Sunset Hills Owner LLC CO Walnut Grill Sunset Hills LLC v. Jake Zimmerman, Assessor, St. Louis County, Missouri

November 4th, 2022


Complainant, )
) Appeal No. 21-15619
v. ) Parcel No. 25M110252
Respondent. )


Sunset Hills Owner LLC, on behalf of Walnut Grill Sunset Hills LLC, (Complainant) appeals the St. Louis County Board of Equalization (BOE) decision determining the appraised value of the subject property was $1,200,000 as of January 1, 2021.  Complainant alleges overvaluation and proposes a value of $585,000.  Complainant did not produce substantial and persuasive evidence of overvaluation.  The BOE decision is affirmed.


  1.   The Subject Property. The subject commercial property consists of an approximately 1.25-acre lot improved with a 6,250-square-foot building located at 10797 Sunset Hills Plaza in St. Louis County, Missouri.  The building is used as a full-service restaurant and bar known as Walnut Grill.

Sunset Hills Owner LLC (Owner) owns the subject property and leases it to Walnut Grill Sunset Hills LLC (Tenant).  Tenant owns and operates Walnut Grill.

  1. Assessment and Valuation. The BOE determined the subject property’s TVM as of January 1, 2021, was $1,200,000.
  2. Complainant’s Evidence. Complainant introduced Exhibits A and B.  Complainant also introduced the written direct testimony (WDT) of Kirk Vogel.  Vogel is Tenant’s manager.  Exhibits A and B and Vogel’s WDT are summarized below:
Exhibit A Lease agreement dated April 11, 2017, obligating Tenant to pay “minimum rent” in the amount of $15,662.50 per month ($187,950 annually) for the first 60 months.   The minimum rent escalates to $17,228.75 ($206,745 annually) per month for months 61 through 120.  (Ex. A at ii)  The minimum rent is the “Fair Market Rate” determined by Owner and reflecting the rental rate a willing lessor and lessee would agree to.  (Id. at 24)
Exhibit B Temporary Rent Relief Amendment providing for a rent abatement of $74,605.09 for August through December 2020.  The abatement amounts to approximately 40% of the rent otherwise due under the lease.
WDT (Kirk Vogel) Vogel testified regarding the subject property and Exhibits A and B

Vogel testified Tenant leases the subject property on a triple net basis, meaning Tenant is responsible for the expenses necessary to operate the property.  (Ex. A at 14)[1]  Tenant is also responsible for common area maintenance, totaling $416 per month.  (Id. at 15-16)

Vogel testified the proposed value of $585,000 was based on four main factors.  First, as of January 1, 2021, rent was abated and the subject property was closed to the public due to St. Louis County public health orders.  Second, as a result of St. Louis County public health orders, the income generated by the subject property in 2021 was 40% less than typical.  Third, the total and partial occupancy limitations caused a “significant impairment to the fair market value of the subject property[.]”  Finally, Vogel testified other properties in the subject’s immediate area have been and continue to be “severely impacted” due to the COVID-19 pandemic, “causing a further impairment to the fair market value of the subject property.”  (WDT at 24)

Complainant did not develop a capitalization rate to discount projected net operating income to its present value as of January 1, 2021.

  1. Respondent’s Evidence. Respondent introduced Exhibit 1, the BOE decision letter determining the subject property’s appraised value was $1,200,000 as of January 1, 2021.
  2. Value. The subject property’s TVM as of January 1, 2021, was $1,200,000.


  1. Assessment and Valuation.  Commercial real property is assessed at 32% of its TVM.  Section 137.115.5(1)(c).  In this case, the valuation date is January 1, 2021.  Section 137.115.1.

The TVM is “the fair market value of the property on the valuation date[.]”  Snider v. Casino Aztar/Aztar Mo. Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005) (internal quotation omitted).  The fair market value is “the price which the property would bring from a willing buyer when offered for sale by a willing seller.”  Mo. Baptist Children’s Home v. State Tax Comm’n, 867 S.W.2d 510, 512 (Mo. banc 1993).  “True value in money is defined in terms of value in exchange not value in use.”  Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 7 (Mo. App. S.D. 2020) (internal quotation omitted).  “Determining the true value in money is an issue of fact for the STC.”  Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008).

“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.”  Snider, 156 S.W.3d at 346.  The three generally accepted approaches are the cost approach, the income approach, and the comparable sales approach.  Id. at 346-48.  “Each valuation approach is applied with reference to a specific use of the property—its highest and best use.”  Id. at 346

“The income approach determines value by estimating the present worth of what an owner will likely receive in the future as income from the property.”  Snider, 156 S.W.3d at 347; see also Equitable Life Assur. Soc. of U.S./Marriott Hotels, Inc. v. State Tax Comm’n, 852 S.W.2d 376, 380 (Mo. App. E.D. 1993) (noting the income approach discounts “future dollars to present levels in order to compensate for risk and the elapsed time required to recapture the initial investment”).  “This approach is most appropriate in valuing investment-type properties and is reliable when rental income, operating expenses and capitalization rates can reasonably be estimated from existing market conditions.”  Snider, 156 S.W.3d at 347.

To estimate the present worth of future income, the income approach employs “a capitalization method of valuation … derived from the market, which reduces the need for unsubstantiated, subjective judgments.”  Drury Chesterfield, Inc. v. Muehlheausler, 347 S.W.3d 107, 113 (Mo. App. E.D. 2011)The income approach “is applied in three steps: (1) net income is forecasted for a specified number of years; (2) an appropriate discount factor or capitalization rate is selected; and (3) the proper discounting and/or capitalization procedure is applied.”  Id. 

  1. Evidence. The hearing officer is the finder of fact and determines the credibility and weight of the evidence.  Kelly v. Mo. Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. W.D. 2015).  “Although technical rules of evidence are not controlling in administrative hearings, fundamental rules of evidence are applicable.”  Mo. Church of Scientology v. State Tax Comm’n, 560 S.W.2d 837, 839 (Mo. banc 1977).
  2. Complainant’s Burden of Proof.  The taxpayer bears the burden of proof and must show by a preponderance of the evidence the property is overvalued. Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. E.D. 2003).  The value determined by the BOE is presumptively correct.   Rinehart v. Laclede Gas Co., 607 S.W.3d 220, 227 (Mo. App. W.D. 2020).  The taxpayer must produce substantial and persuasive evidence rebutting the BOE value and proving the “value that should have been placed on the property.”  Snider, 156 S.W.3d at 346.  “Substantial evidence is that evidence which, if true, has probative force upon the issues, and from which the trier of fact can reasonably decide the case on the fact issues.”  Savage v. State Tax Comm’n, 722 S.W.2d 72, 77 (Mo. banc 1986) (internal quotation omitted).  Evidence is persuasive when it has “sufficient weight and probative value to convince the trier of fact.”  Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. E.D. 2002); see also White v. Dir. of Revenue, 321 S.W.3d 298, 305 (Mo. banc 2010) (noting the burden of persuasion is a “party’s duty to convince the fact-finder to view the facts in a way that favors that party”).
  3. Complainant Did Not Produce Substantial and Persuasive Evidence of Overvaluation.

Complainant’s evidence demonstrates the restaurant business occupying the subject property was affected adversely by St. Louis County public health orders mandating occupancy restrictions.  Complainant documented the dates and extent of the restrictions, and correlated the restrictions to diminished rental income generated by the subject property.  Complainant, however, did not produce evidence permitting the application of a market-based capitalization estimate to the income estimate.   A persuasive income-based value estimate requires application of a market-based capitalization rate.  Drury, 347 S.W.3d at 113.  Standing alone, a showing of decreased income does not permit a persuasive value estimate according to a recognized valuation method.   By not coupling evidence of income with evidence of market-based capitalization rate, Complainant did not produce substantial and persuasive evidence of overvaluation or of the value that should have been placed on the subject property.


Complainant did not produce substantial and persuasive evidence of overvaluation.  The BOE decision is affirmed.

Application for Review

A party may file an application for review of this decision within 30 days of the mailing date set forth in the certificate of service for this decision.  The application “shall contain specific detailed grounds upon which it is claimed the decision is erroneous.”  Section 138.432.  The application must be in writing, and may be mailed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, or emailed to  A copy of the application must be sent to each person 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.

Disputed Taxes

The Collector of St. Louis County, and 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 the disputed taxes have been disbursed pursuant to a court order under the provisions of section 139.031.

SO ORDERED November 4, 2022.

Eric S. Peterson

Senior Hearing Officer
State Tax Commission

Certificate of Service

I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on November 4, 2022, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.

Noah Shepard
Legal Coordinator

[1] All WDT citations refer to the numbered question and answer.