State Tax Commission of
AEI INCOME & GROWTH FUND 25, )
)
Complainant, )
)
v. ) Appeal Number 05-79018
)
LISA POPE, ASSESSOR, )
)
Respondent. )
DECISION AND ORDER
HOLDING
Decision of the Platte 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 2005 and 2006 to be $2,425,000, assessed value of $776,000.
Complainant
appeared by Counsel, Teresa Kidd,
Respondent appeared
by Counsel, John Shank,
Case submitted on exhibits and decided by Senior 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, 2005.
SUMMARY
Complainant appeals, on the ground of overvaluation, the decision of the Platte County Board of Equalization, which sustained the valuation of the subject property. The Assessor determined an appraised value of $2,673,000, assessed value of $855,360, as commercial property. Complainant proposed a value of $2,200,000, assessed value of $704,000. Respondent proposed a value of $2,650,000, assessed value of $848,000.
By Memorandum faxed to the Commission on October 11, 2006, parties waived evidentiary hearing and agreed to submit the appeal on exhibits filed. The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Complainant’s Evidence
Complainant submitted Exhibit A, Appraisal Report of Robert E. Marx, MAI, SRA, Missouri State Certified General Real Estate Appraiser. Exhibit A is received into evidence.
Respondent’s Evidence
Respondent submitted Exhibit 1, Appraisal Report of Brian Everly, Commercial Staff Appraiser for Platte County Assessor. Exhibit 1 is received into evidence.
FINDINGS OF FACT
1. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the Platte County Board of Equalization.
2. The subject property is located at
3. The subject land was purchased on February 20, 2004 by SWH Corp., parent of MiMi’s. Land and proposed restaurant improvements were sold to the current owner (Complainant – AEI Income and Growth Fund 25) for $2,200,000 ($1,300 for land plus $900,000 for improvements) and leased back to SWH Corp. for 20 years with three 5-year options. Exhibit A, Subject-1. The sale-leaseback is common for a freestanding chain-type restaurant, like the subject property. Exhibit A, Income-2.
4. There was no evidence of new construction and improvement from January 1, 2005, to January 1, 2006.
5. Complainant’s evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2005, to be $2,200,000, if there had been no other evidence in the record.
6. Respondent’s evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2005, to be $2,650,000, if there has been no other evidence in the record.
7. The evidence established a true value in money for the subject property, as of January 1, 2005, of $2,425,000, assessed value as commercial property (32% assessment ratio) of $776,000.
CONCLUSIONS
OF LAW AND DECISION
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.
Presumptions in Appeal
There is a
presumption of validity, good faith and correctness of assessment by the
The Supreme
Court of Missouri has held, “A tax assessor’s valuation is presumed
correct.” Snider v. Casino
Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341 (
The presumption of correct assessment is rebutted when substantial and persuasive evidence is presented to establish that the assessor’s or Board’s valuation is erroneous and what the fair market value should have been placed on the property. Snider, Hermel & Cupples Hesse, supra. 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, is accepted as true only until and so long as there is no substantial evidence to the contrary.
In this instance, the evidence presented by Complainant’s appraiser (Exhibit A) and the evidence presented by Respondent’s appraiser (Exhibit 1) each on their own, prima facie, rebut the presumptions of correct assessment and establish two different values for the property under appeal. It is therefore, the responsibility of the Hearing Officer as trier of fact to examine both appraisals and arrive at a final conclusion of the true value in money (fair market value) for the subject property.
Standard for Valuation
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 (
Market Value
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, Glossary – 2.
Methods
of Valuation
Proper
methods of valuation and assessment of property are delegated to the
Commission. It is within the purview of
the Hearing Officer to determine the method of valuation to be adopted in a
given case. See, Nance v. STC, 18
S.W.3d 611, at 615 (Mo. App. W.D. 2000); Hermel, supra; Xerox Corp. v. STC, 529 S.W.2d 413 (
Both Complainant’s and
Respondent’s Appraisers each developed the three recognized approaches to
value. Each arrived at differing
conclusions of value based upon their analysis and reconciliation of the
approaches. Mr. Marx (Complainant’s
Appraiser – Exhibit A) concluded a cost approach value of $2,300,000. Mr. Everly (Respondent’s Appraiser –
Exhibit 1) found the value under the cost approach to be $2,700,000. The sales comparison approaches yielded
indicated values of $2,200,000 (Exhibit A) and $2,676,000 (Exhibit 1). Values of $2,200,000 (Exhibit A) and
$2,600,000 (Exhibit 1) were concluded under the two income approaches. The final reconciled opinion of value offered
by Mr. Marx was $2,200,000. Mr. Everly
proffered his reconciled opinion of value to be $2,650,000.
Each of the three valuation methodologies is
appropriate for the present appraisal problem for several reasons. First, the subject land was purchased 11
months prior to the tax date (1/1/05) and improvement was constructed in
2004 year prior to the assessment date Therefore, as a newly purchased and
constructed property, the cost approach is appropriate and does not present a
major issue as to depreciation.
There was appropriate sales data from which
the sales comparison approach to value could be developed. Both appraisers provided their analysis under
this methodology. Likewise, the income
approach was utilized by both appraisers.
Comparable rental data was sufficient to support this approach to value.
Hearing
Officer Concludes True Value in Money
The range of values presented by the two
appraisers is from $2,200,000 to $2,700,000.
The median value from among the three approaches developed by each
appraiser calculated to $2,450,000. The
average was $2,446,000. As between the
two reconciled opinions of value the range narrowed to $2,200,000 to $2,650,000. The Hearing Officer gives equal weight to the
two final conclusions of value and determines the true value in money for the
property as of
January 1, 2005, to be $2,425,000.
ORDER
The assessed
valuation for the subject property as determined by the Assessor and sustained
by the Board of Equalization for
The assessed value for the subject property for tax years 2005 and 2006 is set at $776,000.
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 Platte 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 November 2, 2006.
STATE TAX COMMISSION OF
_____________________________________
W. B. Tichenor
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 2nd day of November, 2006, to: Teresa Kidd, P.O. Box 860451, Shawnee, KS 66286, Attorney for Complainant; John Shank, 9800 N.W. Polo, Suite 100, Kansas City, MO 64153, Attorney for Respondent; Lisa Pope, Assessor; 415 Third Street, P.O. Box 20, Platte City, MO 64079; Sandra Krohne, Clerk, 415 Third, P.O. Box 30, Platte City, MO 64079; Donna Nash, Collector; 409 Third, P.O. Box 40, Platte City, MO 64079.
___________________________
Barbara Heller
Legal Coordinator