STATE TAX COMMISSION OF MISSOURI
| HORIZONS WEST BUILDING I, LLC | ) | |
| ) | ||
| Complainant, | ) | |
| ) | ||
| v. | ) | Appeal No. 17-79034 |
| )
) |
Parcel/Locator No. 23-3.0-06-000-000-110.000 | |
| DAVID COX, ASSESSOR, | ) | |
| PLATTE COUNTY, MISSOURI,
Respondent |
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) |
DECISION AND ORDER
HOLDING
The decision of the Platte County Board of Equalization (BOE) is SET ASIDE. Horizons West Building I, LLC (Complainant) presented substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE. The true value in money (TVM) for the subject parcel on January 1, 2017, was $3,225,000, commercial assessed value of $1,032,000.
Complainant appeared by counsel Jason Turk.
David Cox, Assessor, Platte County, Missouri, (Respondent) appeared in person and by counsel Robert Shaw.
Case heard and decided by Maureen Monaghan, Chief Counsel (Hearing Officer).
ISSUE
Respondent set the true value in money (TVM) of the subject property at $4,181,859, as commercial property, as of January 1, 2017. Complainant appealed to the BOE. On August 18 2017, the BOE valued the subject property at $4,181,859. Complainant appealed to the State Tax Commission (STC) on the ground of overvaluation. STC takes this appeal to determine the TVM for the subject property as of January 1, 2017.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
EVIDENCE
Complainant’s Evidence. Complainant opined that the TVM of the subject property was $3,225,000 as of January 1, 2017. To support the opinion of value, Complainant offered the following exhibits:
| Exhibit A | Appraisal Report | Admitted |
| Exhibit B | Written Direct Testimony of Brent Mertz | Admitted |
Complainant’s appraiser valued the property using the sales comparison and the income approaches to value. His indications of value using those approaches were $3,250,000 and $3,200,000. His reconciled opinion of value was $3,225,000.
Respondent’s Evidence. Respondent opined that the TVM of the subject property was $3,350,000 as of January 1, 2017. To support the opinion of value, Respondent offered the following exhibits:
| Exhibit 1 | Appraisal | Admitted |
| Exhibit 4 | Building Permit | Admitted |
| Exhibit 5 | Application and Certificate of Payment | Admitted |
Respondent’s appraiser valued the property using the cost and the sales comparison approaches to value. His indications of value using those approaches were $2,910,000 and $3,500,000. His reconciled opinion of value was $3,350,000.
Exhibit 4 is an Application of Construction estimating the cost of construction at $4,400,000. Exhibit 5 is an Application and Certificate of Payment setting forth the original contract sum for construction of $4,995, 457.
FINDINGS OF FACT
- Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission.
- Evidentiary Hearing. The issue of overvaluation was presented at an evidentiary hearing on April 10, 2018, at the Platte County Government Building.
- Identification of Subject Property. The subject property is identified by parcel/locator number 23-3.0-06-000-000-110.000. It is further identified as 4300 NW Mattox Road Riverside, Platte County, Missouri. (Complaint)
- Description of Subject Property. The subject property consists of 2.15 acres of land improved by an office/warehouse constructed in 2015 and occupied in 2016. The property is used by the Seattle Fish Company. The improvements include refridgerated storage unit which was treated by the appraisers as personal property.
The structure is 29,163 square feet. There is 5,880 square feet of office space. The storage space is divided as: 5.3% dry storage, 18.1% freezer storage, and the remaining is cold storage.
- Assessment of the Property Respondent determined a TVM of $4,181,859, as commercial property, as of January 1, 2017. The BOE determined a TVM for the subject property of $4,181,859.
- Presumption of Correct Assessment Rebutted. Parties presented substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE. Complainant presented substantial and persuasive evidence to establish TVM of $3,225,000.
CONCLUSIONS OF LAW AND DECISION
Jurisdiction
The STC has jurisdiction to hear this appeal and correct any assessment, which is shown to be unlawful, unfair, arbitrary or capricious, including the application of any abatement. The Hearing Officer shall issue a decision and order affirming, modifying or reversing the determination of the BOE, and correcting any assessment that 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 property and tangible personal property are assessed at set percentages of true value in money: residential property at 19%; commercial property at 32%; and agricultural property at 12%. Section 137.115.5 RSMo (2000) as amended.
Complainant’s Burden of Proof
To obtain a reduction in assessed valuation based upon an alleged overvaluation, the Complainant must prove the true value in money of the subject property on the subject tax day. Hermel, Inc., v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978). True value in money is defined as the price that the subject property would bring when offered for sale by one willing but not obligated to sell it and bought by one willing or desirous to purchase but not compelled to do so. Rinehart v. Bateman, 363 S.W.3d 357, 365 (Mo. App. W.D. 2012); Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008); Greene County v. Hermel, Inc., 511 S.W.2d 762, 771 (Mo. 1974). True value in money is defined in terms of value in exchange and not in terms of value in use. Stephen & Stephen Properties, Inc. v. State Tax Commission, 499 S.W.2d 798, 801-803 (Mo. 1973). In sum, true value in money is the fair market value of the subject property on the valuation date. Hermel, Inc., 564 S.W.2d at 897.
“’True value’ is never an absolute figure, but is merely an estimate of the fair market value on the valuation date.” Drury Chesterfield, Inc., v. Muehlheausler, 347 S.W.3d 107, 112 (Mo. App. E.D. 2011), citing St. Joe Minerals Corp. v. State Tax Comm’n of Mo., 854 S.W.2d 526, 529 (Mo. App. E.D. 1993). “Fair market value typically is defined as the price which the property would bring when offered for sale by a willing seller who is not obligated to sell, and purchased by a willing buyer who is not compelled to buy.” Drury Chesterfield, Inc., 347 S.W.3d at 112 (quotation omitted).
A presumption exists that the assessed value fixed by the BOE is correct. Rinehart, 363 S.W.3d at 367; Cohen, 251 S.W.3d at 348; Hermel, Inc., 564 S.W.2d at 895. “Substantial and persuasive controverting evidence is required to rebut the presumption, with the burden of proof resting on the taxpayer.” Cohen, 251 S.W.3d at 348. Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact. Cupples Hesse Corp., 329 S.W.2d at 702. 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). See also, 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).
There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a STC 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.” Westwood Partnership, 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. W.D. 1991).
Respondent’s Burden of Proof
Respondent, when advocating a value different from that determined by the BOE, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law. Hermel, Inc., 564 S.W.2d at 895; Cupples-Hesse, 329 S.W.2d at 702; Brooks, 527 S.W.2d at 53.
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule, or method in determining true value in money and is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled. 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 deemed necessary when viewed in connection with all other circumstances. Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. W.D. 1991). The Hearing Officer, as the trier of fact, is not bound by the opinions of experts but may believe all or none of the expert’s testimony or accept it in part or reject it in part. Exchange Bank of Missouri v. Gerlt, 367 S.W.3d 132, 135-36 (Mo. App. W.D. 2012).
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, 615 (Mo. App. W.D. 2000); Hermel, Inc., 564 S.W.2d at 897; 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. 1974).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005), citing St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977). “Each valuation approach is applied with reference to a specific use of the property—its highest and best use.” Snider, 156 S.W.3d at 346-47, citing Aspenhof Corp., 789 S.W.2d at 869. “The method used depends on several variables inherent in the highest and best use of the property in question.” Snider, 156 S.W.3d at 347.
“Each method uses its own unique factors to calculate the property’s true value in money.” Id.
Discussion
Both appraisers opined values substantially lower than the BOE. The Complainant’s appraiser developed the income and sales comparison approaches resulting in indications of value of $3,200,000 and $3,250,000. The Respondent’s appraiser using the cost and the income approaches resulting in indications of value of $2,910,000 and $3,500,000.
Complainant’s appraiser utilized comparables, both in the sales comparison approach and in developing the income approach, that were similar to the subject in that they were cold storage warehouse properties. In the sales comparison approach, the appraiser located five sales of comparable cold storage properties that sold from November 2014 to February 2016. The appraiser adjusted the sale prices for their locations and size. In the income approach, Complainant’s appraiser used five leases for cold storage and made appropriate adjustments for location and size to determine an estimated market rent. The appraiser reviewed market for vacancy, collection and expenses. The appraiser reviewed the market to develop a capitalization rate. The effective tax rate was based upon the subject’s location.
Respondent’s appraiser developed the cost and the sales comparison approaches. For his sales comparison approach, the appraiser selected sales based upon location and time. The appraiser located three sales in the area to use to develop an opinion of value. For the cost approach, the appraiser reviewed properties constructed in the area as well as utilizing a recognized cost estimator.
The cost approach was not developed by the Complainant’s appraiser. Even though the property is somewhat unique – being a cold storage warehouse – office/warehouse properties are typically marketed as income producing properties. Reviewing all the approaches to value and their indications of value of $2,910,000, $3,200,000, $3,250,000, and $3,500,000, there is substantial and persuasive evidence the TVM a value of $3,225,000.
ORDER
The TVM for the subject property as determined by the BOE is SET ASIDE. The assessed value for the subject property for tax year 2017 is set at $1,032,000 commercial classification. (TVM of $3,225,000).
Application for Review
A party may file with the STC 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
Disputed Taxes
The Collector of St. Louis City, 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 May 18, 2018.
STATE TAX COMMISSION OF MISSOURI
Maureen Monaghan
Chief Counsel
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 18th day of May, 2018, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.
Jacklyn Wood
Legal Coordinator