52 N.E.3d 65
Ind. T.C.2016Background
- Lafayette Square Mall in Indianapolis was owned by Simon entities and sold to Ashkenazy on December 27, 2007 for $18,000,000. Simon had timely appealed its 2006 and 2007 assessments before that sale completed.
- PTABOA had reduced the assessments (2006 to $28,000,100; 2007 to $20,000,000); Simon appealed further to the Indiana Board of Tax Review seeking substantially lower values.
- Simon presented evidence including broker marketing materials, testimony that the sale was arm’s-length, and an analysis by appraiser Sara Coers which confirmed sale terms and produced trending factors to relate the December 2007 sale price to the 2006 and 2007 valuation dates.
- The Assessor challenged the sale’s representativeness, the trending methodology, and submitted an income approach valuation that produced much higher values for the Mall.
- The Indiana Board found the December 2007 sale probative and Simon had made a prima facie case; it accepted the Coers trending and concluded the Assessor failed to rebut the prima facie case. The Tax Court affirmed the Board.
Issues
| Issue | Petitioner (Assessor) Argument | Respondent (Simon) Argument | Held |
|---|---|---|---|
| Whether the Dec. 2007 sale was too remote from valuation dates to be probative | Sale is too temporally remote to reflect value on Jan 1, 2005 and Jan 1, 2006 | A sale may be used if trended back to valuation dates; evidence related sale to dates | Court: sale not too remote; trending may relate sale to valuation dates |
| Whether the Dec. 2007 sale was representative of the market | Sale sold "quickly" and may not be arm’s-length or market representative | Broker, marketing, and Coers’s analysis show adequate exposure, no special concessions, typical motivation | Court: Simon made prima facie showing sale was arm’s-length and market representative; Assessor failed to rebut |
| Whether Coers’s trending methodology was reliable | Trending used national indexes and irrelevant sources; factors improperly developed/applied | Coers produced trending from relevant market indices; methodology not challenged with authoritative proof | Court: Assessor failed to show trending factors were improper; Board reasonably relied on them |
| Whether it was improper for Simon’s attorney (not Coers) to apply trending to sale price | Attorney performed the calculations, was unsworn, and not a USPAP appraiser — so results unreliable | Trending factors were established by Coers; arithmetic application does not require an appraiser to be the calculator | Court: No authority required sworn appraiser to do simple math; relying on the trended sale price was not an abuse of discretion |
Key Cases Cited
- Osolo Twp. Assessor v. Elkhart Maple Lane Assocs., 789 N.E.2d 109 (Ind. Tax Ct. 2003) (party challenging agency determination bears burden to show invalidity)
- Hubler Realty Co. v. Hendricks Cnty. Assessor, 938 N.E.2d 311 (Ind. Tax Ct. 2010) (defining abuse of discretion standard for tax-board decisions)
- Lake Cnty. Prop. Tax Bd. of Appeals v. St. George Serbian Orthodox Church, 905 N.E.2d 536 (Ind. Tax Ct. 2009) (need to rebut taxpayer’s prima facie case that a sale is market representative)
- O’Donnell v. Dep’t of Local Gov’t Fin., 854 N.E.2d 90 (Ind. Tax Ct. 2006) (present-day evidence may be used if related to valuation date)
- Crystal Flash Petroleum, LLC v. Indiana Dep’t of State Revenue, 45 N.E.3d 882 (Ind. Tax Ct. 2015) (issues unsupported by legal analysis may be waived)