State Tax Commission of Missouri
|FOCI ENTERPRISES, LLC||)|
|v.||)||Appeal Number 09-11075|
|JAKE ZIMMERMAN, ASSESSOR,||)|
|ST. LOUIS COUNTY, MISSOURI,||)|
DECISION AND ORDER
St. Louis County Board of Equalization’s assessment SET ASIDE. Complainant presented substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization.
True value in for the subject property for 2009-2010 is set at $158,900, commercial assessed value of $50,850.
Complainant appeared by counsel, James Gamble. Respondent appeared by Attorney Priscilla Gunn.
Case heard and decided by Maureen Monaghan, Hearing Officer.
Complainant appeals, on the grounds of overvaluation and discrimination, the decision of the County of Board of Equalization. The Complainant abandoned their discrimination claim. Having considered all of the competent evidence upon the whole record, the Hearing Officer finds that the Complainant presented substantial and persuasive evidence as to overvaluation. The following Decision and Order is entered.
FINDINGS OF FACT
- Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the County Board of Equalization.
- Schedule and Procedure. The State Tax Commission issued an Order setting forth the schedule and procedures for this appeal on August 15, 2014. The Schedule and Procedure required that each party file and exchange exhibits and written direct testimony to establish their case in chief on or before March 5, 2015. Complainant and Respondent filed and exchanged the exhibits set out below under Evidence. Parties had until April 7, 2015, to file objections and rebuttal exhibits. Neither party objected to the exhibits filed. Parties were ordered to file, on or before May 5, 2015, a request for hearing. Complainant requested a hearing in appeal 09-11075, however, the Respondent’s evidence is a document therefore the appeals were taken under advisement with the exhibits submitted.
- Subject Property. The subject property is identified as parcel number 13M120021. It is located at 3012 North Lindbergh Boulevard, St. Louis, MO. The property consists of 59,677 square feet of land with a multi-tenant retail building having a total area of 15,000 square feet. The subject property was damaged by fire in December 2008 and the cost to repair such was $220,000. The subject property is owned by Complainant and rented and/or leased to multiple tenants.
- Assessment. The Assessor and Board of Equalization determined the following true market values respectively for the various tax years as follows:
2009-2010: Assessor $549,000, BOE $527,400.
- Evidence. In all appeals Complainant filed with the Commission the following documents: Exhibit A – Appraisal Report and Exhibit B – Written Direct Testimony of John Hottle. In appeals 09-11075 and 13-12145 Respondent filed Exhibit 1 – the BOE Decision.
- The True Market Value of the property as of January 1, 2009, was $158,900.
CONCLUSIONS OF LAW AND DECISION
The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious. The Hearing Officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious. Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
Basis of Assessment
The Constitution mandates that real property and tangible personal property be assessed at its value or such percentage of its value as may be fixed by law for each class and for each subclass. Article X, Sections 4(a) and 4(b), Mo. Const. of 1945. The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property is assessed at set percentages of true value in money. Section 137.115.5, RSMo
Issuance of Decision Absent Evidentiary Hearing
The Hearing Officer, after affording the parties reasonable opportunity for fair hearing, shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, correcting any assessment which is unlawful, unfair, improper, arbitrary or capricious. Section 138.431.5 RSMo; 12 CSR 30-3.080 (2). The filing of exhibits and written direct testimony establishes the basis upon which opportunity for an evidentiary hearing can be held. The Complainant has the burden to present substantial and persuasive evidence. The Respondent did not file any rebuttal exhibits. Therefore, the Hearing Officer simply considered the exhibits filed and then proceeded to ascertain if said exhibits met the standard of substantial and persuasive evidence to establish the market value of the property.
Standard for Valuation
Section 137.115, RSMo, requires that property be assessed based upon its true value in money which is defined as the price a property would bring when offered for sale by one willing or desirous to sell and bought by one who is willing or desirous to purchase but who is not compelled to do so. St. Joe Minerals Corp. v. State Tax Commission, 854 S.W.2d 526, 529 (Mo. App. E.D. 1993); Missouri Baptist Children’s Home v. State Tax Commission, 867 S.W.2d 510, 512 (Mo. banc 1993).
True value in money is defined in terms of value in exchange and not value in use. Daly v. P. D. George Company, et al, 77 S.W.3d 645, 649 (Mo. App E.D. 2002), citing, Equitable Life Assurance Society v. STC, 852 S.W.2d 376, 380 (Mo. App. 1993); citing, Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798, 801-803 (Mo. 1973). It is the fair market value of the subject property on the valuation date. Hermel, supra. Market value is the most probable price in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.
Implicit in this definition are the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:
- Buyer and seller are typically motivated.
- Both parties are well informed and well advised, and both acting in what they consider their own best interests.
- A reasonable time is allowed for exposure in the open market.
- Payment is made in cash or its equivalent.
- Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.
- The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction. Real Estate Appraisal Terminology, Society of Real Estate Appraisers, Revised Edition, 1984; See also, Real Estate Valuation in Litigation, J. D. Eaton, M.A.I., American Institute of Real Estate Appraisers, 1982, pp. 4-5; Property Appraisal and Assessment Administration, International Association of Assessing Officers, 1990, pp. 79-80; Uniform Standards of Professional Appraisal Practice, Glossary
Mr. Hottle conducted an appraisal of the property under appeal consistent with this standard.
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). 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) The Hearing Officer is persuaded that the valuation presented in the appraisal is based upon appropriate and sound appraisal practice and therefore constitutes substantial and persuasive evidence to allow the establishment of the true market value of $158,900 for 1/1/09, $380,500 for 1/1/11 and $401,800 for 1/1/13.
Methods of Valuation
Proper methods of valuation and assessment of property are delegated to the Commission. It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case. See, Nance v. STC, 18 S.W.3d 611, at 615 (Mo. App. W.D. 2000); Hermel, supra; Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975). Missouri courts have approved the comparable sales or market approach, the cost approach and the income approach as recognized methods of arriving at fair market value. St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987); and State ex rel. State Highway Comm’n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. Div. 2 1974).
The appraiser appraised the property developing the income and the sales comparison approach. The methodologies utilized were appropriate for the appraisal problem presented in the present appeal.
Complainant Proves Value
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, 2009. Hermel, supra There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a Commission appeal still bears the burden of proof. The taxpayer is the moving party seeking affirmative relief. Therefore, the Complainant bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.” See, Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003). Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App. 1991).
The Complainant’s appraiser developed in the income and the sales approach. The appraiser relied primarily on the income approach since the property is a retail property with leased space. The appraiser appropriately handled the fire damage issue from 2008 by deducting the cost of repair from the indication of value and also accounted for the lost rent during such period. The appraiser did use a higher than market vacancy rate and looked at the actual income for three years, which included a year without income due to the fire. Overall, however, the approach was appropriate and supported by market information. The Complainant’s appraisal evidence meets the required evidentiary standard to rebut the presumption of correct assessment by the Board and to allow the establishment of the true value in money as of January 1, 2009 for the subject property at $158,900.
The assessed valuation for the subject property as determined by the Board of Equalization for St. Louis County for the subject tax day is SET ASIDE. True value in money and assessment value for the subject property for the various tax years are as follows:
2009-2010 is set at $158,900, commercial assessed value of $50,850.
Application for Review
A party may file with the Commission an application for review of this decision within thirty days of the mailing date set forth in the Certificate of Service for this Decision. The application shall contain specific facts or law as grounds upon which it is claimed the decision is erroneous. Said application must be in writing addressed to the State Tax Commission of
Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.
Failure to state specific facts or law upon which the application for review is based will result in summary denial. Section 138.432, RSMo.
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 29, 2015.
STATE TAX COMMISSION OF MISSOURI
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 29th day of June, 2015, to: Complainants(s) counsel and/or Complainant, the county Assessor and/or Counsel for Respondent and county Collector.