Energy Marketing 1226 LLC v. Shipman (St. Charles)

February 29th, 2012

State Tax Commission of Missouri






v.) Appeal No.10-32538











Decision of the St. Charles County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax year 2010 is set at $507,100, commercial assessed value of $162,280.

Complainant appeared by Counsel, Alan Agathen, St. Louis, Missouri.

Respondent appeared by Assistant County Counselor, Charissa Mayes.

Case heard and decided by Senior Hearing Officer W. B. Tichenor.


Complainant appeals, on the ground of overvaluation, the decision of the St. Charles County Board of Equalization, which sustained 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, 2010.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. Charles County Board of Equalization.A hearing was conducted on October 18, 2011, at the St. Charles County Administration Building, St. Charles, Missouri.Transcript received by the Commission on January 6, 2012.

2.Subject Property.The subject property is located at 2300 First Capital Dr., St. Charles, Missouri.The property is identified by parcel numbers 6-014B-4438-02.2 and 6-014B-3138-00-11.The Assessor’s account numbers for the respective tracts are: 093690A000 and 093680A000.The property consists of .89 of an acre, 38,768 square feet.Parcel 6-014B-4438-02.2 is .75 of an acre (32,670 square feet).[1]Parcel 6-014B-3138-00-11 contains the remaining 6,098 square feet of the tracts.The site is improved with a 427 square foot gasoline station with a 1,560 square foot canopy.[2]

3.Assessment.The Assessor appraised the property under appeal at $591,780, commercial assessed value of $189,370.[3]The Board sustained the assessment.[4]

4.Property Size – 2010.In 2009 the lot was approximately on .22 of an acre when the road was widened.When the roundabouts were constructed there was excess land owned by the State Highway Department that was then purchased by the current owners increasing the lot size from approximately .22 of an acre to approximately .75 of an acre and an additional approximately .13 of an acre from an abutting property that was also included in the purchase from the State Highway Department.Therefore, the total lot size for the 2010 tax year was .89 of an acre.[5]The property must therefore be valued as of January 1, 2010 based upon the lot size then existing.[6]

5.Subject Topography.The back portion of the subject property behind the gas station suffers from a significant drop-off or sloping from the northwest portion of the property back to the south and east, to the street which borders the back of the property.There a number of mature trees on the site behind the gas station that would require removal for re-development.The subject’s topography is a limiting factor in the future development of the property.There would be the need for construction of a retaining wall along at least a portion of the south and east boundary of the property, with grading and filling in order to provide a relatively level site for development.[7]

6.Marketing of Subject Property.The subject property was listed for sale in the spring of 2010 at an asking price of approximately $1,000,000.No interest was shown in the property at that price.In September, 2010, the price was reduced to $745,000.No interest was shown in the property at that price.At the time of hearing the property had been listed for approximately six weeks at $695,000.Only one inquiry had been made at that list price, but when it was determined the property was a gas station, the contact had no interest at that asking price.There has been no other interest shown.[8]

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




Appraisal – Kent D. Gastreich


MoDot Map – I-70 – First Capital Drive Interchange


Boundary Survey of Subject Property


Front view photograph of Subject Property


Rear view photograph of Subject Property


Property Information – St. Charles County Collector/Assessor


Written Direct Testimony – Steven J. Madras


Written Direct Testimony – Kent D. Gastreich


No objections were filed to Exhibits A through H and they were received into evidence.

Mr. Madras and Mr. Gastreich both testified at the Evidentiary Hearing.[9]

8.Respondent’s Evidence.Respondent submitted the following exhibits:




Appraisal – Keith Hodges


Written Direct Testimony – Keith Hodges


Objection was filed to Exhibit 1.Objection was overruled at the Evidentiary Hearing.Exhibits 1 and 2 were received into evidence.Mr. Hodges testified at the Evidentiary Hearing.[10]

9.Highest and Best Use. The highest and best use of the subject property is to hold for future development or re-development of the property.[11]

10.Demolition and Site Preparation Costs.In order for the subject property to be cleared to an unimproved site for re-development, it would be necessary to remove all existing structures/improvements and the fuel storage tanks.It would then be necessary to construct a retaining wall along a portion of the east and south edge of the property and fill and level the site.[12]These costs a knowledgeable purchaser would take into consideration when determining a purchase price

11.Complainant’s Estimation of Demolition and Site Preparation Costs.Mr. Madras, Complainant’s President, had a current bid for the demolition of the canopy and the removal of the fuel storage tanks and some grading on the back of the site of $19,000 +.This did not include removal of the curbs, the signs, sign bases, the building, and the footings.[13]Based upon experience having a retaining wall constructed at another site in 2010, Mr. Madras estimated the cost of a retaining wall for the subject sit to be approximately $50,000 and the cost for back filling and grading to be $30,000.The total estimated cost to prepare the site for re-development was approximately $100,000.[14]

12.Respondent’s Estimation of Demolition and Site Preparation Costs. Mr. Hodges concluded a cost of $20,000 for demolition of all existing improvements, removal of the underground storage tanks and grading the site for re-development.This was based on Marshall & Swift cost estimation.[15]

13.Value and Allocation.The true value in money of the subject is $507,100, or $13.08 per square foot.[16]See, Determination of Value – Conclusion of Value, infra.Because the two parcels had not been combined under a single parcel/account number in the assessment records, it is necessary to allocate the value between the two parcels.Allocation is based upon square footage of each parcel.See, FINDING OF FACT 2, supra.The value for Parcel 6-014B-4438-02.2/093690A000 is $427,300,[17] commercial assessed value of $136,740.The value for Parcel 6-014B-3138-00-11.093680A000 is $79,800,[18] commercial assessed value of $25,540.



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.[19]

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.[20]The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property is assessed at set percentages of true value in money.[21]In an overvaluation appeal, true value in money for the property being appealed must be determined based upon the evidence on the record that is probative on the issue of the fair market value of 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.[22]This presumption is a rebuttable rather than a conclusive presumption.It places the burden of going forward with some substantial evidence on the taxpayer – Complainant.When some substantial evidence is produced by the Complainant, “however slight”, the presumption disappears and the Hearing Officer, as trier of facts, receives the issue free of the presumption.[23]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.[24]Upon presentation of the Complainant’s evidence[25] the presumption in this appeal disappeared.The case is decided free of the presumption.

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.[26]True value in money is defined in terms of value in exchange and not value in use.[27]It is the fair market value of the subject property on the valuation date.[28]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.[29]


Both appraisers valued the property under the Standard For Valuation.[30]

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.[31]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.[32] Both appraisers valued the property based upon a sales comparison approach to value.[33]The comparable sales were of land sales only, as neither appraiser gave any contributory value to the improvements on the subject land.Utilization of the comparable sales approach of vacant land was appropriate for the present appraisal problem.

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.[34]

The facts and data utilized by each appraiser were of a type reasonably relied upon by appraisers in concluding value for a tract of land such as the subject.The supporting data for each appraisal were otherwise reliable for reaching a conclusion of value.

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, 2011.[35]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.”[36]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.

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[37]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.[38]

Complainant’s evidence standing alone constituted substantial and persuasive evidence to establish the value proposed by the Gastreich appraisal.However, the Hearing Officer must consider all relevant evidence on the record to make a determination of value.

Determination of Value

The Hearing Officer is presented with two separate valuations of the property under appeal.The appraisers use two different sets of vacant land sales.

Gastreich Appraisal

Mr. Gastreich, appraising the property on behalf of Complainant, opined his value as of September 24, 2010 to be $331,000.At hearing, the appraiser testified that to arrive at a value as of January 1, 2009, the time of sale adjustment would simply be decreased appropriately.[39]The following sales and listing comprised the market data provided on behalf of Complainant.

































Listing 9/10









The adjusted price includes a – 3% per annum adjustment for time of sale applied to the sales.No such adjustment was made to the Listing property.The factor of 3% per annum is a .0025 monthly adjustment for time of sale.

Mr. Gastreich valued the property as if it were vacant land without any improvements.[42]He assumed that as of the valuation date the improvements – gas station, canopy, driveway, service area would have all been removed.No analysis was presented in the appraisal as to the cost to remove the improvements and have the tract ready for development.

Hodges Appraisal

Mr. Hodges presented his appraisal on behalf of Respondent.He valued the property as of January 1, 2009, at $620,000.[43]His opinion of value included a deduction of $20,000 to account for the cost to demolish the existing improvements, including removal of the underground storage tanks, and grading for the site to prepare it for re-development.The following sales and listing comprised the market data provided on behalf of Complainant.






























































Conclusion of Value

The Hearing Officer is presented with a total of fifteen sales and a listing to establish the fair market value of the subject property.After correcting the Gastreich time of sale adjustment to reflect a valuation as of 1/1/09, and also removing the time of sale adjustment by Mr. Hodges for his sales 8 and 9, the range of indicated values is as follows:



RP- 10





































The Hearing Officer is persuaded that applying the median of the adjusted sales provides as sound a conclusion of value as is possible given the evidentiary record.Therefore, the indicated value is $607,100.[45]This however, does not account for the cost to demolish the existing improvements, remove the underground fuel storage tanks, construction of a retaining wall and grading the site to prepare it for re-development.Complainant’s evidence establishes an estimated cost of at least $100,000.The fact that Mr. Madras had an actual bid of $19,000+ for just removing the canopy and the fuel tanks rebuts the Marshall & Swift cost estimate of Mr. Hodges for complete demolition and site preparation of only $20,000.A deduction of $100,000 to account for the cost to present the subject as a unimproved tract ready for development is appropriate.Therefore, the true value in money of the subject property as of January 1, 2010 is $507,100.

Deficiencies in Appraisal Reports

There are various shortcomings in both the Gastreich and Hodges appraisals which the Hearing Officer feels needs to be addressed.The appraisers should not take the criticism of the Hearing Officer in any personal manner.It is intended to inform and educate not only the two appraisers in this case, but other appraisers that might have occasion to appear as expert witnesses in State Tax Commission appeals.

Demolition and Site Preparation Costs

Gastreich Appraisal

Appraiser Gastreich took the approach that he was appraising the subject property “as is” and then proceeded to value only the land and make no valuation of the improvements on the property.[46]He assumed that the land was unimproved, but made no analysis as to the cost to put the site in the condition.In point of fact as of the valuation date of January 1, 2010, the subject was improved with various structures and components, which Mr. Gastreich concluded added no contributory value to the property.Any well-informed buyer on January 1, 2010, acting in his own best economic interests would have determined the cost for removal of all improvements to the land, as well as, the cost to grade, level and prepare the site for development.This would have been factored into the final purchase price.Therefore, a conclusion of the value of the land only without making the allowance for what it would cost to have the site unimproved and ready for development does not accurately state the indicated value under a sales comparison approach based upon sales of unimproved land.

Apparently, unknown to Mr. Gastreich, he had available important information from Mr. Madras relative to the costs of demolition of at least a portion of the improvements and the removal of the fuel storage tanks.That information should have been researched and developed in an appropriate manner in the Gastreich appraisal.The Hearing Officer was persuaded by the Madras testimony on this point.At the same time, it would have been preferred to have had supporting documentation as to demolition and site preparation costs.

Hodges Appraisal

Appraiser Hodges recognized that a deduction for demolition and site preparation costs needed to be made to the indicated value derived from his vacant land sales.His reliance on the cost manual of Marshal & Swift is reasonable.However, it would have also been preferred to have had the methodology and the actual source references from the cost manual to have been presented in the body of the appraisal report.The far better method to account for the demolition and site preparation costs would have been the obtaining of an estimate specific to this property.The Hearing Officer questions if the work involved in the removal of the underground fuel tanks is adequately addressed by the cost manual.The Department of Natural Resources would have been a possible source to have assisted in addressing this matter and arriving at estimated costs on this particular demolition project.

Sales Grid Adjustments

Both appraisers provided a sales grid and discussion as to adjustments.However, any sort of analysis or explanation of methodology for arriving at a given adjustment was lacking.

Gastreich Appraisal

Complainant’s appraiser made adjustments to some or all of his comparables based on the factors of Time of Sale, Location, Size, Topography and Access/Visibility.[47]The narrative on these adjustments only told what can readily be observed from simply looking at the Grid.There was no explanation as to how the appraiser arrived at any of the adjustments.

Time of Sale

For example, the Time of Sale adjustment was based upon “conversations with property managers familiar with the subject market.”These conversations from unidentified sources lead the appraiser to an opinion “that there has been a slowdown in the overall St. Louis Metropolitan area real estate markets” and a belief “that retail properties are experiencing a small decrease (3 percent) in value from mid-year 2007 to the present.”The three percent decline was on a per annum basis.[48]

The Hearing Officer is unclear as to how talking to unidentified property managers established a three percent per annum decrease in real estate value for the comparable sales.First, unless the “property managers” had actual firsthand knowledge of a significant number of resales at a time relevant to a 2009 valuation, reliance on such conversations rises to no more than mere speculation.If Mr. Gastreich’s contacts had actual market data from which they drew their conclusions, then that data should have been a part of the appraisal report.


In most instances a sales comparison approach on a commercial property such as the subject will warrant some adjustment for location.The information provided in the narrative was that Sales 1 and 2 are superior and adjusted downward.Sale 4 is inferior and adjusted upward.The Hearing Officer readily understands when he sees a negative adjustment on a sales grid that the sales comp is superior to the property being appraised and that a positive adjustment means that the comp is inferior to the appraisal property.

The Hearing Officer generally is willing to rely upon the expertise and judgment of a given appraiser that a given property is either superior or inferior to the subject property relative

to any given factor of adjustment.However, it is most helpful in weighing the evidence to have an explanation of the basis for the specific adjustment.

For example, Sales 1 and 2 were both adjusted -5% for location.Sale 4 was given a +3% adjustment.No explanation was provided as to how the -5% and +3% adjustments were derived.Was there not some methodology that supports the appraiser’s conclusion?If there was it escaped being included in the appraisal report.The adjustments were simply appraiser’s judgment – an unsupported opinion.While the Hearing Officer generally has placed some level of reliance on such opinions, their level of persuasiveness has diminished over the years.Over the course of hearing appeal after appeal, when appraiser after appraiser provides only narrative information of what the Hearing Officer readily ascertains from reading the sales grid and presents nothing in the way of substantive analysis to support the opinion, the Hearing Officer has come to view appraisal reports with a more critical and discerning eye.


Mr. Gastreich adjusted Sales 1 and 4 because of their larger size than the subject.Sale 3 was significantly smaller than the subject so a downward adjustment was applied.The basis given in the narrative for these adjustments is that “smaller properties tend to sell for higher unit prices than do larger sites.”The Hearing Officer does not disagree that these three sales needed an adjustment for the difference in size from the subject.Furthermore, the appraiser was correct in his conclusion that Sales 2, 5 and 6 had such a slight variance in size from the subject as to not warrant any adjustment for this factor.

The Hearing Officer is also very familiar with the old standard “Larger properties sell for less on a per unit basis and smaller properties sell for more on a per unit basis.”There is a certain level of logic to the assertion.However, it may not always be the case.One has to only look at a comparison of the per unit sale price of Sales 3 and 4 to see that the generalization does not appear to hold.Sale 3 being only 15,000 square feet in size sold for $5.17 per square foot.Sale 4 being 70,567 square feet sold for $5.20 per square foot.Both properties sold in April 2008, the only apparent difference being access/visibility.

More importantly, what provided the basis for Mr. Gastreich to adjust Sale 1 -5%, Sale3 -3% and Sale 4 +2%?The appraisal report provides nothing from which the Hearing Officer can ascertain exactly how the appraiser was able to come to these particular determinations.If an appraiser is going to base a size adjustment on the rule of thumb – larger sells for less and smaller sells for more – then at least some market data validating the rule would be appropriate.


The next adjustment made was a -10% to each of the sale properties for their superior topography when compared to the subject.This is an instance where photographs would be beneficial.There are no photographs of the comparables properties that the Hearing Officer can compare to the subject.The photographic record for the subject establishes that a major portion of the subject property has a significant slope from the north and west to the south and east.Only the limited front area that has the current improvements can be considered to be level.

However, there is nothing in the appraisal report which provides a relevant view of the comparables to first establish their comparative level topography and to secondly provide a point of reference for comparison to the subject.Beyond this, the appraisal contains no narrative explaining how Mr. Gastreich concluded that the -10% adjustment was calculated or concluded.


The appraiser concluded that the subject property had above average visibility from I-70 and adequate access.Sales 1 and 5 were deemed to be superior to the subject as to access/visibility.Sale 4 was concluded to be inferior.Like the issue of topography, some photographic substantiation would have been helpful.The record provides ample evidence on the matter of the subject’s access and visibility, but as to the three comparables that were adjusted, there is no visual representation for comparison by the Hearing Officer.The matter is left to the generalized conclusions of the appraiser.

The Hearing Officer is not suggesting that the appraiser in any manner was misleading in his conclusions on this or on any of the other factors.It is simply that a stronger appraisal report would have been one that on these items, where a visual point of reference could be helpful, it was not provided.

Hodges Appraisal

Respondent’s appraiser made adjustments to some or all of his comparables based on the factors of Time of Sale, Location, and Size.[49]The narrative on these adjustments only told what can readily be observed from simply looking at the Grid.There was no explanation as to how the appraiser arrived at any of the adjustments.

Time of Sale

The appraisal report asserts that no adjustments for time were made.However, the grid shows a -2% adjustment made to Sales 8 & 9.No explanation as to how this -2% factor was derived was provided.There was no presentation of any market data that would support the adjustment.


This adjustment covered the factors of accessibility and visibility according to the report.The narrative explained that Sale 1 was superior due to superior access. It went on to assert that Sales 1, 3, 4, 6, 7 8 & 9 were in inferior locations compared to the subject and were “adjusted accordingly.”Apparently Sale 2 was deemed to be superior to the subject as it was adjusted by a negative factor.

The adjustments for Location to the comparables were as follows: Sale1 +10%, Sale 2 -5%, Sale 3 +5%, Sale 4 +10%, Sale 5 )%, Sale 6 +20%, Sale 7 +10%, Sale 8 +10% and Sale 9 +10%.While there is a level of consistency in the adjustments when the description of the Location factors in the sales grid for each comparable are reviewed, i.e. Average (+), Good (+), Good (-), Good, this still does not inform the Hearing Officer as to how the specific percentages of adjustment were derived.

The report identifies the Location factor in terms of accessibility and visibility from major thoroughfares and the density and average income of the surrounding household and work force.It escapes the Hearing Officer’s logic as to how the density and average income of the surrounding household and work force is relevant to the adjustment.Apparently, the focus of the adjustment concerned the location of the sale properties in relation to the Interstate.This is, of course, a relevant consideration.At the same time, accessibility and visibility from major thoroughfares other than the Interstate or lack thereof, may be just as appropriate to warrant an adjustment or no adjustment.

The adjustment appears to come down to the descriptive terms – good, average, etc – provided in the sales grid.No explanation was provided as to how these terms vary from one another and what the basis for an adjustment between a good and average (+ or -) property might be and how it was derived.For example, the subject is located at First Capitol and I-70 and is deemed to have a Good location.Just east on I-70 at the very next exit Sale 6 is located at S. Fifth Street and I-70 but only has an Average location.Sale 2 is located across the street from the subject but its location is Good (+) while the subject is only Good.No explanation is provided as to why adjoining properties’ locations are deemed different.As to Sales 7 and 8 the appraiser concluded their locations were Average (+) or inferior to the subject, because they were located near I-370 as opposed to I-70.No analysis was provided to establish that I-370 locations are inferior or superior to I-70 locations.


The appraisal informed the Hearing Officer, “Our findings suggest that smaller properties tend to sell for higher unit prices than do larger properties.”Interesting finding, based upon what?Apparently a study has been done, since the Hearing Officer fails to see how findings on something like this could be made without some market study being done.However, no data were reported in the appraisal to support this conclusion.Nevertheless, based upon the unreported “findings” the appraiser made positive adjustments to the sale properties(2, 6 & 9) that were larger than the subject.Two adjustments were at 5% and one at 10%.No analysis was provided to support the individual adjustments or exactly how the amount of each adjustment was determined.


Mr. Hodges did not address the issue of adjusting his comparables relative to the topography factor, although he concluded there would be a cost for grading to prepare the site for re-development.[50]The issue of topography should have been addressed.Unless it is concluded that all nine of the Hodges’ sale properties were burdened by a sever front to back slope like the subject, each of the sales would have needed to have had a negative adjustment to account for their superior status on this point.Unless each sale property was improved by a retaining wall and backfill to level the site after purchase, then the comp property was superior to the subject on this factor.

When a factor like this is present, the Hearing Officer is benefited by visual evidence, photographs of the comparable properties, to verify the degree of similarity or dissimilarity between each comparable and the property being appraised.In some instances topographical maps of the subject and the comparables and an analysis of the comparability of the topographies might prove to be beneficial.Failure to account for this factor diminishes the overall strength of the appraisal report.


Each appraiser presented his appraisal report in compliance with the accepted standards for appraising the subject property.The work product of both Mr. Gastreich and Mr. Hodges would most likely be accepted by various financial institutions that might be financing the purchase of the subject property or refinancing an existing loan on the subject.It is possible that a prospective purchaser of Complainant’s property would accept either of the appraisals in his investigation and research to arrive at a suitable offer for purchase.However, neither of these purposes is what the purpose was for the preparation of the reports.

The presentation of an appraisal in a contested case before the Commission is not the same as when presented to a lending institution or an investor purchaser.The Commission proceeding is a weighing of evidence.The Hearing Officer has the latitude to give the weight he deems appropriate to the evidence in his record.He may find part of one expert’s appraisal and testimony persuasive and part of the testimony and appraisal of the opposing expert to be persuasive.He may accept in whole or in part the rationale and opinion tendered by an appraiser.[51]

In any event, in those cases where the sales comparison approach is being presented, the Hearing Officer needs to have presented in the appraisal report sufficient information and data to demonstrate the basis and method which provide the foundation for adjustments.It is not enough to say on a given factor the comparables are superior or inferior and an adjustment is accordingly made and then insert a percentage adjustment with absolutely no supporting explanation as to how the percentage was reached.To take such a course of action gives the appearance that the appraiser simply picked the percentage out of thin air.Little, if any, probative weight can generally be given to thin air.In those instances where there simply is no way to derive support for an adjustment from research and analysis of market date, it is incumbent upon the appraiser to at the very least provide a narrative as to his logic for arriving at the adjustment that is made.

Evidence of Increase in Value

In any case in St. Charles County where the assessor presents evidence which indicates a valuation higher than the value finally determined by the assessor or the value determined by the board of equalization, whichever is higher, for that assessment period, 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.[52] Evidence presented on behalf of the assessor advocated a value of $620,000, assessed commercial value of $198,400, for the property under appeal.Under the Commission rule just cited and Supreme Court decision[53] the assessed value cannot be increased above $189,370 in this particular appeal.


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 identified as Parcel 6-014B-4438-02.2/093690A000 for tax year 2010 is set at $136,740.

The assessed value for the subject property identified as Parcel 6-014B-3138-00-11.093680A000 for tax year 2010 is set at $25,540.

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, MO65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.Application for Review may also be filed by attachment to an email sent to Barbara Heller, Legal Coordinator:

Failure to state specific facts or law upon which the application for review is based will result in summary denial. [54]

Disputed Taxes

The Collector of St. Charles 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 February 29, 2012.





W. B. Tichenor

Senior Hearing Officer





Certificate of Service


I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 29thday of February, 2012, to:Alan Agathen, 130 S. Bemiston Ave., Suite 610, St. Louis, MO 63105, Attorney for Complainant; Charissa Mayes and Joseph Smith, Assistant County Counselors, 100 North Third Street, Room 216, St. Charles, MO 63301, Attorney for Respondent; Scott Shipman, Assessor, 201 North Second, Room 247, St. Charles, MO 63301-2870; Ruth Miller, Registrar, 201 North Second Street, Room 529, St. Charles, MO 63301; Michelle McBride, Collector, 201 North Second Street, Room 134, St. Charles, MO 63301.




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] Exhibit 1, p. 19 – Assessor’s Data Sheet


[2] Exhibit A, pp. 1, 50 & 52; Exhibit 1, pp 2 & 3.


[3] Commercial property is assessed at 32% of its true value in money (appraised value, fair market value).Section 137.115.5, RSMo.


[4] BOE Decision Letter on Parcel 093690A000.Exhibit 1 – Summary of Salient Facts, p. 2 gives the Assessed Value for Parcel 093690A000 as $179,660 and the Assessed Value for Parcel 093680A000 as $2,720, for a combined Assessed Value of $182,380.This was confirmed by the testimony of Mr. Hodges. TR 41:4 – 24


[5] Exhibit 1, p. 4 – Subject Property History


[6] TR 41:4 – 44:2


[7] Exhibit G, Q & A 16; Exhibit A – Topography, p. 53, Aerial Photo of Site, p. 56, Photograph on page after Cover Page, Subject Site Photographs, pp. 58 & 59; Exhibit E; Exhibit 1 – Site Data, p. 14, Photographs, pp. 39 & 40; TR 53:17 – 22


[8] Exhibit G, Q & A 29;TR 12:8 – 13:9


[9] TR 7 – 12 – Madras; TR 14 – 26 – Gastreich; Rebuttal Testimony – Madras:TR 51 – 65


[10] TR 30 – 50


[11] Exhibit A, pp. 62-65:Complainant’s appraiser concluded highest and best use as vacant for to hold for future development.Exhibit 1, p. 13:Respondent’s appraiser concluded highest and best use as vacant was for re-development into a fast food restaurant.


[12] Exhibit 1, p. 35; TR 26:23 – 27:13


[13] TR 52:5 – 53:12; 56:12-25


[14] TR 57:1 – 58:9


[15] Exhibit A, p. 35


[16] $507,100 ÷ 38,768 = $13.08


[17] 32,670 x $13.08 = $427,323.60, rounded to $427,300

[18] 6,098 x $13.08 = $79,761.84, rounded to $79,800

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


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


[21] Section 137.115.5, RSMo


[22] 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)


[23] United Missouri Bank of Kansas City v. March, 650 S.W.2d 678, 680-81 (Mo. App. 1983), citing to State ex rel. Christian v. Lawry, 405 S.W.2d 729, 730 (Mo. App. 1966) and cases therein cited.


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


[25] Exhibits A, B, C, D, E & F and Testimony of Complainant’s Expert Witness at hearing


[26] 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).


[27] 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).


[28] Hermel, supra.


[29] 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.


[30] Exhibit A, pp. 3-4;Exhibit 1, p. 5


[31] 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).


[32] 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).


[33] Respondent’s Appraiser presented the Respondent’s Mass Appraisal value of $600,270 but his conclusion of value was based upon the sales comparison approach.


[34] 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).


[35] Hermel, supra.


[36] 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).


[37] See, Cupples-Hesse, supra.


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


[39] TR 27:14 – 28:14


[40] The appraiser used 38,963 square feet.However, an acre contains 43,560 square feet of acre, therefore .89 of an acre equals 38,768 square feet – 43,560 x .89 = 38,768.


[41] Per Square Foot Value concluded by appraiser


[42] Exhibit A – Sales Comparison Approach, p. 70 – “The land was valued, assuming the site to be vacant, . . .”


[43] The Appraisal had a value as of January 1, 2010, however, at hearing the appraiser confirmed that his opinion of value of $620,000 was also as of January 1, 2009.TR 48:23 – 49:24


[44] Per Square Foot Value concluded by appraiser.


[45] 38,768 x $15.66 = $607,106.88, rounded to $607,100.


[46] Exhibit A – Transmission Letter; Summary of Salient Facts and Conclusions, p. 1; Purpose and Scope of the Appraisal, p. 2


[47] Exhibit A – Land Sale’s (sic – Sales’) Grid – p. 78


[48] Exhibit A – Time, pp. 79 – 80


[49] Exhibit 1 – Analysis of Vacant Land Sales – pp. 33 – 36


[50] Exhibit 1, p. 35


[51] 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);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).


[52] Section 138.060, RSMo; 12 CSR 30-3.075.


[53] The Supreme Court of Missouri has interpreted Section 138.060.The Court stated:

“Section 138.060 prohibits an assessor from advocating for or presenting evidence advocating for a higher ‘valuation’ than the ‘value’ finally determined by the assessor. … . Because the legislature uses the singular terms ‘valuation’ and ‘value’ in the statute, however, it clearly was not referring to both true market value and assessed value.While the assessor establishes both true market value and assessed value, which are necessary components of a taxpayer’s assessment, as noted previously, the assessed value is the figure that is multiplied against the actual tax rate to determine the amount of tax a property owner is required to pay.The assessed value is the ‘value that is finally determined’ by the assessor for the assessment period and is the value that limits the assessor’s advocacy and evidence.Section 138.060.By restricting the assessor from advocating for a higher assessed valuation than that finally determined by the assessor for the relevant assessment period, the legislature prevents an assessor from putting a taxpayer at risk of being penalized with a higher assessment for challenging an assessor’s prior determination of the value of the taxpayer’s property.”State ex rel. Ashby Road Partners, LLC et al v. STC and Muehlheausler, 297 S.W.3d 80, 87-88 (Mo 8/4/09)


[54] Section 138.432, RSMo.