DNS ELECTRONIC MATERIALS, INC., )
v. ) Appeal Number 01-32620
EUGENE ZIMMERMAN, ASSESSOR, )
ST. CHARLES COUNTY, MISSOURI, )
DECISION AND ORDER
Decision of the St. Charles County Board of Equalization sustaining the assessment made by the Assessor, SET ASIDE, Hearing Officer finds true value in money for the subject property for tax years 2001 and 2002 to be $3,906,595 ($3,859,425 – commercial; $47,170 – agricultural); assessed value of $1,240,660.
Complainant appeared by Counsel, David Dempsey, St. Louis, Missouri.
Respondent appeared by Counsel, Lisa Leslie, Assistant County Counselor.
Case heard and decided by Chief Hearing Officer, W. B. Tichenor.
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2001.
Complainant appeals the decision of the St. Charles County Board of Equalization which sustained the valuation of the subject property. The Assessor determined an appraised value of $13,448,870 (assessed value of $4,294,190, as commercial property). Complainant proposed a value of $5,440,000. A hearing was conducted on August 6, 2002, at the St. Charles County Administration Building, St. Charles, Missouri.
Order was issued August 19, 2002, for Respondent to provide listing of assessed and appraised values and classification on the Complainant’s properties. Respondent provided said listing on September 3, 2002.
Order was issued September 6, 2002, for Respondent to provide the number of acres classified as agricultural for three of the subject parcels. Respondent provided said information on September 13, 2002.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Complainant offered into evidence the following exhibits:
Exhibit A Appraisal Report of Thomas R. McReynolds, MAI and J. Lawrence Von Trapp, MAT, State Certified Real Estate Appraisers.
Exhibit B Written Direct Testimony of Mr. McReynolds.
Exhibit C Depreciation calculations derived from Comparable Sales 2 and 5 of Exhibit A.
Mr. McReynolds testified under cross-examination, redirect and questions by the Hearing Officer. The testimony of Mr. McReynolds at the evidentiary hearing also constitutes part of the record in this appeal.
Respondent did not offer any evidence.
FINDINGS OF FACT
1. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the St. Charles County Board of Equalization.
2. Pursuant to Section 138.430.2, RSMo, the Hearing Officer requested information relative to the assessment of individual parcels of the subject property following the evidentiary hearing (Orders, dated 8/19/02 & 9/6/02), in order to make appropriate allocation as to value and to account for the portion of the property classified as commercial and that classified as agricultural. The information provided in response to the two requests is identified as STC Exhibit 1 and STC Exhibit 2, respectively, and are received as part of the record in this appeal.
3. The subject property is located at 501 Pearl Drive, St. Peters, Missouri. It is known as the MEMC Property. The property consists of six tracts of land owned by Complainant and an additional seven tracts of land owned by the City of O’Fallon. The O’Fallon property is tax exempt. The subject property is improved with a number of hi-tech industrial buildings and ancillary buildings used in the manufacture of polished silicon wafers for the semi-conductor industry. Exhibit A, p. 6.
4. The six parcels which are the subject of this appeal are further identified as follows (STC Exhibit 1):
|Parcel Number||2001 Assessed Value
The percentage of total commercial assessed value of tract 1 represents approximately 92% of the total commercial assessed value. The percentage of total commercial assessed value of tract 4 represents approximately 7% of the total commercial assessed value. The percentage of total commercial assessed value of tracts 3 and 6 represents approximately 1% of the total commercial assessed value. It is appropriate to utilized these percentages in making an allocation of the assessed value for the entire subject property to the individual parcels
5. There was no evidence of new construction and improvement from January 1, 2001, to January 1, 2002.
6. Complainant did not appeal the classification of the portions of the subject property which were valued and assessed as agricultural property. There is a total of 72.57 acres of the subject property which is agricultural land. The total assessed value of the agricultural land is $5,660 (agricultural use value – $47,170) (STC Exhibit 2, Exhibit A, p. 12).
7. Complainant’s evidence was substantial and persuasive to establish the per acre value of the subject land to be $21,780 (.50 cents per square foot; 43,560 x .50 = $21,780) Exhibit A, pp. 81-85. The land value of the 72.57 acres of agricultural land must be deducted from the value determined by Complainant’s appraiser for the total subject property. This deduction is $1,580,575 (72.57 x $21,780 = $1,580,574.60, rounded to $1,580,575).
8. The contributory market value of the property owned by the City of O’Fallon, which is exempt from assessment and taxation is $2,000,000. Exhibit A, pp. 7, 97.
9. The properties relied upon by Complainant’s appraiser in performing his appraisal were comparable to the subject property for the purpose of making a determination of value of the subject property. Exhibit A, pp. 72 – 77. Complainant’s appraiser considered adjustments for various relevant factors in arriving at an opinion of value for the subject property as is appropriate within the appraisal field. Exhibit A, p. 78.
10. Complainant’s evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board, relating to the commercially assessed property, and to establish the true value in money as of January 1, 2001, to be $7,440,000, for the entire subject property (Complainant’s property and City of O’Fallon’s property).
11. The deductions for the contributory value of the agriculturally assessed land and the contributory market value of the City of O’Fallon property result in a contributory market value for the Complainant’s commercial property of $3,859,425 ($7,440,000 – $2,000,000 = $5,440,000; $5,440,000 – $1,580,575 = $3,859,425). This is an assessed value of $1,235,000 ($3,859,425 x .32 = $1,235,016, rounded to $1,235,000) for the commercial property.
12. The assessed value for the subject property is $1,240,660, it is allocated as follows, based upon the percentages of commercial assessment calculated and the agricultural assessments set forth in Finding of Fact 4:
|Parcel Number||Assessed Value||Classification|
|Total Assessed Value:||$ 1,240,660|
CONCLUSIONS OF LAW
The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious. Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, RSMo. 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. Section 138.431.4, RSMo.
Board of Equalization Presumption
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). There is no presumption that the assessor’s valuation is correct. Section 138.431.3, RSMo.
Standard for Valuation
Section 137.115, RSMo 1994, 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). It is the fair market value of the subject property on the valuation date. Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978).
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 is 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 each 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.
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; Federal Register, vol. 55, no. 163, August 22, 1990, pages 34228 and 34229; Uniform Standards of Professional Appraisal Practice, Glossary; Exhibit A, p. 8.
Duty to Investigate
In order to investigate appeals filed with the Commission, the Hearing Officer has the duty to 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 its inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties. Section 138.430.2, RSMo.
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. 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).
Trier of Fact
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. 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).
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. Section 490.065, RSMo; Courtroom Handbook on Missouri Evidence, Wm. A. Schroeder, Sections 702-505, pp. 325-350; Wulfing v. Kansas City Southern Industries, Inc., 842 S.W.2d 133 (Mo. App. E.D. 1992).
Complainant’s Burden of Proof
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, 2001. Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897. Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. See, Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). 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).
Methods of Valuation
Missouri courts have approved the comparable sales or market approach, the cost approach (replacement or construction) 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).
Valuation of Agricultural Property
True value in money for land which is in use as agricultural property is the value which such land has for agricultural use. Agricultural land shall be valued based upon agricultural grades established by Commission rules. Sections 137.017 & 137.021, RSMo; 12 CSR 30-4.010.
The only evidence of value presented on this record is that developed by appraisers McReynolds and Von Trapp. The presumption in favor of the Board is not evidence. A presumption simply accepts something as true without any proof to the contrary. In an evidentiary hearing before the Commission, the valuation determined by the Board, even if simply to sustain the value made by the Assessor, which is not presumed to be correct, is accepted as true only until and so long as there is no proof to the contrary.
Once the Complainant comes forward with credible evidence, especially evidence under a recognized methodology for valuing property, which demonstrates a lower value than that set by the Board, the presumption is gone. It possesses no further weight, unless evidence is put on the record which rebuts Complainant’s evidence of value. If no such evidence is forthcoming, as was the case in the present appeal, then the only evidence on the record upon which a determination of value can be made is that presented by the Complainant.
The Complainant’s appraisal constitutes substantial and persuasive evidence to rebut the presumption of correct assessment by the Board and to establish the fair market value of the subject property. The unrefuted evidence of value in this appeal establishes the fair market value of the subject property to be $7,440,000 before necessary deductions are made.
Two deductions or adjustments to the fair market value are required to be made to the final value arrived at by Complainant’s appraisers. One deduction is for the value of the property owned by the City of O’Fallon which is not subject to assessment and taxation. This deduction was appropriately made by the appraisers. The other adjustment relates to the subject land that is assessed as agricultural land.
Complainant did not appeal the assessment for the agricultural land which comprises a portion of the subject property. The adjustment to be made for the agricultural land is to simply deduct from the value the commercial value of the land determined under the cost approach in the McReynolds’ appraisal and then to add back the agricultural assessed value to the commercial assessed value. This is set forth in detail in Findings of Fact 6, 11 and 12, supra.
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Charles County for the subject tax day is SET ASIDE.
The assessed value for the subject property for tax years 2001 and 2002 is set at $1,240,660, as commercial and agricultural property, as set forth and allocated to the following parcel numbers:
|Parcel Number||Assessed Value||Classification|
A party may file with the Commission an application for review of this decision within thirty (30) days of the mailing of such decision. The application shall contain specific grounds upon which it is claimed the decision is erroneous. Failure to state specific facts or law upon which the appeal is based will result in summary denial. Section 138.432, RSMo 1994.
If an application for review of this decision is made to the Commission, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission. If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of St. Charles County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal. If any or all protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.
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 8, 2002.
STATE TAX COMMISSION OF MISSOURI
W. B. Tichenor
Chief Hearing Officer