated land value of 15 cents per square foot or $6,534 per acre.

Respondent's appraisal, notwithstanding the calculation inconsistencies just discussed, would have been improved by a narrative discussion as to the need for the individual adjustments to each sale presented and the basis for the adjustments. A more comprehensive description of the sale properties used as comparables would also improve the appraisal report.

Exclusion of Exhibits

Counsel for Respondent sought to have admitted into evidence five (5) exhibits (Exhibits 5, 6, 7, 8 & 9) which were excluded upon objection by Counsel for Complainant. An offer of proof was permitted. The exhibits were received only for the purpose of providing a record to the Commission in the event of a filing of an Application for Review or an appellate court in the event of a filing for Judicial Review of an Administrative Decision. The exhibits were not considered by the Hearing Officer in the rendering of his decision. Tr. 47, Line 13 - Tr. 60, Line 21.

Exhibit 5 is a certified copy of a warranty deed dated April 6, 1999, conveying the subject property to Complainant. It was filed for record on April 7, 1999.

Exhibit 6 is a copy of a special sale contract on the subject property, with Complainant as the buyer. The contract was signed on March 1, 1999.

Exhibit 7 is a certified copy of a deed of trust and security agreement securing future advances and future obligations up to $2,500,000, dated April 6, 1999, with the subject property being the property being mortgaged. It was filed for record on April 7, 1999.

Exhibit 8 is a copy of the Complainant's 1999 Partnership Return of Income, Form 1065, dated 4/17/00.

Exhibit 9 is a copy of the Complainant's 2000 Partnership Return of Income, Form 1065, dated 3/27/01.

Commission rule 12 CSR 30-3.060 provides for the Hearing Officer to order an exchange of exhibits and written direct testimony for evidentiary hearings held before the Commission. In the present appeal such a scheduling order was issued on November 8, 2000, setting January 22, 2001, as the date for exchange of exhibits and February 19, 2001, as the date for exchange of written direct testimony.

Complainant filed Exhibits A & B on January 22, 2001.

Respondent filed Exhibit 1 on January 24, 2001.

Complainant filed the Burghoff written direct testimony (Exhibit C) on February 16, 2001.

Respondent filed Motion for Leave to file written direct testimony out of time on February 21, 2001.

By Order of February 22, 2001, Respondent was given until and including March 5, 2001 to file written direct testimony.

Complainant filed objection to Respondent's Exhibit 1 on the grounds that it was not filed in accordance with the Scheduling Order of November 8, 2000.

By Order of March 7, 2001, the Hearing Officer overruled Complainant's objection.

On March 2, 2001, Respondent filed the written direct testimony of Mr. Marcks (Exhibit 2) and Ms. Stojan (Exhibit 3).

By Order of March 21, 2001, the Evidentiary Hearing was set for May 1, 2001.

12 CSR 30-3.060 specifically provides Any exhibit or written direct testimony which has not previously been exchanged in accordance with this rule will be excluded from admission into evidence at the evidentiary hearing. Exhibits 5, 6, 7 and 8 were all in existence prior to the exchange date of January 22, 2001. Under Commission rule parties may obtain all available discovery in the same manner as the Missouri Supreme Court rules provide for civil actions in circuit court. 12 CSR 30-3.140(6).

In the present appeal, Respondent did not seek discovery of Exhibits 6, 8 and 9. Respondent could have easily obtained the certified copies of Exhibits 5 and 7 by the exercise of due diligence, since these are public records. Although Exhibit 9 was not in existence at the time of the exchange date, Respondent could have sought discover of the 2000 tax return and filed for leave to submit this exhibit, with supplemental testimony to establish a foundation for its relevance and admissibility. Respondent failed to exercise due diligence in proper discovery and research of public records so as to be able to submit these exhibits pursuant to the Commission rule.

The purpose of 12 CSR 30-3.060 is to allow for full and fair cross-examination at the evidentiary hearing. Offering of exhibits which could have easily been submitted and exchanged well in advance of the evidentiary hearing, instead of waiting until the close of Complainant's case in chief does not allow for full and fair cross-examination, nor the opportunity for Complainant to have prepared rebuttal evidence.

ORDER

The assessed valuation for the subject property as determined by the Assessor and reduced by the Board of Equalization for St. Louis County for the subject tax day is SET ASIDE.

The assessed value for the subject property for tax year 2000 is set at $132,810.

A party may file with the Commission an application for review of this decision within thirty (30) days of the mailing of such decision. The application shall contain specific grounds upon which it is claimed the decision is erroneous. Failure to state specific facts or law upon which the appeal is based will result in summary denial. Section 138.432, RSMo 1994.

If an application for review of this decision is made to the Commission, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission. If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal. If any or all protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.

Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed. Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.

SO ORDERED June 5, 2001.

STATE TAX COMMISSION OF MISSOURI

W. B. Tichenor

Chief Hearing Officer