CRAIG & TERI BESSINGER,	)
	)
Complainants,	)
	)
v.	)		Appeal Number 03-57000
	)
BILL OVERSCHMIDT, ASSESSOR,	)
FRANKLIN COUNTY, MISSOURI,	)
	)
Respondent.	)

Decision of the Franklin 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 years 2003 and 2004 to be $222,000, assessed value of $71,040.

Complainants appeared pro se.

Respondent appeared by Counsel, Mark S. Vincent, County Counselor.

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

The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2003.

Complainants appeal, on the ground of overvaluation, the decision of the Franklin County Board of Equalization which sustained the valuation of the subject property. The Assessor determined an appraised value of $216,280 (assessed value of $69,210, as commercial property). Complainants proposed a value of $190,000 to 195,000 (assessed value of $60,800 to $62,400). Respondent proposed a value of $224,000 (assessed value of $71,680. An evidentiary hearing was conducted on May 4, 2004, at the Franklin County Courthouse Annex, Union, Missouri. Said hearing was continued to July 27, 2004, to permit Complainant to cross-examine Respondent=s witness.

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

Complainants offered into evidence the appraisal (Exhibit A) and the written direct testimony (Exhibit B) of Thomas R. Noonan, Missouri state certified residential real estate appraiser. Mr. Noonan arrived at an opinion of value for the property under appeal of $190,000 to $195,000. This was based upon a sales comparison approach to value relying on the sales of four properties.

Counsel for Respondent objected at hearing to Exhibit A on the grounds that the appraisal was a restricted appraisal and was not in accordance with the 2003 Uniform Standards of Professional Appraisal Practice (USPAP). The objection was taken under advisement to be ruled on in this decision. See, Ruling on Objection to Exhibit A, infra.

Ms. Bessinger appeared at the hearing on May 4, 2004, and gave testimony on the issue of fair market value. Neither Mr. or Mrs. Bessinger appeared at the continued hearing on July 27, 2004 to cross-examine Respondent=s witness. This Hearing Officer called Complainant and was advised by Mr. Bessinger that his attorney had advised him that a settlement had been reached with the Respondent=s attorney. This Hearing Officer was advised by Mr. Vincent that he had not reached any settlement. No attorney had made an entry of appearance in the case in behalf of Complainants.

Respondent placed into evidence the testimony of Mr. Donald Dwain Dodd, field appraiser for Franklin County. The Appraisal Report (Exhibit 1) and written direct testimony (Exhibit 2) of Mr. Dodd were received into evidence. Mr. Dodd arrived at an opinion of value for the subject property of $224,000 based upon a reconciliation of the cost, sales comparison (four sales), and income approaches to value.

Ms. Bessinger raised an objection to Exhibit 1 when it was discovered (after the exhibit was received into evidence) that Complainants had not received a copy of the Dodd appraisal, but had a copy of an appraisal that was presented at the hearing before the Board of Equalization. The evidentiary hearing was continued to permit Complainants adequate time to review Exhibit 1 and conduct cross-examination.

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

2. The subject property is located at 528 Indian Warpath Dr., Pacific, Missouri. The property is identified by locator number 19210.00027023.300. The property consists of .831 of an acre lot improved by a two structures and site improvements, including asphalt paving, poured concrete areas, some chat rock area and fencing.

Structure 1 is a 3,000 square foot painted metal building, built about 1985. This is an insulated metal building of average steel construction. The interior is open with the exception of several offices in the front of the building. The building has a concrete floor, insulated walls, drywall partitioned offices, forced air heating, electric and limited plumbing facilities. There are three overhead doors in the building.

Structure 2 is a 2,592 square foot painted metal building built about 2000. This is a rectangle wood frame metal building, with a six bay garage, with concrete floors and electric service. Exhibit A; Exhibit 1.

3. There was no evidence of new construction and improvement from January 1, 2003, to January 1, 2004.

4. Complainants= evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2003, to be $190,000 to 195,000, as proposed.

5. Respondent=s evidence met the standard of substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the value of the subject, as of January 1, 2003, to be $222,000.

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.

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).

The presumption in favor of the Board is not evidence. A presumption simply accepts something as true without any substantial proof to the contrary. In an evidentiary hearing before the Commission, the valuation determined by the Board, even if simply to sustain the value made by the Assessor (which is not presumed to be correct), is accepted as true only until and so long as there is no substantial evidence to the contrary.

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

Section 137.115, RSMo, 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).

Market value is the most probable price in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.

Implicit in this definition is the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:

1. Buyer and seller are typically motivated.

2. Both parties are well informed and well advised, and each acting in what they consider their own best interests.

3. A reasonable time is allowed for exposure in the open market.

4. Payment is made in cash or its equivalent.

5. Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.

6. The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction.

Real Estate Appraisal Terminology, Society of Real Estate Appraisers, Revised Edition, 1984; See also, Real Estate Valuation in Litigation, J. D. Eaton, M.A.I., American Institute of Real Estate Appraisers, 1982, pp. 4-5; Property Appraisal and Assessment Administration, International Association of Assessing Officers, 1990, pp. 79-80; Uniform Standards of Professional Appraisal Practice, Glossary; Exhibit A, p. 1; Exhibit 1, p. 7.

In order to investigate appeals filed with the Commission, the Hearing Officer has the duty to inquire of the owner of the property or of any other party to the appeal regarding any matter or issue relevant to the valuation, subclassification or assessment of the property. The Hearing Officer=s decision regarding the assessment or valuation of the property may be based solely upon its inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties. Section 138.430.2, RSMo.

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 Company v. STC, 436 S.W.2d 650 (Mo. 1968).

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).

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 opinions 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. E.D. 1992).

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, 2003. 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). See also, Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003).

Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the Board of Equalization, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law. Hermel, Cupples-Hesse, Brooks, supra.

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).

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).

Under the rules of procedure of the Commission for commercial and some other appeals, a scheduling order is entered setting dates for the filing and exchange of exhibits and written direct testimony. The scheduling order also establishes times within which objections and responses to objections should be made. Generally, a party is given fifteen days after the filing of the opposing party=s written direct testimony to file any written objections to exhibits and written direct testimony. In the present appeal, objections were to be filed on or before April 8, 2004.

The Commission=s procedure in this regard is not a bar to proper objections being raised at the evidentiary hearing, since during or after cross examination of a witness there may have been established grounds upon which an objection may be raised. However, generally objections are to be made in writing pursuant to any scheduling order so that the opposing party is not blind sided at the evidentiary hearing and is able to file its own written response. Furthermore, the filing of objections in advance permits the Hearing Officer the opportunity to research the objection and response and prepare to rule on same either prior to the evidentiary hearing or at the opening of the hearing. It is the opinion of the Hearing Officer that the objection raised by Mr. Vincent as to Exhibit A not conforming to USPAP could have, and should have been raised in a more timely fashion by submitting same in writing on or before April 8, 2004. Nevertheless, the Hearing Officer will address the specific ground raised by Respondent=s counsel.

Under Commission Rule 12 CSR 30-3.065 general guidelines are established for appraisal reports. The Rule refers to Acomplete narrative appraisal report,@ and sets forth what should generally be contained within such an appraisal and what should be covered under each approach to value. The criterions set out are suggested instructions, and generally an appraisal report will not be arbitrarily excluded because it does not meet every jot and tittle of the Rule.

The Rule provides no direction with regard to an appraisal that is identified by the appraiser as a Arestricted form appraisal,@ as in the present appeal. Under the rule the preferred appraisal format is the narrative, however, this does not preclude a limited or restricted appraisal.

If an appraisal is in a form other than narrative, objections will generally go to the weight that should be given the opinion determined by such an appraisal, rather than its admissibility into evidence. Such is the case in this instance.

Counsel for Respondent specifically objected to Exhibit A being received on the grounds that the appraisal did not comport with the 2003 USPAP Standard 1-5 and 1-6 and 2-2(c)(ix).

Tr. 5, Lines 4 - Tr. 6, Line 12. Specifically, that the appraisal did not comply with the following statement:

AWhen the purpose of the assignment is to develop an opinion of market value, information analyzed in compliance with Standards Rules 1-5 and 1-6 is significant information that must be disclosed in a Restricted Use Appraisal Report. If such information is unobtainable, a statement on the efforts undertaken by the appraiser to obtain the information is required. If such information is irrelevant, a statement acknowledging the existence of the information and citing its lack of relevance is required.@ 2003 USPAP, p. 29, lines 1025-1031.

Standards Rule 1-5 states:

AIn developing a real property appraisal, when the value opinion to be developed is market value, an appraiser must, if such information is available to the appraiser in the normal course of business: (a) analyze all agreements of sale, options, or listing of the subject property current as of the effective date of the appraisal; and (b) analyze all sales of the subject property that occurred within the three (3) years prior to the effective date of the appraisal.@

The Hearing Officer finds no specific language contained in Exhibit A that says an analysis of current sale, option or listing agreements was made, that an analysis of all sales of the subject in the prior three years was made, or that such is irrelevant. However, there is no evidence in the record to indicate that the property had a current sale contract, option or listing agreement. Nor was there any evidence that the property had sold within the prior three years. Furthermore, a review of the Dodd appraisal (Exhibit 1) fails to disclose that the required analyses were made or any statement of such information being irrelevant.

If the record had shown that the property was currently under a contract for sale, an option to purchase agreement or a sale listing, or that it had sold in the prior three years, then the failure of both Noonan and Dodd to have addressed the matter would certainly go to the probative weight and value of their individual appraisals. However, the fact is that the matters covered by Standards Rule 1-5 are irrelevant on their face, when the property has not recently sold and is not being marketed. In effect there was no information available Ato the appraiser in the normal course of business,@ because no such information existed. The objection on this point is without merit, and accordinly is overruled.

In like manner the objection under Standards Rule 1-6 is without merit.

Standards Rule 1-6 states:

AIn developing a real property appraisal, an appraiser must: (a) reconcile the quality and quantity of data available and analyze within the approaches used; and (b) reconcile the applicability or suitability of the approaches used to arrive at the value conclusion(s).@

The objection proferred by Mr. Vincent on this point was simply a general objection. There was no specific reference as to exactly in what manner Exhibit A failed to comply with this standard. It is a well recognized rule of procedure that an objection is to be made with a sufficient degree of specificity to advise the trial court and opposing counsel of the grounds or reasons upon which the challenged proof is sought to be excluded. Courtroom Handbook on Missouri Evidence, 2004 Edition, William A. Schroeder, Section 103.3, p. 18.

The Hearing Officer is uncertain as to what the alleged deficiency is that is asserted to bring Exhibit A into a violation of Rule 1-6. It is understood that only one approach to value is presented by Mr. Noonan. That is his choice and may have been at the direction of his client, since the appraisal clearly identifies that the Complainants requested a Arestricted scope appraisal.@

The exact mental exercises and calculations which Mr. Noonan utilized and developed for this appraisal problem are not laid out in detail in Exhibit A. The Hearing Officer has found though his more than twelve years of hearing experience that the mental gymnastics of appraisers are not always disclosed, even in a narrative appraisal, much less in a summary or restricted scope appraisal. In fact, since appraisers often are relying on their general knowledge and experience for various adjustments, the Hearing Officer doubts if in many instances an exact quantitative analysis in written form could always be conveyed as to the actual thought process supporting certain appraisal conclusions.

In any case, Mr. Noonan used four sales of properties to arrive at his conclusion of fair market value. He reconciled the sales prices of each of those four sales in some form or fashion to reach an opinion of value. He specifically asserted that he adjusted the sales for size and condition of improvements, location, road frontage, market value and size of parcel. This appears to the Hearing Officer to be a reconcilation of available data under the sales comparison approach.

The objection is overruled.

The owners= opinion of value was based upon the Noonan appraisal. Therefore, the persuasiveness of the owners= opinion is tied to the persuasiveness of the Noonan appraisal. Complainants= evidence of value (Noonan Appraisal - Exhibit A) failed to provide substantial and persuasive support to establish the value proposed.

Mr. Noonan elected to only present a sales comparison approach to value. Although the cost and income approaches were considered they were not relied upon. The appraisal report only provides information from which the opinion of value drawn from the sales comparison methodology is developed. When an appraiser chooses to only develop a single approach to value that does not reduce the effectiveness of the approach presented. However, the development of an additional approach or approaches to value may provide additional validation of the methodology upon which is placed the greatest reliance.

When the sales comparison approach is presented the emphasis in the mind of the Hearing Officer is on comparison. How comparable to the property being appraised are the sales which are selected? Depending upon the property under examination there are various factors of comparability which come into play. However in nearly every appraisal problem there are some important elements that are common. The land area, building size and relative location to the subject are three of the most basic and fundamental components which give a good indication of comparability for any given sale.

Of the four sales selected by Mr. Noonan, three of them were only approximately thirteen percent of the land area of the subject tract. The remaining sale (Comparable 3) was closer in land size to the subject being only 29% larger than the subject. Comparables 1, 2 and 4 are questionable on this factor of comparability. These sales would require significant upward adjustments to account for their smaller land size. On the factor of land area, only Comparable 3 would be considered as an appropriate comparable property.

The factor of relative size of the sale buildings provides a somewhat better level of comparability. The square foot area for the four sales ranged from 1,760 to 6,120 square feet in area, with an average of 3,947.5 square feet and a median of 3,955. Comparable 1, being only 32% of the total building size of the subject=s two buildings, presents a serious issue of lack of comparability. The other three properties have buildings that, based on area alone, possess sufficient comparability to the subject to have been given some consideration, but for other factors.

The element of location is the third criterion that is next considered. On this factor the four sales are lacking in comparability. Comparables 1, 2 and 3 are located approximately 2 miles from the subject. Only Comparable 4 is located within a mile of the subject. The sales presented by Respondent establish sales of properties comparable in building size and land area which are located in much closer proximity to the subject than any of the properties relied upon by Mr. Noonan.

The general style of the sale properties also reveals a lack of comparability to the subject buildings. Quite simply, the Noonan properties do not look like the subject buildings. They are of different types of construction than the subject buildings. They are generally older structures than are the Complainants= buildings.

When all of these factors are considered, the Hearing Officer is not persuaded, in light of the other evidence on this record, that these sales properties properly reflected market value for the subject property. The per square foot of building area sale prices ranged from $30.91 to $66.25, with an average of $46.66 and a median of $44.74. However, Mr. Noonan=s opinion of value of $190-195,000 represents a value per square foot of $33.98 to $34.87. This is well below both the mean and median of his sales.

No narrative explanation was provided as to which sale property or properties was deemed to be most comparable. It is apparent that the most weight must have been placed on Sales 2 and 4. However, these two properties are on lots of only approximately .11 of an acre, compared to the subject .83 of an acre. Furthermore Sale 2 is an older two-story frame building that simply is not a building that is similar to the subject structures. Sale 4 is a building that is over 50 years old compared to the Complainants= buildings which on tax day (1/1/03) were only 18 and 3 years old on tax day.

Based upon Mr. Noonan=s concluded value for the subject property, he apparently only adjusted these two sales a total of approximately 11% for the great difference in land area and the significant difference in the age, quality and type of construction. This appears to be clearly an inadequate adjustment for these factors to these two properties. These properties are clearly inferior in land area, age and quality of improvements. They would have warranted a larger upward adjustment to account for these differences.

The single sale which is closest to the subject in land area, building size and age of improvement (Sale 3) had an unadjusted sale price of $66.25 per square foot of building area. To arrive at his average per square foot value for the subject of $34.43, this sale would have had to be adjusted downward by about 48%. It is difficult for the Hearing Officer, based upon the limited information in Exhibit A, to understand or justify such a large downward adjustment to give any support to the value concluded.

The appraisal report of Mr. Noonan simply fails on significant and critical points as set out to establish by substantial and persuasive evidence that the sales selected were appropriate for purposes of comparison to establish value as of January 1, 2003, for the subject property. The lack of any additional supporting valuation methodology (cost or income approach) and omission of any narrative discussion as to the reconciliation of the sale properties left the Hearing Officer Ain the nebulous twilight of speculation, conjecture and surmise,@ as to how the conclusion of value was determined. As such Complainants did not carry their burden of proof on the issue of fair market value. See, Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. 1980).

Respondent presented substantial and persuasive evidence from which the Hearing Officer could conclude a fair market value as of January 1, 2003, of $222,000. Exhibit 1. Mr. Dodd developed the three recognized and accepted approaches to value for appraisal of real property. The Dodd appraisal provided sufficient data under each of the approaches to allow the Hearing Officer to understand how he utilized and reconciled each of the approaches.

Dodd was able to use three land sales that were in very close proximity to the subject. Although two of the sales occurred just over six years prior to tax date, the fact that they were located just to the South of the subject property, with one sale actually adjoining the subject, provided a sound basis for the development of the land value for the subject.

In developing the cost less depreciation of the subject improvements, Dobb utilized the Marshall-Swift Valution Service and the age life method of estimating accrued depreciation. This is a recognized and accepted methodology when constructing a cost approach.

The indicated value for the subject under the Dodd cost approach was $223,300.

For his sales comparison approach, Dodd selected four sales of improved properties. These properties had sold in the time frame from December 1999 to December 2001, with three of the sales taking place in 2001. The dates of these sales were closer in time to the tax date of January 1, 2003, than the sales selected by Complainants= appraiser. The Noonan sales ranged from October 1998 to July 2001.

The Dodd comparables ranged in land area from .698 of an acre to 1.340 acre, compared to the subject=s land area of .831 of an acre. The building area of the comparables ranged from 2,650 to 5,494 square feet, compared to the subject buildings total area of 5,592. The age of the comparables= improvements ranged from 1974 to 1995, compared to the subject=s age of improvements of 1985 and 2000. The comparable buildings were all of similar construction as the subject. The comparables were all located in very close proximity to the subject. All of the properties were located within a quarter to three-quarters of a mile of the subject.

The sale prices per square foot of the Dodd comparables were $51.39, $75.47, $57.94 and $45.50. This resulted in a mean of $57.58 and a median of $54.67. Dodd concluded on a per square foot value of $53.00 for the 1985 building and the site. This was based on placing the greatest weight on Comparable 1 which had a building of 3,600 square feet compared to the subjects 1985 building of 3,000. This produced an indicated value of $159,000. To this value Dodd added $63,000 as the contributory value of the subject=s second building, the 2,592 square foot building added in 2000. The total indicated value under the sales comparison approach was calculated to be $222,000.

Although the subject property is owner occupied, it is the type of property which could be purchased by an investor as a rental property. In order to utilize the income approach to value, Mr. Dodd obtained rental data on four comparable properties. These properties had building ages from 1985 to 1995 and building areas of 1,891 to 4,320 square feet. The per square foot lease prices ranged from $6.34 to $7.75, with a mean of $6.93, and a median of $6.81. Dodd concluded on a rental value of $6.50 for the 3,000 square foot building and capitalized this amount to arrive at an indicated value of $165,394 for the Complainants= 1985 building and the subject site. He then added the contributory value of $63,000 for the 2000 building to arrive at an indicated value of $228,400.

The Hearing Officer does not find the Dodd income approach to be persuasive in arriving at fair market value. Dodd simply capitalized the potential gross income on the 3,000 square foot building. He did not account for any vacancy or deduction of any allowable expenses, management fees, insurance, maintenance. He did not arrive at a net operating income, which he should have and then capitalized that amount. This methodology overstated the net operating income which should have been capitalized instead of the potential gross income.

The evidence on the record does not address if in fact that the comparable rental properties were triple net lease properties and if the subject property if leased would most likely rent on a triple net lease basis, so that there would actually be no expenses to deduct, with the exception of a small management fee. If this were the case, then the income approach would have some validity in the present appeal. However, in the absence of such evidence to establish a triple net lease basis for valuing the property, the Hearing Officer will not make any such assumption.

The sales comparison approach to value presented substantial and persuasive evidence to establish the fair market value of the subject property to be $222,000. The cost approach provided additional support for this value. The cost approach will generally give the upper end of the value range when two or three approaches to value are developed. No weight was given to the conclusion of value under the income approach.

Respondent=s evidence establish the fair market value of the subject property to be $222,000.

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

The assessed value for the subject property for tax years 2003 and 2004 is set at $71,040.

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 2000.

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 Franklin 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 August 10, 2004.

STATE TAX COMMISSION OF MISSOURI

W. B. Tichenor

Hearing Officer

On August 10, 2004, Hearing Officer W. B. Tichenor entered his Decision and Order (Decision) setting aside the assessment by the Franklin County Board of Equalization and setting value for the property under appeal.

Complainants timely filed Application for Review of the Decision. Respondent timely filed his Response. On October 15, 2004, the Commission received a Reply to Respondent=s Response to Application for Review from Michael G. Beck, MBE # 30275. No motion for leave to file entry of appearance was filed by Mr. Beck. Mr. Beck had not at the time of the evidentiary hearing in this case, or prior to the Hearing Officer issuing his Decision, filed his entry of appearance as Complainant=s attorney. Mr. Beck raised no legal issue relative to an alleged error on the part of the Hearing Officer in the rendering of his Decision.

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 Company v. STC, 436 S.W.2d 650 (Mo. 1968).

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).

The Commission will not lightly interfere with the Hearing Officer=s Decision and substitute its judgment on the credibility of witnesses and weight to be given the evidence for that of the Hearing Officer as the trier of fact. Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Lowe v. Lombardi, 957 S.W.2d 808 (Mo. App. W.D. 1997); Forms World, Inc. v. Labor and Industrial Relations Com=n, 935 S.W.2d 680 (Mo. App. W.D. 1996); Evangelical Retirement Homes v. STC, 669 S.W.2d 548 (Mo. 1984); Pulitzer Pub. Co. v. Labor and Indus. Relations Commission, 596 S.W.2d 413 (Mo. 1980); St. Louis County v. STC, 562 S.W.2d 334 (Mo. 1978); St. Louis County v. STC, 406 S.W.2d 644 (Mo. 1966).

A review of the record in the present appeal provides support for the determinations made by the Hearing Officer. There is competent and substantial evidence to establish a sufficient foundation for the Decision of the Hearing Officer. A reasonable mind could have conscientiously reached the same result based on a review of the entire record. The Commission finds no basis to support a determination that the Hearing Officer acted in an arbitrary or capricious manner or abused his discretion as the trier of fact and concluder of law in this appeal. Hermel, Inc. v. STC, 564 S.W.2d 888 (Mo. 1978); Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Holt v. Clarke, 965 S.W.2d 241 (Mo. App. W.D. 1998); Smith v. Morton, 890 S.W.2d 403 (Mo. App. E.D. 1995); Phelps v. Metropolitan St. Louis Sewer Dist., 598 S.W.2d 163 (Mo. App. E.D. 1980).

Complainants= Application for Review was based upon Athe fact that the properties used by the Franklin County Assessor were zoned differently than the subject property and therefore could not be used in the comparison.@ A review of the evidence presented on the issue of zoning shows the following. The subject is zoned C-2/Commercial. Exhibit 1, p. 5. Respondent=s appraiser used sales of four improved properties. Each of those properties were also zoned C-2/Commercial. Exhibit 1, pp. 20, 21, 22 & 23. The appraiser use 3 sales of vacant land in his cost approach. All three of these vacant land sales were zoned C-2/Commercial. Exhibit 1, pp. 13, 14 & 15.

Complainants assert that the issue of the different zoning was pointed out to the Hearing Officer at the evidentiary hearing on May 4. The Complainants= appraiser, under cross-examination with reference to one of Respondent=s comparable properties, testified that he believe the zoning shown in Exhibit 1 was incorrect on one property. However, Complainant=s appraiser didn=t have any data to support his belief. There was no evidence presented to establish anything further on the issue of zoning. In any event, zoning is only one fact to be considered and a difference in zoning among commercial properties does not render a sale property not comparable.

The Hearing Officer did not err in his determinations as challenged by Complainants.

Complainants further assert that an agreement had been entered into between their attorney and Respondent=s attorney. There is no record of any attorney filing an entry of appearance on behalf of Complainants in this case prior to or at the time of the evidentiary hearing. Respondent=s Counsel, Mark Vincent, in his Response to the Application for Review informed the Commission that although Mr. Vincent had discussions with Michael Beck, an attorney, relative to attempting to reach a settlement of the case, that Respondent=s staff advised Counsel that they desired to proceed to hearing. Mr. Vincent was so advised of this on the day of the evidentiary hearing. Mr. Vincent attempted to reach Mr. Beck and left a message on his answering machine on the day of the evidentiary hearing that the hearing would go on as scheduled. Mr. Beck did not appear at the hearing on July 27 to cross-examine Respondent=s expert, which was the only purpose of the hearing, which had been continued from May 4th. Mr. Beck=s only action before the Commission in this case was to file a Reply to Respondent=s Response to Application for Review, on October 15, 2004.

No stipulated settlement was filed in this appeal. Mr. Beck did not file an entry of appearance in this case on behalf of Complainants. The Hearing Officer called Complainants on the date of the hearing and so advised. Complainants were not denied their right to cross-examine as alleged. The failure of Complainants to appear in person or by counsel at the evidentiary hearing was the only cause for them not cross-examining Respondent=s witness.

The Hearing Officer did not err in this regard as challenged by Complainants.

The Commission upon review of the record and Decision in this appeal, finds no grounds upon which the Decision of the Hearing Officer should be reversed or modified. Accordingly, the Decision is affirmed.

Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140, RSMo within thirty days of the date of the mailing of this Order.

SO ORDERED November 9, 2004.

STATE TAX COMMISSION OF MISSOURI

Sam D. Leake, Chairman

Bruce E. Davis, Commissioner

Jennifer Tidwell, Commissioner