Breckenridge Group Columbia Missouri LLC v. Tom Schauwecker, Assessor, Boone County

January 29th, 2021


Complainant, ) Appeal No. 19-44600
v. ) Parcel No. 17-702-00-14-001.00.01
Respondent. )



            Breckenridge Group Columbia Missouri 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 $28,740,000, with an assessed value of $5,460,600.   Complainant claims the property is overvalued and proposes a value of $20,300,000. Complainant did not produce substantial and persuasive evidence establishing overvaluation. The BOE’s decision is SET ASIDE.[1]

Complainant was represented by counsel Christopher Mattix.   Tom Schauwecker (Respondent) was represented by counsel C.J. Dykhouse.   The evidentiary hearing was conducted on November 24, 2020.


  1. Subject Property. The subject property is located at 3600 Aspen Heights Parkway in Columbia, Missouri. The parcel/locator number is 17-702-00-14-001.00.01.

The subject property consists of a 39.22-acre lot improved by a 204-building student apartment complex consisting of two stories and containing 318 dwelling units. The units are a mix of two-, three-, and four-bedroom units, containing a total of 972 beds and a total of 581,798 square feet of net rentable area. The subject property was constructed in 2013. The subject property amenities include a clubhouse, a business center, a tanning station, a gated lot, a courtyard, a fitness center, a game room, a conference room, a grilling area, an outdoor pool, a basketball court, a volleyball court, a media center/movie theater, a dog and a private shuttle to the University of Missouri. A court-appointed receiver took over the operation of the property on October 17, 2018.

  1. Respondent and BOE. Respondent classified the subject property as residential and determined the TVM on January 1, 2019, was $28,740,000.   The BOE classified the subject property as residential and independently determined the TVM on January 1, 2019, was $28,740,000.
  2. Complainant’s Evidence. Complainant’s appraiser, Troy Smith (Smith), testified the TVM of the subject property on January 1, 2019, was $20,300,000.   Complainant submitted the following exhibits:
Exhibit Description Ruling
A Appraisal of Smith Admitted
B Written Direct Testimony Smith Admitted
G 2018 Income and Expense Statement Admitted
H 2019 Income and Expense Statement Admitted
L Flooring Repairs Admitted
M Exterior Repairs Admitted
N Gate Repair Admitted
O Internet Upgrade Admitted
P Written Direct Testimony Donald Shapiro Admitted

Smith’s appraisal employed the income approach to value. It did not employ the sales comparison or cost approaches to value. Smith’s appraisal found that the subject property suffers from deferred maintenance.

Smith’s income approach utilized five comparable properties to analyze market rent and market vacancy. The five comparable properties had occupancy rates ranging from 48% to 99%. The subject property had an occupancy rate of 47.5%. The comparable properties had average rents ranging from $330 to $389. The subject property had an average rent projection of $440. Smith projected a vacancy of 18% for purposes of valuing the subject property as of January 1, 2019. Smith analyzed the historical operating expenses of the subject property and utilized four comparables to project operating expenses for the subject property. Smith projected an effective gross income of $4,505,115 and total expenses of $3,234,173 (71.8% expense ratio), resulting in a net operating income (NOI) of $1,270,942. Smith opined a loaded capitalization rate of 7.36%, which he applied to his projected NOI, resulting in his opined TVM of $21,182,367. This figure would result from applying Smith’s previously estimated 6% unloaded overall capitalization rate (by applying 7.36% to $1,270,942, $17,268,234 is the result). Smith then deducted $890,000 in lease-up expenses from his mistaken calculation to reach his opined TVM of $20,300,000.

Complainant offered the testimony of Donald Shapiro (Shapiro) in rebuttal. Shapiro was appointed by the court as receiver of the subject property on October 17, 2018, and took over management and operations of the subject property thereafter. Shapiro testified about his efforts to evaluate the property’s financial and operating conditions and to prepare a strategy to obtain optimal financial and operating results. He testified regarding the insufficiency of the insulation at the property resulting in excessive utility expenses. He testified about repairs that had to be made to HVAC units, the internet, concrete repairs, roof repairs, and a leaking pool, among others. Shapiro testified regarding the actual operating expenses for 2019; however, as the valuation date is as of January 1, 2019, such was given only that weight appropriate.

  1. Respondent’s Evidence. Respondent’s appraiser, Daniel Kann (Kann) testified the TVM of the subject property on January 1, 2019, was $26,690,000.   Respondent submitted the following exhibits:
Exhibit Description Ruling
1 Written Direct Testimony Kann Admitted
2 Appraisal of Kann Admitted
3 Further Testimony of Kann Admitted
4 IREM Report Admitted
5 NAA Data Admitted
6 Columbia Missouri Student Housing Sales Data Admitted
7 American Campus Communities 2019 Report Admitted
8 Excerpt- market expense dad analysis Admitted
9 Excerpt- reconstructed Veracity pro forma Admitted
10 Excel File- Spreadsheet showing market expenses and reconstructed pro forma Admitted

Kann’s appraisal employed both the sales comparison approach and the income approach to value. It did not employ a cost approach to value. Kann noted the decline in freshman enrollment at the University of Missouri-Columbia from 2014 to 2017. He stated, “the recent decline since 2015 resulted from a temporary stigmatization of racial tensions that resulted from September 2015 to November 2015.” He also stated, “the 2018 and 2019 freshman classes reported increasing enrollment data favoring a recovery due to short-term stigmatization of a past event.”   Again, as the valuation date is as of January 1, 2019, any data after the pertinent valuation date was given only that weight appropriate.

Kann’s sales comparison approach utilized three comparables. The first involved acquisition of a business and therefore Kann stated it was not a good indicator of value. Kann stated the second was inferior to the subject and sold for $41,921 per bedroom in July 2014, bracketing the low end of the value of the subject.   Kann stated the third was superior to the subject and sold for $68,008 per bedroom in December 2014, bracketing the high end of the value of the subject. He opined a TVM under the sales comparison approach ranging from $19,400,000 to $46,000,000. Kann’s sales approach was utilized by him as a test of reasonableness.

Kann’s income approach utilized four comparable properties to analyze market rent. The average rent range of the comparables was $509 to $795, with the adjusted average rent range being $484 to $825. Kann projected the subject’s average rent to be $425, as compared to Smith’s $440. Kann projected a vacancy of 15% for purposes of valuing the subject property as of January 1, 2019, as compared to Smith’s 18% projection. Kann analyzed the historical operating expenses of the subject property for 2014, 2015, 2016, and for August and September 2018. Kann gave weight to stabilized student housing expense comparables in estimating stabilized operating expenses. Kann utilized four comparables. Kann projected an effective gross income of $5,032,032 and total expenses of $2,193,001 excluding real estate taxes, resulting in an NOI of $2,839,031. Kann opined a loaded capitalization rate of 7%, which he applied to his projected NOI, resulting in his opined TVM of $33,960,000, before stabilization expenses. Kann then deducted $4,490,000 for rent loss and entrepreneurial incentive to stabilization and deducted $2,778,712 for curable items and entrepreneurial incentive, resulting in his opined TVM of $26,690,000.

Kann opined a reconciled TVM of $26,690,000.

  1. Value. The TVM of the subject property on January 1, 2019, was $26,690,000 with an assessed value of $5,071,100.
  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. Residential real property is assessed at 19% of its TVM as of January 1 of each odd-numbered year. Section 137.115.5(1)(a) . “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 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).

  1. Complainant & Respondent Proved Overvaluation

The BOE determined a TVM of $28,740,000. Smith’s appraisal for Complainant opined a TVM of $20,300,000. Kann’s appraisal for Respondent opined a TVM of $26,690,000. Consequently, both Complainant and Respondent produced substantial evidence to rebut the BOE presumption.

Nevertheless, the Hearing Officer found Respondent’s evidence more persuasive than Complainant’s evidence, particularly the testimony and appraisal of Kann. Kann’s appraisal was based upon established valuation methodology. The Hearing Officer was convinced that Kann’s deductions for the shortcomings of the subject property were appropriate. Finally, the Hearing Officer was most persuaded by Kann’s expense projections. The expense projections of Smith seemed excessive in light of the fact it was being assumed they would exist in perpetuity by applying the capitalization rate to such. Many of the expenses of Smith, although reasonable, seemed to be short-term stabilization expenses, which should have been deducted after capitalization.


The BOE decision is Set Aside. The TVM of the subject property as of January 1, 2019, was $26,690,000 with an assessed value of $5,071,100.

Application for Review

A party may file with the Commission an application for review of this decision within 30 days of the mailing date set forth in the certificate of service for this decision. The application “shall contain specific detailed grounds upon which it is claimed the decision is erroneous.” Section 138.432. The application must be in writing, and may be mailed to the State Tax Commission, P.O. Box 146, Jefferson City, MO 65102-0146, or emailed to A copy of the 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.

SO ORDERED January 29, 2021.



John J. Treu[2]

Senior Hearing Officer


Certificate of Service

I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on January 29, 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, Section 14; section 138.430.1, RSMo 2000. All statutory citations are to RSMo 2000, as amended.

[2] The Hearing Officer heard the appeal and drafted this Decision and Order prior to his departure from employment with the STC.