STATE TAX COMMISSION OF MISSOURI
Appeal No. 19-20071
Parcel No. 4580-05-0160-0
|MICHAEL DAUPHIN, ASSESSOR,||)|
|CITY OF ST. LOUIS, MISSOURI||)|
DECISION AND ORDER
David Streubel (Complainant) appeals the City of St. Louis Board of Equalization’s (BOE) decision finding the fair market value of the subject property on January 1, 2019, was $780,300, with an assessed value of $148,260. Complainant claims the property is overvalued and proposes a value of $475,699.18. Complainant did not present substantial and persuasive evidence establishing overvaluation. The BOE’s decision is affirmed.
Complainant appeared pro se. Respondent appeared personally and was represented by attorney Deborah Deuster.
FINDINGS OF FACT
- Authority. Complainant timely filed a complaint for review of assessment.
- The Subject Property. The subject property is located at 4435 Westminster Place in the City of St. Louis, Missouri. The parcel/locator number is 4580-05-0160-0.
The subject property consists of a lot and a two and one-half story, single-family brick home with approximately 5,338 square feet of living area; five bedrooms; three and one-half baths; and a detached two-car garage. The lot has 50 feet of street frontage and extends approximately 144 feet back from the front lot line. Complainant purchased the subject property in 2013 for $708,687.50.
- Assessment. Respondent determined the fair market value of the subject property on January 1, 2019, was $780,300. Respondent assessed the subject property at the 19% statutory residential rate, yielding an assessed value of $148,260.
- Board of Equalization. The BOE determined the fair market value of the subject property on January 1, 2019, was $780,300, with an assessed value of $148,260.
- Complainant’s Evidence. Complainant submitted Exhibits A-F. Each exhibit was admitted into evidence.
Exhibit A is an “Owner’s Appraisal” of the subject property prepared by Complainant. Complainant has no education, training, or experience in real property appraisal or valuation.
Complainant’s proposed value of $475,669.18 is set forth in Exhibit A. Exhibit A is based on the comparable sales approach and utilizes recent sales of the adjacent properties at 4429 Westminster Place and 4441 Westminster Place. Exhibit A includes the following data:
|4429 Westminster||4441 Westminster|
|Gross Living Area||7121 sq. ft.||6129 sq. ft.|
Complainant produced no public data or independent documentation verifying the square footage of either comparable property. Based on Complainant’s unverified assertions regarding the square footage of the comparable properties, the average unadjusted price per square foot for the recent sales of 4429 and 4441 Westminster is $109.11. Complainant used $109.11 per square foot as the unadjusted baseline value for valuing the subject property.
Complainant discounted the subject property by $10.00 per square foot for “property condition” and by $10.00 per square foot for “market condition.” Complainant subtracted the cumulative $20.00 per square foot adjustment from the $109.11 unadjusted baseline value to conclude the subject property was worth $89.11 per square foot. Complainant multiplied $89.11 by the square footage of the subject property (5,338) to conclude the January 1, 2019, fair market value of the subject property was $475,669.18.
Complainant’s negative $10.00 per square foot adjustment for “property condition” is based on his assertion the comparable properties are in “far superior condition and retain their original architectural details.” Exhibit A, at 2, n.1. There is no other evidence documenting or showing the condition of the subject property relative to the comparable properties.
Complainant’s negative $10.00 per square foot adjustment for “market condition” is based on his assertion the “market condition in my market area has changed and improved since January 1, 2019, and the times of the comparable sales.” Exhibit A, at 2, n.2. The $10.00 per square foot adjustment for market condition represents a 9.2% negative adjustment from the $109.11 per square foot average sale price of 4429 and 4441 Westminster. Complainant provided no market-based data supporting a negative 9.2% adjustment to account for improved market conditions since January 1, 2019.
Complainant’s proposed value of $475,669.18 is 33% less than the 2013 purchase price of $708,687.50. Exhibit A shows the adjacent property at 4441 Westminster Place sold in 2010 for $699,000. Exhibit E, a certificate of value dated January 9, 2020, shows 4441 Westminster Place sold in January 2020 for $735,000. The sales history of 4441 Westminster Place is inconsistent with Complainant’s assertion the 2013 purchase price of the subject property is irrelevant due to deteriorating market conditions.
Complainant introduced Exhibit F during cross-examination of Respondent’s staff appraiser. Exhibit F is a document from the International Association of Assessing Officers (IAAO) explaining the qualifications for a Residential Evaluation Specialist (RES). Complainant’s detailed cross-examination established that neither Respondent’s staff appraiser nor Complainant have the education and training necessary for the RES designation.
- Respondent’s Evidence. Respondent submitted exhibits 1 and 2. Exhibit 1 is an appraisal report of the subject property prepared by Respondent’s staff real property appraiser. Exhibit 2 consists of printouts from Respondent’s website showing assessment data for the subject property.
Exhibit 1 utilizes the sales comparison approach to estimate the market value of the subject property from recent sales of three comparable properties. Like the subject property, all three comparable properties are two and one half story brick homes on Westminster Place. The comparable properties range from 4,784 to 5,185 square feet. Unlike Complainant’s Exhibit A, Respondent’s appraisal report makes market based adjustments accounting for differences between the comparable properties and the subject property. Exhibit 1 estimates the fair market value of the subject property as of January 1, 2019, was $809,200.
- Value. The true value in money of the subject property on January 1, 2019, was $780,300. The assessed value is $148,260.
CONCLUSIONS OF LAW
The Commission has authority 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. Mo. Const. art. X, sec. 14; section 138.430, RSMo 2000; section 138.431.
Residential real property is assessed at 19% of its “true value in money” as of January first of each odd-numbered year. Sections 137.115.1, 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 Missouri 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).
- 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. Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. 2003). To prove overvaluation, a taxpayer must rebut the BOE’s presumptively correct valuation and prove the “value that should have been placed on the property.” Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005). To rebut the BOE presumption and prevail, the taxpayer’s evidence must be both “substantial and persuasive.” 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 v. State Tax Comm’n, 722 S.W.2d 72, 77 (Mo. banc 1986) (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. 2002); see also White v. Dir. of Revenue, 321 S.W.3d 298, 305 (Mo. banc 2010) (noting the burden of persuasion is a “party’s duty to convince the fact-finder to view the facts in a way that favors that party”).
- Computer-Assisted Valuation
In pertinent part, section 137.115.1 provides:
In the event a valuation of subclass (1) real property within any county with a charter form of government, or within a city not within a county, is made by a computer, computer-assisted method or a computer program, the burden of proof, supported by clear, convincing and cogent evidence to sustain such valuation, shall be on the assessor at any hearing or appeal.
Section 137.115.1 does not relieve the taxpayer of his or her independent burden of rebutting the BOE presumption and proving the fair market value of the subject property. Nor does section 137.115.1 generally place the burden of proof on the assessor. Section 137.115.1 shifts the burden of proof to the assessor only if: (1) the valuation of residential property was “made by” a computer-assisted method; and (2) the assessor seeks to “sustain such valuation.” Even if Respondent’s valuation was computer-assisted, Respondent is not seeking to “sustain such valuation” because Respondent is seeking to affirm the BOE’s independent valuation. The burden shifting provision in section 137.115.1 does not apply.
“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 (Mo. banc 2005). 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. For this reason, the comparable sales approach is typically used to value residential property. “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.
The hearing officer is the finder of fact, and determines both the credibility and weight of the evidence. Kelly v. Missouri Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. 2015); Stone v. Missouri Dep’t of Health & Senior Servs., 350 S.W.3d 14, 20 (Mo. banc 2011) (noting that in a contested case, courts defer to administrative agency findings of fact); see also section 536.090 (requiring all decisions and orders in contested cases to include “findings of fact”). 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.
The hearing officer is not bound by any single formula, rule or method in determining the 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 to.” St. Louis Cty. v. State Tax Comm’n, 515 S.W.2d 446, 450 (Mo. 1974). “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. 2020).
In an STC hearing, Respondent “shall not advocate nor present evidence advocating a valuation higher than that value finally determined by the assessor or the value determined by the board of equalization, whichever is higher, for that assessment period.” Section 138.060.1. Therefore, when Respondent introduces “evidence indicating a higher value than the value finally determined by the assessor or the value determined by the board of equalization … such evidence will only be received for the purpose of sustaining the assessor’s or board’s valuation, and not for increasing the valuation of the property under appeal.” 12 CSR 30-3.075(1).
Respondent’s Exhibit 1 concludes the market value of the subject property is higher than the value determined by the Respondent or the BOE. Respondent, however, did not advocate a value higher than that determined by the BOE. Therefore, Exhibit 1 is admissible as evidence for sustaining the value assigned by the BOE. 12 CSR 30-3.075(1).
- Complainant Did Not Prove Overvaluation
Complainant relies primarily on Exhibit A to prove his overvaluation claim. Complainant’s evidence is not substantial and persuasive.
First, Complainant initially testified his valuation analysis, including Exhibit A, was based on his education, experience, and training. During cross-examination, Complainant conceded he has no education, experience, or training in real property appraisal or valuation. Complainant also conceded his knowledge of neighborhood real estate values is from social interaction with neighbors. Complainant’s equivocal testimony regarding his education, training, and experience undermines the persuasiveness of both Exhibit A and his testimony.
Second, unlike Respondent’s appraisal report, Exhibit A includes no market based adjustments for specific differences between the subject property and the comparable properties. Exhibit A does not account for differences in living area, lot frontage, or any other specific differences. Complainant conceded the negative $10.00 adjustment for “property condition” was not based on a paired sales analysis and that he did not know if an adjustment was needed for any single feature. Despite conceding a lack of knowledge of the primary market-based methodology for making adjustments accounting for differences between the subject property and comparable properties, Complainant testified his adjustments were nonetheless appropriate. This testimony is speculative and unpersuasive.
Finally, like the property condition adjustment, Complainant’s market condition adjustment is also speculative. The stated premise of Complainant’s “market condition” adjustment is “The market condition in my market area has changed and improved since January 1, 2019, and the times of the comparable sales.” Ex. A, at 2 n.2. Complainant, however, produced no sales data showing “improved” market conditions warranting the adjustment or justifying the amount of the adjustment. The lack of persuasive evidence regarding market conditions renders it impossible to reconcile Complainant’s assertions the market deteriorated significantly between 2013 and January 1, 2019, but “improved” thereafter.
Complainant did not produce substantial and persuasive evidence proving overvaluation. The fair market value of the subject property as of January 1, 2019, was $780,300.
CONCLUSION AND ORDER
The BOE decision is affirmed. The fair market value of the subject property as of January 1, 2019, was $780,300. The assessed value is $148,260.
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 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 of Missouri, 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.
The Collector of the City of St. Louis, 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 July 17th, 2020.
STATE TAX COMMISSION OF MISSOURI
Eric S. Peterson
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 17th day of July, 2020, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
 All statutory citations are to RSMo 2000, as amended.
 The St. Louis City BOE is a statutorily created entity independent of the assessor. See Section 138.140, et seq; see also Stocke v. Edwards, 244 S.W. 802, 805 (Mo. 1922) (noting the board of equalization is a “distinct and separate entity in the field of taxation”). The BOE is obligated to “adjust, correct, and equalize the valuations and assessments” within the City and “adjust and correct the assessment plat books or records accordingly.” Section 138.150.1. The BOE’s independent valuation supplants the assessor’s valuation.
 Complainant’s unadjusted baseline value of $109.11 per square foot assumes 4429 Westminster is 7121 square feet and 4441 Westminster is 6129 square feet. Complainant produced no public record or other independent documentation establishing the square footage of either comparable property. Assuming the square footage is correct, Complainant’s analysis did not account for the larger size of his selected comparable properties. Complainant testified he was unfamiliar with the economy of scale which often results in lower per square foot prices as otherwise similar homes increase in size.
 During Complainant’s cross-examination of Respondent’s staff appraiser, Complainant questioned whether certain photographs of the subject property were obtained from a public right of way or from private property. Complainant asserted photos taken from private property without the owner’s consent are inadmissible. Complainant did not establish any photos were taken from private property. Even if Complainant established a photograph of the subject property was taken from private property without his consent, section 137.130 expressly authorizes an assessor’s employees “enter into any lands and make any examination…when the assessor is entering because the assessor has insufficient information to assess such real property….” Finally, assuming for the sake of argument the photos were inadmissible and stricken from the record, the omission of photographs from Respondent’s Exhibit 1 would not cure Complainant’s failure to produce substantial and persuasive evidence of overvaluation.
 Complainant’s correspondence with Respondent is inconsistent with his proposed market condition adjustment. On June 28, 2019, Complainant asserted the “current, depressed market for homes in Fullerton’s Westminster Place neighborhood” indicates the subject property was worth $593,852.50. Exhibit C. On August 5, 2019, Complainant asserted the value of the subject property was $472,256.71, and once again requested that Respondent consider that the market for homes in Westminster Place “has been depressed.” Exhibit B. Complainant’s correspondence advocating sequentially lower valuations due to “depressed” market conditions as of August 2019 is inconsistent with his negative adjustment for market condition due to “improved” market conditions since January 1, 2019.