State Tax Commission of Missouri
|RYA LLC||)||Appeal No. 07-11173|
|Stag #1 LLC||)||07-11175|
|Gundaker Commercial Group, Inc.||)||07-11182|
|GHH Investments LLC||)||07-11183|
|Woltman, Richard M.||)||07-11184|
|JGDD Manchester LLC||)||07-11191|
|4156 Shoreline Properties LLC||)||07-11196|
|Shoreline Court Investors LLC||)||07-11197|
|Lynn Stuart, Inc.||)||07-11199|
|Rothermich, Larry & Patricia||)||07-11200|
|Camenzind Family Ltd. Partnership||)||07-11202|
|Kerls, Jack & Judith||)||07-11204|
|Express Enterprises LLC||)||07-11205|
|THF Chesterfield Four Development||)||07-11264|
|2501 Adie Investors LLC||)||07-11270|
|THF Chesterfield Development||)||07-11272|
|THF Chesterfield Development||)||07-11273|
|JAKE ZIMMERMAN, ASSESSOR,||)|
|ST. LOUIS COUNTY, MISSOURI,||)|
DECISION AND ORDER
St. Louis County Board of Equalization’s assessments SET ASIDE. Complainant presented substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization. True value in money and assessment ratio for the subject properties for tax years 2007-2008 is set as follows:
|Appeal No.||Parcel||True Value 2007-2008||Assessment Ratio||Assessed Value|
|07-11173||25O530021||$ 2,207,300||29.4%||$ 648,950|
|07-11175||11N520130||$ 3,928,000||29.4%||$ 1,125,430|
|07-11182||14O630330||$ 5,000,000||29.4%||$ 1,470,000|
|07-11183||18U430356||$ 8,127,300||29.4%||$ 2,389,430|
|07-11184||11N540646||$ 1,200,000||29.4%||$ 352,800|
|07-11190||14N230122||$ 1,201,100||29.4%||$ 353,120|
|07-11191||22N410736||$ 1,200,000||29.4%||$ 352,800|
|07-11196||10P620183||$ 713,000||29.4%||$ 209,620|
|07-11197||10P620233||$ 900,000||29.4%||$ 264,600|
|07-11199||27L410830||$ 2,015,000||29.4%||$ 592,410|
|07-11200||28O310552||$ 1,235,000||29.4%||$ 363,090|
|07-11202||16L421214||$ 1,460,000||29.4%||$ 429,240|
|07-11204||14N420844||$ 742,500||29.4%||$ 218,300|
|07-11205||09O330311||$ 525,000||29.4%||$ 154,350|
|07-11264||17U220112||$ 4,660,700||29.4%||$ 1,370,250|
|07-11266||28K440181||$ 721,800||29.4%||$ 212,210|
|07-11267||22M140869||$ 737,200||29.4%||$ 216,740|
|07-11270||14N330543||$ 1,806,200||29.4%||$ 531,020|
|07-11271||22R310694||$ 902,000||29.4%||$ 265,190|
|07-11272||17T130144||$ 1,485,500||29.4%||$ 436,740|
|07-11273||17T130133||$ 1,153,400||29.4%||$ 339,100|
Complainant appeared by counsel, Thomas Campbell. Respondent appeared by Attorney Edward Corrigan.
Case heard and decided by Hearing Officer Maureen Monaghan.
Complainant appeals, on the grounds of overvaluation and discrimination, the decision of the County. Having considered all of the competent evidence upon the whole record, the Hearing Officer finds that the Complainant presented substantial and persuasive evidence as to overvaluation and discrimination. The following Decision and Order is entered.
FINDINGS OF FACT
- Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the County Board of Equalization.
- Schedule and Procedure. 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 May 2, 2016. Complainant filed and exchanged the exhibits set out below under Evidence. Parties had until May 25, 2016, to file objections and rebuttal exhibits. Respondent did not object to the exhibits filed. Respondent was ordered to file, on or before June 1, 2016, a Certification of Hearing indicating a good faith intention to require a hearing. Respondent failed to file with the Commission.
- Subject Property. The subject properties are identified by parcel number:
- Assessment. The Assessor appraised the property and the Board of Equalization reviewed those values:
|Appeal No.||Assessor’s True Value||Assessor’s Assessed Value||BOE’s Value|
|07-11173||$ 2,251,200||$ 720,390||$ 2,207,300|
|07-11175||$ 4,151,200||$ 1,328,390||$ 3,828,000|
|07-11182||$ 5,921,200||$ 1,894,780||$ 5,000,000|
|07-11183||$ 9,057,500||$ 2,896,480||$ 8,127,300|
|07-11184||$ 1,345,200||$ 430,460||$ 1,200,000|
|07-11190||$ 1,270,800||$ 406,660||$ 1,201,100|
|07-11191||$ ,380,300||$ 441,700||$ 1,200,000|
|07-11196||$ 792,200||$ 253,510||$ 713,000|
|07-11197||$ 1,167,900||$ 373,730||$ 900,000|
|07-11199||$ 2,269,300||$ 726,180||$ 2,015,000|
|07-11200||$ 1,381,300||$ 442,020||$ 1,235,000|
|07-11202||$ 1,681,500||$ 538,080||$ 1,460,000|
|07-11204||$ 864,200||$ 276,540||$ 742,500|
|07-11205||$ 705,500||$ 225,760||$ 525,000|
|07-11264||$ 5,659,000||$ 1,810,880||$ 4,660,700|
|07-11266||$ 816,000||$ 261,120||$ 721,800|
|07-11267||$ 805,100||$ 257,630||$ 737,200|
|07-11270||$ 2,012,900||$ 644,128||$ 1,806,200|
|07-11271||$ 1,927,100||$ 616,670||$ 902,000|
|07-11272||$ 1,953,700||$ 625,180||$ 1,485,500|
|07-11273||$ 1,522,300||$ 487,130||$ 1,153,400|
- Evidence. The Complainant submitted the property record cards and the Board of Equalization Notices.
- 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.
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 is assessed at set percentages of true value in money. Section 137.115.5, RSMo
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. Section 138.431.5 RSMo; 12 CSR 30-3.080 (2) The filing of exhibits and written direct testimony establishes the basis upon which opportunity for an evidentiary hearing can be held. The Complainant has the burden to present substantial and persuasive evidence. The Respondent did not file any rebuttal exhibits. Therefore, the Hearing Officer simply considered the exhibit filed and then proceeded to ascertain if said exhibit met the standard of substantial and persuasive evidence to establish the market value of the property.
Presumption In Appeals
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)
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
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). 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. 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)
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).
In State ex rel. Ashby Road Partners, LLC v. State Tax Commission of Missouri, 297 S.W.3d 80, 85 (Mo Banc 2009), the property owners’ sought a writ of prohibition against a State Tax Commission Order directing them to produce evidence of true value. The State Tax Commission’s position was that “the owners could show true value through several methods, but that, regardless of the method, the true market value of property owners’ properties is relevant and necessary to property owners’ discrimination claims and must be proven.” In State ex rel. Ashby Road Partners, LLC v. State Tax Commission of Missouri, 297 S.W.3d 80, 85 (Mo Banc 2009), The property owners’ argument for the writ included that it was “unnecessary to require property owners to prove their properties’ market values. Property owners argued that they do not dispute the assessor’s determination of market value…”
The Court ruled that the properties’ true value is necessary evidence because the commission is not compelled to accept the assessor’s determination of true value of the taxpayer’s property. The Commission however cannot compel the taxpayers to present evidence in any particular form. “Property owners can choose to present the assessor’s values of the properties as their only evidence of the properties’ true market values. The consequence of their choice, as the party with the burden of proof, is that their chosen evidence must persuade the commission that the assessor discriminated against them by assessing their properties at a higher percentage of value in comparison with other similar properties in the taxing area, and if their evidence does not persuade, property owners will lose their claims.”
Complainant submitted the BOE determination of value and the property record cards.
Complainant Proves Value
In order to prevail, Complainant 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, 2007. 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).
The Complainant’s evidence establishes the true value in money as of January 1, 2007, of the subject properties.
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. Savage v. State Tax Commission, 722 S.W.2d 72 (Mo. banc 1986); Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003.)
There is no evidence that there was an intentional plan of discrimination by the assessing officials so we must determine if the Complainant has presented substantial and persuasive evidence to show that the level of their assessment is so grossly excessive as to be inconsistent with an honest exercise of judgment. “By requiring that the level of an assessment be so grossly excessive as to be inconsistent with an honest exercise of judgment in cases in which intentional discrimination is not shown, the courts and the Commission refrain from correcting assessments which reflect no more than de minimus errors of judgment on the part of assessors. Such a standard recognizes that ‘[w]hile practical uniformity is the constitutional goal, absolute uniformity is an unattainable ideal’.” Savage v. State Tax Commission, 722 S.W.2d 72 (Mo. banc 1986).
In a discrimination case, the Commission evaluates the difference between the average level of assessment for a particular class of real property and the actual assessment imposed on the property of the taxpayer alleging discrimination. Savage 722 S.W.2d at 79 The Commission has held that the average level of assessment for commercial properties in St. Louis County in 2007 was 29.4%. See In The Matter of the 2007 and 2008 Commercial Assessment Ratio of Properties in St. Louis County v. Zimmerman State Tax Commission Appeal 07-08 Ratio (“2007 Ratio Case”). To prevail and be entitled to a remedy in a discrimination case, the taxpayer must show that the differential between the Assessor’s assessment on the taxpayer and the average level of assessment is grossly excessive.
The subject properties’ true values, assessed values as determined by the Assessor using an assessment ratio of 32%, the Board’s determination of true value, the assessed values using a median assessment ratio of 29.4% with the Board’s value and the difference is set forth below:
|Appeal No.||Assessor’s A.V.||Board’s TV||Boards AV using 29.4%||Difference||Assmt Ratio|
|07-11173||$ 720,390||$ 2,207,300||$ 648,950||$ 71,440||33%|
|07-11175||$ 1,328,390||$ 3,828,000||$ 1,125,430||$ 202,960||35%|
|07-11182||$ 1,894,780||$ 5,000,000||$ 1,470,000||$ 424,780||38%|
|07-11183||$ 2,896,480||$ 8,127,300||$ 2,389,430||$ 507,050||36%|
|07-11184||$ 430,460||$ 1,200,000||$ 352,800||$ 77,660||36%|
|07-11190||$ 406,660||$ 1,201,100||$ 353,120||$ 53,540||34%|
|07-11191||$ 441,700||$ 1,200,000||$ 352,800||$ 88,900||37%|
|07-11196||$ 253,510||$ 713,000||$ 209,620||$ 43,890||36%|
|07-11197||$ 373,730||$ 900,000||$ 264,600||$ 109,130||42%|
|07-11199||$ 726,180||$ 2,015,000||$ 592,410||$ 133,770||36%|
|07-11200||$ 442,020||$ 1,235,000||$ 363,090||$ 78,930||36%|
|07-11202||$ 538,080||$ 1,460,000||$ 429,240||$ 108,840||37%|
|07-11204||$ 276,540||$ 742,500||$ 218,300||$ 58,240||37%|
|07-11205||$ 225,760||$ 525,000||$ 154,350||$ 71,410||43%|
|07-11264||$ 1,810,880||$ 4,660,700||$ 1,370,250||$ 440,630||39%|
|07-11266||$ 261,120||$ 721,800||$ 212,210||$ 48,910||36%|
|07-11267||$ 257,630||$ 737,200||$ 216,740||$ 40,890||35%|
|07-11270||$ 644,128||$ 1,806,200||$ 531,020||$ 113,108||36%|
|07-11271||$ 616,670||$ 902,000||$ 265,190||$ 351,480||68%|
|07-11272||$ 625,180||$ 1,485,500||$ 436,740||$ 188,440||42%|
|07-11273||$ 487,130||$ 1,153,400||$ 339,100||$ 148,030||42%|
The Complainant has established that the assessment was more than a de minimus error in judgment on the part of the assessor and thereby established their right to have their “assessment reduced to the percentage of that value at which others are taxed…” (Sioux City Bridge Co. v. Dakota County, Neb, 43 S.Ct.190 (1923)) in other words, the taxpayer’s assessed valuation should be set at the assessment “placed upon the general mass of other taxable property in the county.”
The assessed valuation for the subject property as determined by the Board of Equalization for St. Louis County for the subject tax day is SET ASIDE. The assessed value for the subject properties for tax years 2007 and 2008 is set at:
|Appeal No.||Parcel||True Value 2007-2008||Assessed Value|
|07-11173||25O530021||$ 2,207,300||$ 648,950|
|07-11175||11N520130||$ 3,828,000||$ 1,125,430|
|07-11182||14O630330||$ 5,000,000||$ 1,470,000|
|07-11183||18U430356||$ 8,127,300||$ 2,389,430|
|07-11184||11N540646||$ 1,200,000||$ 352,800|
|07-11190||14N230122||$ 1,201,100||$ 353,120|
|07-11191||22N410736||$ 1,200,000||$ 352,800|
|07-11196||10P620183||$ 713,000||$ 209,620|
|07-11197||10P620233||$ 900,000||$ 264,600|
|07-11199||27L410830||$ 2,015,000||$ 592,410|
|07-11200||28O310552||$ 1,235,000||$ 363,090|
|07-11202||16L421214||$ 1,460,000||$ 429,240|
|07-11204||14N420844||$ 742,500||$ 218,300|
|07-11205||09O330311||$ 525,000||$ 154,350|
|07-11264||17U220112||$ 4,660,700||$ 1,370,250|
|07-11266||28K440181||$ 721,800||$ 212,210|
|07-11267||22M140869||$ 737,200||$ 216,740|
|07-11270||14N330543||$ 1,806,200||$ 531,020|
|07-11271||22R310694||$ 902,000||$ 265,190|
|07-11272||17T130144||$ 1,485,500||$ 436,740|
|07-11273||17T130133||$ 1,153,400||$ 339,100|
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.
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 5, 2016.
STATE TAX COMMISSION OF MISSOURI
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 5th day of July, 2016, to: Complainants(s) counsel and/or Complainant, the county Assessor and/or Counsel for Respondent and county Collector.