STATE TAX COMMISSION OF MISSOURI
| HV REAL ESTATE CORP, | ) | |
| ) | ||
| Complainants, | ) | |
| ) | ||
| v. | ) | Appeal No. 15-13713 |
| ) | ||
| JAKE ZIMMERMAN, ASSESSOR | ) | |
| ST. LOUIS COUNTY, MISSOURI, | ) | |
| ) | ||
| Respondent. | ) |
DECISION AND ORDER
HOLDING
The assessment made by the Board of Equalization of St. Louis County (BOE) is AFFIRMED. Complainant failed to present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE.
HV Real Estate Corp (Complainant) appeared by counsel John Moticka.
Jake Zimmerman, Assessor, St. Louis County, Missouri, (Respondent) appeared by counsel Ed Corrigan.
Case heard and decided by Hearing Officer Maureen Monaghan (Hearing Officer).
ISSUE
Complainant appealed on the grounds of overvaluation and misclassification. The State Tax Commission (STC) takes this appeal to determine the true market value (TMV) and the subclassification of the subject real property as of January 1, 2015.
The Hearing Officer, having considered all of the competent evidence upon the whole record enters the following Decision and Order.
FINDINGS OF FACT
- Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the STC.
- Evidentiary Hearing. The evidentiary hearing occurred on April 3, 2017, at the St. Louis County Administration Building, St. Louis County, Missouri.
- Identification of Subject Properties. The subject property is identified by parcel or locator number 18S230389, located at 16100 Swingley Ridge Road, St. Louis County.
- Description of Subject Properties. The subject property is .24 acres of real property bordered by Swingley Ridge Road, Olive Boulevard and a multistory office building on the adjacent lot which is also owned by Complainant. The properties are also bordered by North Outer Highway 40. The property is improved with pavers for a walkway and a metal sculpture.
- Assessment. Respondent set a TMV for the subject property of $188,200 and classified the property as commercial.
- Board of Equalization. The BOE sustained Respondent’s determination of classification but reduced the TMV to $35,000 ($11,200 assessed value).
- Complainant’s Evidence.
Complainant appealed to the STC alleging that the property should be classified as residential and that the property has no value. To support their opinion, Complainant offered as evidence the following:
| Exhibit | Description |
| A | Aerial Photograph of the subject |
| B | Aerial Photograph of the subject |
| C | Written Direct Testimony of Daniel K Stegmann |
Daniel Stegmann testified on behalf of Complainant. He is the president of HV Real Estate Corporation. He has invested in real estate for 38 years. The witness testified as to the photographs. Complainant purchased the property in December, 2011. The subject parcel has not been developed due to its size. The property is zoned residential. The setbacks only provide for a building of approximately 600 square feet. The witness opined the parcel had no value after purchase by HV Realty.
- Respondent’s Evidence.
Respondent presented no evidence.
- Presumption of Correct Assessment Not Rebutted.
Evidence presented was not substantial and persuasive to rebut the presumption of correct assessment by the BOE and to establish the classification of the parcel as residential or establishing the property had no value.
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 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 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.
The Statutes set forth and define the subclass of real property of residential and commercial as follows:
(1) “Residential property”, all real property improved by a structure which is used or intended to be used for residential living by human occupants, vacant land in connection with an airport, land used as a golf course, manufactured home parks, bed and breakfast inns in which the owner resides and uses as a primary residence with six or fewer rooms for rent, and time-share units as defined in section 407.600, except to the extent such units are actually rented and subject to sales tax under subdivision (6) of subsection 1 of section 144.020, but residential property shall not include other similar facilities used primarily for transient housing. For the purposes of this section, “transient housing” means all rooms available for rent or lease for which the receipts from the rent or lease of such rooms are subject to state sales tax pursuant to subdivision (6) of subsection 1 of section 144.020;….
(3) “Utility, industrial, commercial, railroad and other real property”, all real property used directly or indirectly for any commercial, mining, industrial, manufacturing, trade, professional, business, or similar purpose, including all property centrally assessed by the state tax commission but shall not include floating docks, portions of which are separately owned and the remainder of which is designated for common ownership and in which no one person or business entity owns more than five individual units. All other real property not included in the property listed in subclasses (1) and (2) of Section 4(b) of Article X of the Missouri Constitution, as such property is defined in this section, shall be deemed to be included in the term “utility, industrial, commercial, railroad and other real property”.
The statutes also provide that if real property is vacant, unused or held for future use, the assessor shall classify the property to its most immediate suitable economic use and consider such factors as:
“(1) Immediate prior use, if any, of such property;
(2) Location of such property;
(3) Zoning classification of such property; except that, such zoning classification shall not be considered conclusive if, upon consideration of all factors, it is determined that such zoning classification does not reflect the immediate most suitable economic use of the property;
(4) Other legal restrictions on the use of such property;
(5) Availability of water, electricity, gas, sewers, street lighting, and other public services for such property;
(6) Size of such property;
(7) Access of such property to public thoroughfares; and
(8) Any other factors relevant to a determination of the immediate most suitable economic use of such property.” Section 137.016 RSMo.
Valuation
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.
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 complainant’s opinion is correct. The complainant in a STC appeal still bears the burden of proof. The complainant 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).
Generally, a property owner, while not an expert, is competent to testify to the reasonable market value of his own land. Cohen, 251 S.W.3d at 348-49; Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992). “However, when an owner’s opinion is based on improper elements or foundation, his opinion loses its probative value.” Carmel Energy, Inc., 827 S.W.2d at 783.
Discussion
Complainant contests both the TMV and the classification of the property. The only evidence presented by Complainant as to the TMV was the witness’s statement that the property had no TMV as of January 1, 2015. Such statement was not substantial and persuasive to establish the TMV of the property as of January 1, 2015 and rebut the presumption of correct valuation by the BOE.
Complainant’s evidence as to the classification of the property as residential was that the property is currently zoned as residential.
The property is not improved by a structure used or intended to be used for residential living by human occupants nor does it qualify as residential by meeting any other requirement set out in Section 137.016.1(1) RSMo. The subject property is real property which is vacant and unused. The classification of such property is determined according to its immediate most suitable economic use after review of the factors set forth in Section 137.016.3. The factors relevant to the determination are:
- Immediate prior use, if any, of such property: At one time, a residential structure was located on the property. The residential structure was removed after condemnation proceedings due to the street improvements of Swingley Ridge Road and Olive Boulevard. It currently acts as buffer or excess land for the multi-story office building adjacent to the parcel;
- Location of such property: The subject property is located adjacent to an office building and bordered by Swingly Ridge Road, Olive Boulevard and North Outer Highway 40. There are no residential structures around the subject parcel or its immediate vicinity. The traffic, thoroughfares and surrounding properties make the property more economically suitable for commercial purposes; and
- Zoning classification except that such zoning classification shall not be considered conclusive: Subject property is zoned as residential.
In Bateman v. Rinehart, 391 S.W.3d 441 (S.Ct. 2013), the subject property was vacant property located in a residential subdivision. Commercial land uses were adjacent to the property. In 2009, the assessor classified the properties as agricultural; however, the valuation was based upon a commercial use. Complainant appealed to the STC on the issue of classification and sought residential classification. The STC, after hearing, classified the properties as commercial.
The issue was presented to the Missouri Supreme Court. Property owner argued the STC erred in holding that the “immediate most suitable economic use” of the property was commercial rather than residential. Property owners argued that the STC Decision was unreasonable in that the property was zoned residential, solely used as residential, and commercial uses were prohibited due to the property being zoned residential. The Supreme Court found the STC’s interpretation and application of Section 137.016.5 RSMo was supported by substantial and competent evidence in the record.
The subject property’s immediate and most suitable economic use is commercial. BOE did not err in affirming the Respondent’s determination of classification.
ORDER
The TMV and classification for the subject properties as determined by the BOE is AFFIRMED.
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
Disputed Taxes
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 April 11, 2017.
STATE TAX COMMISSION OF MISSOURI
Maureen Monaghan
Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 11th day of April, 2017, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.
Jacklyn Wood
Legal Coordinator