GUILLERMO & D. PEARSON VILLACIS,	)
	)
Complainants,	)
	)
v.	)		Appeal Number  00-10055
	)
MAURICE M. GOGARTY, ASSESSOR,	)
ST. LOUIS COUNTY, MISSOURI,	)
	)
Respondent.	)

 DECISION AND ORDER

HOLDING

Decision of the St. Louis County Board of Equalization sustaining 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 $370,000, assessed value of $70,300.

Complainant D. Pearson Villacis appeared pro se.

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

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

ISSUES

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 sustained the valuation of the subject property. The Assessor determined an appraised value of $$553,710 (assessed value of $105,200, as residential property). Complainant proposed a value of $368,000 (assessed value of $70,110). A hearing was conducted on March 6, 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 testified in her own behalf. Exhibit A was received into evidence. Exhibit A was a document prepared by Ms. Villacis which addressed the issue of valuation of the subject property.

Exhibit A contained the following data:

1. Cover statement presenting a summary of Complainants' position.

2. A site plan showing the location of the subject property in relation to Interstate 270.

3. Purchaser's Statement on the subject lot.

4. Residential Construction Contract, with cost schedule.

5. BOE Appeal Form, Assessment Notices, Tax Bill, BOE Decision Letter, Survey of subject lot, locator maps.

6. Real estate data sheets on sales of properties on the subject street.

7. Article from the Journal of Transportation and Statistics, October, 1998, pp.1-22, The External Damage Cost of Noise Emitted from Motor Vehicles, Mark Delucchi & Shi-Ling Hsu.

8. Noise Comparison Summary for the East side of I-270 along the location of the subject property and information on sound barrier criteria.

Complainant testified as to the noise problems which impact on the subject property from it being located on the east side of Interstate 270. Her opinion of value of $368,000 was based upon the cost for purchase of the unimproved lot in December, 1997, for $138,00 and the construction cost of $225,400 for the subject house in 1999.

Respondent's Evidence

Respondent placed into evidence the testimony of Mr. James Ryan, State Certified Residential Real Estate Appraiser for St. Louis County. The appraiser testified as to his appraisal of the subject property. The Appraisal Report, Exhibit 1, of Mr. Ryan was received into evidence. Mr. Ryan arrived at an opinion of value for the subject property of $409,000 based upon a sales comparison approach to value. In performing his sales comparison analysis, the appraiser relied upon the sales of properties which he deemed to be comparable to the subject property.

The following exhibits were also received into evidence on behalf of Respondent:

Exhibit 2 Application for Building Permit for construction of the subject house.

Exhibit 3 Aerial photograph of subject site.

Exhibit 4 3 photographs of 23 Sackston Woods.

Exhibit 5 Certificate of Value on the subject lot for its sale in January, 1996.

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 City Merchants' and Manufacturers' Tax Equalization Board.

2. The subject property consists of a 1 acre lot which is improved by a two-story, brick and frame single-family residence. The house was built in 1999. The residence has a total of seven rooms, which includes four bedrooms, three full and two half baths. The house has 3,411 square feet of living area over a full basement with 1,825 square feet of recreation area. The house has an attached four-car garage. The property is located at 36 Sackston Woods Lane, Creve Coeur, Missouri. It is identified by locator number 18O310355.

3. The subject lot was purchased in January, 1996, for $126,000 and purchased in December, 1997, by Complainants for $138,000. The present home was built on the site during 1999 for a total cost of $225,400.

4. The true value in money (market value) of the subject property as of January 1, 2000, was $370,000.

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). There is no presumption that the assessor's valuation is correct. Section 138.431.3, RSMo.

Standard for Valuation

Section 137.115, RSMo 1994, 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, Inc. v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978).

Complainants' Burden of Proof

In order to prevail, Complainants 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, Inc. v. State Tax Commission, 564 S.W.2d 888, 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).

Owner's Opinion of Value

The owner of property is generally held competent to testify to its reasonable market value. Boten v. Brecklein, 452 S.W.2d 86, 95 (Sup. 1970). The owner's opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation. Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).

Methods of Valuation

Missouri courts have approved the comparable sales or market approach, the cost approach (replacement or construction) and the income approach as recognized methods of arriving at fair market value. St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987) and State ex rel. State Highway Comm'n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. Div. 2 1974).

Sale of Subject

Evidence of the actual sales price of property is admissible to establish value at the time of an assessment, provided that such evidence involves a voluntary purchase not too remote in time. The actual sale price is a method that may be considered for estimating true value. The actual sales price, between a willing seller who is not obligated to sell and a willing buyer who is not compelled to buy, establishes an outer limit on the value of real property. St. Joe Minerals Corp. v. STC, 854 S.W.2d 526 (App. E.D. 1993).

DECISION

In light of the entire evidence on this record, Respondent's evidence was not persuasive to establish the value proposed. Complainant's evidence, while not persuasive to establish the exact value proposed by Ms. Villacis, was persuasive to establish the value of $370,000. The owner's opinion of value in this appeal was based upon a proper foundation and proper elements. That opinion of value was for all intents and purposes an opinion based on a cost approach to value.

The subject lot had been purchased in late December, 1997, by Complainants for $138,000. Exhibit A, Villacis Testimony. The same lot had sold in early January 1996, for $126,000. Exhibit 5, Ryan Testimony. Thus, in approximately a 24 month period the value of the land had increase by 9.5%. The subject property as improved on January 1, 2000, must be valued as if the new house had been in place on January 1, 1999. Section 137.115.1, RSMo. Therefore, it is necessary to determine the land value for the subject as of January, 1999.

The land sale of the subject in late December, 1997, 12 months before the tax date is certainly relevant to the tax date and sets the outer limit for the land value, but for the increase in value from December, 1997, to January, 1999. Mr. Ryan even used a comparable sale which was older than the subject land sale. Applying the percentage increase in value derived from the January, 1996, sale for a 12 month period (December, 1997 - December, 1998) the indicated land value is $144,555 ($138,000 x .0475% = $6,555 + $138,000 = $144,555).

The actual cost of construction of the new home in 1999 was $225,400. This was a turn key cost which accurately represents the market value of the home, without the land. Exhibit A, Villacis Testimony. By adding the adjusted value of the land to the construction cost the indicated value of $369,955, rounded to $370,000, is determined. Replacement cost new plus land value provides a valid and persuasive indicator of market value.

Under ordinary circumstances, Respondents appraisal standing alone would have been sufficient to have established value. However, in light of the actual purchase of the subject lot just 12 months before tax date and the construction of the subject house during 1999, the comparable sales approach was brought into serious question. A further factor which cast doubt on the probative value of Respondent's appraisal was the sales data of homes on the subject street.

This sales data was not sufficient for the Hearing Officer to perform an appraisal of the subject based on these sales. The one 1994 sale (12 Sackston Woods) was somewhat dated for a January, 1999, valuation date, although the sales price in comparison to the other four sales, would tend to demonstrate that sales prices had not increased greatly from 1994 through 1998 on the subject street. The two 1996 sales (16 and 19 Sackston Woods) were somewhat dated, but not so much as to not provide an overall indicator as to the general range of home values on the subject street. It would seem that adjustments as for time of sale could have been made to these comparables. One home (19 Sackston Woods) was a two-story house, however, sold for the highest gross amount of any of the five sales.

Several important points can be drawn from the sales data on the five properties. The lot sizes of these five sales ranged from .99 of an acre to 1.6 acre. Each of the properties were certainly comparable to the subject relative to lot size.

The living area of the five houses were very comparable to the subject house. Living area ranged from 2,610 to 4,019, with an average of 3,360. The subject's 3,411 square feet of living area places it right in the middle of the range of these five house on the subject street. The per square foot sales prices for the five properties ranged from $69.44 to $102.59, with an average of $85.31. The 1994 sale was the lowest per square foot price. The two 1996 sales had the highest per square foot prices. The per square foot value determined by the Hearing Officer for the subject calculates to $108.47 ($370,000/3,411 = $108.47).

The Hearing Officer is not advocating the use of the per square foot values as an appraisal tool to arrive at value for the subject. However, they do provide a check relative to the value determined under the actual sales and cost data for the subject. They also indicate that the properties utilized by Mr. Ryan appear to have been located in neighborhoods where the properties are of generally a higher value than on the subject street. The difference in value of the homes on the subject street as opposed to Respondent's three comparables may, in fact, be attributable to their close proximity to Interstate 270.

The five sales on the subject street were all of homes which are very similar and comparable to the subject in number of rooms. Total number of rooms for the five sales was 11, 9, 8, 9 and 10, from the oldest sale to the most recent. The number of bedrooms was 4, 4, 4, 5 and 5. The number of baths was 3 full and 1 half; 2 full; 2 full and 1 half, 4 full and 2 full and 2 half. All of the sales had full basements.

Taken together, this sales data establishes that the subject property is on a lot which is the general size of lots on the subject street. The size of the subject house is of the same general size as the rest of the homes on the subject street. The general configuration as to number of total rooms, bedrooms, bathrooms and basement for the subject is quite similar and comparable to the five sale properties on the subject street. In short, the subject is not over built for its street. The value of the land plus cost to construct of the subject is very similar to sales prices in general for other homes on the subject street.

The Hearing Officer is persuaded that the subject property has a value which is reflected in its land value and construction cost. This value is generally supported by the sales data for homes on the subject street. The location of these sales on the subject street is of prime importance in this particular appraisal problem, given the location of Interstate 270 next to the subject street, a significant feature not shared by any of the Respondent's comparables.

All the evidence, taken as a whole, weighs against the valuation proposed by Respondent and in favor of the valuation under a cost approach based on the land sale and construction of the subject lot and its improvement.

ORDER

The assessed valuation for the subject property as determined by the Assessor and sustained 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 $70,300.

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 April 4, 2001.

STATE TAX COMMISSION OF MISSOURI

W. B. Tichenor

Chief Hearing Officer