2017 Ohio 8347
Ohio2017Background
- On Jan 1, 2009 (tax-lien date) appellant 7991 Columbus Pike, L.L.C. owned a 16.3-acre parcel improved with a ~50,000 sq. ft. office building; it was zoned FR1 (limited development).
- In late 2008 the parties agreed the owner would rezone the parcel and create a condominium; those contingencies were satisfied in April 2009 and the owner conveyed a condominium unit (the office building + 1.488 acres) to Delaware County for $2,000,000. The condominium property totaled 4.303 acres (unit + common and limited common elements).
- The county became sole owner of the unit and, by statute, acquired the undivided interest in the common elements (2.815 acres), leaving Columbus Pike with 11.997 acres post-sale.
- The auditor valued the original undivided parcel at $2,300,000 (as of Jan 1, 2009) and apportioned $622,100 to the conveyed parcel and $1,677,900 to the retained parcel, using an incorrect acreage split (allocating 1.487 acres to the conveyed parcel and 14.812 acres to the retained parcel).
- Columbus Pike asked the Board of Revision (BOR) to allocate the April 2009 sale price to the conveyed parcel ($2,000,000) and value the retained parcel at $300,000; the BOR agreed. The Board of Tax Appeals (BTA) reversed and reinstated the auditor’s valuation. Columbus Pike appealed to the Ohio Supreme Court.
Issues
| Issue | Plaintiff's Argument (Columbus Pike) | Defendant's Argument (BOE/BTA) | Held |
|---|---|---|---|
| Whether the April 2009 partial sale qualifies as a "recent" arm’s-length sale under former R.C. 5713.03 so the sale price must control valuation | The April 2009 sale (within 4 months) was recent and its $2,000,000 price must be used to apportion value (conveyed = $2,000,000; retained = $300,000) | The sale is not a qualifying recent sale because material changes (rezoning and condominium creation) occurred after Jan 1, 2009 and before the sale | Court held the sale was not "recent"; the BTA reasonably disregarded the sale for tax-year-2009 valuation |
| Whether the BTA properly reinstated the auditor’s apportionment of acreage and values | Auditor’s allocation was incorrect; apportionment should reflect the condominium/common-elements transfer and the April sale | BTA reinstated auditor’s allocation due to insufficient contrary evidence | Court held BTA erred in reinstating auditor’s valuation because auditor misallocated 2.815 acres (overstating retained parcel value); vacated and remanded |
| Legal effect of condominium/common elements on ownership and taxation | Columbus Pike argued it retained ownership of common/limited common elements until conveyed to an owners’ association | BOE argued against reallocation to county absent a separate conveyance to an owners’ association | Court held R.C. 5311.04(A) gives the unit owner (county) undivided interest in common elements upon creation/conveyance, so county owned 2.815 acres and Columbus Pike retained 11.997 acres |
| Whether BOE bore burden to present sufficient evidence under Bedford to justify reinstating auditor’s valuation | Columbus Pike invoked Bedford to argue BOE failed to rebut appellant’s showing | BOE relied on BTA’s conclusion that there was insufficient evidence to support BOR reductions and reinstated auditor values | Court deemed Bedford issue moot because auditor’s valuation was demonstrably flawed and the matter must be recalculated on remand |
Key Cases Cited
- Akron City School Dist. Bd. of Edn. v. Summit Cty. Bd. of Revision, 139 Ohio St.3d 92, 9 N.E.3d 1004 (explains standard for recent sale temporal proximity)
- Cummins Property Servs., L.L.C. v. Franklin Cty. Bd. of Revision, 117 Ohio St.3d 516, 885 N.E.2d 222 (recency includes factors beyond time; changes affecting value defeat recency)
- Worthington City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 124 Ohio St.3d 27, 918 N.E.2d 972 (recency "encompasses all factors" that change with time)
- Bedford Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 115 Ohio St.3d 449, 875 N.E.2d 913 (burden to rebut auditor’s valuation; referenced by parties)
- Copley-Fairlawn City School Dist. Bd. of Edn. v. Summit Cty. Bd. of Revision, 147 Ohio St.3d 503, 68 N.E.3d 723 (BTA must independently determine value on remand when auditor valuation is negated)