Cooper Bussman v. Zimmerman (SLCO)

March 6th, 2013

State Tax Commission of Missouri




Complainant, )


v. ) Appeal No. 09-12805 and 09-12808





Respondent. )






Decision of the St. Louis County Board of Equalization reducing 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 to establish the true value in money for the subject property as of January 1, 2009.

True value in money for the subject property for tax years 2009 and 2010 is set at $7,400,000, commercial assessed value of $2,368,000.

Complainant appeared by Counsel Thomas Rynard, Blitz, Bardgett & Deutsch, L.C., Jefferson City, Missouri. Respondent appeared by Associate County Counselor, Carl Becker.

Case heard and decided by Hearing Officer Maureen Monaghan.


Complainant appeals, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization, which reduced the valuation of the subject property. The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2009. The Hearing Officer, having considered all of the competent evidence upon the whole record and the Briefs of the parties, enters the following Decision and Order.


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

2. Evidentiary Hearing. The Evidentiary Hearing was held on September 12, 2012, in St. Louis County, Clayton, Missouri. Transcript was filed with the Commission on

November 28, 2012, and transmitted to respective Counsels on said date.

3. Submission of Briefs – Valuation Evidence. Complainant’s Brief on Valuation Evidence was received by the Commission on January 4, 2013. Respondent’s Response was received by the Commission on February 8, 2013. Complainant’s Reply was received by the Commission on February 27, 2013.

4. Subject Property. The subject property is identified by locator number 23U620122 and 23U340435. The property is located at 114 and 140 Old State Rd, Ellisville, Missouri. The property consists of a 40.12 acre tract improved by a 245,000 square foot, one story building of office, manufacturing, warehouse and distribution space. The Complainant occupies the entire building. A water main break occurred sometime in December 2010 and the repairs were made in 2011. The property was inspected by the appraisers after the damage was remediated.

5. Assessment. The Assessor appraised the property at $11,698,000, a commercial assessed value of $3,743,360. The Board reduced the appraised value to $9,882,900, a commercial assessed value of $3,162,530.

6. Complainant’s Evidence. Complainant submitted the following exhibits:




Qualifications – Douglas A. Zink, Appraiser[1]


Summary Appraisal Report – Douglas A. Zink


Written Direct Testimony – Douglas A. Zink


The Exhibits were received into evidence.

Complainant’s evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board.

7. Respondent’s Evidence. Respondent submitted the following Exhibits:




Appraisal Report – John Kiene

Exhibit 1-1 Corrections to Report


Written Direct Testimony – John Kiene


Complainant filed objections to Exhibits 1 and 2. Hearing Officer overruled the objections by written order dated April 5, 2012, which is incorporated by reference into the transcript.

Exhibit 1-1 was offered and admitted into evidence at the time of the hearing. The appraiser made corrections to his report including the correction of square footage which impacted the analysis and conclusion of value. The resulting value was $9,200,000.

8. The true value of the subject property on January 1, 2009, was $7,400,000.



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.[2]

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.[3] By statute real and tangible personal property is assessed at set percentages of true value in money.[4] The constitutional mandate is to find the true value in money for the property under appeal.

Presumption In Appeals

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[5] 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.[6]

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.[7] True value in money is defined in terms of value in exchange and not value in use.[8] It is the fair market value of the subject property on the valuation date.[9] 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.[10]


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.[11]

In his brief, counsel for the Complainant argues that the appraiser for the Assessor is not credible as his adjustments are based upon the work of his office and the appraiser cannot fully explain them. Counsel faults the appraiser for “blindly accepting what someone else had done.” However, that is exactly what Complainant’s counsel asks of the Hearing Officer. For example, the Complainant’s appraiser made adjustments to the comparable in the sales approach, for which counsel argues are based upon data from the market and extensive experience of the appraiser. However, there is nothing in the appraisal to support the adjustments made by the appraiser other than a chart setting out the sale prices and a percentage adjustment made by the appraiser. The Hearing Officer therefore must “blindly [accept] what someone else had done.”

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.[12]

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.[13] 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.[14]

Cost Approach Not Applicable

For this appraisal problem, the cost approach is not appropriate due to the age, design of the subject and location. Buyers for the subject property would not rely on the cost approach to determine a purchase price.

Sales Comparison Approach Applicable

The development of the sales comparison approach was appropriate for the present appraisal problem. The market provided sufficient data upon which the appraiser could perform this approach to value. Primary weight was properly given to this approach in the appraisers final analysis.

The Complainant’s appraiser used six comparable sales with transaction dates from June 2006 to August 2008. Respondent’s appraiser used four sales with transaction dates from March 2008 to August 2008. The appraisers used three of the same properties in their approach. Both appraisers made downward adjustments to the sales price of the comparables. The Complainant’s appraiser made time adjustments of -15 to -10% for sales occurring from 4 to 9 months prior to the valuation date and then other adjustments ranging from -5 to -15%. The resulting value per square foot was $28.10 to $35.85 for the three properties; a range of values for all the comparables was $24.78 to $35.85. The appraiser rounded those values to $25 and $35 to arrive at a conclusion of $30.20 per square foot. The resulting value was $7,400,000.

The Assessor’s appraiser also made downward adjustments to the three comparable properties. He made time adjustments of -1.8% to -5.4% and then additional adjusts of -3 to

-13% resulting in a range from $34.58 to $38.19. The appraiser averaged the comparables for a per square foot value. The resulting value was $10,000,000.

Income Capitalization Approach Applicable

Both appraisers developed an income approach. The value concluded provided support for the conclusion of value derived under the sales approach.

The Complainant’s appraiser used rent comparables from 2006 to 2008. The comparables differed from the subject in that the appraiser reviewed warehouse distribution comparables as light manufacturing properties in the area were owner-occupied. The appraiser calculated a market rent on a triple net basis and concluded on $3.50 per square foot. The appraiser also included expense reimbursements in the potential gross income calculations. The appraiser used comparables to determine an appropriate amount for operating expenses. The appraiser also used sales, or market, to calculate a capitalization rate as well as looked to published investor surveys and information from market participants. The appraiser made adjustments to his calculations prior to hearing resulting in an increase of value calculated from $7,450,000 to $7,870,000.

The Respondent’s appraiser used rent comparables from 2004 to 2006. His rents were reported on a gross rent basis. The appraiser, upon cross-examination, acknowledged that these types of properties were typically rented on a triple net basis. The appraiser did not adjust his rents for triple net or for size of the improvement. The failure to make adjustments resulted in a rent that was higher than market. The appraiser used the County’s mass appraisal model for an expense calculation. The appraiser also used a band of investment method for calculating a capitalization rate. The Respondent made some adjustments to his approach prior to hearing resulting in a reduction of value from $10,000,000 to $9,200,000.

The Complainant’s appraiser’s income approach is more persuasive as the appraiser looked to, and provided, market information and source data for his calculations. The data used by the Complainant’s appraiser was more reflective of the subject and effective date of the appraisal. The Complainant’s income approach supports the determination of value in the Complainant’s sales comparison approach to value.


The assessed valuation for the subject property as determined by the Board of Equalization for St. Louis County for the subject tax day is SET ASIDE.

The assessed value for the subject property for tax years 2009 and 2010 is set at $2,368,000.

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. 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. [15]

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 139.031.8, 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 March 6, 2013.



Maureen Monaghan

Hearing Officer

Certificate of Service


I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 6th day of March, 2013, to: Thomas Rynard, 308 E. High Street, Suite 301, Jefferson City, MO 65101, Attorney for Complainant; Carl Becker, Associate County Counselor, Attorney for Respondent, 41 South Central Avenue, Clayton, MO 63105; Jake Zimmerman, Assessor, 41 South Central Avenue, Clayton, MO 63105; Eugene Leung, Acting Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.


Barbara Heller

Legal Coordinator


Contact Information for State Tax Commission:

Missouri State Tax Commission

301 W. High Street, Room 840

P.O. Box 146

Jefferson City, MO 65102-0146


573-751-1341 Fax

[1] Missouri State Certified General Real Estate Appraiser


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


[3] Article X, Sections 4(a) and 4(b), Mo. Const. of 1945


[4] Section 137.115.5, RSMo


[5] 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)


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


[7] 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).


[8] Daly v. P. D. George Company, et al, 77 S.W.3d 645, 649 (Mo. App E.D. 2002), citing, Equitable Life Assurance Society v. STC, 852 S.W.2d 376, 380 (Mo. App. 1993); citing, Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798, 801-803 (Mo. 1973).


[9] Hermel, supra.


[10] 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.


[11] 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).


[12] St. Louis County v. Boatmen’s Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).


[13] 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).


[14] 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).


[15] Section 138.432, RSMo.