Monroe County Assessor v. SCP 2007-C-26-002, LLC a/k/a CVS 3195-02
2016 Ind. Tax LEXIS 47
| Ind. T.C. | 2016Background
- Property: a CVS store at 1000 N. College Ave., Bloomington — ~13,000 sq ft on 1.44 acres; contested assessments for 2009–2013.
- Assessor set assessments ranging roughly $3.8M–$3.9M; CVS appealed through PTABOA to the Indiana Board of Tax Review (Board).
- Both parties submitted USPAP-compliant appraisals using sales-comparison, income, and cost approaches; the appraisals produced substantially different values.
- The Assessor also submitted a third-party review criticizing CVS’s use of general retail comparables (rather than CVS-specific, operating-store comparables), arguing CVS’s appraisal measured market value not market value-in-use.
- The Board rejected the Assessor’s review as misunderstanding Indiana’s market value-in-use standard, found CVS’s income approach most credible, and reduced assessments for each year to values consistent with CVS’s income-model.
- The Assessor appealed to the Tax Court, arguing the Board’s decision was contrary to law (misapplying market value-in-use) and arbitrary and capricious; the Tax Court affirmed the Board.
Issues
| Issue | Plaintiff's Argument (Assessor) | Defendant's Argument (Board/CVS) | Held |
|---|---|---|---|
| Proper interpretation of market value-in-use | Tax Court precedents (Meijer, Trimas, Millennium) misinterpret statute; Legislature’s 2015 statutes show prior decisions were incorrect | Precedents correctly define market value-in-use; Board applied those principles properly | Court rejects assessor’s challenge; declines to overturn established precedent |
| Admissibility/weight of comparables | CVS’s use of general retail comparables is improper; should use comparables reflecting an ongoing CVS operation | It is proper to use comparables by comparable use (general retail), and vacant vs. occupied does not render comparables irrelevant | Court affirms Board’s conclusion that general retail comparables can be probative of market value-in-use |
| Internal consistency/arbitrariness of Board decision | Board’s findings are muddled/inconsistent about which comparables apply across approaches, making decision arbitrary | Valuation is an opinion-based exercise; Board reasonably weighed strengths/weaknesses and explained choice of income approach | Court finds Board’s reasoning adequate and not arbitrary or capricious |
| Appropriate valuation approach | Assessor implies income approach and CVS data were improperly favored | Board examined sales, income, and cost approaches and found CVS’s income approach most credible | Court affirms Board’s reliance on CVS’s income approach and resulting reduced assessments |
Key Cases Cited
- Shelby Cnty. Assessor v. CVS Pharmacy, Inc., 994 N.E.2d 350 (Ind. Tax Ct. 2013) (market value-in-use can be measured against comparables by use; vacant comparables may be probative)
- Millennium Real Estate Inv., LLC v. Assessor, Benton Cnty., 979 N.E.2d 192 (Ind. Tax Ct. 2012) (interpretation of market value-in-use standard)
- Meijer Stores Ltd. P’ship v. Smith, 926 N.E.2d 1134 (Ind. Tax Ct. 2010) (analysis of market value-in-use vs. fair market value)
- Stinson v. Trimas Fasteners, Inc., 923 N.E.2d 496 (Ind. Tax Ct. 2010) (valuation is opinion-based; comparables selection is a matter for the party to justify)