Rayman Columbia Center Trust v. Schauwecker (Boone)

July 17th, 2013

State Tax Commission of Missouri




Complainant, )


v. ) Appeal Nos. 10-44589 & 10-44590 11-44500 & 11-44501




Respondent. )







This is a consolidated decision for tax years 2010, 2011 and 2012.

Decision of the Boone County Board of Equalization sustaining the assessment made by the Assessor, for tax year 2010, is SET ASIDE. True value in money for the subject property for tax years 2010 is set at $10,170,000, commercial assessed value of $3,254,400.

Decision of the Boone County Board of Equalization sustaining the assessment made by the Assessor, for tax years 2011 and 2012, is AFFIRMED.

Complainant appeared by Counsel, Jerome Wallach, and Ernest Demba, MAI.

Respondent appeared by Counsel, C.J. Dykehouse, and Daniel Craig, MAI.

Case heard and decided by Senior Hearing Officer Luann Johnson.


The Commission takes these appeals to determine the true value in money for the subject property on January 1, 2010, 2011 and 2012. Specifically, should hotel valuation exclude income streams from such items as guest laundry, audio visual rental, car rental, gift shop revenues, miscellaneous revenues and food and beverage revenues?


Complainant appeals, on the ground of overvaluation, the decision of the Boone County Board of Equalization, which sustained the valuation of the subject property. Values are as follows:


































A hearing was conducted on Thursday, May 9, 2013, at the Boone County Government Center, 9th & Ash, Columbia, Missouri. 

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following
Decision and Order.

Complainant’s Evidence


Demba Appraisal Report for 2010


Written Direct Testimony of Ernest Demba


Demba Appraisal Report for 2011


Respondent’s Evidence


Self-Contained Appraisal Report of Daniel W. Craig for January 7, 2009, opinion of value ($10,170,000.00)


Written Direct Testimony of Daniel W. Craig for 2009 Value Opinion


Daniel W. Craig. MAI – 2003 Article


Deposition of Dennis Pierro and Related Deposition Exhibits


Deposition of Ernest Demba and related deposition exhibits


Request for Official Notice


Value Per Room Comparisons


Dollar & Cents of Shopping Centers / The SCORE 2008 Excerpt


2009 Hotel Capitalization Rate Study prepared by Daniel W. Craig, MAI


Appraisal Review of Ernest Demba Appraisal by HVS


Self-Contained Appraisal Report of Daniel W. Craig for January 1, 2011, opinion of value ($13,770.000.00)


Written Direct Testimony of Daniel W. Craig for 2011 value opinion


Reconstructed Income & Expense Statement for 2009 Appraisal Report (Respondent’s

Exhibit #1)


Income & Expense Statement from 2009 Audited Financial Statements




“The Valuation of Hotels and Motels for Assessment Purposes,” Stephen Rushmore and Karen E. Rubin, April 1984


2010 United States Hotel Valuation Index, Stephen Rushmore, HVS, October 2010


Excerpt from STC’s decision in Felcor Suites, STC Appeal #99-20205


Corrected pages 53-54 from 2009 appraisal report


Corrected page 64 from 2009 appraisal report


Summary of Audited Financial Statements


Excerpt from Demba Work File for 2011 Appraisal



1. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the
decision of the Boone County Board of Equalization.

2. The subject properties are located at 2200 I-70 Drive SW, Columbia, Missouri. The properties are identified by
parcel numbers 16-204-00-01-004.00.01 and 16-204-00-01-006.00.01 . The properties (hereinafter “property”) consist of a combined 10.334 acre tract improved with a 251,774 square foot building over a 22,018 square foot basement and
containing 300 guest rooms and 10 suites, and convention center improvements capable of accommodating a 2,500 person event including an Expo Center, two flexible ballrooms, four meeting rooms and an Executive Boardroom. Other
amenities include three restaurants, a lounge, a business center, a fitness gym, an indoor pool, a spa and whirlpool, an outdoor pool, a hair salon and a gift shop. 3. Although there are several issues in this appeal, the biggest difference in the appraisal reports is the treatment of the income stream derived from food and beverage, hair salon, guest laundry, audio/visual rental, miscellaneous revenue and gift shop. Complainant’s appraiser argues that those income streams should not be valued as part of the real property.

4. The second biggest issue in this appeal is the impact of the recent economic downturn on the hotel/motel
industry. Complainant argues that the impact was long term and consistent covering the life of these appeals (2009 – 2012). Respondent argues that the impact was not as severe, and is now mitigating.

5. Both appraisers agree that the St. Louis hotel/motel market is similar to the subject market and is useful
for establishing trends for the subject market. Market studies for the St. Louis area indicate that the “per room” value of hotels/motels began declining in tax year 2008, bottomed out in 2009 and began climbing in 2010 with the 2012
“per room” rate being higher than it was before the decline began.[7] The room rates are as follows: 2007: $63,483; 2008: $53,813; 2009: $41,752; 2010: $44,159; 2011: $54,973; and $2012: $66,901. The economic conditions/trends
on January 1, 2009 and January 1, 2011, are relevant to the determination of value in these appeals.

6. Both appraisers agree that the “Rushmore” method is an appropriate methodology to use to value the subject
property. The “Rushmore” method has been applied by this Commission to value hotel and motel properties since 1996. The “Rushmore” method of valuation requires the inclusion of income from all sources including food and beverage,
laundry, gift shop, etc.[8] and, within its examples, specifically includes income streams from such things as food and beverage and telephone. The only deductions Rushmore recognizes are adjustments for business value and adjustments for personal property.[9] Inasmuch as Complainant’s appraiser has inappropriately excluded substantial portions of
the subject property’s income, his appraisals are not a reliable indicators of value for the subject property.[10]

7. Respondent’s appraisal report appropriately applies the “Rushmore” method of valuation, including all
relevant income streams and expenses. Respondent’s appraiser made adjustments to remove business value and return on and of the business personal property. Respondent’s appraiser used appropriate capitalization rates based upon
documented market studies. 

8. When Respondent presents an opinion of value which is different than the opinion of value adopted by the

Board of Equalization, he has the same burden of proof as Complainant, i.e. substantial and persuasive evidence. In this instance, Respondent’s appraiser asserts an opinion of value for 2010 which is below the value determined by the
Board of Equalization for tax year 2010 and asserts an opinion of value for 2011 which is above that same Board value.

Respondent 2010 value

Board value

Respondent 2011 value





In determining his 2010 value, Respondent’s appraiser used income trends prior to January 1, 2009, at the time
when the market was at its lowest point. Testimony at hearing established the subject property actually had higher income during 2009 than Respondent’s appraiser had projected. Thus, the value for tax year under appeal was at least $10,170,000 based upon the economic conditions in existence on January 1, 2009. However, the market had only begun to climb out of its slump and, therefore, Respondent’s value of $10,170,000 more accurately reflects the market value of the subject property on January 1, 2009, than the Board value. Therefore, Respondent has presented substantial and persuasive evidence to support setting aside the decision of the Board of Equalization. The market value for tax year 2010 should be $10,170,000 (assessed value $3,254,400).

On the other hand, Respondent’s value for tax year 2011 is not substantially different than the value determined by
the Board of Equalization for that same year. Respondent’s appraisal supports the Board value but does not cause this Hearing Officer to find that the Board’s value was erroneous or that same should be set aside. Therefore, the
value as approved by the Board of Equalization for tax years 2011 and 2012 is affirmed.



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.[11]

Official and Judicial

Agencies shall take official notice of all matters of which the courts take judicial notice.[12]

Courts will take judicial notice of their own records in the same cases.[13] In addition, courts may take judicial notice of records in earlier cases when justice requires[14] or when it is necessary for a full understanding of the instant appeal.[15] Courts may take judicial notice of their own records in prior proceedings involving the same parties and basically the same facts.[16]

Presumptions In Appeals

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[17] 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 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.[18]

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.[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]


Duty to Investigate

In order to investigate appeals filed with the Commission, the Hearing Officer has the duty to inquire of the owner
of the property or of any other party to the appeal regarding any matter or issue relevant to the valuation, subclassification or assessment of the property. The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon its inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties.[22]

Weight to be Given

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.[23]

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.[24]

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.[25] 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.[26] 

Opinion Testimony by

If specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a
witness qualified as an expert on that subject, by knowledge, skill, experience, training, or education, may testify thereto.

The facts or data upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing and must be of a type reasonably relied upon by experts in the field in forming opinions or inferences upon the subject and must be otherwise reliable, the facts or data need not be admissible in evidence.[27]

Respondent’s Burden of

Respondent, when advocating a value different from that determined by the original valuation or a valuation made by
the Board of Equalization, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law.[28]

Complainants’ Burden of

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, 2010 and January 1, 2011.[29] 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.”[30]

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate
to support a conclusion.[31]
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.[32]

Owner’s Opinion of

The owner of property is generally held competent to testify to its reasonable market value.[33] The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[34] “Where the basis for a test as to the reliability of the testimony is not supported by a statement of facts on which it is based, or the basis of fact does not appear to be sufficient, the testimony should be rejected.”[35]

A taxpayer does not meet his burden if evidence on any essential element of his case leaves the Commission “in the
nebulous twilight of speculation, conjecture and surmise.”[36]


The assessed valuation for the subject property for tax year 2010, as determined by the Assessor and sustained by the Board of Equalization for Boone County for the subject tax day is SET ASIDE. The market value for said property for tax year 2010 is here set at $10,170,000 (assessed value $3,254,400).

The assessed value for the subject property for tax years 2011 and 2012 is AFFIRMED.

A party may file with the Commission an application for review of this decision within thirty (30) days of the mailing
date shown in the Certificate of Service. The application shall contain specific 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 appeal is based will result in summary denial.

The Collector of Boone County, as well as the collectors of all affected political subdivisions therein, shall
continue to hold the disputed taxes pending a filing of an Application for Review, unless said taxes have been disbursed pursuant to a court order under the provisions of 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 July 17, 2013.


Luann Johnson

Senior Hearing Officer




Consolidated value 

Consolidated value 

Consolidated value 

Consolidated value 

Consolidated value 

Consolidated value 

Resp. Ex. 12-E, Respondent’s post trial brief 

John Hancock Mutual Life v. Gary Stanton, Assessor for Buchanan County, Missouri, Appeal No. 95-45000. 

Resp. Ex. 12-D 

We cannot tell if Complainant’s appraiser attempted to break out all the expenses associated with what he perceived to be inappropriate income. 

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

Section 536.070(6), RSMo. 

State ex rel. Horton v. Bourke, 129 S.W.2d 866, 869 (1939); Barth v. Kansas City Elevated Railway Company, 44 S.W. 788, 781 (1898). 

Burton v. Moulder, 245 S.W.2d 844, 846 (Mo. 1952); Knorp v. Thompson, 175 S.W.2d 889, 894 (1943); Bushman v. Barlow, 15 S.W.2d 329, 332 (Mo. banc 1929) 

State ex rel St. Louis Public Service Company v. Public Service Commission, 291 S.W.2d 95, 97 (Mo. banc 1956). 

In re Murphy, 732 S.W.2d 895, 902 (Mo. banc 1987); State v. Gilmore, 681 S.W.2d 934, 940 (Mo. banc 1984); State v. Keeble, 399 S.W.2d 118, 122 (Mo. 1966).

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). 

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

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). 

Hermel, supra.

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. 

Section 138.430.2, RSMo. 

St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968). 

St. Louis County v. Boatmen’s Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).

See, Nance v. STC, 18 S.W.3d 611, at 615 (Mo. App. W.D. 2000); Hermel, supra; Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975). 

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

Section 490.065, RSMo; State Board of Registration for the Healing Arts v. McDonagh, 123 S.W.3d 146 (Mo. SC. 2004); Courtroom Handbook on Missouri Evidence, Wm. A. Schroeder, Sections 702-505, pp. 325-350; Wulfing v. Kansas City
Southern Industries, Inc., 842 S.W.2d 133 (Mo. App. E.D. 1992). 

Hermel, Cupples-Hesse, Brooks, supra. 

Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897. 

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). 

See, Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). 

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

Rigali v. Kensington Place Homeowners’ Ass’n, 103 S.W.3d 839, 846 (Mo. App. E.D. 2003); Boten v. Brecklein, 452 S.W.2d 86, 95 (Sup. 1970). 

Cohen v. Bushmeyer, 251 S.W.3d 345, (Mo. App. E.D., March 25, 2008); Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992); State, ex rel. Missouri Hwy & Transp. Com’n v. Pracht, 801 S.W.2d 90, 94 (Mo. App. E.D. 1990); Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965). 

Carmel Energy at 783. 

See, Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. 1980). 

Section 138.432, RSMo 2000.