State Tax Commission of Missouri
MARVIN GREENBERG, )
)
Complainant, )
)
v. ) Appeals Number 05-10096 thru 05-10098
)
PHILIP MUEHLHEAUSLER, ASSESSOR, )
ST. LOUIS COUNTY, MISSOURI, )
)
Respondent. )
DECISION AND ORDER
HOLDING
Decisions of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor, AFFIRMED.
Appeal Number 05-10096, Hearing Officer finds true value in money for the subject property for tax years 2005 and 2006 to be $389,600, assessed value of $124,670.
Appeal Number 05-10097, Hearing Officer finds true value in money for the subject property for tax years 2005 and 2006 to be $299,500, assessed value of $95,840.
Appeal Number 05-10098, Hearing Officer finds true value in money for the subject property for tax years 2005 and 2006 to be $1,530,100, assessed value of $489,630.
Complainant appeared pro se.
Respondent appeared by Counsel, Paula J. Lemerman, Associate County Counselor.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
The Commission takes this appeal to determine whether there was an intentional plan by the assessing officials (Assessor and/or Board of Equalization) to assess the subject properties at a ratio greater than the percentage of fair market value as required by law for commercial property or 32%, or at a ratio greater than the average assessment ratio for commercial property in St. Louis County for 2005.
SUMMARY
Complainant appeals, on the ground of discrimination, the decisions of the St. Louis County Board of Equalization, which sustained the valuations of the subject properties.
In Appeal Number 05-10096, the Assessor determined an appraised value of $389,600, assessed value of $124,670, as commercial property. Complainant proposed a value of $293,040, assessed value of $93,773 on the Complaint for Review of Assessment.
In Appeal Number 05-10097, the Assessor determined an appraised value of $299,500, assessed value of $95,840, as commercial property. Complainant proposed a value of $179,124, assessed value of $57,320 on the Complaint for Review of Assessment.
In Appeal Number 05-10098, the Assessor determined an appraised value of $1,530,100, assessed value of $489,630, as commercial property. Complainant proposed a value of $1,281,126, assessed value of $409,960 on the Complaint for Review of Assessment.
A hearing was conducted on September 14, 2006, at the St. Louis County Government Center, Clayton, Missouri. Transcript of hearing was received by the Legal Section of the Commission on October 12, 2006.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Complainant’s Evidence
Complainant filed the following exhibits which were received into evidence
Exhibit A – Two photographs,
Property Record Card and Commercial/Industrial Review Document (Documents A, L-A & M-A) on property
at
Exhibit B – Two photographs and
Property Record Card (Documents B &
L-B) on property at
Exhibit C – One photograph,
Property Record Card and Commercial/Industrial Review Document (Documents C, L-C & M-C) on property
at
Exhibit D – One photograph,
Property Record Card and Commercial/Industrial Review Document (Documents C, L-D & M-D) on property
at
Exhibit E – Four photographs,
Property Record Card and Commercial/Industrial Review Document (Documents E, F, L-E/F & M-E/F) on
property at
Exhibit G – Two photographs,
Property Record Card and Commercial/Industrial Review Document (Documents G, L-G & M-G) on property
at
Exhibit H – Two photographs and
Property Record Card (Documents H &
L-H) on property at
Exhibit I – One photograph and Property Record Card (Documents I & L-I) on property at 8637 Olive Blvd (subject property Appeal 05-10097).
Exhibit J – One photograph and
Property Record Card (Documents J &
L-J) on property at
Exhibit K – One photograph and
Property Record Card (Documents K &
L-K) on property at
Exhibit N – Chart listing properties identified in Exhibits, A, B, C, D, E, G, H, I, J & K, giving 2005 Appraised Value, for Land and Improvements, Square Feet of Land Improvements and Per Square Foot appraised values for Land and Improvements.
Exhibit O – Chart listing properties identified in Exhibits, A, B, C, D, E, G, H, I, J & K, giving Square Feet for Improvements, 2005 Appraised Value, for Improvements, and Per Square Foot appraised values for Improvements.
Exhibit P – Chart providing summary of data on properties identified in Exhibits, A, B, C, D, E, G, H, I, J & K and giving Total Appraised Value per square feet.
Exhibit Q – Written Direct Testimony of Marvin Greenberg.
Complainant was cross-examined by Counsel for Respondent at hearing.
Respondent’s Evidence
Respondent offered into evidence Exhibit 1 – locator map showing location of the subject and the six properties identified in Complainant’s exhibits. Exhibit 1 was 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 St. Louis County Board of Equalization.
2. Appeal Number 05-10096. The subject property is located at 8643 Olive Blvd, St. Louis, Missouri. The property is identified by locator number 17K430236.
3. Appeal Number 05-10097. The subject property is located at 8637 Olive Blvd, St. Louis, Missouri. The property is identified by locator number 17K430247.
4. Appeal Number 05-10098. The subject property is located at 8601 Olive Blvd, St. Louis, Missouri. The property is identified by locator number 17K430258.
5. Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Assessor and the Board and establish a plan of discrimination against each or all of the properties under appeal.
6. Complainant’s evidence failed to establish that any of the subject properties were being assessed at greater than thirty-two percent of their true value in money.
7. Complainant’s evidence failed to establish that the average assessment ratio for commercial property in St. Louis County for the 2005-06 assessment cycle was less than thirty-two percent.
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 Appeals
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 (
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 (
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.
Complainant Fails to Prove Discrimination
Burden of Proof
In order to
obtain a reduction in assessed value based upon discrimination, the Complainant
must show an intentional plan of discrimination by the assessing officials resulting
in an assessment of the subject properties at a greater percentage of value
than other commercial property, generally, within St. Louis County. Koplar v. State Tax Commission, 321
S.W.2d 686, 695 (
In order to meet the burden of proof in this case, it was necessary for Complainant to prove the average level of assessment for commercial property in St. Louis County for 2005. This could be done by (a) independently determining the market value of a representative sample of commercial properties in St. Louis County; (b) determining the assessed value placed on the sample properties by the assessor’s office for 2005; (c) dividing the assessed value by the market value to determine the level of assessment for each property in the sample; and (d) determining the mean and median of the results.
Complainant would then need to independently determining the market value of the subject properties and by dividing the market value into the assessed value of the property as determined by the assessor’s office the assessment ratio for each property would be established.
The difference between the actual
assessment level of the subject properties and the average level of assessment
for all commercial property, taken from a sufficient representative sample in
St. Louis County must demonstrate a disparity that is grossly excessive. Savage v. State Tax Commission of Missouri,
722 S.W.2d 72, 79 (
Failure
to Establish Average Assessment Ratio
Complainant made no attempt to establish the average or median assessment ratio from a representative sample of commercial properties in St. Louis County. Complainant’s entire case was based upon a claim of “grossly excessive disparity between the appraised square foot values of the subject properties” by the assessor and the average square foot appraised values of six other properties on Olive Boulevard. There are a number of serious flaws in this methodology which render it irrelevant and therefore unsubstantial and unpersuasive to prove a discrimination claim.
The first problem with Complainants methodology is the selection of only six properties as shown in Exhibits A through G. These properties are not sufficient in number or in location to adequately represent the commercial universe of properties in St. Louis County. Case law establishes that an analysis of only a few hand-picked properties is insufficient to establish a statistically representative sample. Therefore, without an adequate sample of commercial properties it is not possible to establish the average or median assessment ratio in St. Louis County for 2005.
The next fatal flaw is that Complainant failed to make any attempt to establish the fair market value of the six properties. Mr. Greenberg accepted the Assessor’s valuations. He did not challenge them. Exhibits A through G establish that each of these properties was assessed at thirty-two percent of the appraised value established by the Assessor. Therefore, without any evidence to established the six properties were undervalued, an assessment ratio lower than thirty-two percent cannot be established. There is the presumption that the Assessor properly valued the six properties presented by Complainant. Snider, supra. Based upon Exhibits A through G these properties are being assessed at thirty-two percent of their fair market values. Complainant’s evidence did not establish a lower assessment ratio on these properties.
The final error in Complainant’s
methodology is that he failed to establish the market value of the properties
under appeal. From the written direct
testimony, it is assumed that Complainant concurred that the appraised values
shown in Exhibits H, I & J established by the Assessor were reflective of
fair market value. Exhibit Q, p. 2. These
values are presumed to be correct in the absence of substantial and persuasive
evidence to establish they are in error. See,
Presumptions in Appeals, supra.
The assessment ratio on the subject properties is thirty-two percent as
required by law and as demonstrated to be the ratio for the six properties
presented in Exhibits A thought G.
Presenting average per
square foot values from assessment records is not a methodology recognized by
the courts, by the Commission or in the appraisal field for valuing real
property for ad valorem purposes.
Summary & Conclusion
Complainant failed to establish the average or median 2005 commercial assessment ratio from a statistically significant and representative sample of properties in St. Louis County. Complainant failed to establish the fair market value of the properties under appeal. Complainant failed to establish that his properties were being assessed at a ratio greater than thirty-two percent of fair market value or greater than the average commercial assessment ratio for 2005 in St. Louis County. Accordingly, the claim of discrimination has failed to satisfy the requirements established by the applicable case law.
The valuations and assessments made by the Assessor and sustained by the Board on the three properties under appeal must be affirmed.
ORDER
The assessed valuations for the subject properties as determined by the Assessor and sustained by the Board of Equalization for St. Louis County for the subject tax day are AFFIRMED.
The assessed value for the subject property In Appeal Number 05-10096, for tax years 2005 and 2006 is set at $124,670.
The assessed value for the subject property In Appeal Number 05-10097, for tax years 2005 and 2006 is set at $95,840.
The assessed value for the subject property In Appeal Number 05-10098, for tax years 2005 and 2006 is set at $489,630.
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 these appeals 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 these appeals. 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 MISSOURI
_____________________________________
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: Marvin Greenberg, 9648 Olive Blvd., Suite 342, St. Louis, MO 63132-3002, Complainant; Paula Lemerman, Associate County Counselor, County Government Center, 41 South Central Avenue, Clayton, MO 63105, Attorney for Respondent; Philip A. Muehlheausler, Assessor, County Government Center, 41 South Central Avenue, Clayton, MO 63105; John Friganza, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.
___________________________
Barbara Heller
Legal Coordinator