Ameristar Casino v. Shipman (St. Charles)

March 3rd, 2014

State Tax Commission of Missouri















Appeals No. 09-32613 & 09-32614



                     11-32503 & 11-32504

















On February 11, 2014, Hearing Officer Maureen Monaghan, entered an Order and Decision.  At the request of the parties, said Decision is amended nunc pro tunc as follows:

The language: “True Value for subject properties for tax year 2009 is $266,839,375, assessed commercial value $85,388,600” is stricken and the following is inserted thereof:

“True Value for subject properties for tax year 2009 is $266,839,570, assessed commercial value $85,388,660.”

SO ORDERED June 10, 2014.



Decision of the St. Charles County Board of Equalization is SUSTAINED.True Value for subject properties for tax year 2009 is $266,839,375, assessed commercial value $85,388,600. True Value for the subject properties for tax year 2011 is $260,749,300 assessed commercial value of $83,439,780.

Complainant appeared by counsel, Thomas Caradonna.

Respondent appeared by Counsels, Greg Dohrman and Amanda Jennings.

Case heard and decided by Hearing Officer Maureen Monaghan.


The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2009 and January 1, 2011. 


For tax year 2009, Complainant appeals, on the ground of overvaluation, the decision of the St. Charles County Board of Equalization, which set value at $266,839,375 (assessed value of $85,388,600).The Complainant proposed a value of $255,000,000 (assessed value of $81,600,000).

For tax year 2011, Complainant appeals, on the ground of overvaluation, the decision of the St. Charles County Board of Equalization, which set value at $260,749,300 (assessed commercial value of $83,439,780.)The Complainant proposed a value of $239,000,000 (assessed value of $76,480,000).

A hearing was conducted on July 9, 2013, in St. Charles, Missouri.The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

Complainant’s Evidence

A.    2009 Appraisal Report of Michael Kelly, Real Estate Analysis Corporation;

A.    2011 Appraisal Report of Michael Kelly, Real Estate Analysis Corporation;

B.    Written Direct Testimony of Michael Kelly;

C.    Application for Temporary Appraiser License;

D.    Purchase Price Allocation of Harrah’s Casino;

F.     Financial Statements of Ameristar 2006, 2007, and 2008; and

G.    Property Assessment Appeal Form.

Respondent’s Evidence

1        2009 Appraisal Report of Michael Cahill, Hospitality Real Estate Counselors;

2        2011 Appraisal Report of Michael Cahill, Hospitality Real Estate Counselors;

3        Property Record Card of Personal Property 2009

4        Property Record Card of Personal Property 2011

5        Written Direct Testimony of Matt Brown

6        Written Direct Testimony of Michael Cahill

7        Property Record Card of 054380A000

8        Property Record Card of 054430A000

9        Property Record Card of A966000147

Rulings on Exhibits

On January 8, 2013, the parties’ objections to exhibits were ruled upon. All Exhibits were admitted into evidence prior to the hearing on July 9 except for Exhibits 7-17 which were not admitted into evidence at the time of the filings of Exhibits.Exhibits were held pending their possible use during cross examination of the Complainant’s expert.

Exhibit D, KPMG Allocation of Value of Harrah’s Casino Sale, was offered during the hearing on July 9, 2013.Respondent objected on the basis of relevance of the document as “book value” or an accounting valuation determination of the property which is not the subject.Hearing Officer excluded the exhibit upon hearsay, lack of foundation and relevance.

Complainant’s Valuation Evidence

Complainant’s appraiser developed all three approaches to value for the 2009 and 2011 assessment cycles.He gave the most consideration to the cost approach and gave the income approach moderate consideration.

His cost approach was developed using information from a 3rd party provider. The provider estimated cost for replacement of the improvements to the property.The appraiser instructed the provider that a replacement hotel would have rooms with less square footage and the casino and related improvements would be smaller.For example, the appraiser removed 120,000 square feet from the hotel and another 100,000 square feet from the entertainment deck improvements. The appraiser opined that the improvements, if replaced, would be smaller as areas such as the night club would not be constructed as they have not generated income.

The reduction of the square footage used during the calculation of replacement cost new by Complainant resulted in a lower cost calculation than historical costs.For example, the hotel’s historical cost was approximately $260 million from its construction in 2008 while the replacement cost new in 2009 was calculated by the provider at $124 million. The appraiser’s provider determined the RCN for the entire enterprise would be $371,937,276 while the actual historical costs exceeded $630 million.

After the Complainant’s appraiser received the RCN calculation, depreciation was applied.The appraiser useda straight line depreciation approach determining that the improvements had a life of 25 years.The resulting value for 2009 was determined to be $259,162,798 with land value of $4,200,000, for a total of $263,362,798 under the cost approach.(The value for 2011, using the cost approach, was determined to be $233,555,976; a reduction in value of $29,806,822 in one cycle.)

The appraiser also developed the income approach and the sales comparison approach.The appraiser determined an overall value for the subject property using the income approach.The appraiser then determined that the difference in the income approach’s determination of value and the cost approach’s determination of value would be the business enterprise value.More specifically, the appraiser determined the value for 2009 to be $615,965,000.The appraiser then deducted the value as determined under the cost approach, $263,362,798.The resulting business enterprise value (BEV) is $352,602,202.After removing the BEV, which in essence is using the cost approach figure, the appraiser then made a deduction for property taxes for a resulting market value estimation of $234,000,000.

The resulting market value estimation by the appraiser using the sales comparison approach was $269,950,000.The appraiser calculated this value by reviewing sales of similar properties and making adjustments to those sales.After he determined a market value of $648,450,000, he deducted the assessor’s determination of value of the personal property ($37,500,000) and deducted his calculated BEV ($345,000,000), for a resulting value of $265,950,000.


1.              In Missouri, gaming is a regulated environment limiting the number of licenses to 13 since 2008.There are four casinos in the area of subject property.Gaming properties in Missouri have transitioned from excursion boats to barges in moats to floating floors on land based improvements.

2.              Complainant is Ameristar Casino Report Spa St. Charles (“Ameristar”).

3.              The real property consists of eleven parcels totaling 239.71 acres.

4.              The improvements include 130,000 square foot casino, 397 room hotel, 22,000 square foot conference center, seven restaurants, twelve bars, nightclub venue and a full-service spa, and covered parking for over 6000 vehicles.The improvements include surface parking for employees and access to the facilities.

5.              The entire complex is NOT under appeal. Parcel number A966000146/ 6-014D-7421-001 (30.32 acres improved with Pavilion and Parking Garage) and parcel number A96600155/ 6-014D-7421-00-3(24.78 acres improved with employee parking surface lot) were appealed.The remaining parcels’ valuations were not appealed.

6.              The facility has had several stages of construction.The original improvements were completed and the casino began operation in 1994.In 1996, a parking deck was completed and an expansion of the casino was started but was halted in 1997.The expansion was restarted in 2001 with completion in 2002.A conference center was added in 2006.In 2007-2008, a new hotel and parking garage was added.

7.              The subject property casino floor is constructed upon multi-level barges. The barges were classified by the Assessor as personal property.No valuations of the personal property, including the barges, were appealed to the State Tax Commission.

8.              The subject property, and another Missouri casino property, was purchased by Complainant in 2000; $160 million was allocated to the subject property.The Complainant expended an additional $210 million in 2002 for improvements and additions.In 2008, Complainant expended $261 million to construct the hotel, spa and garage.The Complainant’s total expenditure on the subject property is $631 million.



The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious.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.[1]

Official and Judicial Notice

Agencies shall take official notice of all matters of which the courts take judicial notice.[2]

Courts will take judicial notice of their own records in the same cases.[3]In addition, courts may take judicial notice of records in earlier cases when justice requires[4] or when it is necessary for a full understanding of the instant appeal.[5] Courts may take judicial notice of their own records in prior proceedings involving the same parties and basically the same facts.[6]

Presumptions In Appeals

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[7]

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.

The presumption of correct assessment is rebutted when the taxpayer, or respondent when advocating a value different than that determined by the Board, presents substantial and persuasive evidence to establish that the Board’s valuation is erroneous and what the fair market value should have been placed on the property.[8]

Complainant’s Burden of Proof

In order to prevail, Complainant must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2009 and 2011.There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a Commission appeal still bears the burden of proof.The taxpayer is the moving party seeking affirmative relief.Therefore, the Complainant bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.”[9]Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[10]Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact.The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief.[11]

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.[12]It is the fair market value of the subject property on the valuation date.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 are 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 both 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.[13] 

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.[14]

Missouri courts have approved the comparable sales or market approach, the cost approach and the income approach as recognized methods of arriving at fair market value.[15]

Impact of Casino Aztar

The Casino Aztar case[16] was the first, and only, appeal of a casino property before the State Tax Commission.The Missouri Supreme Court reviewed the decision and issued an opinion as to the best approach for valuation and the highest and best use analysis for casino property.In that case, the Court looked at the three approaches to value and ruled out the income approach because casinos are not leased.It ruled out the sales approach because adequate sales were not available.It concluded that the cost approach was the appropriate way to value the property subject to that appeal.

The Court ruled, for the casino subject to that appeal, the cost approach was the best indicator of value.The Court went further and ruled that the reproduction cost, not the replacement cost new, was the most appropriate as the property being valued has been recently improved with structures that conform with highest and best use or when property has unique or specialized improvements for which there are no comparables. 

Conclusion of Value for Subject Property

For tax year 2009, St. Charles County Board of Equalization set value at $266,839,375 (assessed value of $85,388,600).The Complainant determined a value under the cost approach of $263,362,798 (a proposed a value of $255,000,000 after reconciliation of all approaches).A difference of 1.3%. For 2009, the Complainant’s evidence fails to meet the burden of presenting substantial and persuasive evidence to show the assessment was “unlawful, unfair, improper, arbitrary or capricious.”

For 2011, the Complainant determined a value of $239,000,000. The Complainant determined that value after development of the three approaches to value and placing the most weight on the cost approach following the opinion in Aztar.The Complainant developed the indication of value with the cost approach using replacement cost new.The Supreme Court in Aztar stated that the reproduction costs would be more appropriate if the construction was recent and the improvements were specialized.The improvements consisting of the hotel and spa were completed in 2008 for $260 million; the total of historical costs for the subject property is approximately $610 million.

The Complainant bears the burden of proof ; they bear the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.”[17] The Complainant has burden of producing or going forward with evidence and the burden of persuasion. The Complainant has an obligation to persuade the fact finder to a requisite degree of belief that a particular proposition is true and if Complainant’s fail to prove the vital elements, their case fails.

The Complainant failed to meet their burden for 2011.The Complainant advocates the methodology presented in Aztar – cost approach, but then ignores the Court’s finding that reproduction cost is most appropriate when improvements are new and the property is specialized. (In this appeal, the hotel, spa and garage were constructed in 2008)The Complainant then claims to have developed the other two approaches to value, income and sales comparison approach, but the appraiser assigned a value to the business enterprise which was the difference between the calculation of the cost approach and the income approach and the cost approach and the sales comparison approach plus personal property valuation.

In this instance, the Complainant failed to meet his burden of presenting sufficient credible evidence to meet his burden of persuasion that the assessment was unlawful, unfair, improper, arbitrary or capricious.The Complainant’s approach to value is flawed as he claims to develop all three approaches to value, relying predominantly on the cost approach and using the income and sales approach as support.However, the value determination reached under the income and the sales approach were concluded after removing the ‘business enterprise value’ which was calculated by subtracting the value determination by cost approach by the value determination by the income approach.Such circular reasoning cannot be relied upon for a logical conclusion to value.

As the Complainant failed to meet their burden, there is no need to address the persuasiveness of the valuation evidence presented by the Assessor.


The assessed value for the subject property for tax years 2009 and 2011 is SUSTAINED.

A party may file with the Commission an application for review of this decision within thirty (30) days of the mailing date shown in the Certificate of Service.The application shall contain specific 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, and a copy of said application must be sent to each person at the address listed below in the certificate of service.

Failure to state specific facts or law upon which the appeal is based will result in summary denial. [1]

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

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 this 11th day of February, 2014 .


Maureen Monaghan

Hearing Officer

[1] Section 138.432, RSMo 2000. 

[1] [1] Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.

[2] Section 536.070(6), RSMo.

[3] [3] State ex rel. Horton v. Bourke, 129 S.W.2d 866, 869 (1939); Barth v. Kansas City Elevated Railway Company, 44 S.W. 788, 781 (1898).

[4] [4] – Burton v. Moulder, 245 S.W.2d 844, 846 (Mo. 1952); Knorp v. Thompson, 175 S.W.2d 889, 894 (1943); Bushman v. Barlow, 15 S.W.2d 329, 332 (Mo. banc 1929)

[5] [5] State ex rel St. Louis Public Service Company v. Public Service Commission, 291 S.W.2d 95, 97 (Mo. banc 1956).

[6] [6] In re Murphy, 732 S.W.2d 895, 902 (Mo. banc 1987); State v. Gilmore, 681 S.W.2d 934, 940 (Mo. banc 1984); State v. Keeble, 399 S.W.2d 118, 122 (Mo. 1966).

[7] [7] Hermel, Inc. v. STC, 564 S.W.2d 888, 895 (Mo. banc 1978); Chicago, Burlington & Quincy Railroad Co. v. STC, 436 S.W.2d 650, 656 (Mo. 1968); May Department Stores Co. v. STC, 308 S.W.2d 748, 759 (Mo. 1958).

[8] [8] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).

[9] [9] See, Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003).Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App. 1991).

[10] [10] See, Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).

[11] [11] Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).

[12] [12] 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 (Mo. banc 1993).

[13] 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.

[14] [14] 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 (Mo. banc 1975).

[15] [15] St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987); and State ex rel. State Highway Comm’n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. Div. 2 1974).

[16] [16] Donna Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 SW 3d 341 (2005)

[17] [17] See, Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003).Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App. 1991).