March 15th, 2011

State Tax Commission of Missouri




Complainant, )


v. ) Appeal Number 09-62522





Respondent. )







Decision of the Jasper County 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 $1,423,760, residential assessed value of $270,500. Complainant appeared by Counsel Richard D. Dvorak, Overland Park, Kansas. Respondent appeared by Assistant Prosecuting Attorney, Jeremy S. Crowley.

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


Complainant appeals, on the ground of overvaluation, the decision of the Jasper County 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 Jasper County Board of Equalization. Respondent consented to have the Decision rendered based upon the submissions of the parties.

2. Assessment. Assessor appraised the property at $2,605,158, a residential assessed value of $494,980. The Board of Equalization reduced the appraised value to $1,712,105, a residential assessed value of $325,300.[1]

3. Subject Property. The subject property is located at 3502 Newman, Joplin, Missouri. The property is identified by map parcel number 20-3-6-5.002 and is otherwise known as the Northpark Apartments.[2] The property is a low income housing project subject to Section 42 and Missouri Housing Development Commission occupancy restrictions.[3]

4. Complainant’s Evidence. Complainant tendered the following exhibits which were received into the record:




STC 2009 Worksheet


Schedule of Definitions – Response to Order for Worksheets


Mortgage Information – Promissory Note


LURA – Land Use Restriction Agreement


2006, 2007 & 2008 Balance Sheets


No Document Provided


Written Direct Testimony – Robert Marx, State Certified Appraiser



Written Direct Testimony – Robert C. Davidson, CFO/COO – Zimmerman Properties Development Group, LLC


Corrected 2008 Income and Expense Worksheet


There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010, therefore the assessed value for 2009 remains the assessed value for 2010.[4]

5. Respondent’s Evidence. Respondent tendered the following exhibits[5] which were received into the record:




Property Record Card for Subject – 2005


Property Record Card for Subject – 2006


Property Record Card for Subject – 2007


Property Record Card for Subject – 2008


Property Record Card for Subject – 2009


Response to Order for Completion of Worksheet


Property Record Card – Webb City Apartments


Property Record Card – Webb City Apartments II


Property Record Card – Quail Ridge Apartments II


Property Record Card – Deer Run Crossing


Summary Comparison Subject to Webb City,

Quail Ridge & Deer Run Apts.


Written Direct Testimony – Lisa Perry, Administrative Assistant

for Jasper County Assessor


Written Direct Testimony – Larry Carsten, Deputy Appraiser,

Jasper County Assessor


6. Net Operating Income. The subject property’s 2008 income and expense data[6] established a Net Operating Income (NOI) of $149,922.

Income : $315,559


Maintenance & Repairs

Make Ready Costs: $10,243

Repairs/Maintenance: $13,107

Contract Services: $ 8,960

Sub-Total: $32,310

Utilities $23,810

Insurance $ 9,595


Payroll & Related: $46,052

Accounting/Audit: $ 8,211

Legal: $ 4,687

Advertising: $ 4,486

Management: $15,827

General & Admin: $ 7,147

Sub-Total $86,410

Reserves $13,512

Total Expenses: $165,637

Net Operating Income: $149,922


7. Capitalization Rate.[7] The original Loan to Value was 30%. The original interest rate was 8%. The term was 15 years. The Mortgage Constant is .1146783[8]. The Equity Ratio was 70%. The Equity Rate of Return is 9%. The effective tax rate is .00793.[9]

Loan Rate: .30 x .1146783 = .03440349, rounded to .0344

Equity Rate: .70 x .09 = .0630

Overall Rate: .0344 + .0630 = .0974

Capitalization Rate: .09740 + .00793 = .10533, rounded to .1053


The appropriate capitalization rate is 10.53%.

8. Valuation. The NOI capitalized at 10.53% yields an indicated fair market value of $1,423,760.[10]

9. Assessment. The residential assessed value of the subject property for the 2009 and 2010 tax years is $270,500.[11]



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.[12] A valuation of property that does not reflect its true value in money is an unlawful, unfair and improper assessment.

Basis of Assessment

The Constitution mandates that real property and tangible personal property be assessed at its value or such percentage of its value as may be fixed by law for each class and for each subclass.[13] The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property is assessed at set percentages of true value in money.[14] In an overvaluation appeal, true value in money for the property being appealed must be determined based upon the evidence on the record that is probative on the issue of the fair market value of the property under appeal. The evidentiary record provided the necessary evidence allowing the Hearing Officer to reach a conclusion of true value in money thereby meeting the mandate of the Constitution.

Motion to Strike and Motion for Summary Judgment

Complainant objected to Respondent’s Written Direct Testimony on the ground that it was not relevant because Respondent failed to complete and submit the required State Tax Commission worksheet. Objection is overruled. Respondent’s Motion for Leave to File Exhibit 6 Out of Time was granted.[15] Exhibit 6 contained on the first page after the cover page the Assessor’s Income Approach based on income and expense statements submitted by Complainant. Although not submitted in on the Worksheet Form provided with the Order of January 12, 2010, Respondent nevertheless complied with the Commission Order. There existed material facts in dispute which have been resolved by the findings of the Hearing Officer in this Decision. Accordingly, Complainant’s Motion for Summary Judgment is denied.

Presumption In Appeals

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[16] This presumption is a rebuttable rather than a conclusive presumption. The presumption of correct assessment is rebutted when substantial and persuasive evidence is presented to establish that the Board’s valuation is erroneous and what the fair market value should have been placed on the property.[17] The evidence meets the required standard to both rebut the presumption and establish the fair market value of the property under appeal.

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.[18] True value in money is defined in terms of value in exchange and not value in use.[19] It is the fair market value of the subject property on the valuation date.[20] 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.[21]


The development of the income approach by the Hearing Officer concludes a value under this Standard.

Hearing Officer Concludes Value

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.[22] 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.[23] The property under appeal is an apartment complex. It would be bought and sold as an investment property. The income approach to value is appropriate for a determination of value in this appeal. The Hearing Officer’s development of the income approach relying on the actual 2008 income and expenses establishes the true value in money of the subject property to be $1,423,760.


The assessed valuation for the subject property as determined by the Board of Equalization for Jasper County for the subject tax day is SET ASIDE.

The assessed value for the subject property for tax years 2009 and 2010 is set at $270,500.

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. The application shall contain specific facts or law as grounds upon which it is claimed the decision is erroneous. Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.

Failure to state specific facts or law upon which the application for review is based will result in summary denial. [24]

Disputed Taxes

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

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

SO ORDERED March 15, 2011.





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 15th day of March, 2011, to: Richard Dvorak, 7111W. 98th Terrace, Suite 140, Overland Park, KS 66212Complainant; Jeremy Crowley, Assistant Prosecuting Attorney, 601 Pearl, Room 100, Joplin, MO 64801, Attorney for Respondent; Connie Hoover, Assessor, 302 S. Main Street, Carthage, MO 64836; Bonnie Earl, Clerk; Stephen Holt, Collector, Jasper County Courthouse, Carthage, MO 64836.




Barbara Heller

Legal Coordinator




Contact Information for State Tax Commission:

Missouri State Tax Commission

301 W. High Street, Room 840

P.O. Box 146

Jefferson City, MO 65102-0146


573-751-1341 Fax




[1] Complaint for Review of Assessment, BOE Decision Letter dated 8/6/09


[2] Id.


[3] Exhibits D & H


[4] Section 137.115.1, RSMo.


[5] Exhibits 7, 8, 9, 10 & 11 were tendered as “Rebuttal Exhibits.”


[6] Exhibit 6 – Northpark II LP – Income Statement – Year to Date 12/31/2008 (Pages 1, 2 & 3)


[7] Exhibits A, B and G. Total Funding for the original project was $4,814,239. The original first mortgage was $1,455,000. The Equity contributed was $3,359,239. $1,455,000 ÷ $4,814,239 = .3022, rounded to 30% = Loan to Value. $3,359,239 ÷ $4,814,239 = .6977, rounded to 70% = Equity Ratio.


[8] Ellwood Tables – Compound Interest Tables – Annual Constant for Monthly Payment Loan


[9] By email correspondence from the Hearing Officer on November 29, 2010, to Lisa Perry, copy to Counsel for Complainant and Counsel for Respondent, the parties were advised that official notice would be taken of the 2009 tax levy on the subject property for purposes of calculating the effective tax rate. Ms. Perry in response provided the following information: The tax rate for the 2009 tax year for residential on the subject property is $4.1747. $4.1747 x .19 \ 100 = .00793, the effective tax rate. The parties were given until and including 5:00 pm, Wednesday, December 1, 2010, to file objection to the taking of official notice. No objection was filed.


[10] $149,922 ÷ .1053 = $1,423,760


[11] $1,423,760 x .19 = $270,514, rounded to $270,500.


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


[13] Article X, Sections 4(a) and 4(b), Mo. Const. of 1945


[14] Section 137.115.5, RSMo


[15] Order, dtd 9/2/10


[16] 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)


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


[18] 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).


[19] Daly v. P. D. George Company, et al, 77 S.W.3d 645, 649 (Mo. App E.D. 2002), citing, Equitable Life Assurance Society v. STC, 852 S.W.2d 376, 380 (Mo. App. 1993); citing, Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798, 801-803 (Mo. 1973).


[20] Hermel, supra.


[21] 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.


[22] 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).


[23] 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).


[24] Section 138.432, RSMo.