Stockwell v. Marion County Assessor, TC-MD 140125N

Background

Plaintiffs Dean and Jennifer Stockwell appealed Marion County assessments for two contiguous tax accounts (R74612, R74620) after purchasing the combined property in June 2013 for $575,000; a third account (R74617) was dismissed as not aggrieved.
The subject property comprises a 41,000+ sq ft main industrial/warehouse building (built 1976), a 3,200 sq ft secondary building, and a covered storage area; the site is ~4.91 acres and has access, floodplain, and condition issues.
Key impairments: roof leaks, degraded concrete slab, limited driveway access (20–30 ft easement), location in/near the 100-year floodplain, and a 1976 land-use restriction limiting uses (later modified for some uses in 2014).
Plaintiffs’ appraiser (Banz) and Defendant’s appraiser (Miner) disagreed on whether the parcels form one economic unit, highest-and-best-use assumptions, cost-to-cure, and valuation approaches; each submitted income and sales analyses (Miner also emphasized a ‘‘scenario’’ cost-to-cure analysis).
The court found the parcels constitute one economic unit, accepted Banz’s highest-and-best-use (improved industrial/flex) and many of Banz’s market inputs, adopted a blended income/sales reconciliation, adjusted reserves and capitalization inputs, accepted a covered-storage value based on Miner’s cost calculations, applied a cost-to-cure of $360,000, and set total real market value at $1,064,000 for 2013–14.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Unit of valuation: whether Account R74617 is part of the economic unit	Banz treated R74617 as required for parking/yard and included it in value allocation	Miner treated R74617 as excess land and not necessary to the economic unit	Court adopted Miner: the subject property is one economic unit; R74617 dismissed as aggrieved separately
Highest and best use	Banz: existing improved use (industrial/flex) assuming deferred maintenance is cured	Miner: improved to Class C industrial flex (maximally productive) using speculative cost-to-cure scenarios	Court accepted Banz’s highest-and-best-use as improved industrial/flex; found Miner’s Class C remediation speculative
Income capitalization inputs (rent, vacancy, expenses, cap rate)	Banz derived market rents from a mix of comparables, concluded NOI and selected cap rate supporting ~$1.35M pre‑adjustment	Miner relied on lease and sales data, used scenarios and a 9.4% cap rate yielding ~$1.45M pre‑adjustment	Court accepted Banz’s gross income and vacancy, adjusted reserves to 3%, adopted Miner’s 9.4% cap rate; income approach value $1,338,767 (excl. covered storage)
Cost to cure and final reconciliation	Banz: cost to cure $360,000 (roof + part slab) and reconciled value $990,000 before adjustments	Miner: presented scenario 1 and 2 costs ($200k and $745k) and favored scenario 2; argued for higher value after hypothetical improvements	Court found Banz’s $360,000 cost-to-cure supported by evidence, gave equal weight to income and sales approaches, added covered storage value, and set final real market value at $1,064,000 for the two accounts

Key Cases Cited

Freedom Fed. Savings & Loan Ass'n v. Dept. of Rev., 310 Or. 723 (1990) (highest-and-best-use governs selection of comparables and valuation framework)
Pacific Power & Light Co. v. Dept. of Rev., 286 Or. 529 (1979) (income capitalization requires fixing an annual income expected by reasonable buyers as of the assessment date)
Reed v. Dept. of Rev., 310 Or. 260 (1990) (taxpayer bears burden to prove real market value by a preponderance of the evidence)