State Tax Commission of Missouri
| RMS PROPERTIES II, | ) | Appeal Number 13-13082 |
| ) | 13-13083 | |
| Complainant, | ) | 13-13085 |
| ) | 13-13088 | |
| v. | ) | |
| ) | ||
| JAKE ZIMMERMAN, ASSESSOR, | ) | |
| ST LOUIS COUNTY, MISSOURI, | ) | |
| ) | ||
| Respondent. | ) |
DECISION AND ORDER
HOLDING
Decision of the County Board of Equalization is SET ASIDE as to appeals 13-13082, 13-13083, 13-13085 and 13-13088. Complainant presented substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization in those appeals.
True value in money for the subject property for tax years 2013 and 2014 is set at:
| Appeal | Parcel | True Value | Assessed Value |
| 13-13082 | 12M311633 | $458,660 | $146,770.00 |
| 13-13083 | 12M330371 | $1,329,560 | $425,460.00 |
| 13-13085 | 12M330416 | $448,360 | $143,480.00 |
| 13-13088 | 12M330434 | $1,763,420 | $564,290.00 |
| $4,000,000 | $1,280,000.00 |
Complainant appeared by attorney Brian Howes.
Respondent appeared by Associate County Counselor Ed Corrigan.
Case heard and decided by Hearing Officer Maureen Monaghan.
ISSUE
Complainant appeals, on the grounds of overvaluation and discrimination, the decision of the St. Louis County Board of Equalization. The Complainant abandoned their claim of discrimination. The Commission takes this appeal to determine the true value in money for the subject properties 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.
FINDINGS OF FACT
- Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.
- Evidentiary Hearing. Exhibits were submitted to the State Tax Commission. Parties were given an opportunity to request a hearing. If no party requested a hearing, the appeal would be submitted on exhibits and taken under advisement. No request for hearing was made.
- Identification of Subject Properties. The subject properties are identified by map parcel numbers:
| Appeal | Parcel |
| 13-13082 | 12M311633 |
| 13-13083 | 12M330371 |
| 13-13084 | 12M311624 |
| 13-13085 | 12M330416 |
| 13-13086 | 12M330407 |
| 13-13087 | 12M330393 |
| 13-13088 | 12M330434 |
They are also identified as 10809, 10817, 10857 and 10915 St. Charles Rock Road, St Louis County, Missouri.
- Description of Subject Property. The subject properties comprise a shopping center on a 16.52 acre lot. The improvements were constructed in 1985-1991. There is a total of 225,842 square feet of retail space. 133,347 square feet was formerly used as a Walmart; Walmart vacated the space in 2012. Due to the anchor tenant leaving, the vacancy rate has increased. Currently there are four tenants leasing 10% of the centers space. The parking lot has 850 parking spaces. The three out-lot buildings – McDonalds, Hardees, and another retail space – are not included as part of the decision.
- Assessment. The assessment of the properties for which evidence was presented is as follows:
| Appeal | Parcel | Assessor TMV | Assessed | BOE | Assessed |
| 13-13082 | 12M311633 | $ 889,400.00 | $284,610 | $ 819,300.00 | $262,180 |
| 13-13083 | 12M330371 | $ 2,589,000.00 | $828,480 | $ 2,375,000.00 | $760,000 |
| 13-13085 | 12M330416 | $ 1,165,500.00 | $372,960 | $ 800,900.00 | $256,290 |
| 13-13088 | 12M330434 | $ 3,472,600.00 | $1,111,230 | $ 3,150,000.00 | $1,008,000 |
| Totals | $ 8,116,500.00 | $2,597,280 | $ 7,145,200.00 | $2,286,460 |
- Complainant’s Evidence. Complainant offered into evidence Exhibits A and B. The exhibits include the testimony of Joe Camerer, a Missouri Certified General Appraiser, and his appraisal report of properties in appeal 13-13082, 13-13083, 13-13085 and 13-13088. The appraiser developed the income and sales comparison approaches to value. Under the income approach the appraiser concluded a value of $4,000,000 after considering the cost to stabilize the property to market occupancy. Under the sales comparison approach, the appraiser concluded a value of $4,000,000. The appraiser felt the sales comparison approach was more reliable. There were sales of similar, large retail building properties that had vacancy issues.
- Respondent’s Evidence. Respondent submitted the Board of Equalization decision which states the conclusion of value reached by the Board.
- 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 values for 2013 remains the assessed values for 2014 respectively. Section 137.115.1, RSMo.
- Presumption of Correct Assessment Rebutted. Complainant’s evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board.
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. 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).
Issuance of Decision Upon Submission of Exhibits
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. Section 138.431.5 RSMo; 12 CSR 30-3.080 (2). The filing of exhibits establishes the basis upon which opportunity for an evidentiary hearing can be held. The Complainant has the burden to present substantial and persuasive evidence. Complainant filed exhibits. Neither party requested a hearing.
Complainants’ Burden of Proof
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, 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). A valuation which does not reflect the fair market value (true value in money) of the property under appeal is an unlawful, unfair and improper assessment.
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. 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). True value in money is defined in terms of value in exchange and not value in use. 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). It is the fair market value of the subject property on the valuation date. Hermel, supra. Market value is the most probable price in terms of money which a property should bring in a 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:
- Buyer and seller are typically motivated.
- Both parties are well informed and well advised, and both acting in what they consider their own best interests.
- A reasonable time is allowed for exposure in the open market.
- Payment is made in cash or its equivalent.
- Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.
- 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. 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.
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).
Complainant Proves Value
Complainant presented substantial and persuasive evidence to establish a fair market value as of January 1, 2013 for the subject properties. Complainant presented the testimony and report of a Missouri Certified General Appraiser with twenty years of experience. The appraiser considered all three approaches to value and developed the income and sales comparison approach. As to the income approach, the appraiser reviewed market leases to develop market rental rates and vacancy. Although the subject is currently 90% vacant, the appraiser utilized a market rate of 15% and addressed the stabilization after determining an opinion of value after stabilization. The appraiser determined a net income and applied an overall capitalization rate to conclude a value of $8,000,000 if the property was stabilized. The property would need additional occupancy to be stabilized. The appraiser anticipated two years to locate an anchor tenant and an additional time to secure tenants for the smaller spaces. The appraiser made a deduction of $4,000,000 to account for the loss of income, cost, and risk of stabilizing the subject properties.
The appraiser also developed the sales comparison approach. The appraiser concluded on a value of $17.50 per square foot to arrive at an indication of value of $4,000,000. The comparable properties were large retail spaces with occupancy issues therefore provided reliable information for the appraiser to use in his analysis.
The appraiser concluded on a value of $4,000,000 relying on the sales comparison approach. No evidence was presented to rebut the testimony and evidence presented.
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Louis County for the subject tax day is SET ASDE in appeals 13-13082, 13-13083, 13-13085, and 13-13088. The assessed value for the subject properties for tax years 2013 and 2014 is set at:
| Appeal | Parcel | Assessed Value |
| 13-13082 | 12M311633 | $146,770.00 |
| 13-13083 | 12M330371 | $425,460.00 |
| 13-13085 | 12M330416 | $143,480.00 |
| 13-13088 | 12M330434 | $564,290.00 |
| $1,280,000.00 |
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
Disputed Taxes
The Collector of St. Louis 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, 23rd day of March 2016.
STATE TAX COMMISSION OF MISSOURI
Maureen Monaghan
Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 23rd day of March, 2016, to: Complainants(s) counsel and/or Complainant, the county Assessor and/or Counsel for Respondent and county Collector.
Jacklyn Wood
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
573-751-2414
573-751-1341 Fax