State Tax Commission of Missouri
IRET MR9 LLC, )
v. ) Appeal No. 09-12810
JAKE ZIMMERMAN, ASSESSOR, )
ST. LOUIS COUNTY, MISSOURI, )
DECISION AND ORDER
Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE. Complainant presented substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization and to establish the true value in money for the property under appeal.
True value in money for the subject property for tax years 2009 and 2010 is set at $12,840,000, commercial assessed value of $4,108,800.
Complainant appeared by Counsels, Thomas Rynard, Blitz, Bardgett & Deutsch, L.C., Jefferson City, Missouri; and Patrick J. Boyle, Gunn & Gunn, St. Louis, Missouri.
Respondent appeared by Associate County Counselor, Paula Lemerman.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
Complainant appealed, on the ground of overvaluation, the decision of the St. Louis 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, 2011. The Hearing Officer, having considered all of the competent evidence upon the whole record and the Briefs of the parties, enters the following Decision and Order.
FINDINGS OF FACT
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. Evidentiary Hearing. The Evidentiary Hearing was held on May 22, 2012, at the St. Louis County Government Center, 41 South Central Avenue, Clayton, Missouri. Transcript was received by the Commission on 8/6/12, and transmitted electronically to respective Counsels on that date.
3. Briefs of Parties. The case was set for briefing at the close of the evidentiary hearing at request of Complainant’s Counsel Rynard. Brief of Complainant in Support of Its Objection to the Admission of Respondent’s Exhibits 1 and 2, prepared by Mr. Boyle, was received 9/14/12. Complainant’s Brief on Valuation Evidence, prepared by Mr. Rynard was received 9/14/12. Respondent’s Brief in Response to Complainant’s Post-Hearing Briefs was received 11/27/12. Complainant’s Reply Brief in Support of Its Objection to the Admission of Respondent’s Exhibits 1 and 2 was received 12/17/12. Complainant’s Reply Brief was received 12/21/12.
4. Subject Property. The subject property is identified by locator number 11P620324. It is located at 13640 Riverport Drive, Maryland Heights, Missouri. A complete description of the property is provided in Exhibit B.
5. Assessment. The Assessor appraised the property at $19,751,400, a commercial assessed value of $6,320,450. The Board of Equalization sustained the assessment.
6. Complainant’s Evidence. Complainant offered into evidence the following exhibits which were received into the record.
Summary Appraisal Report – Subject Property, dated 1/1/09 – Douglas A. Zink
Written Direct Testimony – Douglas A. Zink
Deposition of Nancy McGrath, dated 5/16/12, pp. 22 – 25
Pages 57, 59-62 – Zink Appraisal – 13500 Riverport
Mr. Zink testified at the evidentiary hearing. His opinion of value for the subject property as of January 1, 2009, was $12,840,000.
7. Respondent’s Evidence. Respondent offered into evidence the following exhibits:
Appraisal Review Report, dated 1/1/09 – Nancy K. McGrath
Written Direct Testimony – Nancy K. McGrath
Summary Appraisal – 13500 Riverport Dr., (Douglas Zink), dated 7/20/10
Summary Appraisal – 13500 Riverport Dr., (Douglas Zink), dated 7/8/11
Rebuttal Testimony – Nancy K. McGrath
8. Pre-Hearing Rulings on Respondent’s Exhibits. Objections were filed to Exhibits 1 and 2. Objections were ruled on by Order dated 4/5/12. Objections were overruled.
Objections were filed to Exhibits 3, 4 and 5. Objections were ruled on by Order dated 4/5/12. Objections were sustained and Exhibits 3, 4 and 5 were excluded from evidence. The Order, dated 4/5/12 ruling on objections to Exhibits 3, 4 and 5 is incorporated by reference into this Decision as if set out in full herein.
9. Objection at Hearing to Exhibits 1 and 2. Complainant renewed objection to Exhibits 1 and 2 at the Evidentiary Hearing. Counsel Boyle conducted voir dire examination of Ms. McGrath in support of Complainant’s renewed objection. Ms. Lemerman and the Hearing Officer examined Ms. McGrath in conjunction with the voir dire. Motion for reconsideration of Order dated 4/5/12 ruling on Exhibits 1 and 2 was taken under advisement for ruling in this Decision.
10. Exclusion of Exhibits 1 and 2. Exhibits 1 and 2, as well as the examination at the Evidentiary Hearing of Ms. McGrath relative to her concluding a value of $17,500,000 as of January 1, 2009, are excluded from evidence. See, Granting of Motion for Reconsideration, and Ruling on Objections to Exhibits 1 & 2, infra.
11. Conclusion of Value. Complainant’s evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2009, to be $12,840,000. See, Complainant Proves Value of $12,840,000, infra. The commercial assessed value for the subject property is $4,108,800. There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010, therefore the assessed value to be established for 2009 remains the assessed value for 2010.
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.
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. 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. In an overvaluation appeal, true value in money for the property being appealed determined based upon the evidence on the record that is probative on the issue of the fair market value of the property under appeal.
Granting of Motion for Reconsideration
Complainant timely moved for reconsideration of the Hearing Officer’s initial ruling on the objections to Exhibits 1 and 2. Said motion must now be addressed before the Hearing Officer can proceed to consider the issue of overvaluation.
Complainant filed its objections to Respondent’s Pre-filed Evidence and Motion to Strike Same on 12/14/11. Respondent’s Response was received at the office of the Commission on 1/19/12. The objections advanced by Complainant to the Exhibits were four in number.
Specifically, the objections were:
(a) The appraisal is an “appraisal review”;
(b) The appraisal’s only purpose is to review the mass appraisal conducted by the county;
(c) The report is not compliant with 12 CSR 30-3.065 in that it only updates the property record card; and
(d) The report values the leasehold estate.
The ruling of 4/5/12 overruling the objections was essentially on the basis of the Hearing Officer’s conclusion that the objections essentially went to the matter of the weight that should be given to the Exhibits and the conclusions therein. The ruling of 4/5/12 stands.
Unreliability of Report
Under the Uniform Standards of Professional Appraisal Practice (USPAP), an appraisal review report is to develop an opinion of another appraiser’s work. The transmittal letter for Exhibit 1 asserts that the witness’ scope of work for the review assignment involved an inspection of the subject and its neighborhood and a “review of the St. Louis County appraisal (PRC record . . . )” The witness testified that she was not reviewing another appraiser’s work she was simply reviewing the PRC (Property Record Card) and that she did not review any mass appraisal report prepared by anyone in St. Louis County for 2009 which included the subject property.
The PRC does not qualify as an appraisal under Commission rule. A PRC lacks the basic elements of an appraisal for purposes of admission as such in an appeal before the Commission. It contains no narrative explaining opinions and conclusions it contains. It is simply a compilation of numbers and abbreviations. There is no reference to the sources of information for any numbers or values set forth in the document. No correlation of values, no signature and no certification, all essential elements of an appraisal are to be found in a PRC.
The witness lacked knowledge of the various sources of values for the subject property contained in the PRC and an understanding of the valuation on the PRC. The witness did not do any review as to what data was used or how it was collected or verified for the mass appraisal that was the basis for the PRC. In other words, there was a lack of verification for the underlying data that supported the PRC.
The Hearing Officer concludes that the County was simply going to do a review of the PRC, because that would be “more efficient”, but the witness, probably due to the incorrect square footage in the records, somewhere along the way decided to “appraise” or quickly value the subject relying on the income and sales comparison approach using data on-hand and not necessarily developed for this appraisal problem. The result of the decision was an appraisal that lacked the necessary depth of research, understanding and confirmation of information used as a basis of the opinion of value. Examples include the lack of knowledge on the terms of the rental comparisons, conclusion of capitalization rate, basis of information for the capitalization rate, and selection of comparable properties.
Based on the foregoing analysis, Exhibits 1 and 2 are admitted into evidence but are given no weight.
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization. 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. The presumption is not evidence of value.
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. Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. 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.
The first requirement for rebutting the presumption in favor of the Board’s assessment has been met in two parts in this appeal. First, the Board valuation was established to have been founded upon erroneous data. Ms. McGrath testified under voir dire examination that there was an error as to the square footage of the subject property. The Board could not have been aware of the square footage error and its decision to sustain the Assessor’s valuation was based simply
upon the erroneous PRC. Therefore, the presumption that the Board correctly assessed the property was rebutted.
The Board presumption of correct assessment was additionally rebutted by the presentation of Complainant’s evidence. The submission of the appraisal report, performed by a state certified real estate appraiser, established prima facie that the Board’s value was in error. The appraisal and supporting testimony further established prima facie what the fair market value that should have been placed on the property. No evidence was received that rebutted the conclusion of value in Complainant’s appraisal. 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. True value in money is defined in terms of value in exchange and not value in use. It is the fair market value of the subject property on the valuation date. 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.
The Zink appraisal concluded its value under the Standard For Valuation.
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.
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.
The Hearing Officer has reviewed and analyzed the valuation evidence in this record. The arguments advanced by both the Rynard and Lemerman briefs on the issue of valuation with regard to Mr. Zink’s appraisal have been likewise been considered. When viewed in connection with the arguments made in support of and in opposition to the Zink conclusion of value, as well as the underlying evidence of Complainant’s appraisal and the testimony of its expert the conclusion of value of $12,840,000 must be given significant probative weight. The Hearing Officer is persuaded that the Complainant’s tendered opinion of value is sufficiently established and supported by substantial and persuasive evidence as to be adopted to establish the fair market value of the subject as of January 1, 2009.
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. 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.
Mr. Zink considered the cost approach, but concluded it was not applicable due to the significant amount of external obsolescence due to depressed rental rates which would not support new office development. The appraiser developed the sales comparison and income approaches. He concluded the fair market value for the subject as of January 1, 2009 to be $12,840,000.
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.
Mr. Zink is qualified by knowledge, skill, experience, training, and education to appraise the subject property and offer his conclusion as to the fair market value of the property under appeal. He has been appraising real estate since 1985, specifically in Missouri since 1987. He is a certified general real estate appraiser in both Missouri and Illinois. Mr. Zink has personally appraised an estimated 1,200 to 1,500 commercial, industrial and development properties located in several states. His appraisals have been performed for lenders, investors, and corporations with real estate holdings. He has performed several appraisals on office buildings located in the St. Louis area and other cities. His appraisals have involved all classes of multi-tenant and single tenant properties, ranging in size from under 100,000 to over one million square feet. He has appraised properties for tax assessment purposes. He has testified before the Commission.
The facts and data upon which Mr. Zink developed his appraisal and conclusion of value are of the types reasonably relied upon by experts in the field of commercial real estate appraisal. The supporting facts and data are otherwise reliable.
Accordingly, the appraisal and testimony of Mr. Zink met the Missouri statutory requirement for an expert witness and provided necessary assistance in determining the issue of the fair market value of the subject property as of 1/1/09.
Complainant Proves Value of $12,840,000
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. 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.” Specifically, the taxpayer has the burden to establish the true value in money for the property under appeal as of the valuation date. 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. The Complainant’s burden has been satisfied in this appeal. The Zink appraisal, direct testimony and testimony at hearing provided the required substantial and persuasive basis to prove the value as of 1/1/09 to be $12,480,000. The following findings are all adequately established and supported by Complainant’s evidence.
The highest and best use for the subject property as improved is as an office development. Offices are typically investment properties with the income approach normally the best method for valuing the property because market participants primarily analyze such properties based on their income generating potential. This is true of the subject property. The direct capitalization method of the income approach was appropriately utilized.
The subject property was 100% leased by a single tenant on January 1, 2009; however, that lease was due to expire in September of 2011. The rent per square foot under that lease was $16.60; however, anyone looking to purchase the property on January 1, 2009, would conclude that the current rent would not be sustainable into the future, that it did not represent a stabilized income for the property for purposes of the direct capitalization income approach, and that either at expiration of the lease or earlier in the event of a renegotiation of the lease in anticipation of its expiration, the amount of rent would be substantially reduced to reflect market conditions. In addition, a buyer on January 1, 2009, would have no guarantee that the lease would be renewed and that the property would remain 100% occupied at renewal. Mr. Zink gave appropriate consideration to the existing lease, but properly concluded that the lease presented a near-term risk to any potential purchaser as of 1/1/09.
Mr. Zink determined that the income approach should look to market rents for the property on January 1, 2009, for purposes of coming to a stabilized income for the property. To develop a market rent for the subject property, Mr. Zink considered six rent comparables and two listings for office buildings in the subject’s market area. Three of the rent comparables were located within the same business park as the subject, while the others were within a couple miles of it along Interstate 270. The leases used included two with lease dates of January, 2005, two with 2008 lease dates (June and December), and two with lease dates from early 2009 (February and March). While the 2009 leases were subsequent to the date of valuation, they would have been negotiated prior to January 1, 2009, and would have been based on knowledge of the market at or around the January 1, 2009, date.
The estimated net rents for these leases ranged from $8.57/SF to $13.07/SF. The two listings reviewed indicated an estimated net rental of $11.07/SF. The comparables were similar to the subject with respect to location, individual tenant size and quality. After considering differences in the rent comparables and the subject property, Mr. Zink arrived at a base rent for the subject of $12.60/SF. Since rent abatements were common in the market, the base rent was also adjusted downward to account for this loss of rental income. Applying a five percent rent abatement to the property, an adjusted market rent of $11.97/SF was concluded, which was rounded to $12.00/SF. The use of market rents, the comparables considered, the adjustments made and the final conclusion of a potential market rent of $12.00/SF were reasonable and appropriate in amount and justification. This produced a potential rental income for the subject property of $1,470,804.
Adjustments to potential gross rental income included a deduction of 10% for vacancy and a credit loss of 1%. Even though the subject was 100% occupied at the date of valuation, it was reasonable to include the deductions for vacancy and credit loss as the lease was due to expire in two years time and there was no guarantee that it would continue to be 100% occupied during the economic life of the property. These deductions were reasonable and appropriate to determine the stabilized value of the property and not actually contested by Respondent.
To the adjusted potential rents, Mr. Zink then added in expense reimbursements. This addition to the gross income represented the common practice with NNN (Triple Net) office leases in which a tenant reimburses the owner for a pro rata share of expenses. Mr. Zink added in $827,406 for rental reimbursements based on the property actuals from the year previously. This figure did not include reimbursements related to real estate taxes paid on the property since this was accounted for in the loading of the capitalization rate, as discussed below. The amount added in as potential income for expense reimbursements was reasonable and appropriate as to both inclusion and amount. As Complainant included the expense reimbursements and the effect in doing so was to increase the end value by the income approach, there was no real difference over including this item in the income approach. After applying the vacancy and credit loss and expense reimbursement to the property’s potential income, an effective gross income of $2,045,407 was derived.
Operating expenses were deducted from the effective gross income to produce a net operating income. Mr. Zink’s approach considered different categories of expenses based on the actual experience of the property for 2007 and 2008 and expense comparables from three similar properties. The final determination of operating expenses excluded real estate taxes. The total operating expenses deducted were $847,017. With respect to the actual expenses considered, Mr. Zink noted a much higher actual expense for 2007 and 2008, which he attributed to a miscellaneous item of $1.2 million in the expense records and which he believed was related to the acquisition of the property and not a true expense. Accordingly, he properly did not include this in his expense conclusion. Based on his conclusions on income and expenses, the net operating income for the subject property as derived by Mr. Zink was $1,198,895.
Mr. Zink derived an overall capitalization rate (OAR) of 9% after considering comparable rates, published investor surveys, and the band of investment method. Mr. Zink relied principally on capitalization rates from comparable properties. These indicated a range of OARs of 7.7% to 10.5%. The other methods considered by Mr. Zink indicated OARs in excess of the 9% chosen by him, ranging from 9.14% to 11%.
The cap rate was loaded for real estate taxes, producing an adjusted cap rate of 9.33%. Mr. Zink loaded only that portion of the real estate taxes attributable to the portion of taxes that would not be reimbursed to the owner under a triple net lease. Applying the adjusted cap rate to the net operating income indicated a value by the income approach of $12,840,000, rounded.
Mr. Zink’s income approach reflects conditions in the market on January 1, 2009, and considers all of the sources that would be considered by the market in valuing a property. In addition, the adjustments and conclusions he made were supported by conditions in the market and were appropriate and reasonable. His methodology establishes a value for the property of $12,840,000.
Because properties such as the subject are typically bought for investment purposes, the reliance on the income approach by the appraiser to conclude value was appropriate for this valuation problem. Complainant’s expert appraisal evidence is substantial and persuasive and establishes the value of the subject property to be $12,840,000.
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 2009 and 2010 is set at $4,108,800.
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. 
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: March 6, 2013.
STATE TAX COMMISSION OF MISSOURI
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 6th day of March, 2013, to: Thomas Rynard, 308 E. High Street, Suite 301, Jefferson City, MO 65101 and Patrick Boyle, 11901 Olive Blvd., Suite 312, P.O. Box 419002, Attorneys for Complainant; Paula Lemerman, Associate County Counselor, Attorney for Respondent, 41 South Central Avenue, Clayton, MO 63105; Jake Zimmerman, Assessor, 41 South Central Avenue, Clayton, MO 63105; Eugene Leung, Acting Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.
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
 Complaint for Review of Assessment, BOE Decision Letter dated 9/17/09 (filed with Complaint); Exhibit B: Assessor’s Parcel Number, p. 38
 Exhibit B: Subject Photographs, pp. iii – x; Summary of Salient Facts, p. xi; Site Map, p. 36; Site Summary and Analysis, p.37; Improvements Analysis, pp. 40 – 44
 Commercial property is assessed at 32% of its appraised value (true value in money, fair market value) – Section 137.115.5, RSMo
 Mr. Zink is a Certified General Real Estate Appraiser in Missouri and Illinois. He has the MAI Designation since 1994 with the Appraisal Institute. He also has held since 1996 the Certified Commercial Investment Member Designation. He has in excess of 28 years of appraisal experience.
 Amending Section 503.300, Title V, SLCRO 1974 – Reimbursement to Taxpayers Upon a Final Decision to Reduce Appraised Value
 Exhibit B proffered a conclusion of value of $12,700,000. At the evidentiary hearing before cross-examination of the appraiser, Counsel Rynard and Mr. Zink informed the Hearing Officer of a correction to Exhibit B which increased the opinion of value to $12,840,000. A corrected page 70 to Exhibit B was received into evidence reflecting the correction. Tr. 4:20 – 7:5
 Tr. 115:15 – 116:22 – Testimony of Ms. McGrath; See also, USPAP 2010-2011, Standard 3, U-30, Lines 916 – 918: “STANDARD 3 is directed toward the substantive aspects of developing a credible opinion of the quality of another appraiser’s work that was performed as part of an appraisal, appraisal review, or real property appraisal consulting assignment.” The witness acknowledged that she reviewed Standard 3 in preparing Exhibit 1.
 A PRC may be admissible to establish the basis for an appraiser’s conclusion as to physical attributes or other such factual data for the property, provided, a proper foundation for such information can be provided.
 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)
 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.
 See, Cupples-Hesse, supra.
Substantial and persuasive evidence is not an extremely high standard of evidentiary proof. It is the lowest of the three standards for evidence (substantial & persuasive, clear and convincing, and beyond a reasonable doubt). It requires a small amount of evidence to cross the threshold to rebut the presumption of correct assessment by the Board. The definitions, relevant to substantial evidence, do not support a position that substantial and persuasive evidence is an extremely or very high standard.
“Substantial evidence: Evidence that a reasonable mind would accept as adequate to support a conclusion; evidence beyond a scintilla.” Black’s Law Dictionary, Seventh Edition, p. 580.
The word scintilla is defined as “1. a spark, 2. a particle; the least trace.” Webster’s New World Dictionary, Second College Edition. Black’s definition at 1347 is “A spark or trace <the standard is that there must be more than a scintilla of evidence>.” There must be more than a spark or trace for evidence to have attained the standard of substantial. Once there is something more than a spark or trace the evidence has reached the level of substantial. Substantial evidence and the term preponderance of the evidence are essentially the same. “Preponderance of the evidence. The greater weight of the evidence; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.” Black’s at 1201. Substantial evidence is that a reasonable mind would accept as adequate to support the conclusion. Preponderance is sufficient to incline a fair and impartial mind to one side of the issue rather than the other, i.e. support the proposed conclusion.
 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).
 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).
 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.
 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).
 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).
 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).
 Exhibit B – Appraisal Methodology – Methodology Applicable to the Subject, p. 50; Exhibit C – Q & A 32
 Exhibit B – Appraisal Methodology – Methodology Applicable to the Subject, p. 50; Exhibit C – Q & A 31; See, Exhibit B – Sales Comparison Approach, pp. 51 -55; Income Capitalization Approach, pp. 56 – 71 & Exhibit C – Q & A 33 – 72
 Exhibit B – Reconciliation of Value – Market Value Conclusion, p. 72; Exhibit C – Q & A 72, p. 17; Tr. 4:23 – 6:21
 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).
 Exhibit C – Q & A 36 – 37, p. 8; Q & A 47, p. 12; Q & A 50 – 52, pp. 12 – 13; Q & A 56 – 57, p. 14; Q & A 66 – 67, p. 16;
 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).
 At renewal, the tenant leased only two of the three floors of the building (the first and third floors) at a substantially reduced rental rate and the owner had difficulty leasing the remaining space. Tr. 94:22 – 95:8
 The appraiser also developed a sales comparison approach, the Hearing Officer is persuaded that the income approach presented was sufficient to meet the Complainant’s burden of proof and finds no need to address the sales comparison approach, since in the final conclusion, the opinion of value proffered by the expert witness was the value derived from the income, and not the sales comparison, approach.
 Mr. Zink’s appraisal report and pre-filed direct testimony had indicated a value of $12,700,000. At hearing, Mr. Zink testified to discovering an error in the amount of expense reimbursements that should be added into effective gross income. Applying the corrected figure produced an opinion of value of $12,840,000.