1. Lowe s Home Centers, Inc. v. Washington Cty. Bd. of Revision, 2016-Ohio-372 (February 4, 2016)

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1 Abbreviatins: P/O = Prperty Owner BOE = Bard f Educatin BOR = Bard f Revisin BTA = Bard f Tax Appeals CAV = Cmplaint Against Valuatin TY = Tax Year 1. Lwe s Hme Centers, Inc. v. Washingtn Cty. Bd. f Revisin, 2016-Ohi-372 (February 4, 2016) Facts: Auditr valued Lwe s at $9,091,000. P/O pined (n appraisal reprt) that subject prperty is wrth $3,600,000 at BOR. BOR Hlding: N change. Cmpeting appraisals are presented at BTA. P/O: $5,700,000 (assumptin was that prperty wuld be vacant if sld). Cunty: $7,200,000 (assumptin was that prperty wuld be leased). BTA Hlding: $7,200,000 (Cunty appraisal). Hlding: Remanded t BTA t determine if Special-Purpse Dctrine applies. The Special Purpse Dctrine is necessary t prevent the wner f a distinctive, but yet highly useful building frm escaping full prperty tax because its sale wuld nt attract many ptential buyers. 2. Rite Aid f Ohi, Inc. v. Washingtn Cty. Bd. f Revisin, Slip Opinin N Ohi-371 (February 4, 2016) Facts: Auditr valued Rite Aid stre and parking lt at $3,319,000. Rite Aid, which wned the prperty (as ppsed t leasing), appealed and submitted an appraisal pegging value f $1,396,920. Surveying the surrunding gegraphical area, Rite Aid s appraiser used general retail cmps (bth sale and lease) in the area nt just drugstres. He als adjusted his cmps based upn whether there was a lease. The BOE s appraiser exclusively relied n drugstres cmps (all arund the state). She did nt make adjustments fr leased sales. BOR retained Auditr s value. BTA adpted Rite Aid s appraisal value. The Curt held that Rite Aid s appraisal evidence was mre prbative because a lng-term lease affects sale price and value; the sale price f a leased-fee cmparable shuld be adjusted when the subject prperty has n lease. The Special Purpses Dctrine was nt applicable here because the drugstre cntained 11,000 sq. ft. (cmpared t massive 190,000 sq. ft. buildings like Meijer stres) and thus, current use value nt t be cnsidered, crrect apprach is value-in-exchange. 1

2 3. Warrensville Hts. City Schl Dist. Bd. f Edn. v. Cuyahga Cty. Bd. f Revisin, Slip Opinin N Ohi-78 (January 13, 2016) Facts: Chapter 11 bankrupt P/O sld racetrack at an auctin fr $43,000,000. P/O had prperty appraised at $13,800,000 much f the value f the racetrack attributed t the ptential fr new wner t add vide lttery terminals (i.e., gambling) and varius racetrack fixtures. BOE argued that the purchase price was the best evidence f market value because, at the time, R.C stated a recent arm s length sale shall establish the market value f the subject prperty. BOR issues n change ($14,264,200). BTA adpts P/O s appraisal value ($13,800,000). Curt pinted t R.C which prvides the amunt received fr real prperty sld at an auctin r frced sale des nt establish its value. Hwever, the Curt als pinted ut that this statute is nt an abslute rejectin f all auctins. The prpnent bears the burden t prve that the sale was nevertheless an arm s-length transactin between typically mtivated parties and shuld be regarded as the best evidence f the prperty s value, the BOE failed t prvide any additinal evidence and relied slely n the recent sale. Judgment fr P/O based upn appraisal value f $13,800, Megaland GP, L.L.C. v. Franklin Cty. Bd. f Revisin, Slip Opinin N Ohi-4918 (December 3, 2015) Facts: P/O filed 2 nd appeal within triennial perid claiming that prperty had lst value due t casualty. BOE filed a cunter-cmplaint. BOR dismissed case fr want f jurisdictin because the casualty was an nging cnditin, nt a new event. P/O appealed t BTA and requested that case be referred t Small Claims Dcket. BOE filed a mtin t have case mved t regular dcket (because Small Claims Dcket decisins are nt appealable). BTA denied mtin. BOE appealed. (4 t 3 ruling) R.C (D) requires BTA t return cases t Regular Dcket: (1) upn request f a party that is a taxpayer ; (2) when appeal presents an issue f public r great general interest r presents a cnstitutinal issue; r (3) when BTA determines that the appeal des nt meet the requirements fr assigning the case t Small Claims Dcket under R.C (B). BOE argued it is a taxpayer. Curt disagreed stating that a party that is a taxpayer under R.C (D) means ne whse standing as a party t the case befre the BTA is predicated n the wnership f taxable prperty in the cunty under R.C (B). Because BOE s status as a party t this prceeding depends slely upn having file a cunter-cmplaint in its capacity as an affected schl district pursuant R.C (B), the BOE is nt a taxpayer fr these purpses. Seems t be mre f a plicy ruling intent appears t be t keep BOE frm having the ptin t mve any case ut f Small Claims Dcket unless the BOE had riginally filed a CAV based upn its status as the wner f real prperty lcated in the Cunty, nt its status as the lcal BOE. 2

3 5. Clumbus City Schls Bd. f Edn. v. Franklin Cty. Bd. f Revisin, Slip Opinin N Ohi-4837 (Nvember 25, 2015) Facts: P/O filed CAVs n 3 residential duplex prperties: (1) Auditr s Value: $153,700, P/O s value: $81,066; (2) Auditr s Value: $153,700, P/O s value: $81,066; and (3) Auditr s Value: $149,200, P/O s value: $74,666. P/O testified that he had cnsulted with an unidentified real estate agent (hearsay) and presented sme print-ut dcuments regarding sales f cmparable prperties, but culd ffer n testimny abut inferir cnditins r arm s-length nature f thse sales (nt very strng evidence). Auditr s representative, after the cnclusin f BOR hearing, makes the fllwing recmmendatins and BOR agrees: (1) $96,000; (2) $97,500; and (3) $101,000. BOE files appeal t BTA. Neither party submits any additinal evidence nr appears at BTA hearing. BTA affirms BOR s decisin. BOE appeals t Supreme Curt. BOE waived its claim f errr as appellant when it presented neither argument nr evidence befre the BTA. Even thugh the BOE argues that the evidence relied upn the BOR in making the reductins was nt placed int the recrd, the BOE did nthing t advance this argument befre the BTA. The nly thing the BOE presented at the BTA was its Ntices f Appeal. 6. Sears, Rebuck & C. v. Franklin Cty. Bd. f Revisin, Slip Opinin N Ohi-4522 (Nvember 3, 2015) Facts: Auditr valued subject prperty at $8,323,000 fr TYs P/O filed CAV and has prperty tax manager testify as t a valuatin study which cncludes t a $4,000,000 value fr TYs and a $3,600,000 value fr TYs BOR issues a n change decisin. P/O appeals t BTA. P/O presents appraisal evidence cncluding t values f $6,300,000 fr TYs and $6,550,000 fr TYs At BTA hearing, BOE questins P/O s appraisal methds (in particular, treating Sears department stre and its autmtive center as single ecnmic unit (and nt separately valuing them)), but prvides n evidence in its brief n hw a different methd wuld yield a different value. BTA adpts P/O s appraisal values. BOE appeals. Supreme Curt was very critical f the BOE s appeal essentially asking, if the BOE believed the P/O s appraisal reprt t be s flawed, why didn t it get it hire a 2 nd appraiser t d an appraisal review t refute the P/O s appraisals? BTA is nt required t address each and every criticism raised by cunsel if there is n evidence prvided t supprt such criticism. Quite simply, the speculatins f lawyers abut the substance f appraisals d nt always merit discussin by a busy tax tribunal with a dcket f hundreds, if nt thusands f cases. 3

4 7. Steak n Shake, Inc. v. Warren Cty. Bd. f Revisin, Slip Opinin N Ohi-4836 (Nvember 25, 2015) Facts: Auditr valued prperty at $1,259,590. P/O filed a CAV fr $832,000. BOR uphlds Auditr s value. Bth parties present appraisal evidence at BTA. Cunty s appraiser cncluded t a $997,000 value fr TY 2009; P/O s appraiser cncluded t a $680,000. BTA fund Cunty s appraisal evidence t be mre prbative, but brushed ff P/O s bjectins t Cunty appraiser s qualificatins as well as Cunty appraiser s failure t adjust sales prices f cmparable prperties t remve effects that lng-term leases have n thse sales prices when trying t value unencumbered prperties. P/O appealed. Hlding: Reversed and remanded t BTA t determine value based n P/O s appraisal and any ther evidence in the recrd. Curt rejected P/O s prcedural claims re: Cunty s appraiser testifying at BTA hearing (i) withut being a state certified general appraiser and (ii) nt fllwing USPAP. Individuals may testify abut the appraisal f real estate withut being a certified general appraiser r a Member f the Appraisal Institute. S lng as they are therwise qualified, Appraisers nt required t fllw USPAP standards befre BTA, hwever, nt ding s may affect the weight and prbative character ascribed t the appraisal. P/O did, hwever, raise a successful substantive claim that the Cunty appraiser failed t adjust the sales prices f the cmparable prperties t remve the effect that lng-term leases wuld have n sales prices when valuing an unencumbered parcel since. Prperties unencumbered by a lease wuld generally sell fr less. The Special Purpse Dctrine des nt apply in this case as the prperty is a 3,400 sq. ft. restaurant. 8. Schwartz v. Cuyahga Cty. Bd. f Revisin, 143 Ohi St.3d 496 (August 27, 2015) Facts: Auditr value was $126,800. P/O purchased 2-family dwelling frm HUD fr $5,000; P/O was willing t accept $30,000 as prperty value even thugh that was six times what the P/O paid. N cunter-cmplaint filed by BOE. BOR issued a N Change decisin stating that the recent sale and cmps were nt prbative. BTA affirmed BOR s decisin. Hlding: Reversed and Remanded. BTA erred by rejecting the 2011 HUD sale price as evidence f value R.C s prvisins that the price that a prperty sells fr at auctin r a frced sale is nt indicative f its value, is a rebuttable presumptin. The BTA acted unreasnably by finding that this transactin was nt vluntary and at arm s length because the P/O prvided sufficient evidence t shw that the transactin was equivalent t an arm s length ne: Prperty was n market fr 3 years (including ne year after being transferred frm bank t HUD) and had a Fr-Sale sign in frnt yard P/O made multiple ffers t purchase prperty that were rejected P/O was advised that building wuld be razed unless he wanted t buy it Other sales n same street cnstituted prf that market culd nt bear a higher sales price at the time. 4

5 9. Metamra Elevatr C. v. Fultn Cty. Bd. f Revisin, 143 Ohi St.3d 359 (July 15, 2015) Facts: Auditr valued subject prperty at $2,022,600. P/O prpsed value f $820,740. P/O wanted t remve grain strage bins frm real prperty assessment and classify them as a business fixture (i.e., persnal prperty). BOR issued a N Change Order. P/O appealed nly the larger f the 2 parcels n the subject prperty (this parcel cntained the strage bins). The BTA reversed the BOR s decisin and attributed $1,095,360 t strage bins using the Cunty s wn value fr the strage bins. Thus, the value drpped frm $1,833,600 t $738,240. The BOE appealed. The main questin fr Supreme Curt was: are strage bins imprvements taxable as real prperty r fixtures that cnstitute persnal prperty and therefre nt taxable? The General Assembly has expressly defined the term business fixture in R.C t include strage bins, and therefre, they are persnal prperty nt subject t real prperty tax. The statutry definitin f business fixture als includes machinery, equipment, signs, strage tanks (whether abve r belw grund) and bradcasting, transprtatin, transmissin and distributin systems (whether abve r belw grund). 10. Ginter v. Auglaize Cty. Bd. f Revisin, 143 Ohi St.3d 340 (July 2, 2015) Facts: Auditr valued subject prperty at $113,511. P/O prpsed a value f $99,900. Shrtly after filing CAV but befre the BOR hearing, P/O s attrney submitted evidence f recent arm s length sale supprting prpsed value. Neither P/O nr P/O s attrney appeared at the BOR hearing, which led t the BOR dismissing the case. P/O appealed. BTA held that BOR didn t have authrity t dismiss case and directs BOR t value subject prperty at $99,900 based upn P/O s written submissin. BOR and Auditr appealed t Supreme Curt. Hlding: Reversed 20 year precedent, finding that BOR must make value determinatin. Case remanded t BOR s that it may evaluate the evidence. BORs d nt have the authrity t dismiss a CAV based n the cmplainant s mere failure t attend the BOR hearing. A BOR must make a determinatin f value whenever a CAV prperly invkes its jurisdictin (regardless f whether the P/O attends the hearing). Curt recgnizes that a case can be dismissed when the cmplainant fails t invlve the BOR s jurisdictin; examples: (1) failure t timely file CAV; (2) filing 2 nd CAV in vilatin f 1 filing per triennium rule. BTA decisin vacated and case remanded t BOR. It was premature fr the BTA t address the value. 5