Realty Associates Fund et al v. Zimmerman (SLCo)

 

REALTY ASSOCIATES FUND et al	)
	)
Complainant,	)
	)
v.	)	Appeal Number 07-11122 to 07-11125
	)
JAKE ZIMMERMAN, ASSESSOR,	)
ST. LOUIS COUNTY, MISSOURI,	)
	)
Respondent.	)

 

DECISION AND ORDER

HOLDING

 St. Louis County Board of Equalization’s assessment SUSTAINED. Complainant did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization.

True value in money for the subject properties for tax years 2007-2008 is set:

Appeal No.	True Value	Assessed Value
07-11122	$8,000,000	$2,560,000
07-11123	$225,800	$72,260
07-11124	$7,900,000	$2,528,000
07-11125	$7,400,000	$2,368,000

 

Complainant appeared by counsel, Thomas Campbell. Respondent appeared by Attorney Edward Corrigan.

Case heard and decided by Hearing Officer Maureen Monaghan.

ISSUE

Complainant appeals, on the grounds of overvaluation and discrimination, the decision of the County Board of Equalization.Having considered all of the competent evidence upon the whole record, the Hearing Officer finds that the Complainant failed to present substantial and persuasive evidence as to overvaluation or discrimination.The following Decision and Order is entered.

FINDINGS OF FACT

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

2.Schedule and Procedure.On August 15, 2013, the State Tax Commission issued an Order setting forth the schedule and procedures for this appeal.The Schedule and Procedure required that each party file and exchange exhibits and written direct testimony to establish their case in chief on or before January 2, 2014.Complainant and Respondent filed and exchanged the exhibits set out below under Complainant’s Evidence.Parties had until March 24, 2014 to file objections and rebuttal exhibits.Complainant filed objections and the objections were ruled upon in a separate Order by the Hearing Officer.Respondent consented to submitting the appeal on the exhibits.

3.Subject Property.The subject properties are identified as follows:

Appeal No.	Parcel No.	Address
07-11122	18K331963	150 N. Meramec Ave.
07-11123	18K330544	153 N. Meramec Ave.
07-11124	18K331590	165 N. Meramec Ave.
07-11125	18K331974	168 N. Meramec Ave

.

4.Assessment.The Assessor made the following determinations of value:

Appeal No.	True Value	Assessed Value
07-11122	$10,005,300	$3,201,690
07-11123	$225,800	$72,260
07-11124	$9,853,200	$3,153,020
07-11125	$9,256,300	$2,962,010

 

5.Board of Equalization.The Board of Equalization made the following determinations of value:

Appeal No.	True Value	Assessed Value
07-11122	$8,000,000	$2,560,000
07-11123	$225,800	$72,260
07-11124	$7,900,000	$2,528,000
07-11125	$7,400,000	$2,368,000

 

6.Complainant’s Evidence.Complainant filed with the Commission the following documents:Exhibit A – The Board of Equalization’s finding of value for each parcel.

7.Respondent’s Evidence.Respondent filed the following Exhibits:

Exhibit 1 – Package of materials including Assessor’s webpage, certificate of value, deed, computer screen prints, industrial review document, and handwritten notes.

Exhibit 2 – Package of materials including Assessor’s webpage, certificate of value, deed, computer screen prints, industrial review document, and handwritten notes.

Exhibit 3 – Information regarding sales of properties from Co-Star.

Exhibit 4 – Written Direct Testimony of Nancy McGrath.

The hearing officer ruled on the admissibility of documents.Exhibits 1 and 2 were admitted into evidence as to the determination of value by the Assessor, the determination of value by the Board of Equalization, the deed and certificate of value for the properties as to the sale of the properties in 2004 for $30,250,000 and in 2008 for $33,650,000.

8.Median Level of Assessment.The State Tax Commission previously found that the median level of assessment for commercial property in St. Louis County in 2007 is 29.4%.The previous decision is incorporated by reference.

9.Summary Judgment.Complainant filed a Motion for Summary Judgment.The parties presented oral arguments and briefs.While the Motion was pending, the appeal was heard.

 CONCLUSIONS OF LAW AND DECISION

Jurisdiction

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.1

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.2 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.3

Presumption In Appeals

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.4

Issuance of Decision Absent Evidentiary Hearing

The Hearing Officer, after affording the parties reasonable opportunity for fair hearing, shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, correcting any assessment which is unlawful, unfair, improper, arbitrary or capricious.5 The filing of exhibits and written direct testimony establishes the basis upon which opportunity for an evidentiary hearing can be held.The parties waived a hearing in the appeals.Accordingly, the responsibility of the Hearing Officer was to simply consider the exhibits that were filed and then proceed to ascertain if said exhibits, standing on their own without the benefit of any testimony to explain, or support them, met the standard of substantial and persuasive.

Valuation

Section 137.115 of the Missouri Revised Statutes 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 purchased by one who is desiring to purchase but who is not compelled to do so. 6 The value used for the true value in money of a subject property is the fair market value of the subject property on the valuation date. 7

There is a presumption of validity, good faith, and correctness by the County Board of Equalization.8  The case law and the Commission’s decisions have repeatedly held the presumption of a correct assessment may only be rebutted when substantial and persuasive evidence is presented to establish that Board’s valuation is erroneous. 9 In the absence of such evidence, the presumptions are assumed to be correct.

The determination of true value is necessary for both overvaluation and discrimination claims.The Complainant submitted the Board of Equalization decisions.The Respondent submitted documentation of the assessment by the Assessor and by the Board of Equalization.The Respondent also submitted documentation of the sale of the subject properties in 2004 and 2008 for $30,250,000 and $33,650,000.

A price agreed to between a willing buyer and seller creates a presumption that the transaction was a market transaction. 10 Although there is often evidence that the transaction involved additional real or personal property or that the agreement of purchase and sale does not accurately reflect the price paid for the property, there was no such evidence in this case.Complainant’s evidence does not establish that the property was overvalued.

Discrimination

The purpose of the equal protection clause of the 14^th Amendment is to secure every person within the state’s jurisdiction against discrimination whether it be through intentional violations of the statute or by improper execution of a statute.If a jurisdiction cannot both secure the standard of true value and uniformly and equitably assess property for taxing purposes, “the latter requirement is to be preferred as just and ultimate purpose of law.” A taxpayer whose property is taxed differently from other property within a jurisdiction has the right to have his assessment reduced to the percentage of that value at which the others are taxed. 11

In order to obtain a reduction in assessed value based upon discrimination, the Complainant must (1) prove the true value in money of their property on January 1, 2007; and (2) show an intentional plan of discrimination by the assessing officials resulting in an assessment of that property at a greater percentage of value than other property, generally, within the same class within the same taxing jurisdiction or show that the level of an assessment is so grossly excessive as to be inconsistent with an honest exercise of judgment. 12

As stated previously, the first prong of the test to prove discrimination, determining true value of the property, has been addressed.The next step is to review the assessment of the subject property and properties within the same class.

The median level of assessment for a particular class of real property and the actual assessment imposed on the property of the taxpayer alleging discrimination must be evaluated. 13 The median level of assessment is determined by independently determining the market value of a representative sample of commercial properties within the County; (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. The Commission, in a previous hearing, held that the median level of assessment for commercial properties in St. Louis County in 2007 was 29.4%. 14

The Complainant has not established discrimination.The Respondent presented evidence of true value of the properties through two sales of the properties within a relevant time period.The properties sold in 2004 for $30,350,000 and in 2008 for $33,650,000.The subject properties’ assessed value, in total, as determined by the Assessor was $9,388,980 using an assessment ratio of 32% and a true value of $29,340,600.The subject properties’ assessed value, in total, as determined by the Board of Equalization was $7,528,260.

After review of the sale of the properties in 2004 and 2008 along with the evidence of the assessment of the property in 2007, Hearing Officer cannot find that Complainant presented substantial and persuasive evidence of discrimination.

 ORDER

The assessed valuation for the subject property as determined by the Board of Equalization for St. Louis County for the subject tax day is SUSTAINED.The assessed value for the subject property for tax years 2007 and 2008 remains:

Appeal No.	True Value	Assessed Value
07-11122	$8,000,000	$2,560,000
07-11123	$225,800	$72,260
07-11124	$7,900,000	$2,528,000
07-11125	$7,400,000	$2,368,000

 SO ORDERED April 25, 2014.

 

STATE TAX COMMISSION OF MISSOURI

 Maureen Monaghan

Hearing Officer

 

 1Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.