Olentangy Local Schools Bd. of Edn. v. Delaware Cty. Bd. of Revision (Slip Opinion)
148 Ohio St. 3d 695
| Ohio | 2016Background
- The Kenney Co. appealed the 2009 auditor valuation of 14 unsold office-condo units (combined 22,070 sq ft) valued by the auditor at about $2,512,000 (~$114/sf).
- Owner submitted an appraisal (Porter, MAI) at the Board of Revision (BOR) valuing the 14 units as a single economic unit for rental at $1,430,000 (~$64.80/sf); BOR adopted that reduction.
- Three condo sales existed in the record: two pre-lien-date sales in 2006–2007 (~$137–$139/sf) and a 2010 sale (~$108/sf) of unfinished space; the BTA considered these sales at appeal.
- The Board of Tax Appeals (BTA) reversed the BOR, rejecting the economic-unit appraisal and reinstating the auditor’s valuation based on individual-condo sale evidence.
- Key legal questions involved (1) whether condos must be valued as separate parcels rather than an economic unit, and (2) whether the Bedford rule barred the BTA from reinstating the auditor’s valuation after the BOR adopted the owner’s appraisal.
Issues
| Issue | Plaintiff's Argument (Kenney Co.) | Defendant's Argument (BOE) | Held |
|---|---|---|---|
| Proper valuation method: economic unit vs. individual-condo sales | BOR properly relied on owner's appraisal treating the 14 units as one economic/multi-tenant rental property | Condos are separate taxable parcels; must be valued individually using comparable condo sales | Court/BTA: Must value units individually; economic-unit approach not permitted under R.C. 5311.11; BTA properly rejected the appraisal |
| Weight of sale evidence vs. appraisal | Appraisal’s highest-and-best-use (rental) displaced condo-sale comparables | Condo sale prices in record supported auditor’s higher per-sf value and undermined appraisal | Court/BTA: Condo sales (2006–2007 and 2010) supported auditor’s valuation and contradicted Porter's $64.80/sf conclusion |
| Admissibility/use of 2010 sale (post–lien date) | 2010 sale not directly comparable and occurred after lien date | 2010 sale involved unfinished units and, along with earlier sales, supplied clear support for auditor’s 2009 valuation | Court: 2010 sale (though post-lien and involving multiple units) still furnished probative evidence corroborating auditor’s valuation |
| Application of Bedford rule (effect of BOR reduction) | Bedford rule prevents BTA from reverting to auditor’s valuation once BOR reduces value on owner’s evidence | Bedford rule inapplicable because BOR committed legal error adopting an economic-unit appraisal and sale evidence in record affirmed auditor’s value | Court: Bedford rule does not bar reinstatement where BOR applied improper legal theory and record sales evidence supports auditor’s valuation |
Key Cases Cited
- Dublin City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 139 Ohio St.3d 212 (court rejects economic-unit valuation of condo units)
- Dublin City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 147 Ohio St.3d 38 (clarifies Bedford rule burden-shifting on appeal)
- Worthington City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 140 Ohio St.3d 248 (explains evidentiary consequences when BOR accepts owner’s valuation)
- AP Hotels of Illinois, Inc. v. Franklin Cty. Bd. of Revision, 118 Ohio St.3d 343 (factual statements in appraisal reports retain evidentiary weight despite rejection of appraiser conclusion)