Ecclestone Organization v. Muehlheausler (SLCO)

June 25th, 2009

State Tax Commission of Missouri





v.)Appeal No.07-11534








Decision and Order issued June 25, 2009 is corrected nunc pro tunc as follows:Under HOLDING, in the second sentence the word “residential” is stricken and the word “commercial” is inserted in lieu thereof.Said correction does not impact the final decision as to the assessed value of the subject property at $2,112,000.In all other respects the Decision and Order is affirmed as written.

SO ORDERED August 21, 2009.


W. B. Tichenor

Senior Hearing Officer




Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax years 2007 and 2008 is set at $6,600,000, residential assessed value of $2,112,000.Complainant appeared by Counsel Richard D. Dvorak, Overland Park, Kansas.Respondent appeared by Associate County Counselor Paula J. Lemerman.Case heard and decided by Senior Hearing Officer W. B. Tichenor.


The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2007.


Complainant appeals, on the ground of overvaluation, the decision of the St. Louis County Board of Equalization, which sustained the valuation of the subject property.The Assessor determined an appraised value of $12,543,600, assessed value of $4,045,950, as commercial property.Complainant proposed a value of $6,600,000, assessed value of $2,112,000.Evidentiary hearing was conducted on May 5, 2009, at the St. Louis County Government Center, Clayton, Missouri.Transcript of hearing filed with Hearing Officer on

June 11, 2009.

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.Complainant’s Evidence.Complainant filed the following exhibits and written direct testimony:




Self-Contained Appraisal 1/1/07 – John M. Keeling, MAI,

Mo. Temp. Practice Permit


Calculation of Business Enterprise Value – John M. Keeling


Income and Expenses Data 2002 – 2006


Written Direct Testimony – John M. Keeling

Mr. Keeling provided testimony at the hearing.[1]Exhibits A, B, C & D were received into evidence.[2]

3.Respondent’s Evidence.Respondent filed the following exhibits and written direct testimony:




Self-Contained Appraisal 11/12/05 – John M. Keeling, MAI,
Mo. Temp. Practice Permit


Unsigned Certificate of Value on property at

10100 College Blvd, Overland Park KS – 2/7/07


Certificate of Value on Subject Property – 2/7/07


Written Direct Testimony – John Gillick, MAI

4.Objections to Respondent’s Evidence.Complainant timely filed objections to Respondent’s Exhibits 2, 3 and 4.[3]By Order issued 4/1/09, the Hearing Officer ruled on Complainant’s objections and sustained objections to Exhibit 2.It was excluded from evidence.At the Evidentiary Hearing, Counsel for Complainant objected to Exhibit 4 at hearing.The objection was sustained and Exhibits 1, 3 and 4 were stricken.[4]Exhibits 1, 2, 3 & 4 are maintained in the Commission file but are not part of the evidentiary record for purposes of determining true value in money.See, Exclusion of Respondent’s Exhibits, infra.

5.Subject Property.The subject property is located at 16625 Swingley Ridge Road, Chesterfield, Missouri.The property is identified by parcel number 17S110136.It is otherwise known as the Double Tree Chesterfield Hotel.The property consists of 23.98 acres (1,044,569 square feet) improved by a twelve-story, 223 room hotel and conference center, with two restaurants, a lounge, indoor and outdoor swimming pools, an athletic club with eight indoor and six outdoor tennis courts, 750 uncovered parking spaces and other amenities to support the use of the property as a hotel and conference center. The facility was constructed in 1983.[5]

6.No New Construction and Improvement.There was no evidence of new construction and improvement from January 1, 2007, to January 1, 2008.Therefore the value to be established for tax year 2007 remains the value for assessment purposes for tax year 2008.[6]

7.Complainant’s Methods of Valuation.Complainant’s expert valued the property by developing the sales comparison[7] and income approaches to value.[8]Mr. Keeling concluded on a value of the real and tangible personal property and the business enterprise value of $14,500,000.[9]He allocated $4,300,000 to tangible personal property and $3,600,000 to business enterprise value.The value of the real property for ad valorem tax purposes was established at $6,600,000.[10]

8.Substantial and Persuasive Evidence.Complainant’s evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money for the real property under appeal as of January 1, 2007, to be $6,600,000.



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.[11]

Presumptions In Appeals

There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[12]The presumption in favor of the Board is not evidence.A presumption simply accepts something as true without any substantial 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, is accepted as true only until and so long as there is no substantial evidence to the contrary.

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.[13]Complainant’s evidence met the required standard to both rebut the presumption of correct assessment by the Board and to establish the fair market value of the property under appeal.

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.[14]True value in money is defined in terms of value in exchange and not value in use.[15]It is the fair market value of the subject property on the valuation date.[16]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.[17]

The valuation by Mr. Keeling developed an opinion of value which met the required standard.Respondent presented no opinion of value for Complainant’s property.

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.[18]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.[19] Complainant’s appraiser arrived at his opinion of value after utilizing two established approaches to value, i.e. sales comparison and income.Most reliance was placed on the income approach.The income approach to valuation is very applicable to a valuation problem involving a hotel property.Respondent did not develop an opinion of value relying on any recognized methodology for the valuation of real property.

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.[20]

The opinion of Complainant’s appraiser was developed from data and under methodologies that are recognized and reasonably relied upon by experts in the field of real estate appraisal.More specifically, Mr. Keeling valued Complainant’s property consistent with the approaches to value which are most applicable to the valuation of hotel properties.His valuation properly accounted for and allocated values to those items which are not part of the valuation problem in this appeal, i.e. tangible personal property and business enterprise value.

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, 2007.[21]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.”[22]

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[23]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.[24]

Complainant met the required standard to establish the true value in money of the property under appeal.The appraisal[25] of Complainant’s property constituted substantial and persuasive evidence to establish fair market value.There was no evidence providing a basis for the Hearing Officer to reject the valuation by Mr. Keeling.

Exclusion of Respondent’s Exhibits

In order for a document or testimony to be received into the record in a proceeding before the State Tax Commission, the proffered document or testimony must be relevant.To be relevant, evidence must have a tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.[26]Exhibit 2 as previously ruled on,[27] had no probative value in this proceeding.It neither presented, nor established any fact of consequence to the determination of the fair market value of the subject property.

Exhibit 1

Exhibit 1 likewise lacked relevance.The effective date of valuation was December 31, 2005.There was no testimony from Mr. Keeling that established that the value proffered in this appraisal for December 31, 2005 was his opinion of value for the subject property as of

January 1, 2007.Mr. Keeling’s valuation for tax year 2007[28] rejected the previous valuation developed in Exhibit 1 as having any benefit for valuation purposes of the 2007-08 assessment cycle.[29]

Exhibit 3

Exhibit 3 is without probative value on the issue of the true value in money of Complainant’s property.The Certificate of Value (COV) provided a sale price exclusive of personal property.However, no consideration or allocation for business enterprise value is addressed in the certificate of value.Without a calculation of and allocation for business enterprise value any conclusion of value derived from the COV would tender a value for more than the real property.Furthermore, the transaction occurred after the valuation date of

January 1, 2007.It is reversible error for a hearing officer to receive into evidence and base a decision on sale transactions occurring after the valuation date.[30]Finally, Respondent’s witness did not develop an opinion of value from any recognized approach to value relying upon Exhibit 3.

Exhibit 4

Exhibit 4 also has no probative value in this appeal.The testimony of the witness with regard to the property description[31] does nothing to move forward the inquiry on true value in money as of January 1, 2007.No factual dispute was presented in this case on the property description.Questions and Answers 8 through 13 relate to Exhibit 1 which was stricken.Exhibit 1 did not provide the basis for any opinion of value by Respondent’s witness.It was rejected by Complainant’s appraiser as presenting an opinion of value as of January 1, 2007.Since Exhibit 1 has no probative value in this appeal, questions and answers relating to the Exhibit have no relevance.Question and Answer 15 identifies Exhibit 3 which also has been stricken.The conclusion of the witness that the document “supports the Assessor’s valuation” is in error since Exhibit 3 makes no accounting for business enterprise value and Mr. Gillick made none.Questions and Answers 1 through 4 present no evidence on the issue of value of Complainant’s property.However, irrespective of the exclusion of Exhibits 1, 2 and 3, Exhibit 4 provided no evidence of true value in money, since the witness did not perform an appraisal of the property and thereby could offer no opinion of value and did not have an opinion of value.[32]


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.

The assessed value for the subject property for tax years 2007 and 2008 is set at $2,112,000.

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, MO65102-0146, 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 appeal is based will result in summary denial. [33]

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 June 25, 2009.


W. B. Tichenor

Senior Hearing Officer


[1] Tr. 5:1 – Tr. 69:13.


[2] Tr. 69:20-21.


[3] Complainant’s Objection to Respondent’s Written Direct Testimony, Received by the Commission 3/10/09.


[4] Tr. 82:25 – Tr. 86:23.


[5] Exhibit A, page II-1.


[6] Section 137.115.1, RSMo.


[7] Exhibit A, pp. V-2 – 10.


[8] Exhibit A, pp. V-11 – 31.


[9] Exhibit A, p. V-31.


[10] Exhibits A & B.


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


[12] 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).


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


[14] 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).


[15] Daly v. P. D. George Company, et al, 77 SW3d 645, 649 (Mo.App E.D. 2002), citing, Equitable Life Assurance Society v. STC, 852 SW2d 376, 380 (Mo.App. 1993); citing, Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798, 801-803 (Mo. 1973).


[16] Hermel, supra.


[17] 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.


[18] 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).


[19] 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).


[20] Section 490.065, RSMo; State Board of Registration for the Healing Arts v. McDonagh, 123 S.W.3d 146 (Mo. SC. 2004); 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).


[21] Hermel, supra.


[22] 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).


[23] See, Cupples-Hesse, supra.


[24] Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).


[25] Exhibits A, B & D.


[26] Courtroom Handbook on Missouri Evidence – 2008, William A. Schroeder, Principle 401, p. 83; McCormick on Evidence, Third Ed., 1984, pp. 541-542.


[27] Order, dtd 4/1/09.


[28] Exhibits A, B & D.


[29] Exhibit D, Q & A 55 – Q & A 62.


[30] May v. Bushmeyer, STC Appeal Nos. 08-20005 – 20008, Order Overturning Hearing Officer Decision, 4/7/09.


[31] Exhibit 4, Q & A 5 & 6.


[32] Tr. 74:22-25


[33] Section 138.432, RSMo.