State Tax Commission of Missouri
MCCHINN PROPERTIES, INC.)
v.)Appeal Number 05-52000
SHAWN ORDWAY, ASSESSOR,)
COLE COUNTY, MISSOURI)
ORDER SETTING ASIDE HEARING OFFICER DECISION
The subject property is a small office building subject to a long term lease.For tax year 2005, The Assessor valued the property at $923,300, which value was approved by the Cole County Board of Equalization.Complainant appealed asserting a value of $500,000 within its Complaint for Review of Assessment and $633,531 for the leased fee under a discounted cash flow presented at hearing.Complainant presented no evidence concerning the value of the leasehold interest.Respondent presented an appraisal report indicating fee simple value of $967,300 under the cost approach; $949,600 under the income approach; and $969,500 under the sales comparison approach.Respondent urged a reconciled value of $950,000.Respondent also presented a value of the leased fee of $790,000 and a value for the lease hold interest of $490,000.
An evidentiary hearing was held on June 20, 2006, before Senior Hearing Officer W.B. Tichenor.On September 13, 2006, Hearing Officer Tichenor issued his decision and order finding value of the leased fee to be $580,900.Hearing Officer Tichenor found that no evidence was presented to suggest that the leasehold interest was marketable and, thus, assigned no value to the leasehold interest.We overturn this finding.
Complainant also appealed on the basis of discrimination, but said claim was poorly developed at hearing and Senior Hearing Officer Tichenor found said claim to be without merit.We sustain this finding.
On October 12, 2006, Respondent filed his Application for Review of the Hearing Officer decision citing the following alleged errors:
1.The Hearing Officer’s determination of value is erroneous because it is based upon below market lease rates;
2.The decision fails to value improvements made to the property by the lessee;
3.The decision fails to assign any value to the leasehold interest; and
4.The decision fails to distinguish between the value of the fee and the value of the leasehold interest; and therefore, is contrary to the holding in Nance v. State Tax Commission, 18 S.W.3d 611 (Mo. App. 2000).
Respondent goes on to list a number of specific evidentiary problems, which we do not need to address here, but are more specifically set out in his Application for Review.
We find that the Senior Hearing Officer failed to consider the value of all of the possessory interests in the property when reaching his determination of value and, therefore said value is in error and must be set aside.The correct value for the subject property on January 1, 2005, and January 1, 2006, is $923,300 (assessed value $295,460), as originally determined by the assessor and approved by the Board of Equalization.
The subject property is an 11,205 square foot site improved with a one-story masonry office building containing approximately 11,144 square feet of above grade office area and a finished basement lower level of 11,144 square feet.There is also a sub-basement level containing 1,368 square feet.The actual age of the improvements are 50 years.Their effective age is 15 years.The property is identified as parcel number 11-03-07-0004-005-012, more commonly known as 212 East High Street, Jefferson City, Cole County, Missouri.
Complainant’s Valuation Evidence
James C. Jordan, a state certified appraiser, prepared a spread sheet analysis, for the subject property calculating a value of the leased fee based upon a discounted cash flow analysis.He determined that the leased fee had a value between $630,000 and $700,000.He determined that the reversionary value of the property was between $923,927 and $985,128 at the end of ten years.Most significantly, he failed to assign a value to the leasehold interest. Exhibit C-WDT-1.
At hearing, Mr. Jordan testified that the subject property had a fee simple value of between $910,000 and $1,070,000.Tr. 39-41.Mr. Jordan testified that he was not aware of why the subject property had a below market lease.
Complainant’s Supplemental Evidence
Greg Bowman, a real estate agent, testified that he had been trying to lease the 11,000 square foot basement area for several years with no success.He testified that the asking rent on the tax day was $2.50 per square foot.He further testified that some six months after the tax day, he had been asked to list the entire building for sale.The asking price for the property, subject to the lease, was $700,000 and no one had stepped forward to purchase the property.He did not indicate the typical marketing time for a property such as the subject.Exhibit C-WDT-2.
At hearing Mr. Bowman indicated that he was not aware of how much exposure the basement space had actually received.He indicated that it might be on his website and it had a small sign in the window.He further indicated that an individual wanting to determine if the space was for lease would basically have to walk by it.He testified that it received as much advertising as any of his other properties.He further indicated that there was a very low vacancy rate in Jefferson City.
James Vossen testified that he was the senior vice-president of Exchange National Bank.He testified as to what he believed to be the debt service that could be handled by the subject property, based upon the actual income of the property reduced by interest and depreciation.C-WDT-4.Mr.Vossen admitted that he was not qualified to provide appraisal testimony.He also indicated that he was not aware of what efforts may have been made to rent the basement.
Robert McCurren testified that he was the president and a shareholder of Complainant.He testified that Central Bank leased and remodeled the 10,000 square foot main floor of the building.The initial lease was entered into on July 24, 1995, for a five year period with the option to renew for three additional five year terms.Rent was fixed at $45,000 per year for the first term; $45,000 per year for the first renewal; $50,000 per year for the second renewal; and $52,000 for the third renewal.On the tax day, Central Bank was approaching the end of the first renewal period.At the time of hearing, Central Bank had exercised its option to rent the property under the second renewal period.Complainant, the lessor, is responsible for paying the real estate taxes, insurance, and repairs to roof, interior and exterior walls, plate glass, plumbing, mechanical and electrical systems and other structural elements.
Mr. McCurren testified that it was his opinion that the fair market value of the subject property was between $450,000 and $500,000.He testified that he based his opinion upon the depressed market for properties in the downtown area of Jefferson City.
At hearing Mr. McCurren testified that, other than the opinion letter provided by Mr. Jordan, no efforts had been made to have the subject property appraised.He further indicated that Central Bank had made some $350,000 in improvements to the property.Mr. McCurren was not clear on what constituted market rent at the time of the initial lease, but indicated that he wanted a good solid tenant who was going to make some improvements and “felt like the $4.50 to $5.00 per square foot for the building as it existed was a—was a good price for the—for the lease.”
Respondent’s Valuation Evidence
Judith Trail, a state certified appraiser, prepared a narrative appraisal report on behalf of Respondent.She calculated fee simple value at $967,300 under the cost approach; $949,600 under the income approach; and $969,500 under the sales comparison approach.
Ms. Trail also prepared a discounted cash flow analysis to determine the value of the leased fee and leasehold interest.She determined that the value of the leased fee was $790,000 and the value of the leasehold interest was $490,000; for a total value of $1,280,000.However, she asserts that the assessor is only required to value based upon fee simple.“If this was not the case, the assessor would be required to identify every property in the jurisdiction subject to a lease, obtain a copy of the complete lease with all the changes and modifications, analyze each lease to establish if a leasehold estate was present and then determine which party was responsible for the taxes prior to assigning the property value. . . .Without the assumption of fee simple value for ad valorem purposes, we would be in danger of arriving at values based on the business ability, or lack of, of the property owner.”Exhibit 2, pg. 61.
At hearing Ms. Trail indicated that not only was the Central Bank lease below market at the present time, it was also below market at the time in which it was leased – having leased for less than the basement storage in the same building was being leased for at that time.Tr. 55.
FINDINGS OF FACT
1.Jurisdiction is proper.Complainant timely filed its appeal from the Cole County Board of Equalization.Likewise, Respondent timely appealed from the decision of the Hearing Officer.
2.The subject property is an 11,205 square foot site improved with a one story office building commonly known as 212 East High Street, Jefferson City, Cole County, Missouri.
3.Some 10,000 square feet of the main floor of said building is being leased by Central Bank at a lease rate of $5.00 per square foot.On the tax day, the lease was in its first renewal period and, subsequently, Central Bank has exercised its second renewal option.The lease has the potential to run through August of 2015 with only minimal increases in rent.The subject lease can be characterized as a long-term lease.Stephen and Stephen Properties, Inc. v. STC, 499 S.W.2d 798 (Mo. 1973). (10 year lease is a long-term lease).No evidence was presented at hearing which would allow us to find that this lease was typical of leases being executed in this area in 1995.
4.The rent under the lease is below the current $10 per square rent commanded in the market and was below market rent at the time it was entered into.Although Mr. McCurren testified that he thought the lease was reasonable, no evidence was presented which would suggest that a prudent owner would enter into a long term lease that was below market rent on the date of its inception.
5.Actual rent substantially distorts the property’s true value.
6.No evidence was presented that suggests that the long term lease was necessary to obtain long term financing and there was no demonstration that the existence of the leaseholder enhanced nearby property values.
7.The appraisers agree that the fee simple value of this property is between $900,000 and $1,070,000.
8.The appraisers agree that the leased fee value of this property is between $630,000 and $790,000.
9.Respondent’s appraiser calculated the leasehold value at $490,000.Even though the terms of the lease are highly favorable to the leaseholder, Complainant’s appraiser failed to find any leasehold value.Therefore, we find that the value of the leasehold is $490,000.
10.Although the sum of the value of the leased fee and the value of the leasehold is as much as $1,280,000, uniformity demands a different market value conclusion.Respondent’s cost, sales and income approaches to value indicate that a reasonable substitute for the subject property could be purchased for something less that $1,280,000.
Respondent’s appraiser found eight comparable sales in the immediate area of the subject property which sold between July 2000 and September 2004.After adjustments, these sales indicated a range of value for the subject property between $80.44 and $91.09 per square foot.The four best sales indicated a range of value between $85.56 and $88.87 per square foot.At $87 per square foot, the indicated value of the subject property is $969,528 under the sales comparison approach to value.Exhibit 1, pg. 62-77.
Under the cost approach, the replacement cost new of the improvements is $1,178,166.The subject property has an effective age of 15 years and a typical life of 50 years and is 70% good, for a depreciated value of the improvements of $799,168.The site value is $168,100 for a total value under the cost approach of $967,300.Exhibit 1, pg.32 -49.
Respondent also prepared an income approach based upon market rents, expenses and capitalization.Rents in the area range from $8.04 to $11.54 per square foot.The subject property is considered to be above average quality office space and would be at the high end of the market rent for office space, i.e., $10 per square foot for the main level.The climate controlled basement storage area is expected to rent for $2.50 per square foot.A 4% vacancy loss is expected for the main level while a 40% vacancy loss is expected for the basement storage area.After adjustments for vacancy and collection loss, the effective gross income for the subject property, based upon market conditions,is $117,012.Allowable expenses, including a reserve for replacement, are estimated at $17,210, leaving a net operating income of $99,802.Interest rates in mid 2004 were between 6% and 7.25% for amortization periods of 15 to 25 years.Respondent’s appraiser selected a 6% interest rate on an 80% loan for 20 year;a 9% equity return rate; and a 1.84% effective tax rate; for an indicated overall rate of 10.51%.Capitalizing the net operating income of $99,802 at 10.51% produced an indicated value for the subject property of $949,590.Exhibit 1, pg. 50-56.
Consequently, we find that the true value for the subject property is somewhere between $923,300, as affirmed by the Board of Equalization, and $969,500, the highest number indicated by the fee simple appraisal.The Board’s value of $923,300 is supported by competent and substantial evidence on the record, and is adopted by the Commission.
CONCLUSIONS OF LAW
The Commission finds the following specific law to be controlling:
1.“The assessor. . .shall annually assess all real property. . .and possessory interests in real property at. . .its true value in money. . . “Section 137.115.1(1), RSMo 2000.
2.A value assessment of the fee simple for real estate taxes includes every interest or estate therein.Dorman v. Minnich, 336 S.W.2d 500, 505 (Mo. banc 1960).
3.A long term lease is a relevant factor to consider when determining value.Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798; Missouri Baptist, 867 S.W.2d 510 (Mo. banc 1993).
4.The Commission may look at contract rent in conjunction with economic rent if a long term lease was prudent when entered into.Factors to consider weighing in favor of giving consideration to actual rentals rather than relying solely on market rents include:
(A)Does the long term lease give the property value?
(i)was the long term lease necessary to obtain long term financing which in turn made improvements possible?
(ii)is the leaseholder a large, nationally known retailer whose very presence enhances nearby property values?
(B)Would prudent potential buyers take the lease into consideration when determining what they are willing to pay for the property?
Projected actual income may be adjusted to reflect current market conditions where actual rent substantially distorts the property’s true value.Circumstances may exist where the income approach is too vague to be a reliable measure of value.Missouri Baptist, supra. (emphasis supplied).
5.True value in money is defined as the price which the subject property would bring when offered for sale by one willing but not obligated to sell it, and is bought by one willing or desirous to purchase, but who is not compelled to do so.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. v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978).
6.To obtain a reduction in assessed valuation based upon an overvaluation, also called an improper or over-assessment, or an arbitrary and capricious assessment, 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).
7.Nothing contained within Missouri Baptist stands for the proposition that when valuing a leasehold, fair market value is established solely by actual rent received. . . .To limit the value of the property to the value of the leased fee would ignore the value of the leasehold interest.Under Section 137.115, the assessor is required to assess all real property and possessory interests in real property.Nance v. State Tax Commission, 18 S.W.3d 611 (Mo W.D. 2000).
8.If a property owner could unilaterally alienate his property by lease or by other actions that make the property have no value to him, the taxing authority could not collect appropriate property tax because of the taxpayer’s unilateral action. Nance v. State Tax Commission, 18 S.W.3d 611 (Mo W.D. 2000).
9.Taxes. . .shall be uniform upon the same class or subclass of subjects within the territorial limits of the authority levying the tax . . .Article X, Section 3, Missouri Constitution……Real and tangible personal property shall be assessed for tax purposes at its value or such percentage of its value as may be fixed by law . . .Article X, Sections 4(a) and (b), Missouri Constitution.
For many years we operated under the premise that only market rents could be considered when reaching an opinion of value for a property.Missouri Baptist now tells us when we may consider contract rents, in conjunction with market rents, to determine the impact of a long term lease on the value of the property in certain clearly defined circumstances or when a prudent purchaser would consider the lease when determining what he would pay for the property. It further tells us that contract rents can be adjusted to reflect current market conditions when contract rents substantially distort value.
Missouri Baptist does not tell us what methodology to use in valuing said property. As so clearly pointed out in Nance, “it is not within the purview of this court to determine the method of valuation to be adopted by the Commission.”
It is impossible to make a finding concerning whether or not the lease was prudent when entered into.Although there is a presumption that property owner was acting prudently when entering into the long term lease, Complainant took no steps to rebut Respondent’s testimony that the lease was at below market rates at the time it was entered into nor did Complainant explain why a below market lease constituted a prudent transaction.Complainant further failed to establish how a prudent buyer would react to the existence of the lease.
On the issue of the leasehold value, the law could not be more clear:“Nothing contained within Missouri Baptist stands for the proposition that when valuing a leasehold, fair market value is established solely by actual rent received. . . .To limit the value of the property to the value of the leased fee would ignore the value of the leasehold interest.Under Section 137.115, the assessor is required to assess all real property and possessory interests in real property.”Nance v. State Tax Commission, 18 S.W.3d 611 (Mo W.D. 2000).
The Hearing Officer erred in valuing only the leased fee.The evidence does not support a finding that a below market leasehold interest is not marketable.The dictates of Section 137.115 and Nance, supra, clearly indicate that all interests in the real property are to be valued.Thus, we must determine value for the leasehold interest as well as the leased fee interest and consider what value, or combination of values, accurately address all of the interests in the property while still striving for market value and uniformity.
· In this instance, the only evidence of the value of the leasehold was presented by Respondent.No persuasive evidence was presented tending to dispute Respondent’s proposed leasehold value.Consequently, we adopt said value as true.
· The Hearing Officer’s value for the leased fee based upon actual income ($580,900) together with the Respondent’s evidence of the value of the leasehold interest ($490,000), indicates a value for the subject property of $1,060,000.
· The Respondent’s evidence of the leased fee value ($790,000) and the leasehold value ($490,000), indicates a market value for the subject property of $1,280,000.
· The Complainant’s evidence of the leased fee value ($630,000) added to the leasehold value ($490,000), indicates a market value for the subject property of $1,120,000.
· The Respondent’s evidence of fee simple value based upon an appraisal using the income, cost, and sales comparison approaches indicates a value between $949,600 and $969,500.
· The Board of Equalization adopted a value of $923,300.
We do not dispute the Missouri Baptist Court’s admonition to consider the impact of prudent below market leases.However, we note that that Court has set out only two very limited instances as examples of what constitutes a prudent lease, i.e. (1) if the lease was necessary to obtain long term financing and create improvements; and (2) if the lease involved a nationally recognized retailer whose presence enhances nearby property values.In other words, the lease must give the property value.Not every long term below market lease is going to rise to the level of “prudent.”The property owner has a substantial burden of proof.As suggested in Nance, imprudent action by a property owner cannot justify a tax reduction.Unilateral action by a taxpayer cannot absolve that taxpayer of its appropriate property tax burden.
Although Complainant has failed to meet its burden of proof to allow us to say conclusively that contract rent should be considered, we are willing to concede that a potential purchaser would consider the existence of the lease and contract rent when making a determination on the price to pay for the property.However, given that the value of the leasehold interest puts the total property value above typical market value for a property of this type, we cannot find that a purchaser seeking both the leased fee and the leasehold would necessarily find that the existence of the lease had a chilling effect on the property value.
Conversely, we find that no evidence was presented which would suggest that a potential buyer would pay more for the subject property than the amount he would pay for fee simple in an equally desirable substitute property.Therefore, in this instance, appraisal techniques valuing the subject property in unencumbered fee simple are better indicators of the value of the subject property than determining the sum of the value of each interest in the property and support the determination of the Board of Equalization.
In its opening statement, Complainant asserted that it is not responsible for the taxes on the leasehold estate because the leasehold estate belongs to Central Bank.We note that, by the terms of the lease, Complainant retained the obligation to pay the property taxes.
Complainant has failed to present substantial and persuasive evidence in support of its opinion of market value for the subject property.
The Decision of the Hearing Officer is SET ASIDE.The value approved by the Board of Equalization is AFFIRMED.The Clerk of Cole County, Missouri is hereby ordered to put a market value of $923,300 (assessed value $295,460) on the tax books for the subject property for tax years 2005 and 2006.
Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140, RSMo within thirty days of the date of the mailing of this Order.
SO ORDERED January 9, 2007.
STATE TAX COMMISSION OF MISSOURI
Bruce E. Davis, Chairman
Jennifer Tidwell, Commissioner
Charles Nordwald, Commissioner
DECISION AND ORDER
Decision of the Cole County Board of Equalization sustaining the assessment made by the Assessor, SET ASIDE, the Hearing Officer finds true value in money for the subject property for tax years 2005 and 2006 to be $580,900, assessed value of $185,900.
Complainant appeared by Counsel John A. Ruth, Newman, Comley & Ruth,Jefferson City,Missouri.
Respondent appeared by Counsel, Breck K. Burgess, Assistant Prosecuting Attorney.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
The Commission takes this appeal to determine (1) the true value in money for the subject property on January 1, 2005; and (2) whether there was an intentional plan by the assessing officials to assess the subject property at a ratio greater than 32% of its fair market value as required by law for commercial property, or at a ratio greater than the average commercial assessment ratio for Cole County.
Complainant appeals, on the ground of overvaluation and discrimination, the decision of the Cole County Board of Equalization, which sustained the valuation of the subject property.The Assessor determined an appraised value of $923,300, assessed value of $295,460, as commercial property.Complainant proposed an appraised value of $500,000 in the Complaint for Review of assessment.A hearing was conducted on June 20, 2006, at the Cole County Courthouse Annex,Jefferson City,Missouri.Transcript of hearing and the case file was received by the Hearing Officer for writing of the Decision on July 11, 2006.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Exhibits and Written Direct Testimony
Complainant pre-filed the following exhibits and written direct testimony.
Exhibit A – Letter Dated June 25, 2005, from James C. Jordan
Exhibit B – List of Central Business District Tax Comparables
Exhibit E – Listing Agreement, dated July 1, 2005
Exhibit F – MLS Change Form dated December 31, 2004
Exhibit G – Listing Agreement dated May 6, 2004
Exhibit H – Lease dated July 24, 1995
Exhibit I – Memorandum of Lease dated July 24, 1995
Exhibit J – Letter dated March 20, 2006, from James L. Vossen
Exhibit K – Photograph of property at212 East High Street
Exhibit L – Photograph of property at308 East High Street
Exhibit M – Photograph of property at206 East High Street
Exhibit N – Photograph of property at215 East High Street
Exhibit O – Photograph of property at818 – 830 East High Street
Exhibit P – Photograph of property at227 East High Street
Exhibit Q – Photograph of property at231 – 237 East High Street
Exhibit R – Photograph of property at100 East High Street
Exhibit S – Photograph of property at120 East High Street
Exhibit T – Photograph of property at122 East High Street
Exhibit U – Photograph of property at118 East High Street
Exhibit V – Photograph of property at322 – 324 East High Street
Exhibit W – Photograph of property at330 East High Street
Exhibit C-WDT-1 – Written Direct Testimony of James C. Jordan
Exhibit C-WDT-2 – Written Direct Testimony of Greg Bowman
Exhibit C-WDT-3 – Written Direct Testimony of Robert McCurren, III
Exhibit C-WDT-4 – Written Direct Testimony of James L. Vossen
Exhibits C and D were withdrawn at hearing.The remaining exhibits were received into evidence.
Testimony of Greg Bowman
Greg Bowman, a real estate agent and broker for Bowman Commercial Realty, testified as to the listing of the subject property for sale and listing for rent of the basement area.No opinion of fair market value was offered by Mr. Bowman.
Testimony of James L. Vossen
James L. Vossen, Senior Vice-President of Exchange National Bank, testified as to analysis of the cash flow of the subject property for 2004 and 2005.The analysis illustrated the income available to service debt and the level of debt which the 2004 and 2005 cash flows would service.No opinion of fair market value was opined by Mr. Vossen.
Testimony of Robert McCurren III
Robert McCurren III, President of McChinn Properties, Inc., as to the acquisition of the subject property, the lease of the property, attempts to lease the basement, attempts to sell the property and other matters related to the subject property.Mr. McCurren offered his opinion of the fair market value of the subject property to be between $450,000 and $500,000.
Testimony of James C. Jordan
James C. Jordan, State Certified General Real Estate Appraiser, testified as to his consultation with Mr. McCurren relative to the value of the property under appeal.Mr.Jordanperformed a discounted cash flow analysis on the McChinn property and arrived at an opinion of fair market value of the leased fee for 2005 of $695,686 allowing for a vacancy factor of 25% for the basement area; and a value of $633,531 allowing for a 50% vacancy factor for the basement area.
Respondent placed into evidence the testimony of Ms. Judith A. Trail, State Certified General Real Estate Appraiser for ColeCounty.The appraiser testified as to her appraisal of the subject property.The Appraisal Report (Exhibit 1) of Ms. Trail and her written direct testimony (Exhibit R-WDT-1) were received into evidence.The appraiser arrived at an opinion of value for the subject property of $967,300 based upon the cost approach to value.The income approach resulted in an indicated value of $949,600.An indicated value of $969,500 was derived form the sales comparison approach.Ms. Trail reconciled her three approaches to value and opined the fair market value of the McChinn property to be $950,000.
Exhibit 2, a valuation performed by Mr.Jordandeveloping cost, income and sales comparison analysis of the fee simple interest of the subject property, was received into evidence.No reconciliation of value or opinion of fair market value was developed in Exhibit 2.The indicated range of values for the fee simple estate was $420,000 to $1,070,000
FINDINGS OF FACT
1.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the Cole County Board of Equalization.
2.The subject property is located at 212 East High Street, Jefferson City, Missouri.The property is identified by parcel number 48-11-03-07-0004-005-012.The property consists of a 56.38’ x 198.75’ lot – 11,205.53 square feet or .26 of an acre.The lot is improved by a one-story masonry office building, built in 1956, remodeled 1993-96, containing approximately 10,000 square feet above grade office area and a finished basement with 11,144 square feet and a sub-basement with 1,368 square feet.Exhibit 1, pp. 4, 18; Exhibit C-WDT-3, p.3.
3.The property under appeal is the subject of a lease entered into in July, 1995 for a five year term, with three successive five year renewal terms, so that the entire term of the lease and the renewals extends to August 31, 2015.The lease covers street level floor.The annual rent for the first ten years (9/1/95 – 9/1/05) was $45,000.The annual rent for the term
September 1, 2005, to August 31, 2010, is $50,000.The annual rent for the term September 1, 2010, to August 31, 2015, will be $52,500.Exhibits H, I & C-WDT-3, pp. 3-5.
4.The basement of the McChinn property has been listed for lease since May 2003.It has not been possible to secure a tenant for all or part of the basement.The basement was not leased on January 1, 2005, and remained without a tenant as of the date of hearing.Exhibits F, G, C-WDT-2, pp 1-3, & C-WDT-3, pp 7-8.
5.The property at 212 East High has been listed for sale with Bowman Commercial Realty, Inc. since July 1, 2005, at a price of $700,000.No offers have been made to purchase the property from July 1, 2005, to the date of the hearing.Exhibit E, C-WDT-3, pp. 8-9; C-WDT-2, pp 3-4.
6.There was no evidence of new construction and improvement from January 1, 2005, to January 1, 2006.The assessed value for tax year 2005 will remain the assessed value for tax year 2006.§137.115, RSMo.
7.The existence of the long-term lease, the inability to lease the basement space and the lack of any offer to purchase the property under appeal for $700,000 are all factors which must be considered in the valuation of Complainant’s property.
8.Complainant’s evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board.
9.The income approach to value is an appropriate method for the valuation of the subject property.Exhibit 1, p. 79; Exhibit R-WDT-1, p. 3, Q & A 15; Exhibit C-WDT-1, pp. 2-4.
10.For purposes of a valuation under the income approach for the 2005 – 06 assessment, the direct capitalization method using the following income, expenses and capitalization rate is appropriate:Exhibits 1 & 2.
Potential Gross Income:
Basement: (11,144 x $2.00)$22,288
Vacancy & Collection: (25% – Basement)-5,572
Effective Gross Income:$66,716
Reserves (3% EGI): 2,000
Repairs/Maint (2% EGI): 1,334
Misc. (.05% EGI): 334
Net Operating Income: $61,048
Overall Rate: 8.67
Effective Tax Rate: 1.84
Adjusted Overall Rate:10.51%
Indicated Value:$61,048 ÷ .1051 = $580,856.32, rounded to $580,900
11.The true value in money of the subject property as of January 1, 2005 is $580,900, assessed value is $185,900 ($580,900 x .32 = $185,888, rounded to 185,900).
12.There is no evidence to establish that a market exists for the leasehold interest.
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.Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, RSMo.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.Section 138.431.4, RSMo.
Presumptions in Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.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).
The presumption in favor of the Board is not evidence.A presumption simply accepts something as true without any substantial proof to the contrary.In an evidentiary hearing before the Commission, the valuation determined by the Board, even if simply to sustain the value made by the Assessor, is accepted as true only until and so long as there is no substantial evidence to the contrary.
The Supreme Court of Missouri has held, “A tax assessor’s valuation is presumed correct.”Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341 (Mo. 2005).Citing to Hermel, supra; and Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
The presumption of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the assessor’s or Board’s valuation is erroneous and what the fair market value should have been placed on the property.Snider, Hermel & Cupples Hesse, supra.
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).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 is 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 each 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.
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.
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).
Trier of Fact
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).
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).
Valuation of Complainant’s Property
Consideration of Relevant Factors
The determination by the Hearing Officer of the valuation for property under appeal is based upon the evidence presented to the Commission in the evidentiary hearing.§138.430.2, RSMo.It is well established that consideration must be given to all relevant factors in making a determination of true value in money.“A tax assessment, though presumed valid, will not be upheld where it is clear that the assessment does not take into account all factors relevant to a determination of ‘true value in money.’”Stephen and Stephen Properties Inc. v. STC, 499 S.W.2d 798, 802 (Mo. Div I, 1973), citing to Kahler v. STC, 393 S.w.2d 460 (Mo. 1965) and Drey v. STC, 345 S.W.2d 228 (Mo. 1961).In the present case the original assessment, sustained by the Board, did not take into account several relevant and critical factors.The existence of the below-market, long-term lease and the inability to lease the basement area are both factors relevant to what a potential investment buyer would pay for the property on January 1, 2005.
Relevance of Below-Market, Long-Term Lease
The Court in Stephen Properties specifically took note of a ten year lease which limited rental payments and determined as a matter of law this was a factor relevant to arriving at value.Stephens at 803 & 804. This line of reasoning was cited with approval in Missouri Baptist Children’s Home v. STC, 867 S.W.2d 510, 512 (Mo. banc 1993).The Court in Missouri Baptist addressed the issue of a below-market long-term lease as follows:
“…, consideration of potential rent hypothesizes an unrealistic market.It assumes that properties now subject to long-term below-market leases are suddenly available to rent.… Wholly excluding below-market long-term leases from the equation assumes facts that do not and are unlikely ever to exist. … But to ignore actual rentals payable under a long-term lease when the lease was a prudent business transaction at the time it was entered into would have the effect not only of punishing the entrepreneur whose efforts created the environment for the market but would ignore economic realities. … When the lease was prudent when entered into, the Commission is quite correct to consider actual rent as a factor in determining the value of the property under the income capitalization method.”Missouri Baptist, at 513.
Since the existence of a below-market long-term lease has been recognized by the Supreme Court of Missouri as an element in valuation of property for assessment purposes which cannot be ignored.It must be taken into consideration in this appeal.When proper consideration is given to the below-market, long term lease the valuation determined by the assessing officials for the Complainant’s property is deemed to not reflect its fair market value.
Persuasive and Substantial Evidence
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, 2005.Hermel, supra at 897.Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.See, Cupples-Hesse, supra at 702.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.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).Complainant’s evidence, prima facie, rebuts any presumptions of correct assessment.The evidence establishes the basis for determining true value in money utilizing the direct capitalization methodology under the income approach based upon the data in the record as to the stream of income produced by the McChinn property as of January 1, 2005.
Prudent Business Transaction
The long-term lease on the subject property was entered into ten years prior to the valuation date.There is no evidence on the record upon which the Hearing Officer can conclude that the lease when entered into in 1995 was other than a prudent business decision on both the part of the lessor (Complainant) and the lessee.The testimony of Mr. McCurren established that at the time Complainant entered into the lease the desire was to have a good solid tenant (Central Trust Bank), who was going to make some improvements and that $4.50 to $5.00 per square foot for the building as it existed was a good price for the lease.Tr. 28, Lines 13 – 21.There is a principle of law as to the presumption relating to a market transaction, the principle has been set out in Phoenix Redevelopment Corporation v. Walker, 812 S.W.2d, 881, 883-4 (Mo. App. W.D. 1991).A price agreed to between a willing buyer and seller creates a presumption that the transaction was a market transaction.The reasoning behind this principle has sound application in the present appeal.A lease agreed to between a willing lessor and lessee creates a presumption that the transaction, at the time was a market transaction.It therefore was a prudent business transaction.It must be given consideration in arriving at fair market value.The logic of this presumption is self-evident.Knowledgeable lessors and lessees do not enter into leases that are other than sound business transactions providing mutual advantages to both parties.In other words, well-informed individuals will act in a prudent manner when conducting their business affairs.There is no evidence to even suggest that in the present instance Complainant and its lessee acted in other than a prudent manner when the current lease was negotiated in 1995.
Valuation Under Income Approach
The valuation problem presented in the present appeal is not difficult.The matter of the subject property being under a below-market, long-term lease is a factor which must be accounted for in the appraisal problem.Any well informed investor, in the hypothetical purchase on January 1, 2005, would take into account the fact that the stream of income is restricted until 2015.The investor would also recognize a negative factor for the lack of a tenant for the basement area.Accordingly, the development of the income approach, utilizing the direct capitalization methodology is appropriate.
Actual Income and Expenses
In the direct capitalization approach, the actual income and expenses are to be utilized.This is a method which has been utilized in subsidized housing cases before the Commission.In the lead subsidized housing case it was noted, “The advantages of using actual income, expenses … are clear.An investor will look at the benefits and restrictions the property actually carries when making a purchasing decision.”Maryville Properties, L.P. v. Nelson, STC Appeal No. 97-74500, p. 9 (Johnson – 4/27/2000); affirmed by Western District Court of Appeals, 83 S.W.3d 608.This line of reasoning has been followed in all subsequent subsidized housing cases brought before the Commission.Subsidized housing projects generally have below-market or restricted rents and above market expenses.In nearly all instances the rent restrictions and requirements which cause above market expenses are tied to the property for 20 or more years.Therefore, the subsidized housing arena provides a similar and in many ways a parallel situation to that of a below-market, long-term lease.
Leased Fee Valuation
The accepted methodology for the valuation of a property involving a leased fee and leasehold interest has been addressed in The Appraisal of Real Estate, Twelfth Edition, The Appraisal Institute (2001), pp. 81-82, as follows:
“A leased property, even one with rent that is consistent with market rent, is appraised as a leased fee interest, not as a fee simple interest.Even if the rent or the lease terms are not consistent with market terms, the leased fee interest must be given special consideration and is appraised as a leased fee interest.
“The valuation of a leased fee interest is best accomplished using the income capitalization approach. Regardless of the capitalization method selected, the value of the leased fee represents the owner’s interest in the property.The benefits that accrue to an owner of a leased fee estate generally consist of income throughout the lease and the reversion at the end of the lease.The sales comparison approach can be used to value leased fee interests, but this analysis is only really meaningful when the sales being used as comparables are similar leased fee interests.If not, adjustments for real property rights conveyed must be considered.The cost approach is more suited to valuing a fee simply interest than a leased fee interest.If contract rent and terms are different than market rent and terms, the cost approach must be adjusted to reflect the differences.”
Therefore, the valuation of the McChinn property is most appropriately performed valuing the leased fee under the income approach.
Capitalization of Income Stream for McChinn Property
The direct capitalization income approach is developed utilizing the income and expense data presented on the property under appeal.As of January 1, 2005, the actual income the property was generating was $45,000 per year, with an increase on September 1, 2005 to $50,000 annually.For purposes of arriving at an indicated value the income for the main floor of $50,000 per year is used.Exhibits A, H, I. C-WDT-1 & Exhibit 2.A rental amount of $2.00 per square foot or $22,288 for the basement area, with a 25% vacancy accounts for projected income for the remainder of the building.Exhibits A, H, I. C-WDT-1 & Exhibit 2.Allowable expenses include insurance ($2,000 – fixed); Reserves ($2,000 – 3% EGI); Repairs and Maintenance ($1,334 – 2% EGI) and Miscellaneous ($334 – .05% EGI).The total expenses amount to $5,668, which produces a Net Operating Income of $61,048.The overall rate of 8.67 developed by Respondent’s appraiser is appropriate.The effective tax rate of 1.84 added to the overall rate produce a capitalization rate of 10.51.Capitalizing the NOI at .1051 produces an indicated value of $580,900.
Fee Simple Valuation Not Persuasive
A fee simple valuation that does not take into account the existence of the below-market, long-term lease does not properly reflect the fair market value of the subject property.The development of a cost approach which does not make a deduction and allowance for the actual economic conditions impacting the McChinn property overstates its fair market value.Relying upon a sales comparison approach utilizing sales of properties not subject to below-market, long-term leases requires an adjustment to the sale properties to account for this factor.An income approach that ignores the below-market, long-term lease does not establish the true value in money of the subject property.
Respondent’s appraiser determined an effective gross income of $117,000 for the subject property valuing it under market conditions.The use of actual income and expenses and allowing a 25% vacancy on the unleased basement area produced an EGI of only $66,700 or only 57% market.Therefore, applying this economic reality to Respondent’s fee simple cost approach produces an indicated value of $551,361 ($967,300 x .57 = $551,361).Adjusting the indicated fee simple sale comparison approach in a like manner results in an indicated value of $552,615 ($969,500 x .57 = $552,615).This brings these two approaches in line with what is shown to be fair market value under the income approach ($580,900) when the actual economic impact of the existing lease is properly considered.
Respondent’s Equalization Emphasis
Respondent’s emphasis upon valuing the subject in fee simple and ignoring the below-market, long-term lease in order that equality might be achieved is misdirected.Equalization is brought about when properties are valued at their true value in money – what a willing buyer and seller would agree to in an arms length transaction for the purchase of the property – and assessed at the statutory ratio, thirty-two percent for the property in the present appeal.Equalization does not result when a property is artificially valued in excess of its fair market value.
No knowledgeable investor on January 1, 2005, would have invested $950,000 in the subject property for an annual return on his investment of only 6.4% ($61,000 ÷ $950,000 = .0643), before taxes.Ms. Trail concedes an investor would anticipate an equity rate of 9% and would expect to pay 6% on borrowed money, although Mr. Vossen’s analysis established an interest rate of 7.5%.In short, based upon the actual performance of the property burdened by the below-market, long-term lease, and the inability to lease the basement area, the property simply would not command a sales price of $950,000.If in reality that were the property’s true value in money, then at an offering price of $700,000 basic common sense dictates it would have been purchased long ago.The fact is the income stream that existed on January 1, 2005 and which will exist for the next ten years will not support a fair market value of $950,000 or $700,000.
The standard for valuation of the leasehold has been recognized in an earlier Commission Decision, citing to Land Clearance for Redevelopment Corp. v. Doernhoefer, et al., 389 S.W.2d 780, 784 (Mo. Div. I, 1965).Broyhill, et al. v. King, STC Appeal 97-20252, 53rd Annual Report 345 at 359-360 (9/10/1998).Broyhill involved a below-market, long-term lease.The Decision discusses in detail valuation of fee simple interest and valuation of the leased fee and leasehold interests.The evidence in Broyhill addressing these valuations was much more extensive than in the present case.However, in line with Broyhill the evidence here does not provide a substantial basis upon which it can be determined that there is a market for the leasehold.Accordingly, a detailed discussion on this point as was performed in Broyhill is not warranted.There is insufficient evidence on this record to make any claim that the value of the leased fee and the leasehold should be combined to arrive at a value for the “bundle of rights.”Therefore, for the Hearing Officer to do an analysis based on the limited evidence on this point serves no useful purpose.A brief quotation from Broyhill is applicable to the present case and will illustrate that no value can be attributed to the Central Bank leasehold.
“Quite simply, based on this record, even if it were to be assumed the lessee enjoys some rent advantage, it is not shown there is a market for this benefit.Furthermore, to take advantage of its so-called rent advantage, the lessee would have to convey its leasehold interest and turn around and pay a higher rent to the purchaser of the leasehold or vacate the premises and relocate, paying a higher rent.It has not been shown that either option is in the realm of economic reality.
“To assume the current lessee would do either would be an assumption without foundation, a speculation without a factual basis, a conjecture supported by no evidence.This Hearing Officer would not base a valuation on such an assumption, wrapped in speculation and boxed in conjecture.”Broyhill at 363.
The true value in money of the owner’s interest has been developed by means of the direct capitalization income approach as set out above.This is the assessable interest for purposes of ad valorem taxation in the present appeal.
In order to obtain a reduction in assessed value based upon discrimination, the Complainant must establish two elements.These are the actual assessment ratio of the property under appeal and the average assessment ratio for the same class of property within the taxing jurisdiction as of the tax date. Koplar v. State Tax Commission, 321 S.W.2d 686, 690 & 695 (Mo. 1959).Evidence of value and assessments of a few properties does not prove discrimination.Substantial evidence must show that all other property in the same class, generally, is actually undervalued.State ex rel. Plantz v. State Tax Commission, 384 S.W.2d 565, 568 (Mo. 1964).The difference in the assessment ratio of the subject property and the average assessment ratio in the subject county must be shown to be grossly excessive.Savage v. State Tax Commission of Missouri, 722 S.W.2d 72, 79 (Mo. banc 1986).No other methodology is sufficient to establish discrimination.Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696 (Mo. 1958).
Assessment Ratio on Subject
In the present case Complainant was required under the applicable case law just cited to prove the fair market value of its property so that the assessed value set by the assessor could be divided by the fair market value to establish the ratio at which the property was actually being assessed.Commercial property is to be assessed at thirty-two percent (32%) of true value in money or fair market value.§137.115.5(3), RSMo.The assessed value set by the assessor for 2005 was $295,460, based on a true value in money of $923,300.However, the true value in money which has been established in this Decision is $580,900.The assessed value, applying the 32% factor as required by law, is $185,900.Therefore, while the assessor had in fact assessed the subject property at 50.87% ($295,460 ÷ $580,900 = .5087) of its now determined fair market value, this does not establish discrimination, since the over assessment is easily corrected by simply applying the statutory assessment ratio to the true value in money determined for the subject property.
Average Assessment Ratio on Commercial Property
The other factor necessary to establish discrimination and have property assessed at a rate less than the statutory ratio is to establish the average assessment ratio in the county for the type of property under appeal.In this instance, since the subject property is a commercial property, it would be necessary to establish that the commercial assessment ratio for Cole County for 2005 was not in fact 32% of fair market value.In order to establish the average assessment ratio it is required that a statistically significant sample that is representative of the commercial property universe in Cole County be examined and the fair market values be determined for those properties.Once fair market values are established either by a sales ratio study or an appraisal ratio study or both, it is then possible to apply the assessed values for the properties set by the assessor to determine the actual assessment ratio for each of the sample properties.From the resulting ratios the average assessment ratio for the county can be established.Complainant failed to do this in the present case.
Exhibit B – Not Probative of Discrimination
Complainant tendered Exhibit B apparently in support of the discrimination claim.Exhibit B only contained a listing of eight properties in the Central Business District on East Capitol, High and McCarty streets with a calculation of the 2005 taxes per square foot of these properties.This information provides nothing to establish fair market value of these properties, assessed values of these properties or assessment ratios of these properties.
Six High Street Properties
Mr. McCurren calculated the per square foot fair market values as of January 1, 2005, from the Assessor’s records on six properties on East High Street.Exhibit C-WDT-3, pp. 11 – 13.The per square foot values ranged from $13.66 to 42.46, with a median of $21.26 and a mean of $25.08.The per square foot fair market value placed on the McChinn property for 2005 by the assessor calculates to $82.86.On its face such a level of disparity would appear to present a grossly excessive difference in fair market values.
However, no solid conclusion can be drawn from the limited information provided in the McCurren testimony as to the comparability or lack thereof between each of these six properties and the property at 212 East High.In short, the information does not rise to a level to establish that like properties are being compared, irrespective of the fact that this information is irrelevant to establish the average assessment ratio for commercial property in Cole County.The information does not present a statistically significant sample that is representative of commercial property in the county.Fair market values were not established for any of these properties, therefore, the median and mean of assessment ratio could not be established.
Complainant’s discrimination claim is not well taken.The subject property is to be assessed at the statutory rate of thirty-two percent of its fair market value.§137.115.5(3), RSMo.
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization forColeCountyfor the subject tax day is SET ASIDE.
The assessed value for the subject property for tax years 2005 and 2006 is set at $185,900.
A party may file with the Commission an application for review of this decision within thirty (30) days of the mailing of such decision. The application shall contain specific grounds upon which it is claimed the decision is erroneous.Failure to state specific facts or law upon which the appeal is based will result in summary denial.Section 138.432, RSMo 2000.
If an application for review of this decision is made to the Commission, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission.If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of Cole County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal.If any or all protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.
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 September 13, 2006.
STATE TAX COMMISSION OFMISSOURI
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 13thday of September, 2006, to:John Ruth, 601 Monroe, Suite 301, P.O. Box 537, Jefferson City, MO 65102-0537, Attorney for Complainant; Breck Burgess, Assistant Prosecuting Attorney, 311 E. High, Room 300, Jefferson City, MO 65101, Attorney for Respondent; Shawn Ordway, Assessor, 210 Adams Street, Jefferson City, MO 65101; Marvin Register, Clerk, Cole County Courthouse Annex, Room 201, Jefferson City, MO 65101; William Rich, Collector, Cole County Courthouse Annex, Jefferson City, MO 65101.