Bonstores Realty One, LLC v. City of Wauwatosa
839 N.W.2d 893
Wis. Ct. App.2013Background
- Bonstores Realty One owns the Boston Store at Mayfair Mall; the City of Wauwatosa assessed the property at $25,593,300 for tax year 2009; Bonstores appealed, claiming $11,000,000.
- After the Board of Review upheld the City's assessment and the City issued a tax bill, Bonstores sued in circuit court under Wis. Stat. § 74.37 alleging excessive assessment for 2009–2010.
- Both sides presented expert appraisers: Bonstores' Michael Kelly (primarily income-capitalization and sales-comparison relying on “stabilized” retail sales) and the City’s Mark Kenney (tier-two sales-comparison, supported by tier-three checks: income-capitalization and cost approaches).
- The circuit court found the assessor’s valuation presumptively correct and concluded Bonstores failed to overcome the statutory presumption by producing persuasive contrary evidence; it rejected Kelly’s methodology as unreliable and found Kenney’s valuation consistent with the assessment.
- Bonstores appealed, challenging the presumption standard application, the court’s consideration of prior transaction evidence (2006 purchase, Cushman & Wakefield appraisal, Ernst & Young report), and the circuit court’s criticisms of Kelly’s comparables.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Bonstores overcame the statutory presumption of correct assessment | Bonstores: apply a "substantial evidence" test; its expert evidence (value ~$11M) overcomes presumption | City: assessor's declared value is presumptive; Bonstores must persuade trier of fact that assessed value is probably incorrect | Court: presumption remains unless opponent proves nonexistence of presumed fact is more probable; Bonstores failed to persuade; assessment affirmed |
| Admissibility/relevance of prior sale price and prior appraisals (2006 purchase, Cushman & Wakefield, Ernst & Young) | Bonstores: such evidence is irrelevant and should not be relied upon to value 2009 property | City: prior public filings and appraisals are relevant context for credibility and value range | Court: admission and consideration were within discretion; the 2006 $32.7M public filing and related appraisal were properly considered for credibility and context |
| Reliability of plaintiff’s appraisal methodology (use of retail sales and "stabilized" sales; comparables that went "dark") | Bonstores: Kelly’s reliance on retail sales stabilization and selected comparables yields correct market value | City: Kelly’s method improperly attributes business-specific sales to real property and uses distressed/non-arm’s-length comparables | Court: rejected Kelly’s approach as conflating business operation with real property value and relying on unreliable/distressed comparables; court found his opinion unpersuasive |
| Proper application of Wisconsin Property Assessment Manual tiers and appraisal practice | Bonstores: its tier-three approaches suffice to challenge assessment | City: tier-two comparable sales were available and properly used by City’s appraiser; tier-three only if tiers 1–2 not applicable | Court: Kenney’s tier-two sales-comparison was appropriate and reconciled with tier-three checks; his valuation supported the assessment |
Key Cases Cited
- Allright Props., Inc. v. City of Milwaukee, 317 Wis. 2d 228 (Ct. App.) (presumption of assessor's valuation and deference rules)
- Adams Outdoor Adver., Ltd. v. City of Madison, 294 Wis. 2d 441 (Wis.) (standard for overcoming assessor presumption; Property Assessment Manual compliance)
- ABKA Ltd. P'ship v. Bd. of Review of Fontana-On-Geneva Lake, 231 Wis. 2d 328 (Wis.) (limits on using business-specific income to value land)
- Bloomer Housing Ltd. P'ship v. City of Bloomer, 257 Wis. 2d 883 (Ct. App.) (factfinder's role in weighing expert credibility)
- U.S. Oil Co., Inc. v. City of Milwaukee, 331 Wis. 2d 407 (Ct. App.) (trier of fact as ultimate arbiter of weight and credibility)
- Kersten v. H.C. Prange Co., 186 Wis. 2d 49 (Ct. App.) (trial court’s role in weighing and crediting evidence)
- State ex rel. N/S Assocs. v. Bd. of Review of Greendale, 164 Wis. 2d 31 (Ct. App.) (examples of transferable, land‑attributable income)
- Waste Mgmt. of Wis. v. Kenosha County Bd. of Review, 184 Wis. 2d 541 (Wis.) (income attributable to land in special-use contexts)