Attilio Cosgrove v. Jake Zimmerman, Assessor, St. Louis County

STATE TAX COMMISSION OF MISSOURI

ATTILIO COSGROVE,	)
Complainant,	)	Appeal No. 19-10575
	)
	)	Parcel No. 18K640173
v.	)
	)
JAKE ZIMMERMAN, ASSESSOR,	)
ST. LOUIS COUNTY, MISSOURI,	)
Respondent.	)

 

DECISION AND ORDER

 

Attilio Cosgrove (Complainant) appeals the St. Louis County Board of Equalization’s (BOE) decision finding the true value in money (TVM) of the subject property on January 1, 2019, was $368,200 with an assessed value of $69,960.   Complainant claims the property is overvalued and proposes a value of $310,000.[1] Complainant did not produce substantial and persuasive evidence establishing overvaluation. However, Respondent presented substantial and persuasive evidence showing the TVM of the subject property as of January 1, 2019, was $350,000.  The BOE’s decision is set aside.[2]

The evidentiary hearing[3] was conducted on October 28, 2020, at the Wainwright State Office Building in the City of St. Louis, Missouri. Complainant appeared pro se and in person.   Respondent was represented by counsel Monique Nketah, who appeared via WebEx video conference.

FINDINGS OF FACT

1. Subject Property. The subject property is located at 7545 Delmar Blvd. in St. Louis, Missouri. The parcel/locator number is 18K640173 .

The subject property consists of a 3,052 square foot two-family building.  Each of the two units has three bedrooms and two full baths. Complainant testified that about 29 years ago, he purchased the subject property. The subject property is rented to tenants.

2. Respondent and BOE. Respondent classified the subject property as residential and determined the TVM on January 1, 2019, was $368,200. The BOE classified the subject property as residential and independently determined the TVM on January 1, 2019, was $368,200.
3. Complainant’s Evidence. Complainant asserted the TVM of the subject property on January 1, 2019, was $310,000. Complainant submitted the following exhibits:

Exhibit	Description	Ruling
A	Appraisal as of January 1, 2019, of subject property by William M. McGeorge, Premier Appraisal Group.	Admitted
B	Copy of page titled “Setting Realistic Expectations for the Appraised Value of Duplexes, Triplexes & Fourplexes” by Mike Hanna and Lynee Dee Murrow with highlighting.	Admitted
C	October 4, 2019, Board of Equalization Findings and Notice of Decision determining the appraised value of the subject property to be $368,200.[4]	Admitted
D	A one-page, highlighted article by McKissock titled “Appraisal: The Challenges with Appraising Multiple-Unit Properties.”	Admitted
E	May 8, 2019, Change of Assessment Notice for the subject property.[5]	Admitted
F	STC Assessor Manual pages IV – 1 and IV – 2 from the Ratio Study chapter with highlighting.	Admitted
G	Part of pamphlet from St. Charles County Assessor’s Office with highlighting and note.	Admitted
H	Summary of adjustments prepared by Complainant	Admitted
I	Summary of appraisals prepared by Complainant	Admitted

 

Respondent made a hearsay objection to Exhibits B, D, F, and G, and Exhibits A through I were received into evidence to be given the weight deemed appropriate.

Complainant testified and presented the testimony of William M. McGeorge, a residential appraiser with Premier Appraisal Group. Mr. McGeorge testified that his opinion of value for the subject property was $310,000.  In Exhibit A, Mr. McGeorge utilizes the income approach and sales comparison approach to estimate the market value of the subject property from four comparable rentals and six comparable sales, respectively. Mr. McGeorge calculated a $368,000 value for the subject property using the income approach, based upon a $3,200 total gross monthly rent multiplied by a 115 gross rent multiplier, and a $310,000 value for the subject property using the sales comparison approach. Mr. McGeorge indicated that “[t]he Sales Comparison Approach gives the best indication of true market activity for similar properties in the area and is considered the best indicator of value for the subject.” (Ex. A at 15.)  As to the sales comparison approach, the key property data in Exhibit A are as follows:

 

	Subject Property	Comp. 1	Comp. 2	Comp. 3	Comp. 4	Comp. 5	Comp. 6
Address	7545 Delmar Blvd.	7229 Tulane Ave.	7375 Amherst Ave.	7251 Dartmouth Ave.	7265 Delmar Blvd.	7122 Tulane Ave.	7135 Amherst Ave.
Proximity to subject		0.68 miles NE	0.42 miles NE	0.66 miles NE	0.60 miles SE	0.82 miles NE	0.80 miles NE
Date of sale/time		10/30/2018	10/26/2018	07/02/2018	06/08/2018	06/29/2018	01/19/2018
View	A; res; bsyrd[6]	N; res	N; res	N; res	A; res; bsyrd	N; res	N; res
Design	2 Family	2 Family	2 Family	2 Family	2 Family	2 Family	2 Family
Condition	Average +	Average +	Average	Average	Average +	Average	Average
Gross building area 20	3,052	2,736	3,096	2,576	2,592	2,430	2,688
Unit Breakdown total/bedrooms/baths	Unit 1: 6/3/2 Unit 2: 6/3/2	Unit 1: 6/2/1 Unit 2: 6/2/1	Unit 1: 6/3/1 Unit 2: 6/3/1	Unit 1: 5/3/1 Unit 2: 5/3/1	Unit 1: 6/3/1 Unit 2: 6/3/1	Unit 1: 5/2/1 Unit 2: 5/2/1	Unit 1: 5/2/1 Unit 2: 5/2/1
Parking on/off site	1 Bln Gar,[7] 2 Crp[8]	2 car garage	Offstreet	2 car bln garage	2 car bln garage	2 car garage	Street parking
Porch/patio/deck	Porch, patio	Porch, balcony	Porch, balcony	Porch, balcony	Porch	Porch/balcony	Pr,[9] pto,[10] dk[11]
Total net adjustment		$25,320	$32,120	$38,520	$23,200	$51,440	$50,280
Adjusted sale price		$315,320	$307,120	$279,520	$332,200	$306,440	$300,280

 

The comparable properties are similar with respect to design, quality of construction, actual age, basement description, and functional utility. Comparables 1, 2, 3, 4, 5, and 6, differ from the subject property with respect to view, gross building area, unit breakdown, and basement finished rooms; view, condition, gross building area, unit breakdown,  basement finished rooms, and parking, on/off site; view, condition, gross building area, unit breakdown, and basement finished rooms; gross building area, unit breakdown, and basement finished rooms; view, condition, gross building area, unit breakdown, and basement finished rooms; and view, condition, gross building area, unit breakdown, basement finished rooms, parking on/off site, and porch/patio/deck, respectively. Exhibit A indicates that these differences have been adjusted for when determining an opinion of value.

4.   Respondent’s Evidence.  Respondent submitted Exhibit 1, a restricted appraisal report for the subject property, which was prepared by Senior Appraiser Steven J. Zahner. In Exhibit 1, Mr. Zahner determined the TVM of the subject property on January 1, 2019, was $350,000. Complainant did not object, and Exhibit 1 was received into evidence.

Mr. Zahner testified in support of his opinion of value. In Exhibit 1, Mr. Zahner utilizes the income approach and sales comparison approach to estimate the market value of the subject property from three comparable rentals and four comparable sales, respectively. Mr. Zahner calculated a $378,000 value for the subject property using the income approach, based upon a $2,700 market rent for both units multiplied by a 140[12] gross rent multiplier, and a $350,000 value for the subject property using the sales comparison approach. In using the income approach, Mr. Zahner indicated the actual rents of $4,715 per month, which included the rent of one unit for $2,535 and rent of the other unit for $2,180, “are considerably higher than typical for similar properties in the subject market,” and that the rental comparables “indicate a reasonable estimate of the subject’s market rent is $1400 per month for the unit with the finished basement and $1300 per month for the unit with the unfinished basement.” (Ex. 1 at 8.) Mr. Zahner further indicated that “[d]ue to the abundance of comparable sales on the subject’s street, there is no need to rely on the Income Approach.” (Ex. 1 at 11.) As to the sales comparison approach, the key property data in Exhibit 1 are as follows:

 

	Subject Property	Comp. 1	Comp. 2	Comp. 3	Comp. 4
Address	7545 Delmar Blvd.	7943 Delmar Blvd.	7829 Delmar Blvd.	7265 Delmar Blvd.	7720 Delmar Blvd.
Proximity to subject		0.47 miles NW	0.35 miles NW	0.60 miles SE	0.21 miles SW
Date of sale/time		08/15/2016	10/02/2016	06/08/2018	05/20/2016
Location	Traffic Street	Traffic Street	Traffic Street	Traffic Street	Traffic Street
View	Residential	Residential	Residential	Residential	Residential
Design	2 Family Flat	2 Family Flat	2 Family Flat	2 Family Flat	2 Family Flat
Condition	Above Average	Above Average	Above Average	Above Average	Above Average
Gross building area 20	3,052	3,554	2,997	2,592	2,758
Unit Breakdown total/bedrooms/baths	Unit 1: 6/3/2 Unit 2: 6/3/2	Unit 1: 6/3/2 Unit 2: 6/3/2	Unit 1: 6/2/1 Unit 2: 6/2/1	Unit 1: 6/3/1 Unit 2: 6/3/1	Unit 1: 5/2/1 Unit 2: 5/2/1
Basement Finished Rooms	2 Rms and Bath	1 Rm, No Bath	Unfinished	Unfinished	Unfinished
Parking on/off site	1 Bsmt Gar,[13] 2 CP[14]	4 Car Bsmt Gar.	4 Car Bsmt Gar.	2 Car Bsmt Gar.	2 Car Carport
Porch/patio/deck	None	Balcony	None	None	None
Total net adjustment		$9,040	$26,000	$27,200	$37,880
Adjusted sale price		$350,960	$366,000	$326,200	$351,880

 

The comparable properties are similar with respect to location, view, design, quality of construction, actual age, condition, basement description, functional utility, and porch/patio/deck. Comparables 1, 2, 3, and 4 differ from the subject property with respect to gross building area, basement finished rooms, and parking on/off site; unit breakdown, basement finished rooms, and parking on/off site; gross building area, unit breakdown, and basement finished rooms; and gross building area, unit breakdown, basement finished rooms, and parking on/off site, respectively. Exhibit 1 indicates that these differences have been adjusted for when determining an opinion of value.

5. Value. The TVM of the subject property on January 1, 2019 was $350,000.

CONCLUSIONS OF LAW

1. Assessment and Valuation. 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 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.  “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.

2. 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.
3. Complainant’s Burden of Proof. The taxpayer bears the burden of proof and must show by a preponderance of the evidence that the property was overvalued or misclassified. Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. E.D. 2003). The BOE’s valuation is presumptively correct.  Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 7 (Mo. App. S.D. 2020).  The “taxpayer may rebut this presumption by presenting substantial and persuasive evidence that the valuation is erroneous” and must prove “the value that should have been placed on the property.”  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”).        
4. Complainant Did Not Prove Overvaluation. The presumption of correct valuation by the BOE was rebutted because neither party contended that the $368,200 BOE value was correct, and both parties presented evidence in support of values lower than the BOE value. However, Complainant did not persuasively establish that his proposed value, $310,000, was the value that should have been placed on the subject property as of January 1, 2019.  While Complainant’s appraiser prepared a detailed appraisal report, Exhibit A, and provided testimony in support of Exhibit A, Respondent’s appraiser and appraisal report, Exhibit 1, were more persuasive. Respondent’s comparable sales are all located within three blocks of and on the same street as the subject property. In Exhibit 1, adjustments were not necessitated due to the view or the condition of the comparable sales, while adjustments for both were required for many of the comparable sales included in Exhibit A.[15] Although three of the comparable sales utilized in Exhibit 1 were from 2016 and older than the sale dates for the comparable sales included in Exhibit A, Mr. Zahner testified that “due to the peculiarities of this property, the fact that it is a two family, the fact that it is on Delmar, comparable properties were limited, and for that reason, 2016 properties were included.” Because “values had not declined,” he felt comfortable including those 2016 properties in his appraisal.  (Tr. pt. 2 42:38-43:36.)  Respondent persuasively established that $350,000, which is lower than the BOE’s valuation, is the TVM of the subject property as of January 1, 2019.

CONCLUSION AND ORDER

The BOE decision is set aside.  The TVM of the subject property as of January 1, 2019, was $350,000.[16]

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 Legal@stc.mo.gov.  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 St. Louis  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 October 8, 2021.

 

 

Laura A. Storck-Elam

Senior Hearing Officer

State Tax Commission

 

 

Certificate of Service

I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on October 8, 2021, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.

 

Elaina Mejia

Legal Coordinator

 

 

 

[1] In the Complaint for Review of Assessment, Complainant’s proposed value was $296,800. During the evidentiary hearing, Complainant testified that he believes the value should be $310,000 based on his appraiser’s opinion of value.

[2] 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.

[3] During the hearing, references were made to testimony and arguments presented during the evidentiary hearing for appeal number 19-10574, which occurred earlier that same day and involved the same comparable sales for both parties.

[4] This exhibit also includes a Findings and Notice of Decision for the property the subject of appeal number 19-10574.

[5] This exhibit also includes a Change of Assessment Notice for the property the subject of appeal number 19-10574.

[6] Busy road.

[7] Basement garage.

[8] Carport.

[9] Porch.

[10] Patio.

[11] Deck.

[12] Mr. Zahner stated, “The comparable sales, and their rents which were included in this report along with others, indicated a typical Gross Rent Multiplier for two family properties located on Delmar of 140.” (Ex. 1 at 9.)

 

[13] Basement garage.

[14] Carport.

[15] In Exhibit A, comparable sales 1, 2, 3, 5, and 6 had $5,000 negative adjustments in the view characteristic due to no busy road, and comparable sales 2, 3, 5, and 6 had $20,000 positive adjustments in the condition characteristic due to average rather than average plus condition.

[16] Missouri operates on a two-year reassessment cycle for valuing real property.  See Section 137.115.1.  Absent new construction or improvements to a parcel of real property, the assessed value as of January 1 of the odd year remains the assessed value as of January 1 of the following even year.  Id.