Columbus City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision (Slip Opinion)
58 N.E.3d 1126
Ohio2016Background
- Buckeye Hospitality bought a 137-room Comfort Inn in Columbus in Jan. 2007 for $3,490,000; that sale became the auditor’s 2009 valuation after a county triennial update.
- Buckeye sought a reduced 2009 valuation; submitted an appraisal by Charles G. Snyder (certified appraiser) valuing the property at $2,002,000 using income- and sales-comparison approaches.
- Snyder declined to treat the subject’s Jan. 2007 sale as a reliable comparable, citing declining hotel revenue/RevPAR and occupancy beginning in 2007 and into 2008 and asserting the sale required both market-condition and circumstance-of-sale adjustments.
- The Franklin County Board of Revision accepted Snyder’s $2,600,000 total-asset analysis but added back some intangible allocation, arriving at $2,531,500; the BTA affirmed, rejecting the 2007 sale as indicative of value.
- Columbus City Schools (appellant) argued the BTA improperly disregarded the recent 2007 sale and relied on a defective appraisal; the Supreme Court of Ohio affirmed the BTA.
Issues
| Issue | Plaintiff's Argument (BOE) | Defendant's Argument (Buckeye) | Held |
|---|---|---|---|
| Whether the Jan. 2007 sale presumptively establishes 2009 tax value | 2007 sale is recent and presumptively indicates value; should control | Appraisal and testimony rebut presumption because market changed and sale had atypical circumstances | Presumption can be rebutted by appraisal facts/testimony; 2007 sale was rebutted |
| Whether the appraiser’s report/testimony may be used to rebut the sale presumption | Appraisal is defective and cannot overcome presumptive sale evidence | Appraiser’s certified report + sworn testimony supply factual basis to rebut recency/arm’s-length presumptions | Court permits reliance on certified appraisal report and appraiser’s sworn testimony to rebut presumption |
| Whether market change between Jan. 2007 and Jan. 1, 2009 was shown | No substantial market change; lack of adjustments to some 2008 comps proves no change | Documentary hotel performance data (RevPAR, STAR) and paired sales show decline beginning in 2007/early 2008 | Record showed market softening in 2007/early 2008; BTA reasonably inferred change |
| Whether paired-sales/Knickerbocker reasoning precludes BTA’s conclusion | Knickerbocker requires reliance on adjusted comparables; appraiser’s paired-sales approach is circular/unsupported | Paired-sales and other data support market decline; Knickerbocker is distinguishable | Knickerbocker inapposite; BOE waived some objections to paired-sales; BTA’s use was reasonable |
Key Cases Cited
- Cummins Property Servs., L.L.C. v. Franklin Cty. Bd. of Revision, 885 N.E.2d 222 (Ohio 2008) (sale price presumptively indicates value but presumption may be rebutted)
- Berea City School Dist. Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 834 N.E.2d 782 (Ohio 2005) (standards on presumption from sale price)
- AP Hotels of Illinois, Inc. v. Franklin Cty. Bd. of Revision, 889 N.E.2d 115 (Ohio 2008) (appraiser’s certification can support use of appraisal report facts)
- Olentangy Local Schools Bd. of Edn. v. Delaware Cty. Bd. of Revision, 926 N.E.2d 302 (Ohio 2010) (Knickerbocker) (analysis of adjusted-comparables and limits on rebuttal evidence)
- Bedford Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 972 N.E.2d 559 (Ohio 2012) (arm’s-length sale presupposes knowledgeable, typical market participants)
- Hilliard City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 9 N.E.3d 920 (Ohio 2014) (treatment of intangible business value in valuing hospitality properties)
- Worthington City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 949 N.E.2d 986 (Ohio 2011) (discussion of arm’s-length sale concept)