Villas of Quail Creek v. Rick Kessinger, Assessor Greene County

July 14th, 2015

State Tax Commission of Missouri

VILLAS OF QUAIL CREEK	)
	)
Complainant,	)
	)
v.	)	Appeal Number 12-33002
	)
RICK KESSINGER, ASSESSOR,	)
GREENE COUNTY, MISSOURI,	)
	)
Respondent.	)

ORDER AFFIRMING HEARING OFFICER DECISION

UPON APPLICATION FOR REVIEW

On July 14, 2015, Hearing Officer Maureen Monaghan, entered her Decision and Order (Decision) setting aside the Board of Equalization value for tax year 2012 and setting a new residential value of $2,102,080 (assessed value $399,400).

Respondent timely filed his Application for Review of the Decision. Complainant filed no Response. Consequently, the Application for Review is ripe for a Decision by the State Tax Commission.

Standard Upon Review

A party subject to a Decision and Order of a Hearing Officer with the State Tax Commission may file an application requesting the case be reviewed by the Commission. The Commission may then summarily allow or deny their request. The Commission may affirm, modify, reverse or set aside the decision. The Commission may take any additional evidence and conduct further hearings.

DECISION

Respondent’s Claims of Error

Respondent puts forth the following alleged errors in the Decision.

THE HEARING OFFICER ERRED AS A MATTER OF LAW IN APPLYING HOUSE BILL 613 TO THIS APPEAL, IN THAT HB 613 OPERATES PROSPECTIVELY AND ITS RETROACTIVE APPLICATION TO THIS APPEAL VIOLATES ARTICLE 1, SECTION 13 OF THE MISSOURI CONSTITUTION.

THE HEARING OFFICER ERRED AS A MATTER OF LAW IN APPLYING THE VALUATION METHODOLOGY SET FORTH IN HB 613 BECAUSE THE METHODOLOGY SET FORTH THEREIN IS UNCONSTITUTIONAL, FACIALLY AND AS APPLIED TO THE FACTS OF THIS APPEAL.

ASSUMING FOR THE SAKE OF ARGUMENT THE METHODOLOGY SET FORTH IN HB 613 IS CONSTITUTIONAL, THE HEARING OFFICER MISAPPLIED THE VALUATION METHODOLOGY SET FORTH THEREIN TO THE FACTS OF THIS APPEAL

THE HEARING OFFICER’S DECISION WAS NOT SUPPORTED BY COMPETENT AND SUBSTANTIAL EVIDENCE UPON THE WHOLE RECORD

Constitutionality of Section 137.076 RSMo

Respondent argues that Section 137.076 RSMo. (2015) is unconstitutional. The State Tax Commission will not address the point raised. “Deciding constitutional issues is beyond the authority of an administrative agency…” Fayne v. Department of Social Services, 802 S.W.2d 565, 567 (Mo.App.1991); Duncan v. Missouri Board for Architects, Professional Engineers and Land Surveyors, 744 S.W.2d 524, 530–31 (Mo.App.1988).

Income Approach

The Hearing Officer evaluated the evidence presented in the appraisals to determine the true value of the subject property. 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). 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).

The Hearing Officer evaluated the evidence presented. The Hearing Officer discussed each approach – cost, sales comparison and income – and ultimately adopted the income approach to determine the true value of the property. The Missouri Courts have approved the use of the income approach for valuation of property. The income approach is based on an evaluation of what a willing buyer would pay to realize the income stream that could be obtained from the property. The income approach restates market value of a property by converting future benefits of property ownership into present worth. (Property Assessment Valuation, IAAO) Investors in property rely on the approach in determining the market value of properties. This approach is most appropriate in valuing investment-type properties and is reliable when rental income, operating expenses and capitalization rates are known or can reasonably be estimated.

The Hearing Officer ultimately determined that the income approach was the most persuasive for the subject property. The property is income producing. Information such as the income, expenses and capitalization rates was presented at the hearing. Using the information provided, the Hearing Officer concluded on a market value of $2,102,080. The Respondent has not established that the Hearing Officer in relying on the income approach acted in an arbitrary, capricious, unreasonable or unlawful manner.

It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case. A hearing officer is afforded a great deal of discretion and judgment. The Missouri Supreme Court, in Savage v. State Tax Commission of Missouri, 722 S.W.2d 72 (Mo. banc 1986) observed:

Our review of the Commission’s decision is ordinarily limited to whether that decision is “supported by competent and substantial evidence upon the whole record or whether it was arbitrary, capricious, unreasonable, unlawful or in excess of its jurisdiction.” Evangelical Retirement Homes of Greater St. Louis, Inc. v. State Tax Com’n, 669 S.W.2d 548, 552 (Mo. banc 1984); Section 536.140.01, RSMo. 1978. In matters of property tax assessment, this Court has acknowledged “the wisdom of the General Assembly in providing an administrative agency to deal with this specialized field.” State ex rel Cassilly v. Riney, 576 S.W.2d 325, 328 (Mo. banc 1979). Thus we recognize that the courts may not assess property for tax purposes, Drey v. State Tax Commission, 345 S.W.2d 228, 238‑9 (Mo. 1961), that proper methods of valuation and assessment of property are delegated to the Commission, C & D Investment Co. v. Bestor, 624 S.W.2d 835, 838 (Mo. banc 1981) and that on review, “[t]he evidence must be considered in the light most favorable to the administrative body, together will all reasonable inferences which support it, and if the evidence would support either of two opposed findings, the reviewing court is bound by the administrative determination.” Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, 894 (Mo. banc 1978) (citation omitted). When read together, our cases demonstrate that this Court is loathe to substitute its judgment for the expertise of the Commission in matters of property tax assessment. Absent clear cause, we will “stay our hand[s].” Pierre Chouteau Condominiums v. State Tax Commission, 662 S.W.2d 513, 517 (Mo. banc 1984).

Summary and Conclusion

The appraisal of property is not an exact science. The State Tax Commission has reviewed the record which is properly before it. After review of the evidence presented, it is clear that the Hearing Officer made a considered and well reasoned determination of value based upon the evidence she was given, after a thorough and complete review and analysis of the evidence.

ORDER

The Decision and Order of the Hearing Officer, including the findings of fact and conclusions of law therein, is AFFIRMED and incorporated by reference, as if set out in full, in this final decision of the Commission.

Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140, RSMo within thirty days of the mailing date set forth in the Certificate of Service for this Order.

If judicial review of this decision is made, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the courts unless disbursed pursuant to Section 139.031.8, RSMo.

If no judicial review is made within thirty days, this decision and order is deemed final and the Collector of Greene County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal.

STATE TAX COMMISSION

Bruce E. Davis, Chairman

Randy Holman, Commissioner

Victor Callahan, Commissioner

Certificate of Service

I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 16th day of February, 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

State Tax Commission of Missouri

VILLAS OF QUAIL CREEK	)
	)
Complainant,	)
	)
v.	)	Appeal Number 12-33002
	)
RICK KESSINGER, ASSESSOR,	)
GREENE COUNTY, MISSOURI,	)
	)
Respondent.	)

DECISION AND ORDER

HOLDING

Decision of the County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE. Substantial and persuasive evidence was presented by Complainant to rebut the presumption of correct assessment by the Board of Equalization and sufficient evidence was presented to establish a true value for tax year 2012 of $2,102,080, residential assessed value of $399,400.

Complainant appeared by attorney Richard Dvorak.

Respondent appeared in person and by counsel Aaron Klusmeyer.

Case heard and decided by Hearing Officer Maureen Monaghan.

ISSUE

Complainant appeals, on the ground of overvaluation, the decision of the Greene County Board of Equalization, which sustained the valuation of the subject property. The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2011 for tax year 2012. 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 Greene County Board of Equalization.
Evidentiary Hearing. The Evidentiary Hearing was held on November 19, 2014 in Greene County, Missouri.
Identification of Subject Property. The subject property is identified by map parcel number 1814204015. It is further identified as 1505 West Lark, Springfield, Missouri.
Description of Subject Property. The subject property consists of a 3.07 acre tract of land improved by a three story, multi-family dwelling of 60 units. The improvement was constructed in 2011. The land was purchased for $745,900 with terms including an increase in price contingent upon the receipt of tax credits. The cost to construct was $5,773,946. The construction was funded by low income housing tax credits. The LIHTC equity was $6,106,086 with a claimed cost of $7,063,139. The owners entered into an agreement subject to rent and land use restrictions. The housing is designated for persons over 55.

The property has two wings with a common area between the wings. The common area contains the leasing center, lounge, kitchen, fitness room, game/library/computer room, and restrooms. Half of the units are 1 bedroom and the other half are 2 bedroom units. The one bedroom units are 751 sf and the two bedroom (2 bath) units are 1,023 sf. The units were 100% occupied by January 1, 2012. The net operating income for the subject $157,656. The market direct capitalization rate was 7.5%.

Assessment. The Assessor appraised the property at $5,397,800, an assessed residential value of $1,025,590. The Board of Equalization sustained the assessment.
Complainant’s Evidence.

Exhibit	Description
A	Appraisal
B	Written Direct Testimony of Kenneth Jaggers
C	Written Direct Testimony of Tonya Coffrey
Rebuttal
D	Investor Survey 4^th Quarter 2010
E	Nu Elm Apartments
F	Recalculations – Amendment to appraisal

Respondent objected to Complainant’s Exhibits. A ruling on the Exhibits was issued on June 18, 2014. Exhibit C was withdrawn.

Exhibit F was a correction by Mr. Jaggers to his appraisal report. Mr. Jaggers was not familiar with the STC previous decisions on low income housing and development of capitalization rates. Mr. Jaggers amended his band of investment cap rate and offered the recalculations on the date of hearing. Respondent objected. The objection was taken under advisement with the hearing.

Exhibits D and E were not submitted on rebuttal and therefore not considered.

Exhibits A, B and F were admitted into evidence.

New Construction & Improvement. The property was constructed in 2011 and fully occupied by January 1, 2012.
Respondent’s Evidence.

Exhibit	Description
1	CV of Ben Edmondson
2	Appraisal
2A	Supplemental
3	MHDC Form 2013
4	Application and Certification of Payment
5	Appraisal of Kenneth Jaggers on subject dated 7/14/10
Rebuttal 6	Financial Statements
Rebuttal 7	Revised Income and Expense Statements
8	WDT Edmundson

Rebuttal exhibits 6 and 7 were not offered for admission.

Presumption of Correct Assessment Rebutted. Evidence presented was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2011 for tax year 2012.

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.

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).

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).

“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 terms of cash in United State dollars or in terms of financial arrangements comparable thereto; and

The price represents a normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.” Property Assessment Valuation, IAAO, pp 18-19.

In regards to financing and the definition of market value, financing which is generally available in the community and the price must represent 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.)

As to the participants and their motivation in regards to market value, 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)

“Value in use” or “use value” is defined as “the value a specific property has for a specific use” (Ibid., at 383) and “the value of property which reflects a value to a specific user, recognizing the extent to which the property contributes to the personal requirements of the owner.” The Appraisal of Personal Property, American Society of Appraisers, 1994 at 2. “In estimating use value, the appraiser focuses on the value the real estate contributes to the enterprise of which it is a part, without regard to the highest and best use of the property or the monetary amount that might be realized from its sale. The Appraisal of Real Estate, 12^th Edition, Appraisal Institute.

“Value in exchange” or “exchange value” is defined as “[t]he value of a commodity in terms of money to persons generally, as distinguished from use value to a specific person.” The Dictionary of Real Estate Appraisal, Third Edition, Appraisal Institute, 1993, at 125. An exchange value is an objective value determined by transactions between buyers and sellers in the open market. See, Daly v. P.D. George, 2002 WL 553712 (Mo. App. E.D. 2002).

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).

Subsidized Housing

“Objective standards should be used in determining fair market value in the market place. The particular circumstances of the owner are not a proper consideration . . . Investment value is the value of a property to a particular investor, whereas market value is not related to the needs of the individual investors but is objective, impersonal, and detached; investment value is based on subjective, personal parameters . . .” (Maryville Properties v. Nelson, 83 SW3d 608, 616 WD 2002)

In the past, when valuing subsidized housing, we have attempted to look at actual income, actual expenses, financing terms and market capitalization rates in order to try to account for risks and benefits associated with this unique type of real property, recognizing that subsidized properties do not tend to sell and costs tend to be inflated, making sales and cost approaches difficult.

The weight to be given to certain economic realities has been addressed by our courts. In Nance v. State Tax Commission, [18 SW3d 611 (Mo. App. WD. 2000)] the Court specifically affirmed the Commission’s determination that:

“ . . .projected actual income may be adjusted to reflect current market conditions where actual rent substantially distorts the property’s true value . . .”

“ . . .[I]f a property owner could unilaterally alienate his property by lease or by other actions that make the property have no value to him, the taxing authority could not collect appropriate property tax because of the taxpayer’s unilateral action. If the property were not valued and assessed as unencumbered by the lease, the taxpayer appears to be afforded a tax cut because of the poor judgment . . .” (emphasis added)

The difference in value indication by using market data from the sub-market of multi-family dwellings and data from a sub-market of subsidized properties is illustrated by the appraisal dated July 14, 2010. (Exhibit 5) In that appraisal, the certified general appraiser developed the following opinions of value:

Appraisal Premise	Value Conclusion
Market Value of Land	$800,000
Market Value at Completion with Market Rents	$3,400,000
Market Value at Stabilized Market Rents	$3,600,000
Market Value at Completion with Restricted Rents	$1,400,000
Market Value at Stabilized Restricted Rents	$1,600,000
Value of LIHTC Tax Credits	$6,300,000

The July 14, 2010 appraisal was authored by Complainant’s appraiser. In that appraisal, the appraiser developed all three approaches to value. The appraiser also authored Exhibit B – an appraisal of the subject property dated January 31, 2014. In that appraisal the appraiser only found the sales comparison approach and the income approach appropriate to determine a value of $1,700,000.

Cost Approach

Complainant’s appraiser developed the cost approach for the appraisal developed not for the ad valorem appeal but for Great Southern Bank The cost approach is most appropriate when the property being valued has been recently improved with structures that conform to the highest and best use of the property or when the property has unique or specialized improvements for which there are no comparables in the market. While reproduction cost is the best indicator of value for newer properties where the actual costs of construction are available, replacement cost may be more appropriate for older properties. Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W. 3d, 341, 347 (Mo. 2005). (citations omitted).

In the bank appraisal, the appraiser found the cost approach applicable since the improvements would be new and the market for land sales was active. The appraiser developed the replacement cost new to opine a value of approximately $6.01 million (or $7.08 to include entrepreneurial incentive). The appraiser did not find functional or external obsolescence. However, the appraiser did conclude that because the indication of value under this approach was so much higher than with the sales and income approach, LITC are needed to induce the market.

In the appraisal developed for the ad valorem hearing, the appraiser again states that the cost approach is “particularly applicable when the improvements being appraised are relatively new and represent the highest and best use of the land…” (p33). The appraiser found that the highest and best use is an apartment property. The appraiser then lists in a grid that the cost approach is not applicable to the subject and the approach was not used in the assignment. In the reconciliation the appraiser puts in a grid the cost approach was not used. The appraiser did not state why it was not employed.

Comparable Sales Approach

The comparable sales approach uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties. Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character. This approach is most appropriate when there is an active market for the type of property at issue such that sufficient data is available to make a comparative analysis. Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W. 3d, 341, 347 (Mo. 2005). (citations omitted).

Complainant’s appraiser developed the sales comparison approach in each of his appraisals. In the bank appraisal, the concluded value under this approach was $3,600,000. In the ad valorem appraisal, the concluded value under this approach was $1,800,000. Both appraisals used three comparable sales to develop an indication of value. Two of the comparable sales were used in each appraisal. The difference in the indicated values from the two sales comparison approaches resulted from the appraiser making a downward 35% adjustment in the ad valorem appraisal for property rights – the comparables being fee simple and the subject property having the land use restrictive agreement. The downward adjustment was not made in the appraisal for the bank.

Income Approach

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. The income approach is based on an evaluation of what a willing buyer would pay to realize the income stream that could be obtained from the property when devoted to its highest and best use. Both appraisals developed the income approach. In the ad valorem appraisal, the appraiser concluded a value of $1,700,000 – using actual income and expenses (net operating income of $157,656) and a loaded capitalization rate using a band of investment methodology previously used in State Tax Commission appeals (9.12%). In the bank appraisal, the appraiser concluded a value of $3,600,000 using a net operating income from market rents and expenses of apartments of $268,820 and a capitalization rate developed from the market of 7.5%. In the bank appraisal, the appraiser concluded a value of $1,600,000 using a net operating income from the market rents and expenses of subsidized apartments of $121,430 and a capitalization rate developed from the market of 7.5%.

Conclusion

The two appraisals developed by the Complainant’s appraiser are illustrative of forming an opinion on housing developed through the use of low income tax credits. Tax policy favors taxation and any exemption is the exception. LIHTC owners have willingly participated in a carrot and stick program – accepting various restrictions in exchange for economically desirable benefits.

For ad valorem purposes, the property should be valued using actual rents and expenses and looking to the market to develop a capitalization rate. The legislature has given us specific direction on the issue of valuing subsidized property. (SCS HCS HB 613, signed by the Governor on 7/6/15). That direction, in the form of a new paragraph 2 under Section 137.076 RSMo., provides as follows:

In establishing the value of a parcel of real property, the county assessor shall use an income based approach for assessment of parcels of real property with federal or state imposed restrictions in regard to rent limitations, operations requirements, or any other restrictions imposed upon the property in connection with:

(1) The property being eligible for any income tax credits under section 42 of the Internal Revenue Code of 1986, as amended;

(2) Property constructed with the use of the United States Department of Housing and Urban Development HOME investment partnerships program;

(3) Property constructed with the use of incentives provided by the United States Department of Agriculture Rural Development; or

(4) Property receiving any other state or federal subsidies provided with respect to the use of the property for housing purposes.

For the purposes of this subsection, the term “income based approach” shall include the use of direct capitalization methodology and computed by dividing the net operating income of the parcel of property by an appropriate capitalization rate not to exceed the average of the current market data available in the county of said parcel of property. Federal and state tax credits or other subsidies shall not be used when calculating the capitalization rate. Upon expiration of a land use restriction agreement, such parcel of property shall no longer be subject to this subsection.

The Complainant’s appraisals provide sufficient information to do so. The net operating income of $157,656 (page 50 of Exhibit B) may be capitalized using the market average of 7.5% (p. 74 of Exhibit 5), for an appropriate indication of value of $2,102,080.

ORDER

The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Greene County for the subject tax day is SET ASIDE.

The assessed value for the subject property for tax year 2012 is set at $399,400.

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 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 14th day of July, 2015.

STATE TAX COMMISSION OF MISSOURI

Maureen Monaghan

Hearing Officer