Lowe's Home Ctrs., Inc. v. Washington Cty. Bd. of Revision (Slip Opinion)
145 Ohio St. 3d 375
| Ohio | 2016Background
- Tax year 2010 valuation dispute over a Lowe’s Home Center in Marietta: auditor valued property at $9,091,000; Lowe’s sought $3,600,000 at the BOR and later presented a $5,700,000 appraisal to the BTA.
- Property: 16.22 acres with a 142,446 sq ft building (built 2002); owner-occupied on the lien date (no lease encumbrance).
- Competing BTA appraisals: Lowe’s appraiser (Costello) used comparables reflecting second‑generation/ vacancy assumptions and concluded $5,700,000; county appraiser (Blosser) relied on first‑generation/owner‑occupied Big‑Box comparables and concluded $7,200,000.
- BTA adopted the county’s appraisal, rejecting Costello for excluding first‑generation and long‑term leased built‑to‑suit comparables, relying in part on its earlier Target decision.
- Supreme Court vacated and remanded because the BTA failed to determine whether the special‑purpose doctrine (as explained in Meijer Stores) applied — a determination necessary before treating leased and first‑generation comparables without adjustment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether BTA lawfully adopted county appraisal without addressing special‑purpose doctrine | Lowe’s: BTA misapplied Meijer; must determine if special‑purpose doctrine applies before accepting unadjusted first‑generation/leased comparables | County: Blosser’s owner‑occupied comparables were appropriate given subject was owner‑occupied and drew from regional market | Vacated and remanded: BTA must determine whether special‑purpose doctrine applies before adopting appraisal |
| Whether differential treatment violates equal protection / due process | Lowe’s: inconsistent treatment vis‑à‑vis Rite Aid indicates discrimination | County: taxpayers differently situated if special‑purpose factors differ | Court: differential treatment permissible if taxpayer is differently situated; BTA must make that factual finding |
| Whether fee simple must be valued “as if unencumbered” for 2010 lien date | Lowe’s: fee simple should be valued unencumbered (no lease) | County: 2012 statutory “as if unencumbered” language not retroactive to 2010; encumbrances then were not automatically removed | Held: 2012 amendment inapplicable to 2010; subject should be valued as it existed (unencumbered in fact), but comparables that were leased require adjustment unless special‑purpose doctrine applies |
| Whether departures from USPAP fatally undermine Blosser appraisal | Lowe’s: procedural/USPAP defects (assistant performed interviews, unlicensed interviewees) undermine credibility | County: industry standards alone do not control tax valuation legality | Held: USPAP issues do not automatically bar adoption; BTA (finder of fact) must assess whether such departures affect credibility on remand |
Key Cases Cited
- Meijer Stores Ltd. Partnership v. Franklin Cty. Bd. of Revision, 122 Ohio St.3d 447 (discusses special‑purpose doctrine and when owner‑occupancy/unique use justifies different valuation treatment)
- EOP-BP Tower, L.L.C. v. Cuyahoga Cty. Bd. of Revision, 106 Ohio St.3d 1 (BTA has role to weigh evidence and assess credibility of appraisals)
- Gahanna-Jefferson Local School Dist. Bd. of Edn. v. Zaino, 93 Ohio St.3d 231 (Court will reverse BTA for incorrect legal conclusions)
- Dinner Bell Meats, Inc. v. Cuyahoga Cty. Bd. of Revision, 12 Ohio St.3d 270 (discusses cost approach for special‑purpose buildings and doctrine’s application)
- Cummins Property Servs., L.L.C. v. Franklin Cty. Bd. of Revision, 117 Ohio St.3d 516 (addresses valuation treatment of encumbrances under pre‑2012 R.C. 5713.03)
- Sapina v. Cuyahoga Cty. Bd. of Revision, 136 Ohio St.3d 188 (statutory amendment to value "as if unencumbered" is not retroactive)