State Tax Commission of Missouri

 

NESTLE PURINA PETCARE COMPANY,  )

)

Complainant,                            )

)

v.                                                         )           Appeal Nos.     03-20047 through 03-20098

                                                            )                                   and 04-20004

)          

ED BUSHMEYER, ASSESSOR,                    )

ST. LOUIS CITY, MISSOURI,                      )

)

Respondent.                             )

 

ORDER

MODIFYING HEARING OFFICER DECISION

UPON APPLICATION FOR REVIEW

 

On January 20, 2006, Senior Hearing Officer Luann Johnson entered her Decision and Order (Decision) setting aside the assessment by the St. Louis City Board of Equalization and setting value for the property under appeal.

Respondent timely filed his Application for Review of the Decision.  Respondent’s Points on Appeal are not persuasive but, after a careful review of the evidence, we find that the Hearing Officer’s decision should be affirmed in part and modified in part.

COMMISSION FINDINGS

            There is a presumption that the value determined by the Board of Equalization is correct.  In the instant appeals, the Board of Equalization determined that the correct value for all parcels for tax year 2003 was $47,095,440 (assessed value $15,070,540).  Under the two-year assessment cycle, value determined for the odd-numbered year shall be applied to the even-numbered year unless there is evidence of new construction and property improvements.  During tax year 2004, the Energizer Building was remodeled and renovated.  The Board of Equalization determined that the correct value for this building for tax year 2004 was $5,273,438 (assessed value $2,687,500).

            In order to overcome the presumption in favor of the Board of Equalization, the taxpayer must present substantial and persuasive evidence tending to demonstrate that the Board’s decision was unlawful, unfair, improper, arbitrary or capricious.  Substantial evidence is that evidence which, if true, has probative force upon the issues.  Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact.

            Although the Hearing Officer weighed the evidence as between the two appraisers, there is no indication that the Hearing Officer properly applied the first portion of the test and weighed Complainant’s evidence against the presumption in favor of the Board of Equalization.  We find that Complainant’s evidence, in vast part, was not sufficient to overcome the presumption in favor of the Board.  Flaws include:  using sales that are admittedly not highly comparable.  Ex. A, pg  85; failing to use a paired sales analysis to make locational adjustments for comparable sales; failure to present market data for vacancy and collection loss or operating expenses in the income approach.  Ex. A, p. 112-114; and failure to support capitalization rates.  Ex. A, pg. 114-115.   All of these flaws are potentially fatal when Complainant bears the burden of proof.

The improvements in the area South of Highway 40, North of Lafayette, and East of Jefferson are predominantly low-rise, industrial, retail and residential (Tr. 201-202) like most of the buildings that are the subject of this appeal.  The Board of Equalization could easily have had the experience, expertise and comparable sales to determine appropriate market value for the low


rise office buildings and industrial buildings.  Complainant’s flawed evidence does not support a finding that the Board improperly valued these buildings. 

However, since approximately 1960, the only building over 10 stories tall which has been built in this area is the Nestle’ Tower Building.  (Tr. 200).  The fact that there are no sales – and can be no sales - of similar buildings in the subject area which could support the Board of Equalization’s value, supports a finding that Complainant has overcome the presumption in favor of the Board of Equalization as to the Tower Building.

Having overcome the presumption in favor of the Board of Equalization on the issue of Tower value, Complainant’s evidence must now be more substantial and persuasive than Respondent’s evidence in order for Complainant to prevail.

Respondent’s appraiser relied upon sales of four office towers which sold between June of 1998 and February of 2004.  Respondent’s appraiser made adjustments to those sales but said adjustments were not supported by market data.  None of said towers were located South of Highway 40 like the subject tower.  Ex. 1, pp. 190-105. We do not find Respondent’s evidence to be persuasive as to the value of the Nestle’ Tower Building.

We are, however, persuaded that the lack of construction of mid sized office buildings in the subject area in the last 40-odd years indicates a lack of market demand.  Further, the evidence indicates that the heating and cooling systems for this building are provided by boilers and chillers located in another building which make selling this building as a stand alone structure very difficult.  Finally, the building does not meet current code because it is not protected by sprinkler systems and said systems would be difficult to install because of the building’s all concrete construction.  Ex. A, pg. 54-55.

In view of all the foregoing, we find that Complainant can only prevail on the issue of the Tower value.  On the remainder of the property, Complainant has failed to overcome the presumption in favor of the Board of Equalization.

COMMISSION SETS VALUES

            The Commission sets the following values for each parcel:

Appeal

Number

Parcel

Number

Building

Original value

Respondent’s

value

Complainant’s

value

STC value

03-20047

0212-00-00100

CBC/Zappi

$1,593,750

$418,600

$259,270

$1,593,750

20048

0212-00-00200

CBC/Zappi

$695,625

$279,100

$109,530

$695,625

20049

0212-00-00300

CBC/Zappi

$763,125

$602,300

$470,170

$763,125

20050

0420-00-00100

Administration

$264,063

$474,300

$287,690

$264,063

20051

0421-00-00100

R. Nor./Solvent

$5,340,938

$5,266,000

$1,923,950

$5,340,938

20052

0421-00-00110

R. Nor./Solvent

$9,063

$183,000

$11,100

$9,063

20053

0421-00-00120

R. Nor./Solvent

$4,063

$8,800

$3,960

$4,063

20054

0421-00-00130

R. Nor./Solvent

$65,625

$163,800

$73,690

$65,625

20055

0421-00-00150

R. Nor./Solvent

$19,063

$47,900

$21,560

$19,063

20056

0421-00-00200

Research South Administration

$7,948,438

$2,877,700

$4,881,600

$2,331,410

$7,948,438

20057

0422-00-00500

Administration

$39,063

$139,400

$62,710

$39,063

20058

0422-00-00600

Administration

$92,813

$204,700

$124,170

$92,813

20059

0429-00-00400

Tower

$100,313

$233,500

$135,530

$135,530

20060

0429-00-00450

Tower

$3,438

$15,300

$6,866

$6,866

20061

0429-00-00500

Tower

$58,750

$129,800

$78,710

$78,710

20062

0429-00-00600

Tower

$39,063

$86,300

$52,330

$52,330

20063

0430-00-00100

Tower

$302,188

$596,300

$241,670

$241,670

20064

0430-00-00200

Tower

$184,688

$360,400

$220,860

$220,860

20065

0430-00-00300

Tower

$11,585,000

$10,196,800

$3,256,280

$3,256,280

20066

0430-00-00400

Tower

$24,063

$47,500

$28,800

$28,800

20067

0430-00-00500

Tower

$89,688

$175,100

$106,200

$106,200

20068

0430-00-00600

Tower

$128,125

$246,600

$149,530

$149,530

20069

0431-05-00100

Solae

$9,880,625

$5,690,700

$2,556,170

$9,880,625

20070

0431-05-00200

Solae

$498,750

$981,800

$595,480

$498,750

20071

0431-05-00400

Solae

$175,000

$358,900

$217,690

$175,000

20072

0431-06-00100

Solae

$440,313

$868,600

$526,790

$440,313

20073

0431-06-00200

Tower

$101,250

$199,500

$120,990

$120,990

20074

0431-06-00300

Tower

$68,438

$137,500

$82,160

$82,160

20075

0431-06-00400

Tower

$61,250

$121,100

$73,440

$73,440

20076

0431-06-00600

Tower

$53,125

$121,500

$73,710

$73,710

20077

0431-06-00700

Purina Credit

$200,000

STIP

STIP

STIP

20078

0432-00-00400

Tower

$41,250

$81,000

$49,125

$49,125

20079

0432-00-00500

Tower

$40,313

$79,700

$48,305

$48,305

20080

0439-00-00100

Tower

$31,000

$190,800

$115,710

$115,710

20081

0440-00-00100

Research South

$615,000

$1,222,300

$381,630

$615,000

20082

0443-00-01000

Tower

$214,400

$1,391,300