TKG Biscayne, LLC vs Tom Schauwecker, Assessor, Boone County

January 15th, 2021


TKG BISCAYNE, LLC ) Appeal No. 19-44505
) 16-204-00-03-001.01 01
Complainant, )
v. )
Respondent. )




            TKG Biscayne, LLC (Complainant) appeals the Boone County Board of Equalization’s (BOE) decision finding the true value in money (TVM) of the subject property on January 1, 2019, was $6,500,000, with an assessed value of $2,080,000.   Complainant claims the property is overvalued and proposes a value of $3,410,000. Complainant did not produce substantial and persuasive evidence establishing overvaluation. The BOE’s decision is affirmed.[1]

Complainant was represented by counsel Richard Dvorak. Tom Schauwecker, Assessor of Boone County, Missouri (Respondent) was represented by counsel Charles J. Dykhouse.   The evidentiary hearing was conducted on September 14, 2020, via Webex.


  1. Subject Property. The subject property is located at 201 N. Stadium Blvd., in Columbia, Missouri. The parcel/locator number is 16-204-00-03-001.01 01.

The subject property consists of a former Macy’s department store, which is now vacant. The subject property is a 6.9-acre tract of land improved by a two-story building with 139,967 square feet of gross building area. The improvement was built in 2003 and is of poor to average condition with average construction quality. The interior of the improvement was reduced to a shell (demolished) before January 1, 2019. One appraiser stated the improvement has an effective age of 16 years while the other stated an effective age of 45 years. As of January 1, 2019, the subject property was under two letters of intent from Ross Dress for Less and HomeGoods/TJ Maxx. As of July 3, 2019, the subject property was under an additional letter of intent from Burlington Coat Factory. (Complaint for Review of Assessment; Complainants’ Exhibit A; Respondent’s Exhibit 2)

  1. Respondent and BOE. Respondent classified the subject property as commercial and determined the TVM on January 1, 2019, was $7,233,400.   The BOE classified the subject property as commercial and independently determined the TVM on January 1, 2019, was $6,500,000.
  2. Complainant’s Evidence. Complainant testified the TVM of the subject property on January 1, 2019, was $3,410,000. Complainant submitted the following exhibits:
Exhibit Description Ruling
Exhibit A Appraisal of Bernie Shaner (Complainant’s Appraiser) Admitted
Exhibit B Written Direct Testimony Complainant’s Appraiser Admitted

Complainant’s Appraiser developed the sales approach to value. He did not develop the income or cost approaches to value. His appraisal included a hypothetical condition that “as of the date of value little if any, interior demolition of improvements had begun.” Complainant’s Appraiser performed a highest and best use analysis, including a financial feasibility analysis. In his feasibility analysis, he utilized the Complainant’s expected costs of $21,353,565 to renovate the building, his projected income stream for the subject property, and an 8% capitalization rate.   He did not do a market-based cost analysis of the cost to renovate. He determined the project was not financially feasible, partially based upon his assertions that there is low demand for two-story department store designs with escalators. Ultimately, Complainant’s Appraiser determined the highest and best use was as vacant with the demolition of the improvement for future redevelopment. Consequently, he did a land valuation of the subject property (300,564 square feet) as compared to four comparable land sales with an adjusted sales price per gross square foot range of $7.60 to $15.01. The median sale price per gross square foot was $13.96, and the mean sale price per gross square foot was $12.63. Complainant’s Appraiser utilized $14 per gross square foot to arrive at a preliminary market value of $4,210,000. After subtracting estimated demolition costs of approximately $800,000, Complainant’s Appraiser opined a TVM of $3,410,000, as of January 1, 2019. (Complainant’s Exhibit A)

  1. Respondent’s Evidence. Respondent opined that the reconciled TVM of the subject property as of January 1, 2019, was $7,000,000. Respondent submitted the following exhibits:
Exhibit Description Ruling
Exhibit 1 Written Direct Testimony Timothy Keller (Respondent’s Appraiser) Admitted
Exhibit 2 Appraisal of Respondent’s Appraiser Admitted
Exhibit 3 Complaint for Review of Assessment Admitted
Exhibit 4 Complainant’s Answers to Interrogatories Admitted
Exhibit 5 Response to Request for Production of Documents 11 Admitted
Exhibit 6 Missouri DNR Asbestos Project Notification Admitted
Exhibit 7 Response to Request for Production of Documents 23 Admitted
Exhibit 8 USPAP Ethics Rule Admitted
Exhibit 9 Excerpt from Respondent’s Exhibit 2 Admitted
Exhibit 10 Boone County Plat Book 11 Admitted
Exhibit 11

Excerpt from March 24, 2020, version of Exhibit A

Exhibit 12 Class A Retail Sales Comparable – Boone County Admitted

Respondent’s Appraiser testified that the subject property’s interior was demolished before January 1, 2019. His appraisal noted the 2018 plans to divide the subject improvement and that the plans were denied by the city council as the plans included architectural towers that exceeded height restrictions. Respondent’s Appraiser developed a land valuation, a cost approach, a sales comparison approach, and an income approach. For his land valuation, Respondent’s Appraiser utilized five comparable land sales to which he made adjustments. He concluded a land value of $3,010,000. For the cost approach, Respondent’s Appraiser calculated replacement cost new relying on Marshall Valuation Service resulting in a valuation of $7,160,000. He utilized five comparable properties in his sales comparison approach. All had single story improvements. He made adjustments to the sales prices for conditions of sale, location, design, age, parking ratio, and size. The adjusted sales price range was $39.64 to $63.06 per square foot.[2] Respondent’s Appraiser concluded a value of $7,000,000 under the sales comparison approach. Finally, under the income approach, Respondent’s Appraiser utilized nine single-story comparables to calculate market rent and six comparables to calculate market expenses. To the nine market rent comparables, he adjusted for size, design, market conditions, and location. The adjusted rent per square foot of the comparables ranged from $9.89 to $14.44. He concluded a market rent projection of $12 per square foot for the subject property. Respondent’s Appraiser’s six expense comparables had an expense per square foot range of $4.20 to $13.71. The percent of effective gross income range was 31.21% to 46.16%. He prepared a pro forma income and expense sheet for the subject property, which indicated expenses of $1.70 per square foot or 13.59% of effective gross income. To the net operating income, Respondent’s Appraiser applied a 7.7% capitalization rate, resulting in an opined value of $7,040,000 under the income approach.

  1. Value. The TVM of the subject property on January 1, 2019, was $6,500,000, with a commercial assessed value of $2,080,000.
  2. No Evidence of New Construction & Improvement. There was no evidence of new construction and improvement from January 1, 2019, to January 1, 2020, therefore the assessed value for 2019 remains the assessed value for 2020. Section 137.115.1.


  1. Assessment and Valuation

            Pursuant to Article X, Sections 4(a) and 4(b), Mo. Const. of 1945 real property and tangible personal property is assessed at its value or such percentage of its value as may be fixed by law for each class and for each subclass. Article X, Sections 4(a) and 4(b), Mo. Const. of 1945. Commercial real property is assessed at 32% of its TVM as of January 1 of each odd-numbered year. 137.115.5(1)(c). “True value in money is the fair market value of the property on the valuation date, and is a function of its highest and best use, which is the use of the property which will produce the greatest return in the reasonably near future.” Snider v. Casino Aztar/Aztar Mo. Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005) (internal quotation omitted). The fair market value is “the price which the property would bring from a willing buyer when offered for sale by a willing seller.” Mo. Baptist Children’s Home v. State Tax Comm’n, 867 S.W.2d 510, 512 (Mo. banc 1993).   Determining the TVM is a factual issue for the STC. Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008). The “proper methods of valuation and assessment of property are delegated to the Commission.” Savage v. State Tax Comm’n, 722 S.W.2d 72, 75 (Mo. banc 1986).

            “For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider, 156 S.W.3d at 346. The three generally accepted approaches are the cost approach, the income approach, and the comparable sales approach. Id. at 346-48; see also St. Louis Cty. v. Sec. Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977).

The comparable sales approach “is most appropriate when there is an active market for the type of property at issue such that sufficient data are available to make a comparative analysis.” Snider, 156 S.W.3d at 348. For this reason, the comparable sales approach is typically used to value residential property. “The comparable sales approach uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties.”  Id. at 347-48 (internal quotation omitted). “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.” Id. at 348.

The income approach “is most appropriate in valuing investment-type properties and is reliable when rental income, operating expenses, and capitalization rates can reasonably be estimated from existing market conditions.” Snider, 156 S.W.3d at 347. “The income approach determines value by estimating the present worth of what an owner will likely receive in the future as income from the property.” Id. “The income approach is based on an evaluation of what a willing buyer would pay to realize the income stream that could be obtained from the property when devoted to its highest and best use.” Id. (internal quotation omitted). “When applying the income approach to valuing business property for tax purposes, it is not proper to consider income derived from the business and personal property; only income derived from the land and improvements should be considered.” Id.

  1. Evidence

The hearing officer is the finder of fact and determines the credibility and weight of the evidence.   Kelly v. Mo. Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. W.D. 2015). The finder of fact in an administrative hearing determines the credibility and weight of expert testimony. Hornbeck v. Spectra Painting, Inc., 370 S.W.3d 624, 632 (Mo. banc 2012). “It is within the purview of the hearing officer to determine the method of valuation to be adopted in a given case.” Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 9 (Mo. App. S.D. 2020).   The hearing officer “may 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.” Section 138.430.2. The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon his inquiry and any evidence presented by the parties or based solely upon evidence presented by the parties. Id.

  1. Complainant’s Burden of Proof

         The BOE’s valuation is presumptively correct. Rinehart v. Laclede Gas Co., 607 S.W.3d 220, 227 (Mo. App. W.D. 2020). To prove overvaluation, a taxpayer must rebut the BOE’s presumptively correct valuation and prove the “value that should have been placed on the property.” Snider, 156 S.W.3d at 346. The taxpayer’s evidence must be both “substantial and persuasive.” Id. “Substantial evidence is that evidence which, if true, has probative force upon the issues, and from which the trier of fact can reasonably decide the case on the fact issues.” Savage, 722 S.W.2d at 77 (internal quotation omitted). Evidence is persuasive when it has “sufficient weight and probative value to convince the trier of fact.” Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. E.D. 2002); see also White v. Dir. of Revenue, 321 S.W.3d 298, 305 (Mo. banc 2010) (noting the burden of persuasion is the “party’s duty to convince the fact-finder to view the facts in a way that favors that party”). A taxpayer does not meet his burden if the evidence on any essential element of his case leaves the STC “in the nebulous twilight of speculation, conjecture and surmise.” See, Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. 1980).


Neither Complainant’s nor Respondent’s evidence was substantial and persuasive to rebut the BOE presumption and to establish a different TVM of the subject property as of January 1, 2019. Complainant’s appraisal started with an erroneous hypothetical, namely that the interior of the property had not yet been demolished. Additionally, Complainant’s appraiser utilized the Complainant’s budgeted renovation cost and did not do a market-based analysis of such cost. Complainant’s Appraiser utilized these owner supplied costs in his feasibility analysis. Complainant’s Appraiser did not utilize the cost approach or income approach, therefore limiting the breadth, usefulness, and ultimately the persuasiveness of his appraisal. Complainant’s Appraiser also seemed to disregard the reality of the subject property in his feasibility analysis in that the subject property was under letters of intent to lease the property. Complainant’s Appraiser’s appraisal was not persuasive to the Hearing Officer.

Respondent’s Appraiser’s appraisal was also not persuasive. Respondent’s Appraiser only utilized single-story properties as comparables. In his income approach, he also failed to account for the reduction in the net rentable area to accommodate an escalator and failed to account for second-floor rents being lower. In calculating a vacancy rate, Respondent’s Appraiser acknowledged his big box survey contained no two-level properties. Respondent’s Appraiser’s appraisal was not persuasive to the Hearing Officer.

The BOE presumption was not overcome as the evidence as a whole was not both substantial and persuasive and did not establish that the BOE’s determination of TVM was in error.


            The TVM for the subject property as determined by the BOE is AFFIRMED. The assessed value for the subject property for tax years 2019 and 2020 remains that set by the BOE.

Application for Review

            A party may file with the STC an application for review of this decision within thirty days of the mailing date set forth in the Certificate of Service for this Decision. The application shall contain specific facts or law as grounds upon which it is claimed the decision is erroneous. Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, or emailed to, and a copy of said application must be sent to each person listed below in the certificate of service.

            Failure to state specific facts or law upon which the application for review is based will result in summary denial. Section 138.432.

Disputed Taxes

            The Collector of Boone County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending the possible filing of an Application for Review, unless said taxes have been disbursed pursuant to a court order under the provisions of Section 139.031.8.

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 January 15, 2021.


John Treu

Senior Hearing Officer


Certificate of Service

I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 15th day of January 2021, to Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent, and County Collector.


Elaina McKee

Legal Coordinator

[1] Complainant timely filed a complaint for review of assessment. The State Tax Commission (STC) has authority to hear and decide Complainant’s appeal.  Mo. Const. art. X, § 14; section 138.430.1, RSMo 2000. All statutory citations are to RSMo 2000, as amended.

2 The table of page 63 of Exhibit 2 contains erroneous adjusted sales prices. The grids on pages 78 and 79 of Exhibit 2 were relied on by the Hearing Officer.