Bronx Park S. III Lancaster, L.L.C. v. Fairfield Cty. Bd. of Revision (Slip Opinion)
108 N.E.3d 1079
| Ohio | 2018Background
- Property: 13,650 sq. ft. Walgreens on ~1.2 acres in Lancaster, built 2004 and subject to a 75‑year lease with fixed $27,500/month rent; tenant has periodic termination options.
- Bronx Park (owners) purchased the property in July 2014; Lancaster City School District (BOE) argued the sale price should set the 2014 tax valuation.
- Fairfield County Board of Revision (BOR) increased the valuation to the July 2014 sale price of $5,641,100; Bronx Park appealed to the Board of Tax Appeals (BTA).
- Bronx Park submitted an appraisal (Coers) concluding the sale reflected a leased‑fee interest and that the unencumbered fee‑simple value was $1,660,000 as of Jan. 1, 2014, noting the sale was influenced by long lease term, above‑market rent, strong tenant credit, and a 1031 exchange.
- BTA declined to address the appraisal, affirmed the BOR’s use of the sale price, and Bronx Park appealed to the Ohio Supreme Court.
Issues
| Issue | Plaintiff's Argument (Bronx Park) | Defendant's Argument (BOE/BOR) | Held |
|---|---|---|---|
| Whether a recent arm’s‑length sale conclusively establishes true value under R.C. 5713.03 as amended by H.B. 487 | Sale price reflects a leased‑fee interest; statute requires valuing the unencumbered fee‑simple estate, so appraisal showing lower unencumbered value should be considered | Sale price of July 2014 represents true value and supports BOR valuation | Sale price is presumptive but not conclusive; BTA must weigh and address appraisal evidence when sale is of a leased property (remand) |
| Whether BTA erred by refusing to consider appraisal evidence | BTA should evaluate appraisal showing sale price was for leased‑fee, not unencumbered fee | BTA treated sale price as dispositive and declined to address appraisal | BTA erred by not addressing appraisal; decision vacated and remanded for consideration |
| Whether H.B. 487’s amendment (value "as if unencumbered") is unconstitutional under Ohio Constitution art. XII, § 2 | (Raised by BOE on appeal) H.B. 487 conflicts with constitutional definition of true value favoring sale price | H.B. 487 valid; sale price aligns with constitutional valuation | Court declined to decide constitutionality because BOE’s argument was undeveloped |
| Whether new evidence may be submitted on remand | Bronx Park sought consideration of existing appraisal only | BOR/BOE might seek additional materials | Court directed BTA to weigh evidence presented below and not permit new evidence on remand |
Key Cases Cited
- Terraza 8, L.L.C. v. Franklin Cty. Bd. of Revision, 150 Ohio St.3d 527, 2017-Ohio-4415, 83 N.E.3d 916 (recent sale not conclusive; must consider evidence of unencumbered fee‑simple value)
- Akron City School Dist. Bd. of Edn. v. Summit Cty. Bd. of Revision, 139 Ohio St.3d 92, 2014-Ohio-1588, 9 N.E.3d 1004 (standard of review and de novo review for legal issues)
- In re Application of Columbus S. Power Co., 129 Ohio St.3d 271, 2011-Ohio-2638, 951 N.E.2d 751 (court will not develop undeveloped arguments for a party)