State Tax Commission of Missouri
|WELSH GREEN PARK,||)|
|v.||)||Appeal No. 13-13054|
|JAKE ZIMMERMAN, ASSESSOR,||)|
|ST LOUIS COUNTY, MISSOURI,||)|
DECISION AND ORDER
Decision of the County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE. Complainant presented substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization. True value in money for the subject property for tax years 2013 and 2014 is set at $5,450,000, commercial assessed value of $1,744,000.
Complainant appeared by counsel Brian Howes
Respondent appeared by counsel Ed Corrigan.
Case heard and decided by Hearing Officer Maureen Monaghan.
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 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.
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. A scheduling order was issued. Exhibits were filed pursuant to that schedule. The parties were given opportunity to request a hearing. No parties requested a hearing and therefore the appeals were taken under advisement.
- Identification of Subject Property. The subject property is identified by map parcel number 28J440478. It is further identified as 10360 Lake Bluff Drive, St Louis County, Missouri.
- Description of Subject Property. The subject property consists of 13.37 acre of land improved by an industrial building of 142,800 square feet of gross building area constructed in 2007. There is office space of 4,600 sf. There were two tenants at the time the appraiser valued the property. The largest tenant had not occupied the space in some time. Their lease expired on October 31, 2014. The other lease was scheduled to expire on May 31, 2014.
- Assessment. The Assessor appraised the property at $6,921,700, commercial assessed value of $2,214,940. The Board of Equalization reduced the value to $6,640,200.
- Complainant’s Evidence. The Complainant submitted Exhibit A (Appraisal Report dated May 2013) and Exhibit B (Written Direct Testimony of Certified Appraiser John Hottle). The appraiser developed an opinion of value for the property using the income and sales comparison approaches. Using the recognized methodology, the appraiser concluded a value of $5,450,000 as of January 1, 2013.
- 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 submitted the following exhibits:
1.CV of John Gillick
2. Deed from 2014
- Certificate of Value of 2014
- Costar report on the sale of the subject in 2014
- Costar report on the sale of the subject
- Sale Brochure
- Property Record Card of the subject 2015
- Property Record Card of the subject 2015
WDT of Kathy Anderson
WDT of John Gillick
Neither witness offered an opinion of value of the subject or presented evidence contradictory to the information found in the appraisal report of the Complainant.
- 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
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).
Upon presentation of the Complainant’s evidence (Exhibit A) the presumption in this appeal disappeared. The submission of the appraisal report, performed by a state certified real estate appraiser, established the Board’s value was in error. The appraisal established the fair market value that should have been placed on the property.
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.
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)
Complainant Proves Value
The Complainant presented the testimony and report of a general certified appraiser. The appraiser valued the subject property using the income approach and the sales comparison approach. The appraiser’s report is dated May, 2013.
The Complainant’s appraiser relied most heavily on the income approach. The sales comparison approach was utilized to support his conclusion in the income approach – although both approaches provided a reliable indication of value. The appraiser reviewed ten industrial warehouse properties with rents that were most similar to the subject property. After considering adjustments, the appraiser concluded an economic rental rate. The appraiser estimated income and expenses for the subject property to arrive at a net operating income. The appraiser employed the direct capitalization method of the income approach. The appraiser utilized market sales and authoritative surveys to determine a capitalization rate. The resulting indication of value was $5,450,000.
The appraiser developed the sales comparison approach by reviewing four similar type properties in similar market areas and applied adjustments for their differences. The resulting indication of value was $5,700,000. The reconciled value concluded was $5,450,000.
The Respondent did not present any evidence of an opinion of value. The Respondent presented a deed and certificate of value for the subject property for a sale in September 2014. The certificate of value sets a sales price of $6,700,000. Neither of the witnesses presented by the Respondent analyzed the sale or the market conditions of January 1, 2013 and September 2014. It is unknown if the expiring leases had any impact on the sale or if new leases were in place.
There is a presumption of validity, good faith, and correctness of assessment by the County Board of Equalization. The Complainant has the duty to provide substantial and persuasive evidence. The Complainant met its burden through the presentation of a witness who was a state certified general real estate appraiser with more than 30 years of appraisal experience regarding a variety of properties, including residential, commercial, industrial, agricultural, institutional, and recreational properties. The appraiser conducted a site visit to physically inspect the subject property and examined documentation and information relevant to the property to form his opinion of value. The appraiser developed his opinion of value 5 months after the valuation date. The Respondent’s presentation of the sale of the property one year and nine months after the valuation date without analysis of the sale does not rebut the evidence of the Complainant.
The assessed valuation for the subject property as determined by the Assessor and modified by the Board of Equalization for St. Louis County for the subject tax day is SET ASIDE for an assessed value of $1,744,000.
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 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 16th day of March, 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 16th day of March, 2016, to: Complainants(s) counsel and/or Complainant, the county Assessor and/or Counsel for Respondent and county Collector.
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