Bank of Kirksville v. Waybill (Adair)

 

BANK OF KIRKSVILLE,	)
	)
Complainant,	)
	)
v.	)	Appeal Number 13-40000
	)
DONNIE WAYBILL, ASSESSOR,	)
ADAIR COUNTY, MISSOURI,	)
	)
Respondent.	)

 

DECISION AND ORDER

HOLDING

 

Decision of the Adair County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.Complainant presented substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization and establish fair market value.

True value in money for the subject property for tax years 2013 and 2014 is set at $1,104,130 ($1,090,910 – commercial; 13,220 – agricultural), assessed value of $350,680 ($349,090 – commercial; $1,590 – agricultural).

Complainant appeared by Counsel, Keith Hicklin, Witt, Hicklin & Snider, P.C., Platte City, Missouri.

Respondent appeared in person and with Counsel, Matt Wilson, Adair County Prosecuting Attorney.

Case heard and decided by Senior Hearing Officer W. B. Tichenor.

ISSUE

Complainant appeals, on the ground of overvaluation, the decision of the Adair County Board of Equalization, which sustained the Assessor’s valuation of the subject property.The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2013.1 The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

FINDINGS OF FACT

1.Jurisdiction.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the Adair County Board of Equalization.

2.Evidentiary Hearing.The Evidentiary Hearing was held on February 20, 2014, at the Adair County Courthouse, Kirksville, Missouri.

3.Identification of Subject Property.The subject property is identified by map parcel number 13-05.0-15-002-01-20.000000.It is further identified as being located at 2101 S. Baltimore, Kirksville, Missouri.2

4.Description of Subject Property.The subject property consists of 54.3 acres.It is improved by an industrial building constructed in 1964, 1968 and 1971, containing approximately 165,000 square feet of gross building area.3

5.Assessment.The Assessor appraised the property at $2,786,300, an assessed agricultural and commercial value of $752,320.There is 21.5 acres of land that is classified as agricultural land with a productive value of $13,220, assessed value of $1,590.The Board of Equalization sustained the assessment.4

6.Complainant’s Evidence.The following exhibits were received into evidence on behalf of Complainant:

 

Mr. Kirby and Ms. Magruder testified at hearing.

7.No Evidence of New Construction & Improvement.There was no evidence of new construction and improvement from January 1, 2013, to January 1, 2014, therefore the assessed value for 2013 remains the assessed value for 2014.5

8.Three-Year Ownership History.The subject property sold to Wi-Fi Sensors on 5/29/09 for $1,700,000.The seller in that transaction was Hollister Inc.The sale was utilized as comparable 6 in the Kirby appraisal.The property was foreclosed by Complainant on 6/22/12.The property was then offered back to the original owner (Hollister) for $1,700,000.Hollister decline the offer.Although not currently offered for sale, Complainant has made it known to the local real estate community that the property is available and any offer would be entertained.As of the date of the Kirby appraisal, no offers have been made to Complainant.The property was offered for sale on Loopnet (a national listing service) from 10/31/10 to 6/12.6

9.Operating History – Lease Information.Complainant has operated the property since 6/22/12.The property as of 1/1/13 was in the first year of a three year lease with two – three renewal options.The existing lease is reasonable.The annual rental payment under the lease as of 1/1/13 was $180,000.The actual expenses for the property are likewise reasonable.7

10.Presumption of Correct Assessment Rebutted.Complainant’s evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2013, to be $1,110,220.See, Presumption In Appeal and Complainant Proves Value, infra.

11.Respondent Precluded from Offering Evidence.The parties were given until and including 1/15/14 to file and exchange exhibits and written direct testimony.8 Respondent did not file any exhibits or written direct testimony on or before said date and was precluded from offering evidence. 9 On 1/21/14, Respondent requested additional time to submit evidence. 10 Complainant objected to Respondent’s request. 11 Objection was sustained and Respondent’s request for additional time was denied. 12 Orders dated 1/21/14 and 1/29/14 are incorporated by reference as if set out in full in this Decision.

12.Commission Exhibit.In order to verify and have in the record the assessment relative to the agricultural land that is a part of Complainant’s property, the Hearing Officer at the hearing instructed the Assessor to provide a copy of the property record card for the subject property which would show the agricultural acreage, true value and assessed value.Said document was marked as Commission Exhibit 1 and received into the record for the stated purpose and no other.

13.True Value in Money and Assessed Values.The true value in money of the 32.8 acres improved by the commercial improvements is $1,090,910, an assessed value of $349,090.The true value in money of the 21.5 acres of agriculture land is $13,220, assessed value $1,590.

The total true value in money for the property under appeal is $1,104,130, total assessed value of $350,680.

CONCLUSIONS OF LAW AND DECISION

Jurisdiction

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.13

Basis of Assessment

The Constitution mandates that real property and tangible personal property be assessed at its value or such percentage of its value as may be fixed by law for each class and for each subclass.14The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property is assessed at set percentages of true value in money.15

Presumption In Appeal

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.16This presumption is a rebuttable rather than a conclusive presumption.It places the burden of going forward with some substantial evidence on the taxpayer – Complainant.When some substantial evidence is produced by the Complainant, “however slight”, the presumption disappears and the Hearing Officer, as trier of facts, receives the issue free of the presumption.17The presumption is not evidence of value.

The presumption of correct assessment is rebutted when the taxpayer 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.18

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.19 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.20

Upon presentation of the Complainant’ evidence 21 the presumption in this appeal disappeared.The submission of the appraisal report, performed by a state certified general real estate appraiser, established prima facie that the Board’s value was in error.The appraisal established what the fair market value that should have been placed on the property.No evidence was presented that rebutted the conclusion of value in Complainants’ appraisal.

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.22 True value in money is defined in terms of value in exchange and not value in use. 23 It is the fair market value of the subject property on the valuation date.24 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.25

 

Value was concluded by Complainant’s appraiser utilizing the Standard For Valuation.26

Investigation by Hearing Officer

In order to investigate appeals filed with the Commission, 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.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.27 The Hearing Officer during the evidentiary hearing made inquiry of Complainant’s witnesses.The Hearing Officer also made inquiry of the Assessor relative to the property record card of the subject property and instructed that he would be receiving a copy of the card as Commission Exhibit 1 in the appeal.

Weight to be Given Evidence

The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled.The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide.28

 

The Hearing Officer as the trier of fact may consider the testimony of an expert witness and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances.The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert’s testimony and accept it in part or reject it in part.<29

Upon review, consideration and analysis of the evidence in this appeal, the Hearing Officer finds no reasonable basis upon which he could or should not give full probative weight to the conclusion of value determine by Mr. Kirby in his appraisal and testimony.

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. 30 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 31 Mr. Kirby considered the three recognized approaches to value and concluding on the development of the sales comparison and income approaches as the soundest methodologies for the appraisal problem. 32Due to the age of the subject improvements, the Hearing Officer concurs in the appraiser’s decision to not develop the cost approach.The Hearing Officer furthermore is not persuaded that an investment purchaser or a purchaser who would be an owner occupier of the property would look to the cost approach to make a determination as to the purchase price.Therefore, the utilization of the sales and income approaches were appropriate given the facts concerning the property as it existed as of 1/1/13.

Opinion Testimony by Experts

If specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert on that subject, by knowledge, skill, experience, training, or education, may testify thereto.

The facts or data upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing and must be of a type reasonably relied upon by experts in the field in forming opinions or inferences upon the subject and must be otherwise reliable, the facts or data need not be admissible in evidence.33

The record established that Mr. Kirby possessed the knowledge, sill, experience, training and education to appraise the subject property and to render an opinion of value for the property as of 1/1/13.  34 The data upon which the appraiser based his opinion were of a type reasonably relied upon by experts in real estate appraisal to arrive at a conclusion of value.No evidence was presented to draw into question the reliability of the underlying data utilized by Mr. Kirby.The Hearing Officer recognizes and concludes that the data was reliable for the development of the appraisal and the conclusion of value.

Complainant Proves Value

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, 2013. 35There 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.”36A valuation which does not reflect the fair market value (true value in money) of the property under appeal is an unlawful, unfair and improper assessment.

The Kirby appraiser met the standard of substantial and persuasive evidence to establish rebut the presumption of correct assessment and establish the fair market value of Complainant’s property.There was no contrary evidence which brought the conclusion of value under two recognized approaches to valuation of real property into question in the mind of the Hearing Officer.Complainant’s appraiser, relying on both the income and sales comparison approaches concluded the fair market value of the subject property, including excess a land to be $1,200,000.

The appraiser had concluded a value for the excess land (20.3 acres) to be $103,000 or $5,074 per acre.The Assessor assessed 21.5 acres as agricultural land and this assessment was not actually part of the Complainant’s appeal.Therefore, the fair market value of the 21.5 acres must be backed out of the Kirby value of $1,200,000 and then the agricultural productive land value must be added back to arrive at the total true value in money for the 54.3 acres and improvements of the subject property.The fair market value of the 21.5 acres equates to $109,090. 37 Subtracting the agricultural land value ($109,090) from the concluded total value ($1,200,000) yields a value for the 32.8 acres of land with the commercial improvements of $1,090,910.To this value must be added back the agricultural productive land value as set by the assessor of $13,220.This results in a total true value in money for Complainant’s property for purposes of assessment as of 1/1/13 of $1,104,130.

The assessment made by the Board in sustaining the Assessor’s value was rebutted.The value established based on the Kirby appraisal with the adjustment to account for the agricultural land value of $1,104,130 is set as the true value in money for Complainant’s property.

ORDER

The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Adair County for the subject tax day is SET ASIDE.

The assessed value for the subject property for tax years 2013 and 2014 is set at $350,680 ($349,090 – commercial; $1,590 – agricultural).

Application for Review

A party may file with the Commission 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, MO65102-0146, 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 application for review is based will result in summary denial.

Disputed Taxes

The Collector of Adair 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, 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 April 25, 2014.

STATE TAX COMMISSION OF MISSOURI

 W. B. Tichenor

Senior Hearing Officer