State Tax Commission of Missouri
|v.||)||Appeal Number 13-33023|
|RICK KESSINGER, ASSESSOR||)|
|GREENE COUNTY, MISSOURI,||)|
DECISION AND ORDER
Decision of the Greene County Board of Equalization sustaining the assessment made by the Assessor is SUSTAINED. Complainant did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization.
Complainant represented by S. Jay Dobbs, Attorney at Law.
Respondent represented by Theodore Johnson, Attorney at Law.
Case heard and decided by Hearing Officer Maureen Monaghan.
Complainant appeals, on the grounds of overvaluation and discrimination, the decision of the Greene County Board of Equalization, which sustained the Assessor’s valuation of the subject property. Complainant presented no evidence as to discrimination and therefore that claim is waived. The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2013. The value as of January 1 of the odd numbered year remains the value as of January 1 of the following even numbered year unless there is new construction and improvement to the property. Section 137.115.1 RSMo
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
The following exhibits were introduced into the record without objection.
Ex. A Complainant’s Appraisal Report
Ex. B Complainant’s Written Direct Testimony
Ex. 1 Respondent’s Appraisal Report
Ex. 2 Respondent’s Written Direct Testimony
FINDINGS OF FACT
- Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the Greene County Board of Equalization.
- Evidentiary Hearing. The Evidentiary Hearing in this appeal was held on Wednesday, November 19, 2014, at the Greene County Courthouse, Springfield, Missouri.
- Identification of Subject Property. The subject property is identified by map parcel number 12-02-300-003. It is further identified as 4455 E. Mustard Way, Springfield, Greene County, Missouri.
- Description of Subject Property. The subject property is a 49.03 acre tract improved with an industrial building constructed in 1971. The industrial building is approximately 494,370 square feet. The building has office space of 26,565 square feet, multi-story space of 75,552 square feet, cooler section of 2,850 square feet, and air conditioned manufacturing space of 144, 892 square feet. The building has 30 truck docks, 4 drive through doors, and rail service (2,100 lineal feet). There are also 12 silos and 8 storage tanks.
- Highest and Best Use. The highest and best use of the property is for industrial use.
- Assessment. The Assessor appraised the property at $8,481,800, an assessed commercial value of $2,714,170. The Board of Equalization sustained the assessment.
- Complainant’s Evidence. Complainant presented an appraisal report which was marked as Exhibit A and the Written Direct Testimony of Daniel Kelly (Exhibit B), a certified general real estate appraiser with a temporary license for State of Missouri.
The appraiser developed the sales comparison approach to value. The appraiser reviewed six sales occurring from October 2009 to August 2012. The buildings ranged in size of 240,589 to 945,160 square feet and were located in Springfield and Kansas City, Missouri; Tulsa, Oklahoma; Pittsburg, Kansas; and Siloam Springs, Arkansas.
The appraiser compared the properties as to location (proximity to interstate, rail or airport access), size, age, clear ceiling heights, land-to-building ratio, and percentage of multi-story space. The appraiser made a determination as to whether the comparable was inferior or superior to the subject as to each characteristic. The appraiser concluded on $10 per square foot or $4,943,700 value. The appraiser determined a value for the tanks and silos on the property of $160,000. His concluded total valuation was $5,100,000.
- No Evidence of New Construction & Improvement. There was no evidence of new construction and improvement from January 1, 2013, to January 1, 2014, therefore the assessed value for 2013 remains the assessed value for 2014. Section 137.115.1, RSMo.
- Respondent’s Evidence. Respondent produced an appraisal report identified as Exhibit 1 and Written Direct Testimony of Brian Wood (Exhibit 2), a certified residential real estate appraiser. The appraiser developed all three approaches to support the valuation sustained by the Board of Equalization.
- True Value. True Value remains set at $8,481,800 as the Complainant’s appraisal was not substantial and persuasive to rebut the presumption of correct assessment by the County Board of Equalization.
CONCLUSIONS OF LAW AND DECISION
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. Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
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. Article X, Sections 4(a) and 4(b), Mo. Const. of 1945. The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property are assessed at set percentages of true value in money. Section 137.115.5, RSMo – residential property at 19% of true value in money; commercial property at 32% of true value in money and agricultural property at 12% of true value in money.
Presumption In Appeal
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization. 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).
The presumption of correct assessment is rebutted when the taxpayer 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. Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. See, Cupples-Hesse, supra. 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. Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).
Burden of Proof
In order to prevail, a party 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, 2013. Hermel, supra. 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.” 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).
Weight to be Given Evidence
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. 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).
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. 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). 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. 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).
Opinion Testimony by Experts
An expert’s opinion must be founded upon substantial information, not mere conjecture or speculation, and there must be a rational basis for the opinion. Missouri Pipeline Co. v. Wilmes, 898 S.W. 2d 682, 687 (Mo. App. E.D. 1995). The State Tax Commission cannot ignore a lack of support in the evidence for adjustments made by the expert witnesses in the application of a particular valuation approach. Drey v. State Tax Commission, 345 S.W. 2d 228, 234-236 (Mo. 1961), Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W. 3d, 341, 348 (Mo. 2005). The Hearing Officer, as the trier of fact, has the authority to weigh the evidence and 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 may accept it in part or reject it in part. Beardsley v. Beardsley, 819 S.W. 2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W. 2d 605, 607 (Mo. 1981); Scanlon v. Kansas City, 28 S.W. 2d 84, 95 (Mo. 1930).
Complainant has the burden of proof and therefore must present substantial and persuasive evidence as to their opinion of value. The Complainant’s appraiser developed only one approach to value. The appraiser stated that the cost and income approach were not appropriate methodologies for this property. The approach to value developed by an appraiser will depend upon the type of property, data available and the use of the appraisal. An appraiser may weigh the results of one approach more than another approach given the appraisal assignment. Appraisers should apply all approaches applicable as alternative value determinations can provide support or refute the proposed value developed using another approach. (Appraisal of Real Estate 13th Edition)
The appraiser developed the sales comparison approach to value. The appraiser reviewed six sales. The appraiser compared the properties as to numerous characteristics. The appraiser made a determination as to whether the comparable was inferior or superior to the subject as to each characteristic then made an overall conclusion as to whether the comparable was inferior or superior. The appraiser made no analysis as to the degree of the difference or the adjustment necessary to the comparable’s sales price. The appraiser stated that he could not quantify the adjustments or provide explanation. The appraiser in reviewing characteristics that made a property inferior or superior to the subject and determined that sales 2, 3, 5, and 6 were all inferior to the subject and sales 1 and 4 were superior to the subject. Sales 1 and 4 also have the highest sales price per feet square ($11.04 & $11.39) and the inferior comparables had lower sales price per square foot ($4.58 to $8.36). The higher sales price per square foot properties were in Missouri and most of the lower price properties were outside of Missouri. The appraiser stated that he did not study the markets in any of the areas; he testified that he does not conduct market studies nor did he review any time studies. The appraiser concluded that the sales price for the subject property would fall between the highest per square foot price inferior property and the lowest square for price for the property deemed superior.
The Appraisal of Real Estate sets forth the steps in a properly conducted sales comparison approach. One of the steps is to “adjust the price of each sale property, reflecting how it differs, to equate it to the subject property.” The appraiser should also “[r]econcile the various value indications produced from the analysis of comparables to a value bracket and then to a single value of indication.” The Complainant’s appraiser failed to make any adjustments to the comparable properties sale prices. The appraiser used some type of “middle” value as his market value.
The Complainant’s appraiser’s consideration of the appraisal problem and basis of sales comparison approach lacked persuasiveness. The appraiser testified that he was not familiar with the market in which the subject property was located nor was he familiar with the market of the comparables. The appraiser did not provide a list of industrial properties he reviewed as part of the sales comparison approach. There were additional sales of properties as evidenced by the sales offered by the Respondent’s appraiser in his sales comparison approach.
Without knowledge of the markets, without a properly conducted sales approach, without supporting information for the development of the valuation approach, and without an additional valuation approach to support the opinion of value developed under the sales approach, the evidence is not substantial and persuasive. The State Tax Commission cannot ignore a lack of support in the evidence for adjustments made by the expert witnesses in the application of a particular valuation approach. Drey v. State Tax Commission, 345 S.W. 2d 228, 234-236 (Mo. 1961), Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W. 3d, 341, 348 (Mo. 2005).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.” See, Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. 1980).
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Greene County for tax years 2013 and 2014 is AFFIRMED.
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, 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. Section 138.432, RSMo
The Collector of Greene 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 this 22nd day of December, 2014.
STATE TAX COMMISSION OF MISSOURI
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed by electronic mail this 22nd day of December, 2014, to: Jay Dobbs, 100 S. 4th St. #1000, St Louis, MO 63102, Attorney for Complainant; Theodore Johnson, Greene County Counselor, 901 St. Louis Street, 20th Floor, Springfield, MO 65806, Attorney for Respondent; Rick Kessinger, Assessor; Richard Struckhoff, Clerk; Scott Payne, Collector, Greene County Courthouse, 940 Boonville, Springfield, MO 65806.