Health Care REIT, Inc. v. Cuyahoga Cty. Bd. of Revision (Slip Opinion)
140 Ohio St. 3d 30
| Ohio | 2014Background
- Property: 6.415-acre parcel in Middleburg Heights (Berea City School Dist.) improved in 1998 as Brookside Estates, an assisted‑living facility; zoned "Senior Residence/Life Care District."
- 2004 sale: Health Care REIT purchased the property for $8,740,000; county fiscal officer used that sale price to value the property for tax purposes in 2006 and initially for 2007.
- Proceedings: Health Care REIT sought reduction for tax year 2007 (ultimately to $3,100,000); BOR retained $8,740,000; both sides appealed to the BTA.
- Competing appraisals at BTA: Racek (owner) used apartment comparables and income/cost approaches to value realty at $3,100,000; Ritley (school board) used assisted‑living comparables and all three approaches to value at $5,400,000.
- BTA decision: rejected reliance on the 2004 sale as too remote/reflecting business value, found Racek more persuasive, and set value at $3,100,000; majority of the Ohio Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument (School Bd.) | Defendant's Argument (Health Care REIT) | Held |
|---|---|---|---|
| Whether the 2004 sale is the best evidence of 2007 true value | 2004 arm’s‑length sale is recent and should control | Sale was remote and included business value; market changed by 2007 | Sale was not reliable for 2007; BTA reasonably rejected it |
| Whether appraiser may use apartment comparables for an assisted‑living facility | Zoning and unit configuration render apartments noncomparable; BTA should not credit such comparisons | Apartment comparables valid to separate real‑property value from business value | Permissible; BTA reasonably credited Racek’s use of apartment comparables |
| Whether BTA unreasonably preferred Racek over Ritley given methodological flaws | Ritley’s assisted‑living comparables better capture market for this use | Racek properly isolated realty value from business components; adjustments were made | Deference to BTA; record supports finding Racek more persuasive |
| Whether BTA’s opinion failed to state adequate reasons | Decision lacks detailed findings and explanation of evidence considered | BTA identified which appraisal it found persuasive and gave reasons | BTA satisfied requirement to state evidence it deemed relevant; no reversal required |
Key Cases Cited
- Conalco, Inc. v. Monroe Cty. Bd. of Revision, 50 Ohio St.2d 129 (1977) (actual recent arm’s‑length sale is best evidence of true value)
- Fodor, Cuyahoga Cty. Bd. of Revision v., 15 Ohio St.2d 52 (1968) (valuation for tax purposes is factual and within taxing authorities’ province)
- Cummins Property Servs., L.L.C. v. Franklin Cty. Bd. of Revision, 117 Ohio St.3d 516 (2008) (recency and market changes govern whether sale presumptively reflects true value)
- Hilliard City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 128 Ohio St.3d 565 (2011) (treatment of sale price under former R.C. 5713.03 and presumption of sale as true value)
- LTC Properties, Inc. v. Licking Cty. Bd. of Revision, 133 Ohio St.3d 111 (2012) (permitting apartment comparables to isolate real‑property value of congregate‑care facilities)