Bainbridge Limited Lp v. Dekalb County Tax Assessors
A21A1808
Ga. Ct. App.Feb 15, 2022Background
- Bainbridge Ltd., L.P. owns Granite Crossing, a rent-restricted apartment complex developed with Low-Income Housing Tax Credits (LIHTC); 74 units have below-market rents and regulatory operating requirements.
- Construction completed after Jan. 1, 2018; 2018 assessment was $11,801,800. A hearing officer set FMV at $10,707,500; superior court bench trial followed.
- DeKalb County appraisers (Hicks and Geoffrey Johnson) used the cost approach and Johnson concluded FMV of $14,226,785. County declined to adjust for rent restrictions or higher operating costs under the cost approach.
- Bainbridge’s experts used the income approach: CFO Bamberger valued it at $1,000,000; Brian Walsh (VSI) gave a stabilized FMV of $3,700,000.
- Trial court adopted the County’s cost-approach valuation, denied Bainbridge’s motion in limine to exclude Johnson, and denied Bainbridge’s request for attorney fees; appeal followed.
Issues
| Issue | Bainbridge’s Argument | DeKalb County’s Argument | Held |
|---|---|---|---|
| Whether assessors are required to apply rent limitations and higher operating costs listed in OCGA § 48-5-2(3)(B) when determining fair market value | OCGA § 48-5-2(3)(B) uses mandatory language — assessors must apply those factors, so valuation must reflect them | Those factors need only be considered and may not require adjustment under the cost approach; they are matters of contract or owner control, not adjustments | Court: Assessors are required to apply (not merely consider) rent limits and higher operating costs; trial court’s valuation that ignored application of these factors was legal error — vacated and remanded |
| Whether assessors must deduct economic obsolescence for rent restrictions/higher operating costs | These constraints and higher costs amount to economic obsolescence and should reduce FMV | Under the cost approach such items are not external economic obsolescence but owner/contractual matters and thus need not be a deduction | Court: Did not decide on economic obsolescence because reversal on statutory-application grounds made the issue unnecessary to resolve at this time |
| Whether trial court abused its discretion by denying motion in limine to exclude Geoffrey Johnson’s testimony | Johnson’s testimony was unreliable because he did not apply the mandatory statutory factors; it should have been excluded | Johnson explained his methods and data; admissibility hinges on reliability and fit, and factual omissions go to weight, not admissibility | Court: No abuse of discretion — Johnson’s methodology was admissible; failure to adjust goes to credibility for the factfinder |
| Whether Bainbridge was entitled to attorney fees under OCGA § 48-5-311 because final valuation was ≤85% of prior valuation | Final determinations by Bainbridge’s experts were ≤85% of the hearing officer’s number, so fees should be awarded | The hearing officer’s valuation was excluded from trial evidence at Bainbridge’s request; without that valuation before the court, the statutory threshold cannot be measured | Court: Denial affirmed — no hearing officer valuation was presented at trial, so Bainbridge did not meet statutory predicate for fees |
Key Cases Cited
- Cherokee County Bd. of Tax Assessors v. Mason, 340 Ga. App. 889 (explaining appellate standards of review in tax valuation appeals)
- SJN Properties, LLC v. Fulton County Bd. of Assessors, 296 Ga. 793 (duty to return property at fair market value and equalize assessments)
- Heron Lake II Apartments, LP v. Lowndes County Bd. of Tax Assessors, 306 Ga. 816 (noting 2017 amendment requiring assessors shall apply rent limits/higher operating costs for Section 42 properties)
- Leverett v. Jasper County Bd. of Tax Assessors, 233 Ga. App. 470 (trial court erred when relying on valuation performed in violation of statutory requirements)
- Emory Univ. v. Willcox, 355 Ga. App. 542 (expert’s factual basis generally affects credibility, not admissibility)
- White Horse Partners LLLP v. Monroe County Bd. of Tax Assessors, 348 Ga. App. 603 (trial court did not abuse discretion in admitting tax assessor expert despite memory gaps)
- Sph Glynn, LLC v. Glynn County Bd. of Tax Assessors, 326 Ga. App. 196 (evidence from prior administrative proceedings may be admissible in superior court de novo trial)