Crown Diversified Industries v. Jake Zimmerman, Assessor St Louis County

February 9th, 2016

State Tax Commission of Missouri


Complainant, )  
v. ) Appeal No. 13-13051
Respondent. )  






Decision of the County Board of Equalization sustaining the assessment made by the Assessor is ASET ASIDE. Complainant presented substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization. True value in money for the subject property for tax years 2013 and 2014 is set at $3,725,000, commercial assessed value of $1,192,000.

Complainant appeared by counsel Richard Dvorak.

Respondent appeared by counsel Ed Corrigan

Case heard and decided by Hearing Officer Maureen Monaghan.


            Complainant appeals, on the grounds of overvaluation and discrimination, the decision of the St. Louis County Board of Equalization, which reduced the valuation of the subject property.  The Complainant abandoned their claim of discrimination.  The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2013.  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 and improvement to the property. Section 137.115.1 RSMo


The Hearing Officer, having considered all of the competent evidence upon the whole record, 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 parties waived Evidentiary Hearing.
  3. Identification of Subject Property. The subject property is identified by map parcel number 11N420133.  It is further identified as 12402-12410 St. Charles Rock Road, St. Louis County, Missouri.
  4. Description of Subject Property. The subject property consists of 8.23 acres of land improved by a multi-tenant retail strip center with 80,160 sf of gross leasable area.  The property was constructed in 1988 as a single-tenant property.  It is currently configured for three tenants.  Best Buy occupies 46,529 sf.  Dollar Tree occupies 12,000.  The remaining space is vacant.  The vacancy is likely due to the fact the only entrance to the building is through a garden center entrance once used by Builders Square, the original occupant.
  5. Assessment. The Assessor appraised the property at $5,129,000, commercial assessed value of $1,641,280.  The Board of Equalization reduced the value to $5,000,000, a commercial assessed value of $1,600,000.
  6. Complainant’s Evidence. The Complainant submitted Exhibit A (Appraisal Report) and Exhibit B (Written Direct Testimony of certified Appraiser Troy Smith).  In Appeal 09-10369, the State Tax Commission found the value of the property as of January 1, 2009 to be $2,850,000.  The appraiser developed the sales comparison approach and the income approach to value, relying primarily on the income approach.  The appraiser concluded an opinion of value of $3,725,000.
  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.  Section 137.115.1, RSMo. 
  8. Respondent’s Evidence. Respondent submitted Exhibit 1(Qualifications of Bo Frumson), Exhibit 2 (Appraisal Review Report), and Exhibit 3 (Written Direct Testimony).  The evidence did not present evidence of value.  The evidence goes to the weight to be given to Complainant’s evidence.  Respondent’s review appraisal made some valid and pointed criticism and raised issues of less concern. Respondent’s witness expressed an opinion of credibility of the Complainant’s expert witness and such shall be disregarded.
  9. Presumption of Correct Assessment Rebutted. Complainant’s evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board.



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.  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 and tangible personal property are assessed at set percentages of true value in money. Section 137.115.5, RSMo – residential property at 19% of true value in money; commercial property at 32% of true value in money and agricultural property at 12% of true value in money.

Presumption In Appeal

            There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.  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). 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. Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. See, Cupples-Hesse, supra.  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. Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).

Upon presentation of the Complainant’s evidence (Ex.A) the presumption in this appeal disappeared. The submission of the appraisal report, performed by a state certified real estate appraiser, established the Board’s value was in error.  The appraisal established what the fair market value that should have been placed on the property.   Evidence was presented critiquing the appraisal; however, no evidence was presented that rebutted the conclusion of value in Complainants’ appraisal.

Complainants’ Burden of Proof


In order to prevail, Complainants 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. Hermel, supra. 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.” 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).  A 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.

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. 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).  True value in money is defined in terms of value in exchange and not value in use. 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).   It is the fair market value of the subject property on the valuation date. Hermel, supra. 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.


  1. Both parties are well informed and well advised, and both acting in what they consider their own best interests.


  1. A reasonable time is allowed for exposure in the open market.


  1. Payment is made in cash or its equivalent.


  1. Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.


  1. 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. 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.


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, at 615 (Mo. App. W.D. 2000); Hermel, supra; 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. Div. 2 1974).

The Complainant presented the testimony and report of a general certified appraiser.  The appraiser valued the subject property using the sales comparison approach and the income approach.  The Respondent did not present evidence of value of the property.  The Respondent’s exhibit provides a critique of the Complainant’s appraiser.  Any testimony or commentary as to the credibility of Complainant’s witness was disregarded.  Only facts were considered.

The Complainant’s appraiser relied upon the income approach to value as a buyer of this property would rely on this information in the market place. The appraiser reviewed the actual leases for the property.  The appraiser also reviewed nine market rents.  Market rents ranged from $6 to $10.84 per square foot and the appraiser used $8 for the two occupied spaces.  As to the vacant space, the appraiser used a rate of $2.00 per square foot as market rent for storage. The appraiser utilized market information and surveys to estimate expenses and a capitalization rate.  The appraiser selected a 9.34% overall cap rate.  The resulting indication of value was $3,725,000.  The appraiser developed the sales comparison approach as a cross check to the income approach.

The Respondent did not present evidence of value. The review was a desk review.  The witness made no inspection of the property, made no independent valuation of the property and did not investigate the market.  The reviewer critiques the appraisal report.  In this appeal, the reviewers critique includes the functionality of the subject property and the approaches to value.

The reviewer is of a different opinion regarding the underlying lease and the options associated with the lease.  The Complainant owns the land and a trust owns the improvements.  The initial terms of the ground lease have expired; the first option has been exercised.  There are two five year options remaining.  The improvements revert to the owner at the expiration of the lease.  The appraiser states that a buyer may have concern that an upcoming option may not be exercised.  It is the reviewer’s opinion that it should not negatively impact the value.

The reviewer argues that the building has no design functionality issues because two businesses have entered into leases for the space. First, two businesses do not make a market.  Second, the reviewer does not address the space that has remained vacant due to the layout and will need work such as a new entrance, canopy, door, demolition of partitions, etc.  Given the history and the layout of the property, which was observed by the appraiser and not reviewer, the functionality of the subject property is suspect and the appraiser’s opinion is more persuasive.

The review appraiser criticized the Complainant’s appraiser’s income and sales comparison approach. The reviewer criticized the appraiser’s selection of properties in the sale approach.  The reviewer did not provide documentation regarding the sales or the appropriate adjustments on a sales comparison grid.  The Complainant’s appraiser states in his sales comparison approach that this approach is less reliable under these circumstances and used this approach not to conclude an opinion of value but as a cross check to the income approach.

The reviewer also critiqued the income approach. The reviewer noted that the appraiser failed to present market information as to the adjustments made to his rental comparisons and failed to set forth the explanation for the differential from the actual income and expenses of the property and the income and expenses used in the approach to value.  The selection of a cap rate was also critiqued.  The appraiser selected a 9.34% overall cap rate.  The sales indicate a range of cap rates of 6-10.5% with a median of 8%.  The reviewer presented no information to support his allegations.

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization. The Complainant has the duty to provide substantial and persuasive evidence.  The Complainant met its burden through the presentation of a witness with 24 years of appraisal experience in sixteen states regarding a variety of commercial properties including retail spaces.  The expert is a Certified General Real Property Appraiser in the State of Missouri as well as Kansas, Texas, Illinois, Iowa, Oklahoma, Colorado, Georgia, Indiana, Florida, Virginia and New Mexico. The Respondent’s witness did not inspect the property or provide an opinion of value to the subject property.  The Respondent’s evidence did not provide substantial and persuasive evidence as to value or provide sufficient evidence to refute the findings presented by the expert witness of the Complainant.


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

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


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 this 9th day of February, 2016.




Maureen Monaghan

Hearing Officer


Certificate of Service


I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 9th day of February, 2016, to: Complainants(s) counsel and/or Complainant, the county Assessor and/or Counsel for Respondent and county Collector.


Jacklyn Wood

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