STATE TAX COMMISSION OF MISSOURI
|CHESTERFIELD VILLAGE TOWNHOMES,||)|
|v.||)||Appeal No. 17-11005 thru|
|JAKE ZIMMERMAN, ASSESSOR||)|
|ST. LOUIS COUNTY, MISSOURI,||)|
DECISION AND ORDER
The assessment made by the Board of Equalization of St. Louis County (BOE) is AFFIRMED. Evidence was not substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE.
Complainant Chesterfield Village Townhomes (Complainant) appeared by Counsel Cathy Steele.
Respondent Jake Zimmerman, Assessor, St. Louis County, Missouri, (Respondent) appeared by Counsel Steven Robson.
Case heard and decided by Chief Counsel Maureen Monaghan (Hearing Officer).
Complainant appealed on the ground of overvaluation. Respondent set the true value in money (TVM) of each subject property, as residential property. The BOE sustained the valuations. The value as of January 1 of the odd numbered year remains the value as of January 1 of the following even numbered year unless there is new construction or improvement to the property. Section 137.115.1 RSMo The State Tax Commission (STC) takes this appeal to determine the true value in money for the subject property as the property existed on January 1, 2017, under the economic conditions as they existed on January 1, 2017.
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.
2. Evidentiary Hearing. The issue of overvaluation was presented at an evidentiary hearing on July 19, 2018, at the St. Louis County Government Administration Building, 41 South Central Avenue, Clayton, Missouri. The parties submitted post-hearing briefs on or before September 30, 2018.
3. Identification of Subject Property. The properties are units within a residential condominium development of Chesterfield Village Townhomes. They are identified as:
APPEAL # LOCATOR # ADDRESS
17-11005 18S530272 723 TIMBERVALLEY CT, UNIT B
17-11006 18S530326 702 TIMBERVALLEY CT, UNIT A
17-11007 18S530337 706 TIMBERVALLEY CT, UNIT B
17-11008 18S530348 710 TIMBERVALLEY CT, UNIT C
17-11009 18S530360 720 TIMBERVALLEY CT, UNIT A
17-11010 18S530371 724 TIMBERVALLEY CT, UNIT B
17-11011 18S530382 728 TIMBERVALLEY CT, UNIT C
17-11012 18S530414 738 TIMBERVALLEY CT, UNIT B
17-11013 18S530425 742 TIMBERVALLEY CT, UNIT C
17-11014 18S530447 750 TIMBERVALLEY CT, UNIT E
17-11015 18S530470 764 TIMBERVALLEY CT, UNIT B
17-11016 18S530481 768 TIMBERVALLEY CT, UNIT C
17-11017 18S530557 15664 FERNCREEK DR, UNIT B
17-11018 18S530568 15670 FERNCREEK DR, UNIT C
17-11019 18S530591 15682 FERNCREEK DR, UNIT F
17-11020 18S530601 15652 FERNCREEK DR, UNIT A
17-11021 18S530612 15654 FERNCREEK DR, UNIT B
17-11022 18S530645 15628 FERNCREEK DR, UNIT A
17-11023 18S530667 15636 FERNCREEK DR, UNIT C
17-11024 18S530678 15640 FERNCREEK DR, UNIT D
17-11025 18S530689 15644 FERNCREEK DR, UNIT E
17-11026 18S530690 15648 FERNCREEK DR, UNIT F
17-11027 18S530700 15610 FERNCREEK DR, UNIT A
17-11028 18S530711 15612 FERNCREEK DR, UNIT B
17-11029 18S530722 15616 FERNCREEK DR, UNIT C
17-11030 18S530733 15620 FERNCREEK DR, UNIT D
17-11031 18S530744 15624 FERNCREEK DR, UNIT E
17-11032 18S530755 15626 FERNCREEK DR, UNIT F
17-11033 18S530766 15602 FERNCREEK DR, UNIT A
17-11034 18S530788 15606 FERNCREEK DR, UNIT C
17-11035 18S530810 817 FOREST TRACE DR, UNIT B
17-11036 18S530832 809 FOREST TRACE DR, UNIT D
17-11037 18S530843 805 FOREST TRACE DR, UNIT E
17-11038 18S530865 15691 FERNCREEK DR, UNIT A
17-11039 18S530876 15687 FERNCREEK DR, UNIT B
17-11040 18S530887 15683 FERNCREEK DR, UNIT C
17-11041 18S530898 15679 FERNCREEK DR, UNIT D
17-11042 18S530911 15671 FERNCREEK DR, UNIT F
17-11043 18S530920 15667 FERNCREEK DR, UNIT A
17-11044 18S530942 15659 FERNCREEK DR, UNIT C
17-11045 18S530953 15655 FERNCREEK DR, UNIT D
17-11046 18S530964 15651 FERNCREEK DR, UNIT E
17-11047 18S530975 15647 FERNCREEK DR, UNIT F
17-11048 18S530986 15643 FERNCREEK DR, UNIT A
17-11049 18S530997 15639 FERNCREEK DR, UNIT B
17-11050 18S531020 15627 FERNCREEK DR, UNIT E
17-11051 18S531031 15623 FERNCREEK DR, UNIT F
17-11052 18S531053 15619 FERNCREEK DR, UNIT B
17-11053 18S531097 15605 FERNCREEK DR, UNIT B
17-11054 18S531107 15603 FERNFREEK DR, UNIT C
17-11055 18S531129 739 FOREST TRACE DR, UNIT A
17-11056 18S531130 735 FOREST TRACE DR, UNIT B
17-11057 18S531141 731 FOREST TRACE DR, UNIT C
17-11058 18S531152 727 FOREST TRACE DR, UNIT D
17-11059 18S531163 724 FOREST TRACE DR, UNIT A
17-11060 18S531174 728 FOREST TRACE DR, UNIT B
17-11061 18S531185 732 FOREST TRACE DR, UNIT C
17-11062 18S531196 736 FOREST TRACE DR, UNIT D
17-11063 18S531206 740 FOREST TRACE DR, UNIT E
17-11064 18S531217 744 FOREST TRACE DR, UNIT F
17-11065 18S531228 723 FOREST TRACE DR, UNIT A
17-11066 18S531239 719 FOREST TRACE DR, UNIT B
17-11067 18S531240 715 FOREST TRACE DR, UNIT C
17-11068 18S531251 711 FOREST TRACE DR, UNIT D
17-11069 18S531273 703 FOREST TRACE DR, UNIT F
17-11070 18S531284 700 FINCH CT, UNIT A
17-11071 18S531295 704 FINCH CT, UNIT B
17-11072 18S531327 718 FINCH CT, UNIT A
17-11073 18S531338 722 FINCH CT, UNIT B
17-11074 18S531349 726 FINCH CT, UNIT C
17-11075 18S531350 730 FINCH CT, UNIT D
17-11076 18S531372 738 FINCH CT, UNIT F
17-11077 18S531383 742 FINCH CT, UNIT A
17-11078 18S531394 746 FINCH CT, UNIT B
17-11079 18S531415 754 FINCH CT, UNIT D
17-11080 18S531437 749 FINCH CT, UNIT B
17-11081 18S531448 745 FINCH CT, UNIT C
17-11082 18S531460 737 FINCH CT, UNIT A
17-11083 18S531471 733 FINCH CT, UNIT B
17-11084 18S531482 729 FINCH CT, UNIT C
17-11085 18S531503 721 FINCH CT, UNIT A
17-11086 18S531514 717 FINCH CT, UNIT B
17-11087 18S531525 713 FINCH CT, UNIT C
17-11088 18S531536 709 FINCH CT, UNIT D
17-11089 18S531547 705 FINCH CT, UNIT E
17-11090 18S531570 15684 QUAIL MEADOWS DR, UNIT B
17-11091 18S531581 15688 QUAIL MEADOWS DR, UNIT C
17-11092 18S531592 15692 QUAIL MEADOWS DR, UNIT D
17-11093 18S531646 857 FOREST TRACE DR, UNIT A
17-11094 18S531657 853 FOREST TRACE DR, UNIT B
17-11095 18S531668 849 FOREST TRACE DR, UNIT C
17-11096 18S531680 873 FOREST TRACE DR, UNIT A
17-11097 18S531734 911 QUAIL MEADOWS CT, UNIT B
17-11098 18S531745 907 QUAIL MEADOWS CT, UNIT C
17-11099 18S531910 15628 QUAIL MEADOWS DR, UNIT D
17-11100 18S531921 15632 QUAIL MEADOWS DR, UNIT E
17-11101 18S531954 15651 QUAIL MEADOWS DR, UNIT B
17-11102 18S531965 15647 QUAIL MEADOWS DR, UNIT C
17-11103 18S531976 15643 QUAIL MEADOWS DR, UNIT D
17-11104 18S531998 15635 QUAIL MEADOWS DR, UNIT F
17-11105 18S532009 848 FOREST TRACE DR, UNIT A
17-11106 18S532021 856 FOREST TRACE DR, UNIT C
17-11107 18S532032 860 FOREST TRACE DR, UNIT D
17-11108 18S532043 864 FOREST TRACE DR, UNIT E
17-11109 18S532054 868 FOREST TRACE DR, UNIT F
17-11110 18S532065 832 FOREST TRACE DR, UNIT A
17-11111 18S532076 836 FOREST TRACE DR, UNIT B
17-11112 18S532087 840 FOREST TRACE DR, UNIT C
17-11113 18S532098 844 FOREST TRACE DR, UNIT D
17-11114 18S532119 15627 QUAIL MEADOWS DR, UNIT B
17-11115 18S532120 15623 QUAIL MEADOWS DR, UNIT C
17-11116 18S532153 15611 QUAIL MEADOWS DR, UNIT B
17-11117 18S532175 15603 QUAIL MEADOWS DR, UNIT D
4. Description of Subject Property. The properties are condominiums located in a 192 unit development called Chesterfield Village Townhomes. The subject appeals involve 113 of the units. The properties were constructed in 1987 and renovated in 2005; six of the units were more recently updated. There are four different configurations for the condominiums. The units are two to three bedroom floor plans with a basement, walkout or garage.
In October 2015, the subject properties were purchased in a single transaction for $14,900,000. The subject properties operate as leased residential housing.
5. Assessment. Respondent set a TMV on the subject property and classified the properties as residential.
6. Board of Equalization. Complainant appealed to the BOE. The BOE determined the TVM for the properties as follows:
Appeal No. Parcel No. BOE’s TVM
17-11005 18S530272 $ 147,400
17-11006 18S530326 $ 138,900
17-11007 18S530337 $ 148,300
17-11008 18S530348 $ 148,300
17-11009 18S530360 $ 138,900
17-11010 18S530371 $ 148,300
17-11011 18S530382 $ 148,300
17-11012 18S530414 $ 148,300
17-11013 18S530425 $ 148,300
17-11014 18S530447 $ 148,300
17-11015 18S530470 $ 148,300
17-11016 18S530481 $ 148,300
17-11017 18S530557 $ 155,500
17-11018 18S530568 $ 155,500
17-11019 18S530591 $ 148,300
17-11020 18S530601 $ 139,100
17-11021 18S530612 $ 148,300
17-11022 18S530645 $ 148,300
17-11023 18S530667 $ 155,500
17-11024 18S530678 $ 155,500
17-11025 18S530689 $ 155,500
17-11026 18S530690 $ 148,300
17-11027 18S530700 $ 148,300
17-11028 18S530711 $ 155,500
17-11029 18S530722 $ 155,500
17-11030 18S530733 $ 155,500
17-11031 18S530744 $ 155,500
17-11032 18S530755 $ 148,300
17-11033 18S530766 $ 139,100
17-11034 18S530788 $ 123,700
17-11035 18S530810 $ 147,400
17-11036 18S530832 $ 147,400
17-11037 18S530843 $ 162,000
17-11038 18S530865 $ 123,700
17-11039 18S530876 $ 156,600
17-11040 18S530887 $ 156,600
17-11041 18S530898 $ 156,600
17-11042 18S530911 $ 123,700
17-11043 18S530920 $ 123,700
17-11044 18S530942 $ 156,600
17-11045 18S530953 $ 156,600
17-11046 18S530964 $ 156,600
17-11047 18S530975 $ 123,700
17-11048 18S530986 $ 148,300
17-11049 18S530997 $ 156,600
17-11050 18S531020 $ 156,600
17-11051 18S531031 $ 148,300
17-11052 18S531053 $ 123,700
17-11053 18S531097 $ 123,700
17-11054 18S531107 $ 123,700
17-11055 18S531129 $ 139,100
17-11056 18S531130 $ 148,300
17-11057 18S531141 $ 148,300
17-11058 18S531152 $ 139,100
17-11059 18S531163 $ 123,700
17-11060 18S531174 $ 155,500
17-11061 18S531185 $ 155,500
17-11062 18S531196 $ 155,500
17-11063 18S531206 $ 155,500
17-11064 18S531217 $ 123,700
17-11065 18S531228 $ 136,400
17-11066 18S531239 $ 147,400
17-11067 18S531240 $ 147,400
17-11068 18S531251 $ 147,400
17-11069 18S531273 $ 136,400
17-11070 18S531284 $ 138,900
17-11071 18S531295 $ 123,700
17-11072 18S531327 $ 148,300
17-11073 18S531338 $ 156,600
17-11074 18S531349 $ 156,600
17-11075 18S531350 $ 156,600
17-11076 18S531372 $ 148,300
17-11077 18S531383 $ 139,100
17-11078 18S531394 $ 148,300
17-11079 18S531415 $ 152,500
17-11080 18S531437 $ 148,300
17-11081 18S531448 $ 148,300
17-11082 18S531460 $ 139,100
17-11083 18S531471 $ 123,700
17-11084 18S531482 $ 123,700
17-11085 18S531503 $ 148,300
17-11086 18S531514 $ 155,500
17-11087 18S531525 $ 155,500
17-11088 18S531536 $ 155,500
17-11089 18S531547 $ 155,500
17-11090 18S531570 $ 123,700
17-11091 18S531581 $ 123,700
17-11092 18S531592 $ 123,700
17-11093 18S531646 $ 123,700
17-11094 18S531657 $ 123,700
17-11095 18S531668 $ 123,700
17-11096 18S531680 $ 123,700
17-11097 18S531734 $ 123,700
17-11098 18S531745 $ 123,700
17-11099 18S531910 $ 147,400
17-11100 18S531921 $ 147,400
17-11101 18S531954 $ 147,400
17-11102 18S531965 $ 147,400
17-11103 18S531976 $ 147,400
17-11104 18S531998 $ 136,400
17-11105 18S532009 $ 123,700
17-11106 18S532021 $ 156,600
17-11107 18S532032 $ 156,600
17-11108 18S532043 $ 156,600
17-11109 18S532054 $ 123,700
17-11110 18S532065 $ 140,100
17-11111 18S532076 $ 148,300
17-11112 18S532087 $ 148,300
17-11113 18S532098 $ 139,100
17-11114 18S532119 $ 123,700
17-11115 18S532120 $ 123,700
17-11116 18S532153 $ 123,700
17-11117 18S532175 $ 123,700
Total $ 16,179,200
7. Complainant’s Evidence. Complainant offered the following evidence:
A Appraisal Report of Susan Meldrum
B Written Direct Testimony of Susan Meldrum
C No exhibit submitted
D Discounted Cash Flow Analysis
E Discounted Cash Flow Analysis
F Allocation of the Total Valuation for Each Parcel.
Complainant presented the testimony of Susan Meldrum (Meldrum). She is a certified General Real Estate Appraiser. She opined a TVM of $14,110,000 for all of the subject properties as of January 1, 2017.
Meldrum considered all three approaches to value and developed the sales comparison and income approaches due to the nature and age of the property. She opined that the highest and best use of the properties would be as their continued use as a site with 192 residential condominiums of which the subject consists of 113 rental units.
In developing the income approach, the appraiser reviewed the rental rates of the subject and in the market as well as the expenses. She estimated a net operating income (NOI) of $1,053,844. She developed a capitalization rate through sales and authoritative sources. She applied a loaded capitalization rate of 7.47% to the NOI for a resulting indication of value of $14,110,000.
Meldrum also developed the sales comparison approach. Meldrum reviewed sales of apartment complexes. The comparable properties sold for $19,000,000 to $51,000,000. The comparable sales ranged in size from 192 to 532 rental units with the average size of each unit ranging from 922 to 1,503 square feet. The units of comparable properties ranged from 1 bedroom/ 1 bath to 3 bedroom / 2.5 baths and square footage ranged from 695 to 2,270 square feet.
The appraiser made adjustments for location, number of units, size of units, amenities, and parking. The resulting indication of value was $14,240,000. Complainant allocated the valuation to each unit by determining the percentage of each parcel’s BOE value to the sum of the BOE’s valuations for all 113 subject properties ($16,179,200) and applying the resulting percentages to the unit valuation of $14,110,000.
8. Respondent’s Evidence. Respondent offered the following evidence:
1 Qualifications and Written Direct Testimony of Astrid Reichenbacher
2 Listings and Certificates of Value of Chesterfield Townhomes
3 Sales of Townhomes from 1/1/15 – 6/27/18
4 MARIS Listing of 852 Forest Trace #B
5 Plat Map of Subject
6 Ownership List of Chesterfield Village Townhomes
7 Written Direct Testimony of Sharon Kuelker
8 Qualifications of Sharon Kuelker
9 Appraisal Report of 15606 Ferncreek Dr
10 Appraisal Report of 723 Timbervalley Court
11 Appraisal Report of 720 Timbervalley Court
12 Appraisal Report of 15664 Ferncreek Dr Unit B
13 List of Subject Properties and Appraised Value
Respondent presented the testimony of Astrid Reichenbacher (Reichenbacher). Reichenbacher is a residential real estate appraiser for the Respondent. She has a realtor license. She testified that the complex has 192 condominium units; individuals own 79 of the condominiums and Complainant own 113 condominiums. She researched condominium sales since 2015. She located 24 sales of individual units since 2015 and 2 active listings. The sales occurred from February 2015 to June 2018. The sale prices ranged from $122,000 to $185,000.
Respondent offered the testimony and appraisal reports of Sharon Kuelker (Kuelker). Kuelker, a Residential Appraiser Senior, appraised four of the condominiums subject to the appeal. Kuelker reviewed the entire complex of 192 units. All of the units are townhouse style and are of four floor plans ranging in square footage from 868 square feet to 1370 square feet. She performed four appraisals to address the valuation of each of the floor plans.
Exhibit 9 is an appraisal of a two bedroom, one and one-half bath unit of 868 square feet that is subject of appeal number 17-11034. She utilized the sales comparison approach. She selected three sales in the same development as the subject properties and within .08 miles of the subject. The comparable properties sold between October 2015 and September 2017. The comparable properties were two bedroom condominiums with 1.5 baths. The properties sold for $132,000 to $140,000. Kuelker opined the TVM of the property subject to Appeal 17-11034 at $137,000. The appraisal was submitted to support the valuations of 28 of the subject properties.
The subject properties of the following appeals have the same configuration as that in Exhibit 9. The properties were all valued by the BOE at $123,700. Kuelker opined a TVM of $137,000. Respondent offered the appraisal to support the BOE’s TVM.
Appeal No. Parcel No.
Exhibit 10 is an appraisal of a two bedroom, two-and one-half bath unit of 1,212 square feet that is subject of Appeal Number 17-11005. Kuelker utilized the sales comparison approach. She selected three sales in the same development as the subject properties and within .19 miles of the subject. The comparable properties sold between August 2016 and December 2016. The comparable properties were two to three bedroom condominiums with two to two and one-half baths. The properties sold for $160,000 to $177,500. Kuelker opined the TVM of the property subject to Appeal 17-11005 at $169,000. The appraisal was submitted to support the valuations of 39 of the subject properties.
The subject properties of the following appeals have the same configuration as that in Exhibit 10. The properties were valued by the BOE between $147,400 and $162,000. Kuelker opined a TVM of $169,000 for Appeal 17-11005 and stated that it would be her opinion of value for all the following appealed properties. Respondent offered the appraisal to support the BOE’s TVM.
Appeal No. Parcel No.
Exhibit 11 is an appraisal of a two bedroom, two-bath unit of 1,125 square feet that is subject of Appeal Number 17-11009. Kuelker utilized the sales comparison approach. She selected three sales in the same development as the subject properties and within .11 miles of the subject. The comparable properties sold between August 2016 and October 2017. The comparable properties were two to three bedroom condominiums with two baths. The properties sold for $159,000 to $177,500. Kuelker opined the TVM of the property subject to Appeal 17-11009 at $165,000. The appraisal was submitted to support the valuations of 15 of the subject properties that had the same configuration as found in Exhibit 10.
The subject properties of the following appeals have the same configuration as that in Exhibit 11. The properties were valued by the BOE at a range of $136,400-$152,500. Kuelker opined a TVM of $165,000. Respondent offered the appraisal to support the BOE’s TVM.
Appeal No. Parcel No.
Exhibit 12 is an appraisal of a three bedroom, two-and one-half bath unit of 1,370 square feet that is subject of Appeal Number 17-11017. Kuelker utilized the sales comparison approach. She selected three sales in the same development as the subject properties and within .12 miles of the subject. The comparable properties sold between March 2016 and October 2017. The comparable properties were two to three bedroom condominiums with two to two and one-half baths. The properties sold for $159,000 to $170,000. Kuelker opined the TVM of the property subject to Appeal 17-11017 at $169,000. The appraisal was submitted to support the valuations of 31 of the subject properties.
The subject properties of the following appeals have the same configuration as that in Exhibit 12. The properties were valued by the BOE at a range of $155,500-$156,600. Kuelker opined a TVM of $169,000 for the property subject to appeal 17-11017. Respondent offered the appraisal to support the BOE’s TVM of Appeal 17-11017 and all like configurations.
Appeal No. Parcel No.
9. Presumption of Correct Assessment Not Rebutted. Evidence presented was not substantial and persuasive to rebut the presumption of correct assessment by the BOE.
CONCLUSIONS OF LAW AND DECISION
The Commission has jurisdiction to hear this appeal and correct any assessment, which is shown to be unlawful, unfair, arbitrary, or capricious, including the application of any abatement. 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. Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
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. Article X, Sections 4(a) and 4(b), Mo. Const. of 1945. The constitutional mandate is to find the true value in money for the property under appeal. By statute, real property and tangible personal property are assessed at set percentages of true value in money: residential property at 19%; commercial property at 32%; and agricultural property at 12%. Section 137.115.5 RSMo (2000) as amended.
Complainant’s Burden of Proof
To obtain a reduction in assessed valuation based upon an alleged overvaluation, the Complainant must prove the true value in money of the subject property on the subject tax day. Hermel, Inc., v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978). True value in money is defined as the price that the subject property would bring when offered for sale by one willing but not obligated to sell it and bought by one willing or desirous to purchase but not compelled to do so. Rinehart v. Bateman, 363 S.W.3d 357, 365 (Mo. App. W.D. 2012); Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008); Greene County v. Hermel, Inc., 511 S.W.2d 762, 771 (Mo. 1974). True value in money is defined in terms of value in exchange and not in terms of value in use. Stephen & Stephen Properties, Inc. v. State Tax Commission, 499 S.W.2d 798, 801-803 (Mo. 1973). In sum, true value in money is the fair market value of the subject property on the valuation date. Hermel, Inc., 564 S.W.2d at 897.
A presumption exists that the assessed value fixed by the BOE is correct. Rinehart, 363 S.W.3d at 367; Cohen, 251 S.W.3d at 348; Hermel, Inc., 564 S.W.2d at 895. “Substantial and persuasive controverting evidence is required to rebut the presumption, with the burden of proof resting on the taxpayer.” Cohen, 251 S.W.3d at 348. Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact. Cupples Hesse Corp., 329 S.W.2d at 702. The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief. Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975). See also, 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).
There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a STC appeal still bears the burden of proof. The taxpayer is the moving party seeking affirmative relief. Therefore, Complainant bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.” Westwood Partnership, 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. W.D. 1991).
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule, or method in determining true value in money and 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. St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).
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 deemed necessary when viewed in connection with all other circumstances. Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. W.D. 1991). The Hearing Officer, as the trier of fact, is not bound by the opinions of experts but may believe all or none of the expert’s testimony or accept it in part or reject it in part. Exchange Bank of Missouri v. Gerlt, 367 S.W.3d 132, 135-36 (Mo. App. W.D. 2012).
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. See, Nance v. STC, 18 S.W.3d 611, 615 (Mo. App. W.D. 2000); Hermel, Inc., 564 S.W.2d at 897; Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975). 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. 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. 1974).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005), citing St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977). “Each valuation approach is applied with reference to a specific use of the property—its highest and best use.” Snider, 156 S.W.3d at 346-47, citing Aspenhof Corp., 789 S.W.2d at 869. “The method used depends on several variables inherent in the highest and best use of the property in question.” Snider, 156 S.W.3d at 347. “Each method uses its own unique factors to calculate the property’s true value in money.” Id.
“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 348. “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.” Id. (quotation omitted). “This approach is most appropriate when there is an active market for the type of property at issue such that sufficient data [is] available to make a comparative analysis.” Id.
The income approach may be used to opine a value for a property. In the approach, the appraiser analyzes a property’s capacity to generate income. A buyer of income property is trading present dollars for the expectation of receiving future dollars. The method converts the property’s ability to generate income into an indication of value.
Unit of Comparison and Bulk Sales
Complainant’s appraiser developed the income approach to value. Meldrum found sufficient income and expense information on apartment complexes in the area to develop an opinion of value. The appraiser reviewed rental rates and other income information as well as expenses of such properties. Under the income approach, the appraiser opined a total valuation of all 113 units of $14,110,000.
Both parties’ appraisers developed the sales comparison approach; however, their opinion as to the unit of comparison affected their opinions of TVM. Complainant’s appraiser used apartment complexes to value the properties as a unit or “bulk sale” of the condominiums. Respondent valued the properties as individual units and used sales comparisons of single units in the same complex that sold during a relevant period of time.
Complainant’s appraiser opined a TVM under the sales comparison approach of $14,240,000. Complainant proffered a method of allocating the TVM of $14,240,000 to each of the 113 parcels. Respondent testified that the condominiums subject to appeal were of one of four types of configurations within the condominium development. Respondent valued each type of configuration. The valuations of the four configurations were $137,000, $165,000, $169,000 and $169,000. The opinion of value was offered by the Respondent in support of the BOE’s determination of TVM.
Both parties submitted briefs after the evidentiary hearing to support their valuation and unit of comparison. The parties set forth various prior decisions of the STC.
The following decisions were offered to support a unit or bulk sales comparison approach to value.
Behlmann Farms v Zimmerman, 2013 WL 4043972, involved a residential development consisting of vacant lots. The evidence established that the market and comparable properties were lots sold in multiples or bulk sales of lots in neighboring developments. In Vanderbilt DGR LP v. Eugene Zimmerman, 1993 WL 321553, the subject property was an apartment complex platted as a condominium development. The evidence in the appeal established that the property, although platted as a condominium development, was never intended to be a condominium development. The property was intended, developed and operated as an apartment complex. The highest and best use of the properties was as an apartment complex. All units were part of the apartment complex and subject to the appeal. No single unit within the subject development was owned individually. There was no evidence that any of the units would ever be marketed individually. The valuation of the property as a unit was appropriate in that case. The decisions were offered to support a unit or bulk sales comparison approach to value.
In contrast, Heritage Associates v. Zimmerman, 1990 WL 99929, the STC found the valuation of the individual units to be appropriate. The property in Heritage was a 210-condominium development. The appeal involved 126 of the units, which were owned by one owner and leased. The remaining 84 condominiums, which were not under appeal, sold as individual condominium units and were used as individual residential dwellings. The Complainant’s appraiser valued the 126 properties under appeal as an entire unit. The Respondent’s appraiser valued each condominium as a separate unit. The STC found the Respondent’s valuation appropriate and persuasive as the evidence established the subject properties were located within a development in which individually owned condominiums existed and that there was a market for the individual condominium units.
Complainant’s evidence was not substantial and persuasive. The subject properties are a portion of a development consisting of 192 condominiums. The subject properties consist of 113 units, which were purchased in October 2015 in a single transaction for $14,900,000. The remaining 79 condominiums are individually owned. Respondent’s appraisers presented evidence that the development has an active market for individual sales of condominiums.
The subject properties are similar to the properties under appeal in Heritage Associates. The properties were in a condominium development in which there were individually owned condominiums and sufficient sales of individually owned units to establish a market. The STC found the valuation of the condominiums as individual units appropriate as the evidence established sales of individual units within the same development.
From the evidence, it is reasonable to conclude that the subject properties can be sold individually, if Complainant, so chooses. Given that the development consists of both individually owned condominiums and bulk-owned, leased condominiums, which may be sold individually, the valuation of the condominiums as individual units was appropriate.
The TVM for the subject property as determined by the BOE is AFFIRMED
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, 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 application for review is based will result in summary denial. Section 138.432, RSMo
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 139.031.8, 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 October 23, 2018.
STATE TAX COMMISSION OF MISSOURI
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 23rd day of October, 2018, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.