G&I IX 6840 Pontius, L.L.C. v. Franklin Cty. Bd. of RevisionG&I IX 6840 Pontius, L.L.C. v. Franklin Cty. Bd. of Revision
Rendered on September 29, 2020
On brief: Taft, Stettinius & Hollister LLP, and Stephen M. Griffith, Jr., for appellants.
On brief: Rich & Gillis Law Group, LLC, Mark H. Gillis, and Karol C. Fox, for appellee Board of Education of the Groveport Madison Local Schools; Ron O‘Brien, Prosecuting Attorney, and William J. Stehle, for appellees Franklin County Auditor and Board of Revision.
APPEALS from the Franklin County Court of Common Pleas
DORRIAN, J.
{¶ 1} Appellants G&I IX 6840 Pontius LLC (“G&I 6840“), G&I IX 7070 Pontius LLC (“G&I 7070“), Zeller-401 FX TIC LLC (“Zeller-401“), Zeller-FX-TIC LLC (“Zeller“), and Cabot IV-OH1B02, LLC (“Cabot“) (collectively, “appellants“) appeal from a judgment of the Franklin County Court of Common Pleas affirming orders of appellee Franklin County Board of Revision (“the Board“) related to the values of three properties in Franklin County, Ohio. For the following reasons, we affirm.
I. Facts and Procedural History
{¶ 2} These appeals involve the Board‘s decisions resolving complaints challenging the property values assessed by appellee Franklin County Auditor (“the Auditor“) for tax years 2016 and 2017 for the properties located at 6840 Pontius Road and 7070 Pontius Road and for tax year 2017 for the property located at 6606 Pontius Road. We begin by summarizing the history of those complaints.
A. Tax Year 2016 Property Valuations
{¶ 3} The Auditor assessed the value of the property located at 6840 Pontius Road for tax year 2016 as $14,500,000. The Auditor allocated this total value as $3,049,200 in land, $560,800 in taxable improvements, and $10,890,000 in improvements exempt from real property taxation. Appellee Board of Education of the Groveport Madison Local
{¶ 4} The Auditor assessed the value of the property located at 7070 Pontius Road for tax year 2016 as $18,700,300. The Auditor allocated this total value as $2,698,300 in land, $518,800 in taxable improvements, and $15,483,200 in improvements exempt from real property taxation. Groveport Madison filed a complaint with the Board asserting the total value of the property should be increased to $25,137,100 due to a recent arm‘s-length sale (“BoR Case 16-900657“). G&I 7070 filed a counter-complaint in BoR Case 16-900657 asserting the total property value should not be changed. Gelhaus also filed a complaint asserting the total value of the property should be increased to $25,137,026 due to a recent arm‘s-length sale (“BoR Case 16-530“). Groveport Madison filed a counter-complaint in BoR Case 16-530 asserting the total value of the property should be increased to $25,137,100 due to a recent arm‘s-length sale.
{¶ 5} The Board conducted a hearing in Ohio 2017 on BoR Cases 16-900662 and 16-529, relating to 6840 Pontius Road, and BoR Cases 16-900657 and 16-530, relating to 7070 Pontius Road. Following the hearing, the Board issued decisions in each case on July 12, 2017 assessing total values of $27,964,000 for 6840 Pontius Road and $25,137,000 for 7070 Pontius Road for tax year 2016. G&I 6840 and G&I 7070 appealed the Board‘s July 12, 2017 decisions to the common pleas court.
B. Appeals of Board‘s July 12, 2017 Valuation Decisions
{¶ 6} On appeal to the common pleas court, G&I 6840 and G&I 7070 argued the Board erred by failing to address their counter-complaints, which they alleged sought to have total property values allocated between land and improvements.1 In Ohio 2018, the
C. Tax Year 2017 Property Valuations
{¶ 7} The Auditor‘s assessment of the value of 6840 Pontius Road for tax year 2017 remained unchanged at $14,500,000, allocated as $3,049,200 in land, $560,800 in taxable improvements, and $10,890,000 in improvements exempt from real property taxation. Groveport Madison filed a complaint with the Board asserting the total value of 6840 Pontius Road for tax year 2017 should be increased to $27,964,000 due to a recent arm‘s-length sale (“BoR Case 17-900554“). Zeller and Zeller 401 also filed a complaint asserting the $560,800 of improvements that were treated as taxable were tax-exempt under a community reinvestment area (“CRA“) tax exemption granted by the city of Groveport (“BoR Case 17-4874“).
{¶ 8} The Auditor‘s assessment of the total value of 7070 Pontius Road for tax year 2017 increased to $20,180,000. The Auditor allocated this total value as $2,698,300 in land, $517,400 in taxable improvements, and $16,964,300 in improvements exempt from real property taxation. Groveport Madison filed a complaint with the Board asserting the total value of the property should be increased to $25,137,100 due to a recent arm‘s-length sale (“BoR Case 17-901320“). G&I 7070 also filed a complaint asserting the $517,400 of improvements that were treated as taxable were tax-exempt under a CRA tax exemption granted by the city of Groveport (“BoR Case 17-4872“).
{¶ 9} The Auditor assessed the value of the property located at 6606 Pontius Road for tax year 2017 as $43,370,000. The Auditor allocated this total value as $5,260,700 in land, $668,600 in taxable improvements, and $37,440,700 in improvements exempt from real property taxation. Cabot filed a complaint with the Board asserting the $668,600 of improvements that were treated as taxable were tax-exempt under a CRA tax exemption granted by the city of Groveport (“BoR Case 17-4870“).
{¶ 10} The Board considered the tax year 2016 complaints, on remand from the common pleas court, and all the tax year 2017 complaints at a hearing on September 20, 2018, where appellants presented testimony from a certified real estate appraiser, Martin Hunter, regarding the fair market value of the land portion of each property. Appellants provided the Board with copies of appraisal reports prepared by Hunter. Hunter only appraised the land value of each property and did not offer any appraisal of the improved value or the total fair market value of any of the properties. Appellants requested the Board allocate the land portion of the total value of each property in accordance with Hunter‘s appraisals. Appellants further requested the Board allocate all of the improved value of each property as exempt from real property taxation. At a subsequent meeting on September 25, 2018, the Board voted to increase the total value of 6840 Pontius Road and 7070 Pontius Road for tax years 2016 and 2017, with the increase in value attributed to the tax-exempt improved value of each property. The Board also voted to retain the Auditor‘s determinations regarding the taxable portions of the improved value of each property. On Ohio 3, 2018, the Board issued decisions setting the values of the properties as follows: $27,964,000 for 6840 Pontius Road for tax year 2016 (BoR Cases 16-529 and 16-900662) and tax year 2017 (BoR Cases 17-4874 and 17-900554), $25,137,000 for 7070 Pontius Road for tax year 2016 (BoR Cases 16-530 and 16-900657) and tax year 2017 (BoR Cases 17-4872 and 17-901320), and $43,370,000 for 6606 Pontius Road for tax year 2017 (BoR Case 17-4870).
E. Appeal of Board‘s Ohio 3, 2018 Valuation Decisions
{¶ 11} Appellants timely appealed the Board‘s decisions to the common pleas court, and the appeals were consolidated. Appellants argued on appeal the Board erred by holding that a portion of each property‘s improved value was subject to real property taxation. Appellants requested the court determine that all the improved value of each property was exempt from real property taxation as part of the city of Groveport CRA pursuant to
{¶ 12} The common pleas court issued a judgment affirming the Board‘s decisions. The court found the Board performed separate allocations for the value of each property
III. Assignments of Error
{¶ 13} Appellants appeal and assign the following three assignments of error for our review:
[I.] THE TRIAL COURT ERRED BY DETERMINING THAT THE BOARD OF REVISION‘S DECISIONS IN THESE CASES ALLOCATED THE ASSESSED PROPERTY VALUE BETWEEN LAND AND IMPROVEMENTS.
[II.] THE TRIAL COURT ERRED BY DETERMINING THAT NO APPELLANT HAD DEMONSTRATED THAT THE FAIR MARKET VALUE OF ITS PARCEL OF THE LAND AT ISSUE IN THESE CASES WAS LESS THAN SUCH PARCEL‘S ASSESSED VALUE.
[III.] THE TRIAL COURT ERRED BY DETERMINING THAT THE AUDITOR COULD ASSESS AS TAXABLE IMPROVEMENTS THAT A HOUSING OFFICER HAD DETERMINED WERE EXEMPT UNDER REVISED CODE SECTION 3735.67.
IV. Analysis
A. Standard of Review
{¶ 14} Under
{¶ 15} An abuse of discretion occurs where a decision is unreasonable, arbitrary, or unconscionable. Blakemore v. Blakemore, 5 Ohio St.3d 217, 219 (1983). “A decision is unreasonable if there is no sound reasoning process that would support that decision.” AAAA Ents., Inc. v. River Place Community Urban Redevelopment Corp., 50 Ohio St.3d 157, 161 (1990). An arbitrary decision is one that lacks adequate determining principle and is not governed by any fixed rules or standard. Porter, Wright, Morris & Arthur, LLP v. Frutta del Mondo, Ltd., 10th Dist. No. 08AP-69, 2008-Ohio-3567, ¶ 11. An unconscionable decision may be defined as one that affronts the sense of justice, decency, or reasonableness. Id.
B. Common Pleas Court‘s Determination that Board Allocated Property Value Between Land and Improvements
{¶ 16} Appellants argue in their first assignment of error that the common pleas court erred by determining the Board allocated the total value of each property between land and improvements. Appellants assert that because the Board‘s decision letters did not specify the portions of the total property value allocated to land and to improvements, the decisions do not comply with
{¶ 18} Accordingly, we overrule appellants’ first assignment of error.
C. Common Pleas Court‘s Determination that Appellants’ Evidence was Insufficient to Support Reduction in Land Value
{¶ 19} In their second assignment of error, appellants assert the common pleas court erred by concluding appellants failed to demonstrate that the land value of each property was less than the land value assessed by the Auditor. Hunter appraised the land value of 6840 Pontius Road as $2,422,000 ($627,200 less than the Auditor‘s land valuation), the land value of 7070 Pontius Road as $2,664,000 ($34,300 less than the Auditor‘s land valuation), and the land value of 6606 Pontius Road as $4,180,000 ($1,080,700 less than the Auditor‘s land valuation). Although Hunter acknowledged the properties contained improvements, he only appraised the value of the land portion of each property, treating the land as if vacant and available for development. The Hunter
{¶ 20} The complaint process under
{¶ 21} At the September 25th hearing, a member of the Board stated that with regard to the cases involving 6840 Pontius Road and 7070 Pontius Road, “the first recommendation is that we are going to not place weight on the separate land appraisals that were presented on behalf of the property owner. We will retain the current allocations with an increase in value to the sale price going to the CRA portion of the -- of each of these parcels in each of these complaints.” (Sept. 25, 2018 Tr. at 4.) Similarly, with respect to the case involving 6606 Pontius Road, the same Board member stated, “[w]e were, again, presented an appraisal report only for the land component of this property. We were not, unfortunately, given an overall valuation opinion by the appraiser on behalf of the property owner. So the recommendation in these cases would be to not change the current value of this property with the current value grain of $43,370,000.” (Sept. 25, 2018 Tr. at 4.) This Board member‘s statements appear to indicate the Board was not persuaded by the Hunter appraisals because they did not put the appraised land value in context of the total value of the property.
{¶ 22} In the appeal to the common pleas court, Groveport Madison asserted Hunter‘s testimony and appraisals were insufficient to satisfy the burden of proving that the Auditor‘s allocations of the total property values were incorrect because the appraisals only assessed the value of the land portion of each property.
{¶ 23} In its judgment affirming the Board‘s decisions, the common pleas court addressed Hunter‘s testimony and appraisals:
The Court has independently reviewed Mr. Hunter‘s testimony and retrospective appraisal reports. The Court agrees with the reasoning set forth by the Board of Revision and Groveport and hereby finds that the evidence is not sufficient to prove the decrease in the land values sought by Appellants.
(Decision and Entry at 7.) By referring to the reasoning offered by the Board and Groveport Madison, the common pleas court appears to have concluded the land values contained in the Hunter appraisals were insufficient to refute the Auditor‘s allocations of the total value of each property between land and improvements.
{¶ 24} A party appealing a board of revision‘s decision bears the burden of proving its right to the change in value sought and must present competent and probative evidence supporting the value asserted. 6800 Avery at ¶ 11. See also CABOT III-OH1M02, LLC v. Franklin Cty. Bd. of Revision, 10th Dist. No. 13AP-232, 2013-Ohio-5301, ¶ 26 (“When a party appeals a board of revision‘s decision, the appellant, whether a taxpayer or a board of education, bears the burden of proving its right to a reduction or increase in the board‘s determination of value. To prevail on appeal, the appellant must present competent and probative evidence supporting the value the appellant asserts.” (Internal citations omitted.)). As explained above, the common pleas court must apply its independent judgment to the evidence considered by the Board, and any additional evidence accepted by the court, and determine the taxable value of the property. 6800 Avery at ¶ 10. Our review is limited to determining whether the common pleas court abused its discretion in making that determination. Id. Contrary to appellants’ claim, the record in this appeal indicates the common pleas court considered Hunter‘s testimony and appraisals, as well as the Board‘s conclusions and the arguments proffered by Groveport Madison. Based on this consideration, the common pleas court found appellants’ evidence insufficient to prove that reductions in the land values of the properties were warranted. Thus, the common pleas court fulfilled its statutory duty to independently consider and weigh the record evidence and apply its independent judgment. Under these circumstances, we cannot find an abuse of discretion by the common pleas court. See CABOT III-OH1M02 at ¶ 29-31.
{¶ 25} Accordingly, we overrule appellants’ second assignment of error.
{¶ 26} In their third assignment of error, appellants argue the common pleas court erred by affirming the Board‘s property value determinations because the Auditor classified some of the improvements to the properties as taxable when the city of Groveport had certified new construction on the properties as tax-exempt under its CRA program. Appellants claim there is no legal basis for treating improvements different from other structures for purposes of determining eligibility for tax exemption within a municipal CRA. Appellants further argue the common pleas court erred by finding there was insufficient evidence to determine which improvements to the properties qualified as tax-exempt.
{¶ 27} Under
The legislative authority may stipulate in the resolution that only new structures or remodeling classified as to use as commercial, industrial, or residential, or some combination thereof, and otherwise satisfying the requirements of section 3735.67 of the Revised Code are eligible for exemption from taxation under that section. If the resolution does not include such a stipulation, all new structures and remodeling satisfying the requirements of section 3735.67 of the Revised Code are eligible for exemption from taxation regardless of classification.
{¶ 28} In this case, appellants submitted a copy of the application for tax exemption under the CRA program for each property, showing approval by the city administrator for the city of Groveport. Appellants argue that because the city administrator certified new construction on the properties as tax exempt under the CRA program, the Auditor had no authority to classify a portion of the improvements to the property as taxable. The Board‘s
{¶ 29} Accordingly, we overrule appellants’ third assignment of error.
V. Conclusion
{¶ 30} For the foregoing reasons, we overrule appellants’ three assignments of error and affirm the judgment of the Franklin County Court of Common Pleas.
Judgment affirmed.
BRUNNER and BEATTY BLUNT, JJ., concur.