101 N.E.3d 895
Ind. T.C.2018Background
- Belterra owns a casino resort (riverboat, 608‑room hotel, 18‑hole golf course, ~250 acres) in Florence, IN; assessment years at issue: 2009–2014.
- Belterra appealed the Assessor’s 2009–2014 assessed values; parties litigated only 2009 and 2014 values before the Indiana Board and agreed to trend intermediate years.
- Belterra offered appraisals (Herman for riverboat and golf course; Lennhoff for hotel) valuing the real property at about $44.4M (2009) and $48.7M (2014).
- The Assessor offered Cahill’s appraisal using a going‑concern (DCF/EBITDA) approach, extracting non‑realty values to arrive at real‑property values of about $134.3M (2009) and $127.0M (2014).
- The Indiana Board found portions of both sides’ work probative, synthesized evidence, and fixed real‑property value at $98.5M for both years (allocating modest amounts to riverboat and golf course per Belterra’s appraisals, and the remainder to the hotel).
- On judicial review the court affirmed the Board’s rejection of Lennhoff’s hotel appraisal but reversed the Board’s adoption of Cahill’s going‑concern valuation and remanded with instructions to reinstate the 2008 assessed value subject to limited component value adjustments (riverboat and golf course values from Herman).
Issues
| Issue | Belterra's Argument | Assessor's Argument | Held |
|---|---|---|---|
| Whether the Board erred in giving no weight to Lennhoff’s hotel income approach | Lennhoff properly valued the hotel (treated resort amenities and used investor surveys; Board misunderstood and mischaracterized his method) | Lennhoff relied on full‑service hotel benchmarks without adjusting for resort/luxury differences; projections lacked credibility | Affirmed — Board reasonably discounted Lennhoff for failing to adjust benchmarks and for implausible income/expense projections |
| Whether the Board erred in adopting Cahill’s going‑concern (DCF/EBITDA) valuation | Cahill’s EBITDA growth projections are contradicted by market evidence (recession, reduced gaming revenue, declining EBITDA) and thus the going‑concern DCF is unreliable | Cahill’s projections are supported by market data and internal budgets showing upside potential and growth drivers | Reversed — Court concluded Cahill’s EBITDA growth assumptions were not supported by substantial, reliable evidence; going‑concern values vacated |
Key Cases Cited
- Osolo Twp. Assessor v. Elkhart Maple Lane Assocs., 789 N.E.2d 109 (Ind. Tax Ct. 2003) (party challenging Board bears burden to show invalidity)
- Bailey Seed Farms, Inc. v. State Bd. of Tax Comm’rs, 542 N.E.2d 1389 (Ind. Tax Ct. 1989) (defines substantial evidence review standard)
- Mabasa v. Gonzales, 455 F.3d 740 (7th Cir. 2006) (explains substantial‑evidence review requires assessment of record as a whole)
- Starke Cnty. Assessor v. Porter‑Starke Servs., Inc., 88 N.E.3d 814 (Ind. Tax Ct. 2017) (defines substantial evidence as more than a scintilla)
- McClain v. Review Bd. of Indiana Dep’t of Workforce Dev., 693 N.E.2d 1314 (Ind. 1998) (deference owed under substantial evidence standard)
- Stinson v. Trimas Fasteners, 923 N.E.2d 496 (Ind. Tax Ct. 2010) (market value‑in‑use defined as value for current use — value of property, not value of the use)