Nathan Fleck v. Jake Zimmerman, Assessor, St. Louis County

July 30th, 2021

STATE TAX COMMISSION OF MISSOURI

 

NATHAN FLECK, ) Appeal No. 19-11512
  ) Parcel/Loc. 17W230142
             Complainant, )  
  )  
v. )  
  )  
JAKE ZIMMERMAN, ASSESSOR, )  
ST. LOUIS COUNTY, MISSOURI, )  
  )  
             Respondent. )  

 

DECISION AND ORDER AFFIRMING HEARING OFFICER DECISION

UPON APPLICATION FOR REVIEW

HOLDING

On October 30, 2020, the Hearing Officer entered a Decision and Order (Decision) affirming the Board of Equalization of St. Louis County (BOE). Nathan Fleck (Complainant) subsequently filed an Application for Review of the Hearing Officer’s Decision with the Commission.

The Hearing Officer’s Decision is AFFIRMED. Segments of the Hearing Officer’s Decision may have been incorporated into the Commission’s Decision and Order without further reference.

FINDINGS OF FACT AND PROCEDURAL HISTORY

            The subject property is identified by parcel/locator number 17W230142. It is further identified as 600 Spirit Valley E Dr., Unit B3, Chesterfield, St. Louis County, Missouri. (Complaint for Review of Assessment) The subject property consists of a 1,400 square-foot storage unit located in “The Place” condominiums in Spirit Valley Business Park.

The subject property is subject to the Indenture and Declarations of Protective Conditions, Covenants, Restrictions, Reservations and Easements for Spirit Valley Business Park Phase I and Phase II (Indenture). (Respondent’s Exhibit 9) The Indenture was recorded on August 4, 2016. The Indenture states that the business park was developed as “an integrated commercial business center . . . .” (Respondent’s Exhibit 9)

The subject property also is subject to The Place Condominium Association Declaration of Condominium (Declaration), dated June 1, 2016. (Respondent’s Exhibit 10) The Declaration contains Article IV Restrictions on Use and Improvements, which provides that the subject property:

(a). . . shall be used only for parking, garaging and storing vehicles and other items approved by the Association and related to incidental uses only (but only if such related incidental uses as are permitted in City Zoning Ordinance Nos. 2456 and 2413) and shall not be used for other purposes.

(b)  The Units may not be used as residences or to operate a business.

(Respondent’s Exhibit 10)

Complainant purchased the subject property in February 2017 for $185,000.

(Respondent’s Exhibit 2)

Respondent valued the subject property as commercial property at $154,000, as of January 1, 2019. Complainant appealed to the BOE. The BOE valued the subject property as commercial property at $185,000, as of January 1, 2019. Complainant timely filed his appeal with the STC. A Hearing Officer was assigned, and the appeal proceeded to an evidentiary hearing at which both parties presented evidence.

At the evidentiary hearing, Complainant asserted that the subject property should be classified as residential property. Complainant’s opinion of the subject property’s value as of January 1, 2019, was $122,300. Complainant’s evidence included testimony establishing that he uses the subject property to store a recreational vehicle, tools, and other personal property and does not use or intend to use the subject property for human habitation. Complainant presented evidence of sales of other similar units in “The Place” condominiums. The sales occurred between October 2016 and April 2020 and ranged from $130,000 to $242,500. (Complainant’s Exhibit A)

In his post-hearing memorandum of law on the issue of classification, Respondent argued that the subject property and other units in “The Place” condominiums were used as “garage/storage/man-cave condominium units where restrictions state that owners cannot dwell in the units and cannot run a business in the units.” Respondent further argued that the subject property did not fall under the definition of residential property as stated in Section 137.016.1(1)[1] and that the subject property did not fall under the definition of commercial property; therefore, to determine the classification of the subject property, the factfinder must review the eight-factor test announced in Section 137.016.5. Respondent concluded that, particularly in light of Complainant’s burden of proof, none of the eight factors supported Complainant’s opinion that the subject property should be classified as residential.

The Hearing Officer subsequently issued his Decision with findings of fact and conclusions of law. The Hearing Officer specifically concluded that Complainant’s evidence regarding value did not include market-based adjustments accounting for differences between the subject property and other units listed in Exhibit A even though a range of values was provided. The Hearing Officer also specifically concluded that Respondent’s evidence showed the subject property was not residential given that it was located within an “industrial district” and can be used only for “business or commercial uses” but cannot be used as a residence or to operate a business. The Hearing Officer further specifically concluded that Complainant’s own testimony that the subject property was not used or intended to be used as a residence constituted an admission that the subject property did not qualify as residential property as defined by Section 137.061.1. The Hearing Officer reasoned that, given this evidence, it was unnecessary to analyze the subject property under the eight-factor test announced in Section 137.016.5. Consequently, the Hearing Officer affirmed both the BOE’s valuation and classification of the subject property as of January 1, 2019.

Complainant timely filed his Application for Review. The STC thereafter issued its Order allowing the Application for Review and granting Respondent time to file a response. Respondent filed a response.

CONCLUSIONS OF LAW

Complainant’s Point on Review

            In his Application for Review, Complainant requested a review of the decision on the issue of valuation but specifically declined review of the decision on the issue of classification. On Application for Review, Complainant raises four points asserting the Hearing Officer’s Decision was in error because:

  1. Exhibit A supports the overvaluation claim, but additional supporting documentation not presented at the evidentiary hearing, consisting mainly of pictures of comparable units, should be allowed into evidence because those pictures would show the comparable properties might be subject to valuation adjustments based on features;
  2. The subject property is a basic model unit compared to other units with more valuable finishes and features, such as restrooms, mezzanines, auto lifts, and millwork, and, in comparison to other units, the subject property is valued higher than basic model units;
  3. Other comparable units have recent selling prices greater than the subject property but lower assessed valuations than the subject property;
  4. Since the evidentiary hearing in this appeal, Respondent offered to settle appeals with other unit owners for amounts below the valuation of the subject property.

Standard of Review

A party subject to a Decision and Order of a Hearing Officer of the STC may file an application requesting the case be reviewed by the STC. Section 138.432. The STC may then summarily allow or deny the request. Section 138.432. The STC may affirm, modify, reverse, set aside, deny, or remand to the Hearing Officer the Decision and Order of the Hearing Officer on the basis of the evidence previously submitted or based on additional evidence taken before the STC. Section 138.432.  

Commission’s Ruling

For the reasons that follow, the Commission finds Complainant’s arguments to be unpersuasive. After thoroughly reviewing the whole record and having considered the Hearing Officer’s Decision, the Application for Review of Complainant, and Complainant’ exhibits and evidence in the record, the Commission affirms the Hearing Officer’s decision.

To obtain an assessment reduction based on overvaluation, Complainant bears the burden of proving the true value in money of the subject property on the valuation date. Hermel, Inc., v. State Tax Comm’n, 564 S.W.2d 888, 897 (Mo. banc 1978). The “true value in money” is the same as fair market value, and refers to “the price which the property would bring from a willing buyer when offered for sale by a willing seller.” Mo. Baptist Children’s Home v. State Tax Comm’n, 867 S.W.2d 510, 512 (Mo. banc 1993). Determining the proper method of valuation is delegated to the Commission. Hermel, 564 S.W.2d at 897. Determining the true value in money is a factual issue. Parker v. Doe Run Co., 553 S.W.3d 356, 360 (Mo. App. 2018). The Hearing Officer, as the trier of fact, determines both the credibility and weight of the evidence.   Exchange Bank of Missouri v. Gerlt, 367 S.W.3d 132, 135-36 (Mo. App. 2012).

The BOE’s valuation is presumed correct. Hermel, Inc., 564 S.W.2d at 895. The BOE presumption is rebuttable with “substantial controverting evidence.” Id.; see also Cupples Hesse Corp. v. State Tax Comm’n, 329 S.W.2d 696, 702 (Mo. 1959).

“Substantial evidence is that evidence which, if true, has probative force upon the issues, and from which the trier of fact can reasonably decide the case on the fact issues.” Savage v. State Tax Comm’n, 722 S.W.2d 72, 77 (Mo. banc 1986) (internal quotation omitted). If the taxpayer produces substantial evidence rebutting the BOE presumption, “the burden of proof on the facts and inferences would still rest on petitioner, for it is the moving party seeking affirmative relief.” Cupples Hesse, 329 S.W.2d at 702. The taxpayer must then produce “persuasive” evidence sufficient to convince the trier of fact. White, 321 S.W.3d at 305; see also Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. 2002) (evidence is persuasive when it has “sufficient weight and probative value to convince the trier of fact”).

The Hearing Officer correctly determined Complainant did not produce substantial and persuasive evidence rebutting the correctness of the BOE’s valuation and proving his proposed TVM of the subject property was correct.

With regard to Complainant’s first, second and third arguments in the Application for Review, Complainant did not present a sales comparison approach to value. Exhibit A did not include market-based adjustments accounting for the differences between the subject property and other units listed in the exhibit. Exhibit A was a listing of units, their square footage, their sales prices and sales dates, their 2018 and 2019 assessment amounts, and their 2018 and 2019 tax amounts per square foot. Exhibit A also included two graphs showing fluctuations in sales prices per square foot and the 2019 tax amount per square foot. The compilation of this data did not constitute a proper sales comparison approach.

In addition to market-based adjustments made to comparable properties to provide a range of value estimates for the subject property, a properly-conducted sales comparison approach shows 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 interest;
  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.

Although Complainant now argues that the subject property is a basic model unit with a lower value as compared to other units with more valuable finishes and features, none of the evidence before the Hearing Officer assigned market values to finishes. The evidence also failed to show that recent sales of other units shown in Exhibit A were market-based, arm’s length transactions capable of supporting a sales comparison approach to determining value.

In his Application for Review, Complainant claims that additional information “consisting mainly of pictures of comparable units” not presented to the Hearing Officer should be considered by this Commission because he believed the information had been filed prior to the evidentiary hearing but later discovered that the information had not been filed. Even if the additional information “consisting mainly of pictures of comparable units” had been admitted into evidence, the additional information would not have aided Complainant because the factfinder’s review of pictures does not substitute for Complainant’s burden of showing market-based adjustments to the sales prices of comparable properties. To make an adjustment to the value of the subject property based upon pictures of features of other units would require us to engage in speculation, which would be improper. See Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. 1980) (plaintiff who has the burden of proof does not meet his burden if the evidence on any of the essential elements would leave the factfinder “in the nebulous twilight of speculation, conjecture and surmise”).

Finally, Complainant argues that, since the evidentiary hearing in this appeal, Respondent offered to settle appeals with other unit owners for amounts below the valuation of the subject property, which warrants a lower valuation of the subject property. We disagree. Respondent’s potential settlement of disputes regarding value with other unit owners relates solely to the market-based value of the other units and is not a reflection of the value of the subject property. Moreover, a “settlement offer is not an admission.” Netherton v. Netherton, 593 S.W.3d 654, 663 (Mo. App. W.D. 2019). In Missouri, public policy favors settlement of disputed claims out of court. Netherton, 593 S.W.3d at 663. Settlement offers are considered to be a means to obtain peace rather than an admission to be held against the party making the offer. Id. Consequently, in this appeal, we will not consider Respondent’s potential settlement of other appeals as evidence of the TVM of the subject property.

The Commission finds that a reasonable mind could have conscientiously reached the same result as the Hearing Officer based on a review of the entire record. Hermel, 564 S.W.2d at 895-96; Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998). The evidence did not establish by any recognized approach to valuing property that the BOE’s valuation of $185,000 was incorrect and that Complainant’s opinion of $122,300 was correct.

ORDER

The Decision of the Hearing Officer is AFFIRMED. Segments of the Decision of the Hearing Officer, including the findings of fact and conclusions of law therein, have been incorporated without reference in this final decision of the Commission.

Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140 within 30 days of the mailing date set forth in the Certificate of Service for this Order.

If judicial review of this decision is made, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the courts unless disbursed pursuant to Section 139.031.8.

If no judicial review is made within 30 days, this decision and order is deemed final, and the Collector of St. Louis 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.

SO ORDERED July 30, 2021

STATE TAX COMMISSION OF MISSOURI

 

Gary Romine, Chairman

 

Victor Callahan, Commissioner

 

Will Kraus, Commissioner

 

Certificate of Service

I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid, July 30, 2021 to: Complainant(s) and/or Counsel for Complainant(s); County Assessor and/or Counsel for Respondent; County Collector; and County Clerk.

 

Elaina Mejia

Legal Coordinator

 

STATE TAX COMMISSION OF MISSOURI

 

NATHAN FLECK, ) Appeal No. 19-11512
Complainant, ) Parcel/Loc. 17W230142
)
)
v. )
)
JAKE ZIMMERMAN, ASSESSOR, )
ST. LOUIS COUNTY, MISSOURI, )
Respondent. )

DECISION AND ORDER

Nathan Fleck (Complainant) appeals the St. Louis County Board of Equalization’s (BOE) decision finding the true value in money (TVM) of the subject commercial property on January 1, 2019, was $185,000.  Complainant claims the subject property is overvalued and should be classified as residential property. Complainant asserts the TVM of the subject property on January 1, 2019, was $122,300.  Complainant did not produce substantial and persuasive evidence of overvaluation or misclassification.  The BOE’s decision is AFFIRMED.

Complainant appeared pro se. Respondent appeared by counsel Steven Robson.

FINDINGS OF FACT

  1. Authority. The BOE issued its decision on October 4, 2019.  Complainant filed a complaint for review of assessment within 30 days of the BOE decision.
  2. The Subject Property. Complainant owns the subject property.  The subject property is real property located in the Spirit Valley Business Park at 600 Spirit East Drive, Unit B3, in Chesterfield, Missouri.  The subject property is a storage unit subject to condominium declarations dated June 1, 2016, and recorded on August 4, 2016. Complainant purchased the subject property in February 2017 for $185,000. (Exhibit 2).
  3. Assessment.  Respondent assessed the subject property as commercial property and determined the appraised value was $154,500 as of January 1, 2019.
  4. Board of Equalization. The BOE determined the appraised value of the subject property was $185,000, commercial, as of January 1, 2019.
  5. Complainant’s Evidence. Complainant submitted Exhibit A to support his overvaluation claim. Respondent objected to Exhibit A because it was not submitted by the exhibit exchange date set forth in the scheduling order. The objection was overruled and Exhibit A was admitted into evidence, to be given the weight deemed appropriate in light of all of the evidence.

Exhibit A consists of a spreadsheet showing the sale price, sale date, and recent assessments of 41 other units in the complex. Complainant testified the data were drawn from publicly available records compiled by St. Louis County. Exhibit A includes a graph showing the sale price per square foot and the “2019 Tax per Sq. Ft.” of other units in the complex. The sale price of the units listed in Exhibit A range from $90.00 per square foot to $228.00 per square foot. Complainant testified Exhibit A indicates decreasing market values for nearby storage units.

According to Exhibit A, the subject property is 1,400 square feet. Complainant testified that the subject property’s value as of January 1, 2019, was $122,300, which equates to approximately $87.00 per square foot. In addition to the subject property, Exhibit A lists 19 other 1,400 square foot units which sold between October 2016 and April 2020. The sale prices ranged from $242,500 to $130,000. The median sale price was $154,000, which equates to $110 per square foot. Exhibit A does not indicate whether the other units are identical or have different configurations, amenities, and features compared to the subject property.

Complainant testified the subject property should be classified as residential property. Complainant testified that the subject property is a storage unit that generates no income and is used for storing a recreational vehicle, tools, and other personal property.   Complainant conceded that as of January 1, 2019, the subject property was not used or intended be used for human habitation and that the condominium declarations prohibit residential use.

  1. Respondent’s Evidence. Respondent submitted Exhibits 1 – 10. Each exhibit was admitted into evidence. The exhibits are as follows:
Exhibit 1 BOE Findings and Notice of Decision valuing the subject property at

$185,000 as of January 1, 2019.

Exhibit 2 Certificate of Value showing Complainant purchased the subject property in 2017 for $185,000.
Exhibit 3 Permit issued in 2017 showing plumbing work was completed at the subject property.
Exhibit 4 Permit issued in 2017 showing electrical work was completed at the subject property.
Exhibit 5 Permit issued in 2017 showing interior finish work was completed at the subject property.
Exhibit 6 Permit issued in 2017 showing mechanical interior finish work was completed at the subject property.
Exhibit 7 Certified copy of City of Chesterfield ordinance showing the subject property is located in an area zoned as a “Planned Industrial District.”
Exhibit 8 Certified copy of City of Chesterfield ordinance showing the subject property is included in the Spirit Valley Business Park.
Exhibit 9 Spirit Valley Business Park indentures and declarations providing, at Article 19.1, that “Lots shall only be used for those business or commercial uses” permitted by the City of Chesterfield Zoning Code.
Exhibit 10 Condominium declarations providing, at Article 4, section 4.01(a) and (b), that the subject property can only be used for “parking, garaging, and storing vehicles or “storing other items” and that “The Units may not be used as residences or to operate a business.”
Exhibit 11 State Tax Commission decision and order in appeals 18-10948 through 18-10968 concluding other condominium storage units in the Spirit Valley Business Park were properly classified as commercial property.

 

Exhibits 7 and 8 show the subject property is located in a planned industrial district. Exhibits 9 and 10 show that the subject property can only be used for “business or commercial uses” and “may not be used as residences or to operate a business.”

  1. Value and Classification. The TVM of the subject property on January 1, 2019, was $185,000. The subject property was properly classified as commercial property as of January 1, 2019.

CONCLUSIONS OF LAW

 

  1. Authority

The STC has authority to hear and decide Complainant’s appeal.   Mo. Const. art. X, sec. 14; section 138.430.1, RSMo 2000[2].
2.  Evidence

The hearing officer is the finder of fact and determines both the credibility and weight of the evidence.  Kelly v. Missouri Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. 2015); see also section 536.090 (requiring all decisions and orders in contested cases to include “findings of fact”).  “Although technical rules of evidence are not controlling in administrative hearings, fundamental rules of evidence are applicable.”  Mo. Church of Scientology v. State Tax Comm’n, 560 S.W.2d 837, 839 (Mo. banc 1977).

Following the evidentiary hearing, Respondent submitted Exhibit 11. Exhibit 11 is a decision and order involving other storage units in the subject property’s condominium. “Agencies shall take official notice of all matters of which the courts take judicial notice.” Section 536.070(6). Courts may take judicial notice of records in a related case. Skaggs Chiropractic, L.L.C. v. Ford, 564 S.W.3d 633, 635 n.2 (Mo. App. S.D. 2018). The decision and order in Exhibit 11 is officially noticed. Although the decision and order in Exhibit 11 is officially noticed, Exhibit 11 has no precedential value because an administrative agency “is not bound by its previous decisions, so long as its current decision is not otherwise unreasonable or unlawful. Laclede Gas Co.’s Verified Application to Re-Establish & Extend the Fin. Auth. Previously Approved By the Comm’n v. Mo. Pub. Serv. Comm’n, 526 S.W.3d 245, 252 (Mo. App. W.D. 2017). The underlying appeal is resolved according the evidence adduced at the evidentiary hearing.

  1. Complainant’s Burden of Proof

The taxpayer bears the burden of proof and must show by a preponderance of the evidence that the property was overvalued or misclassified.  Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. E.D. 2003).  The assessed value determined by the BOE is presumptively correct and the taxpayer must produce “substantial and persuasive” evidence to rebut the presumption. Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W. 3d 341, 346 (Mo. banc 2005). The taxpayer has the burden to establish the “value that should have been placed on the property.”  Id.   “Substantial evidence is that evidence which, if true, has probative force upon the issues, and from which the trier of fact can reasonably decide the case on the fact issues.”  Savage v. State Tax Comm’n, 722 S.W.2d 72, 77 (Mo. banc 1986) (internal quotation omitted).  Evidence is persuasive when it has “sufficient weight and probative value to convince the trier of fact.”  Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. E.D. 2002); see also White v. Dir. of Revenue, 321 S.W.3d 298, 305 (Mo. banc 2010) (noting the burden of persuasion is a “party’s duty to convince the fact-finder to view the facts in a way that favors that party”).

  1. Complainant Did Not Prove Overvaluation

Commercial real property is assessed at 32% of its “true value in money” as of January first of each odd-numbered year.  Sections 137.115.1, 137.115.5(1)(c).  “True value in money is the fair market value of the property on the valuation date, and is a function of its highest and best use, which is the use of the property which will produce the greatest return in the reasonably near future.”  Snider, 156 S.W.3d at 346 (internal quotation omitted).  The fair market value is “the price which the property would bring from a willing buyer when offered for sale by a willing seller.”  Mo. Baptist Children’s Home v. State Tax Comm’n, 867 S.W.2d 510, 512 (Mo. banc 1993).

“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.”  Snider, 156 S.W.3d at 346.  The three generally accepted approaches are the cost approach, the income approach, and the comparable sales approach.  Id. at 346-48.

“The comparable sales approach uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties.”  Snider, 156 S.W.3d at 347-48 (internal quotation omitted).   Adjustments are necessary to reconcile differences and enable a market based comparison of properties with varying characteristics.  For instance, if a feature of the comparable property is superior to the subject property, the sale price of the comparable property must be adjusted downward. Conversely, if a feature of the comparable property is inferior to the subject property, the sale price of the comparable property must be adjusted upward.

Exhibit A does not include market-based adjustments accounting for differences between the subject property and the other units listed in Exhibit A. Exhibit A includes no information regarding differences between the subject property and the other units and omits the necessary market-based adjustments. Therefore, Exhibit A does not constitute substantial and persuasive evidence rebutting the BOE’s presumptively correct valuation and does not establish the “value that should have been placed on the property.”  Snider, 156 S.W.3d at 346; see also In re Marriage of Patrick, 201 S.W.3d 591, 598 (Mo. App. S.D. 2006) (holding the circuit court properly disregarded a “comparative market analysis” that failed to make monetary adjustments to account for property differences because the analysis “did not meet the requirements of the comparable sale approach method for valuation of real estate”).   Complainant’s overvaluation claim is denied.

  1. Complainant Did Not Prove Misclassification

Section 137.016.1(3) defines “Utility, industrial, commercial, railroad and other real property” as “all real property used directly or indirectly for any commercial, mining, industrial, manufacturing, trade, professional, business, or similar purpose….”  In pertinent part, Section 137.016.1(1) defines “residential property” as “all real property improved by a structure which is used or intended to be used for residential living by human occupants….” “All other real property not included in the property listed in subclasses (1) and (2) of Section 4(b) of Article X of the Missouri Constitution, as such property is defined in this section, shall be deemed to be included in the term “utility, industrial, commercial, railroad and other real property.” Section 137.016.1(3). “Determining whether a property’s use falls within one of the subclassification definitions set forth in section 137.016.1 is an issue of fact for the STC.”  Rinehart v. Bateman, 363 S.W.3d 357, 366 (Mo. App. W.D. 2012).

Complainant’s claim that the subject property should be classified as residential property fails for two independently sufficient reasons.[3] First, Exhibits 7-10 demonstrate the subject property is not residential.   Exhibit 7 shows the subject property is located in a planned industrial district. Exhibits 9 shows the subject property can only be used for “business or commercial uses.” The condominium declarations in Exhibit 10 show the subject property and other units in the condominium “may not be used as residences or to operate a business.” Exhibit 10 is critical because condominium declarations are recorded “and executed in the same manner as a deed.” Section 448.2-101.1.[4]  The condominium declarations in Exhibit 10 contractually preclude Complainant from using the subject property as a residence. Cf. Hazelcrest III Condo. Ass’n v. Bent, 495 S.W.3d 200, 205-07 (Mo. App. E.D. 2016) (affirming a judgment for breach of contract based on violations of condominium declarations). Exhibits 7-10 negate Complainant’s argument the subject property should have been classified as residential property.

Second, Complainant testified the subject property was not used or intended to be used as a residence as of January 1, 2019. This testimony constitutes a “clear, unequivocal admission of fact” that the subject property was not residential. See Goudeaux v. Bd. of Police Comm’rs of Kansas City, 409 S.W.3d 508, 519 (Mo. App. W.D. 2013) (holding a “clear, unequivocal admission of fact” during trial is binding and dispenses with the need for additional proof). Because determining whether a property’s use qualifies as residential or commercial is a question of fact, Complainant’s admission that the subject property is not used or intended to be used for human habitation as of January 1, 2019 is a “clear, unequivocal admission of fact” that the property’s use does not qualify as “residential property” pursuant to section 137.016.1. See Rinehart, 363 S.W.3d at 366 (noting that whether a property’s use falls within one of the section 137.016.1 subclassification definitions is “an issue of fact for the STC”).

In a post-hearing brief, Respondent notes section 137.016.5 provides that when classification cannot be determined under the section 137.016.1 definitions, the property “shall be classified according to its immediate most suitable economic use” according to eight statutorily enumerated factors. Respondent argues the statutory factors demonstrate the subject property is properly classified as commercial property.

It is unnecessary to address the section 137.016.5 factors in this case. The subject real property must be classified as residential, agricultural, or commercial. Mo. Const. art. X, sec. 4(b); section 137.016.1. Complainant’s sole claim – that the property was residential – was refuted conclusively by Respondent’s exhibits and Complainant’s admission. Because Complainant failed to prove the property was residential, and neither party asserts the property is agricultural, there is no basis in the record for concluding the subject property is not properly classified as commercial property. Under these circumstances, there is no classification ambiguity requiring an analysis of the section 137.016.5 factors. Complainant did not prove misclassification.

CONCLUSION AND ORDER

The BOE’s decision is affirmed.  The subject property was properly classified as commercial property. The TVM of the subject property on January 1, 2019, was $185,000 commercial (assessed value $59,200).

Application for Review

A party may file with the STC an application for review of this decision within 30 days of the mailing date set forth in the certificate of service for this decision.  The application “shall contain specific detailed grounds upon which it is claimed the decision is erroneous.”  Section 138.432.  The application must be in writing, and may be mailed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, or emailed to Legal@stc.mo.gov.  A copy of the application must be sent to each person listed below in the certificate of service.

Disputed Taxes

The Collector of St. Louis County, and 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 the disputed taxes have been disbursed pursuant to a court order under the provisions of section 139.031.

 

SO ORDERED October 30, 2020.

STATE TAX COMMISSION OF MISSOURI

Eric S. Peterson

Senior Hearing Officer

Certificate of Service

I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on October 30, 2020, to:  Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.

 

Elaina McKee
Legal Coordinator

 

[1] All statutory citations are to RSMo. 2000, as amended, unless indicated otherwise.

[2] All statutory citations are to RSMo. 2000, as amended, unless indicated otherwise.

[3] During the hearing, Respondent orally moved to dismiss Complainant’s misclassification claim on ground Complainant did not produce evidence of misclassification. Because the BOE’s decision is affirmed, Respondent’s motion is overruled as moot.

[4] “Sections 448.1-101 to 448.4-120 apply to all condominiums created within this state after September 28, 1983.” Section 448.1-102.1. “The provisions of sections 448.005 to 448.210 do not apply to condominiums created after September 28, 1983.” Section 448.1-102.2.