Neighborhood Enterprises, Inc. v. Bushmeyer (SLCY)

February 26th, 2010

State Tax Commission of Missouri






v.) Appeal Number 09-20198












Decision of the St. Louis City Board of Equalization reducing the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax years 2009 and 2010 is set at $72,000, residential assessed value of $13,680.Complainant appeared by Counsel, Mark Schulte.Respondent appeared by Associate City Counselor, Carl W. Yates III.

Case heard and decided by Senior Hearing Officer W. B. Tichenor.


Complainant appeals, on the ground of overvaluation, the decision of the St. Louis City Board of Equalization, which reduced the valuation of the subject property. The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2009.The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.


1.Jurisdiction.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the St. Louis City Board of Equalization.Evidentiary hearing was held on February 18, 2010, in the assessor’s Conference Room, City Hall, St. Louis, Missouri.

2.Subject Property.The subject property is located at 4129 McRee, St. Louis, Missouri.The property is identified by map parcel number 4970-00-0330-0.The property consists of 3,456 square foot lot improved by a two-story brick, single-family structure.The house was built in 1915 and appears to be in average condition.The residence has a total of eight rooms, with two bedrooms.It has two bathrooms, and contains 1,872 square feet of living area.There is a full basement.[1] There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010.Therefore, the assessed value for 2009 shall remain the assessed value for 2010.[2]

3.Assessment.The Assessor appraised the property at $75,600, a residential assessed value of $14,370.The Board of Equalization reduced the value to $65,000, a residential assessed value of $12,350.

4.Complainant’s Evidence.Complainant presented the testimony of James Roos, President of Neighborhood Enterprises.Exhibit A was also received into evidence over the objection of Counsel for Respondent.Exhibit A consisted of (1) a cover memo, dated 2/18/10 addressing valuation of the subject property and a property at 4370-71 Chouteau;[3] a copy of a letter to the Assessor from Mr. Roos, dated 6/6/09; and six photographs of the subject and properties at 4121, 4125, 4133, 4001, 4130 and 4136 McRee.

Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2009, to be $41,000, as proposed in the Complaint for Review of Assessment, or $50,000 as testified to by Mr. Roos at hearing.

5.Respondent’s Evidence.Respondent presented the testimony of Gerald C. Rowland, Real Property Appraiser I and his appraisal of the subject.[4]The properties relied upon by Respondent’s appraiser were comparable to the subject property for the purpose of making the determination of value. The three properties were located within two blocks of the subject.Each sale property sold at a time relevant to the tax date of January 1, 2009.The sale properties were similar to the subject in style, quality of construction, age, condition, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability.Adjustments made to account for differences were appropriate and within an acceptable range for the appraisal problem presented.

Respondent’s evidence met the standard of substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the value of the subject, as of January 1, 2009, to be $72,000.The value determined by Respondent’s appraiser was less than a 1% variance from the actual sale price.Therefore, the concluded value of $72,600 was for all intents a verification of the subject’s sale price as establishing value.See, Hearing Officer Finds Value, infra.



The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious.The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious.[5]

Presumptions In Appeals

There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[6]The presumption in favor of the Board is not evidence.A presumption simply accepts something as true without any substantial proof to the contrary

The presumption of correct assessment is rebutted when the taxpayer, or respondent when advocating a value different than that determined by the Board, presents substantial and persuasive evidence to establish that the Board’s valuation is erroneous and what the fair market value should have been placed on the property.[7]The evidence submitted on behalf of Complainant[8] failed to meet the standard of substantial and persuasive to rebut the presumption of correct assessment and establish the true value in money of the property under appeal.The evidence of the 2008 purchase of the subject property, supported by Respondent’s appraisal constituted substantial and persuasive evidence of fair market value.

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.[9]True value in money is defined in terms of value in exchange and not value in use.[10]It is the fair market value of the subject property on the valuation date.[11]Market value is the most probable price in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.

Implicit in this definition are the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:

1.Buyer and seller are typically motivated.


2.Both parties are well informed and well advised, and both acting in what they consider their own best interests.


3.A reasonable time is allowed for exposure in the open market.


4.Payment is made in cash or its equivalent.


5.Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.


6.The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction.[12]


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.[13]Missouri courts have approved the comparable sales or market approach, the cost approach and the income approach as recognized methods of arriving at fair market value.[14]The President of Complainant, James Roos, did not present a valuation methodology that is accepted for valuation of real property for ad valorem tax purposes by the courts or by this Commission.Respondent’s appraiser presented an opinion of value determined by the development of the sales comparison approach to value.This method of appraisal is generally recognized and accepted as the most reliable and hence the most persuasive when valuing single family residences, when adequate market data is available, as was the case in this instance.The appraisal of Mr. Rowland gave support to the actual sales price as representative of the fair market value of the subject property for this appeal.

Complainant’s Burden of Proof

In order to prevail, Complainant must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2009.[15]There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a Commission appeal still bears the burden of proof.The taxpayer is the moving party seeking affirmative relief.Therefore, the Complainant bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.”[16]

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[17]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.[18]

Mr. Roos testified as President of Complainant at hearing to an opinion of the fair market value of the subject property to be $50,000.No market data was presented to establish any basis for this opinion of value.The information provided in Exhibit A[19] was not relevant to establish what a willing buyer and seller would have paid for the property on January 1, 2009.The basis for the appeal was the assertion that Respondent, “on average, appraises properties at 2/3rds of their value.”[20]The information then presented, which Mr. Roos testified was gleaned from Assessment records, related to four properties which were listed by their 2008 sales prices and then by the Assessor’s appraised prices and the percentage of sales price represented by the appraised price.

The first defect in this methodology is that it does nothing to establish what a willing buyer and seller would have paid for the subject property on January 1, 2009.The second defect is that the figures don’t add up.The calculated percentages in the exhibit for the four properties provided by Mr. Roos are 81.7%, 60.0%, 103.3% and 104.5%.These four average to .87375%, not 66.67% as claimed by Mr. Roos.However, the final flaw in this methodology is that Mr. Roos was essentially arguing a discrimination or lack of uniformity in assessment claim.However, even on that basis, Complainant cannot prevail.

Complainant Failed to Prove Discrimination

In order to obtain a reduction in assessed value based upon discrimination or inequality in assessment, the Complainant would have to establish two critical elements.These two elements are the average residential assessment ratio for St. Louis City for 2009, and the assessment ratio for Complainant’s property for 2009.Failure to establish either element means Complainant cannot carry its case.The difference between the actual assessment level of the subject property and the average level of assessment for all residential property, taken from a sufficient representative sample in St. Louis City must demonstrate a disparity that is grossly excessive.[21]

The establishment of the 2009 residential ratio is done by (a) independently determining the market value of a representative sample of residential properties in St. Louis City; (b) determining the assessed value placed on the property by the assessor’s office for the relevant year; (c) dividing the assessed value by the market value to determine the level of assessment for each property in the sample; and (d) determining the mean and median of the results.[22]

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.[23]The difference in the assessment ratio of the subject property the average assessment ratio in the subject county must be shown to be grossly excessive.[24]No other methodology is sufficient to establish discrimination.[25]

Presentation of the limited information on the first page of Exhibit A fails to meet the case law standard to provide inequality in assessment.The information did not establish that in fact the 2008 sales prices were the fair market value of each of those properties on January 1, 2009, so that a calculation of the actual assessment ratio could be calculated.However, even assuming, without finding, that the 2008 sales prices would represent the 1/1/09 fair market value, the use of only four properties in a very limited are of St. Louis City does not provide a representative sample that has statistical validity to prove the 2009 residential ratio.

Therefore, the attempt by Mr. Roos to establish an inequitable assessment of his property fails on the first basis for the failure to establish the 2009 residential ratio.Furthermore, he failed to prove the true value in money of the subject property as of January 1, 2009.The actual sales price of the subject less than eight months prior to tax date rebuts the attempt to prove fair market value of only $41,000 or $50,000.In short, the information presented filed to prove either the required elements to establish a claim of discrimination.

Hearing Officer Finds Value

Evidence of the actual sales price of property is admissible to establish value at the time of an assessment, provided that such evidence involves a voluntary purchase not too remote in time.The actual sale price is a method that may be considered for estimating true value.The actual sales price, between a willing seller who is not obligated to sell and a willing buyer who is not compelled to buy, establishes an outer limit on the value of real property.[26]The sale of the subject property on May 20, 2008 was at a time relevant to the assessment date of January 1, 2009.This is persuasive evidence of the value of the property on that date.It is substantial and persuasive evidence to rebut the presumption of correct assessment and set value at $72,000.


The assessed valuation for the subject property as determined by the Board of Equalization for St. Louis City for the subject tax day is SET ASIDE.

The assessed value for the subject property for tax years 2009 and 2010 is set at $13,680.

Application for Review

A party may file with the Commission an application for review of this decision within thirty days of the mailing date set forth in the Certificate of Service for this Decision.The application shall contain specific facts or law as grounds upon which it is claimed the decision is erroneous.Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.

Failure to state specific facts or law upon which the appeal is based will result in summary denial. [27]

Disputed Taxes

The Collector of St. Louis City, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending the possible filing of an Application for Review, unless said taxes have been disbursed pursuant to a court order under the provisions of Section 139.031.8, RSMo.

Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed.Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.

SO ORDERED February 26, 2010.





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 26thday of February, 2010, to:Mark Schulte, 2200 Pestealozzi, St. Louis, MO 63118, Attorney for Complainant; Carl W. Yates III, Associate City Counselor, 314 City Hall, St. Louis, MO 63103, Attorney for Respondent; Ed Bushmeyer, Assessor, 120 City Hall, St. Louis, MO 63103; Gregory Daly, Collector, 110 City Hall, St. Louis, MO 63103.




Barbara Heller

Legal Coordinator






[1] Exhibit 1.


[2] Section 137.115.1, RSMo.


[3] The property at 4370-72 Chouteau is the subject of Appeal 09-20199.


[4] Exhibit 1.


[5] Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.


[6] 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).


[7] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).


[8] Exhibit A and Testimony of James Roos.


[9] 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).


[10] Daly v. P. D. George Company, et al, 77 SW3d 645, 649 (Mo.App E.D. 2002), citing, Equitable Life Assurance Society v. STC, 852 SW2d 376, 380 (Mo.App. 1993); citing, Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798, 801-803 (Mo. 1973).


[11] Hermel, supra.


[12] 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.


[13] 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).


[14] St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987); and State ex rel. State Highway Comm’n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. Div. 2 1974).


[15] Hermel, supra.


[16] See, Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003). Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App. 1991).


[17] See, Cupples-Hesse, supra.


[18] Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).


[19] Memo, dtd 2/18/10 & Letter, dated 6/6/09.


[20] Exhibit A, Memo, dated 2/18/10.


[21] Savage, supra.


[22] Koplar v. State Tax Commission, 321 S.W.2d 686, 690, 695 (Mo. 1959).


[23] State ex rel. Plantz v. State Tax Commission, 384 S.W.2d 565, 568 (Mo. 1964).


[24] Savage v. State Tax Commission of Missouri, 722 S.W.2d 72, 79 (Mo. banc 1986).


[25] Cupples-Hesse, supra.


[26] St. Joe Minerals Corp., supra.


[27] Section 138.432, RSMo.