*1 persuade These circumstances me the BTA has erred in I year for tax 2003. would reverse and remand instructions $325,000. the board of revision’s respectfully retain valuation therefore J., opinion. concurs the foregoing O’Donnell, Kondzer, Kondzer, Desimone, Kolick & Thomas A. John appellee Olmsted Falls Board Education. Co.,
Sleggs, L.P.A., & Gill Danzinger and Todd W. Sleggs, appellant. County Appellee, Corporation, v. Greene Appellants. al., Board of et Revision Corp. [Cite Ctg. Bd. Greene
122 Ohio
{¶ the Greene 1} Board (collectively, “the county”), appeal from a decision the Board of Tax (“BTA”) Appeals adopted valuation reduced of the property owned appellee, Target Corporation. The BTA based its determination of value on an appraisal report testimony Target presented to the board of revision (“BOR”). The tax year issue is and the property at issue consists of an parcel
11.82-acre in 1998 with a improved Target discount store encompass- 122,522 square es feet. The auditor valued the appraisal report that Target presented to the BOR principally relied on a sales- needs to suit the originally built “big that used box” stores comparison of those the bankruptcy context of later sold Kmart Ames but $4,500,000for report concluded value retailers. *2 of the figure property. that as the value adopted the and law, fault the both of which propositions two advances {¶ 3} were, that other properties for sales of upon using that the BTA relied appraisal find view, we to issue. Because comparable not the county’s in the is, and probative reliable and supported the BTA’s decision is that lawful, and the both reasonable the evidence before given
Facts Dayton as (formerly known Target Corporation On March the challenged a that filing complaint this case Corporation) Hudson initiated $2,599,860 a plus a land value auditor had determined auditor’s valuation. The $8,188,290. The $5,588,430 complaint requested a total value of budding value for $5,000,000. May At before on hearing a value to the the BOR reduction Robin Lorms and Curtis presented appraisal report an authored that the Hannah, appraisal with Hannah’s determined along testimony. if retail the improved, and best use of the vacant was use. As highest appraisers the and best use was “continued discount storeroom” —but significant have observing “improvements the qualified finding by that “results big developments,” that is of most box feature typical obsolescence replacement physical value than cost less significantly in a market which is less depreciation.” Indeed, appraisal of economic dominates the topic the obsolescence
5}{¶ efficiency, their Although big-box knowing “retailers thrive on report. and product are of identical of store purposes design, stores dimensions marketability of their placement restocking,” standpoint and display and external because big-box structures suffer “functional obsolescence” accordingly are of this capable occupying space “few retailers size” much make new “tenants rents which are lower than rents which would Moreover, to existing big feasible.” financially “[c]osts construction retrofit high are too generation’ boxes accommodate the needs ‘first retailers marketability, feasibility.” lengthy big-box financial After a discussion simple states that “the fee market value of these is substan- appraisal properties costs, also replacement physical lower than due to but tially only depreciation This occurs are thus even day they completed[;] obsolescence. obsolescence box worth less than their cost to rebuild.” big brand new stores are when guided appraisers they performed These considerations property. sales-comparison income-capitalization approaches both as sale and as rent Namely, appraisers comparables selected or second- second-generation that had been either sold to users leased to four particular, tenants. stores —two abandoned Ames stores and approach; two Kmarts —constituted the for the sales-comparison abandoned basis $4,500,000. As for rent yielded comparables, value of approach discount appraisers specifically they the use of new stores because were or owner-occupied approach either leased on build-to-suit basis. The income $3,800,000. yielded a valuation of performing After on the cost it appraisal rejecting obsolescence, report
because the external relied appraisal principally the sales-comparison approach and viewed the income-capitalization approach noted, value for supporting lower As determined $4,500,000. value be decision, $2,599,860 In its the BOR retained the land value at reduced the value adjustment This in a total resulted *3 value of appealed parties where the waived hearing. The BTA reviewed the record and found no or rationale which “evidence
supports subject $7,659,380.” BOR’s decision to value the Target Corp. v. Cty. 27, 2008), 2006-V-751, Greene Bd. Revision BTA (May No. at 8. In its review of the appraisal, essentially with agreed appraisers’ emphasis sales-comparison approach. Id. at 11. The BTA specifically observed that county provide “elected not to us with any competing market information that could us to allow come subject’s different conclusion concerning value.” Additionally, Id. at 12. the board the county’s suggestion that terms, should first-generation have relied on leasing particular build- terms, to-suit lease upon based of any absence evidence to support theory. Id. The BTA Target’s found that appraisal sustained its burden show a value different from the adopted by one BOR. county Noting had no presented rebuttal, the $4,500,000 BTA adopted as the value of the
Analysis
“
cases,
Under our
we
‘will
BTA
hesitate
reverse a
decision that
”
Wilkins,
legal
based on
incorrect
conclusion.’ Satullo v.
111 Ohio St.3d
¶
first-generation sale and rentals than prices second-generation examples. rather observed, But as the BTA the appraisers’ any research “did not uncover sales users,” generation between first county any “offered no evidence of sale or lease between first generation Target Corp. users.” Greene 27, 2008), 2006-V-751, (May No. at 10. This left the record in a state that supported the BTA’s conclusion that generation “second users are the potential buyers/renters most viable of big-box space.” Id. In particular, the county argues that the appraisal’s reference to “six
first lease rates for Wal-Mart stores in Ohio” and “four build-to-suit presented Kohl’s leases” the proper avenue for analyzing the value of the property at issue. cites the court’s recent, latest cases which a arm’s-length price sale was deemed to constitute the value of the property and asserts that these cases its position.1 reject We this contention for two First, *4 reasons. the appraisal states specific using reasons for not the first- Second, rents as comparable. the case law focuses on properties involves encumbered above-market present leases. The property encumbered, is not so circumstances, and under these comparability cannot be established without more evidence. county’s main argument second relies on Meijer, Montgom- Inc. v.
ery
Cty.
181,
75 Ohio St.3d
661
In Meijer,
N.E.2d 1056.
of
we affirmed a BTA
decision that specifically
of
type
functional
City
Revision,
1. Berea
School Dist. Bd. Edn. v.
Bd.
106 Ohio St.3d
2005-
269,
of
of
(encumbrance
obsolescence
adopt
in
Meijer
the BTA
declined
appraisals,
resolving
context of
battle
appraiser.
the owner’s
found
amount
obsolescence
larger
or useless to the
which is obsolete
present property
“nothing
found
about
Cty.
Meijer,
Montgomery
Inc.
business conditions.”
changing
owner due to
(Feb.
1993-M-731,1993-M-732,
1995),
and 1993-M-
8,
BTA Nos.
Revision
Bd. of
Indeed,
owner,
constructing
the land and
733,
by purchasing
at 28.
“[t]he
Therefore the costs of
a market
for such
evidences
need
building,
purchaser
willing
that a
was
prospective
construction evidence
purchase and
newly
constructed.”
Id.
32.
the costs of the
least
in
that this
constituted valuation
argued
reasoning
the owner
Although
in
Constitution,
our decision
disagreed, citing
use
the Ohio
prohibited
(1984), 12
Meats,
Inc. v.
Cuyahoga
Dinner Bell
270,
347,
Meijer,
affirmed the BTA.
75 Ohio St.3d
12
purpose-property doctrine
cost
based on their
competing appraisals employed differing
approaches
two
271,
in nature.
Id. at
findings
“special purpose”
respective
utilizing
concluded that “in
the ‘cost approach’
OBR
have never
disturbed
contrary,
To the
each of the decisions in which we have alluded
speculation.
special-purpose
to the
doctrine involves
offered
our affirmance of the BTA’s reliance on
ultimately
value that was
determined and
Meats,
1056;
Dinner Bell
Meijer,
evidence.
75 Ohio St.3d
*5
270,
347,
909;
Cuyahoga Cty.
12
12 OBR
Oakwood Club v.
Ohio St.3d
(1994),
furnishing
70 Ohio
147 discussed, no county presented already In the as present tribunal. might qualify special- store as theory in of its
Conclusion reasons, reasonably lawfully adopted and foregoing For all the We therefore propounded by Target’s appraiser.
the conclusion of value Decision affirmed. Cupp, JJ., Moyer, C.J., and concur. O’Donnell, O’Connor, Lanzinger, Lundberg JJ., Stratton, Pfeifer J., dissenting.
Pfeifer, Meats, (1984), 12 In Dinner Bell Inc. v. Bd. Revision 270, 272, utilizing we held that “in Ohio St.3d OBR considered approach’ ‘special purpose’ building,” appraiser “simply ‘cost conjunction in with the and best use” of its utility ‘the is special purpose exception applied current owner. We reasoned currently in condition used and for the foreseeable future for good built,’ it was “the unique purpose necessary prevent for which doctrine distinctive, useful, full yet highly building” “escap[ing] owner of a Minneapolis tax Fed. Res. Bank v. State liability.” (Minn.1981), 619, 623. 313 N.W.2d Later, BTA Inc. v. applied Meijer, Montgom- Dinner Bell Meats (Feb. 8, 1995), 1993-M-731, 1993-M-732, BTA
ery Cty. Bd. Revision Nos. BTA which is “nothing present property 1993-M-733. The found about the owner,” purchase obsolete or useless to the id. at and held “the costs of at least prospective purchaser willing and construction evidence that newly the costs of the constructed.” Id. 32. We affirmed the BTA. Meijer, Montgomery Cty. Inc. v. big-box Like the Dinner Bell Meats and the retail meatpacking plant and constructed Meijer, designed
store store this case has been Kmart to suit its owner’s business needs. Unlike the owners particular comparable properties, Target and Ames stores that used as Target’s appraiser viable, the state. going operating many throughout concern locations just light the evidence in of the case law viewing believe the erred cited. *6 majority opinion acknowledges principles we articulated Meijer
Dinner Bell Meats and but declines to them on the apply grounds auditors, boards, I I think county presented disagree no evidence. because sense, and courts should use common and common sense dictates that Kmart and bankruptcy Meijer Ames stores sold out of are not similar to stores that are still operated light successful retailers built them. distinction, of that I discharge real-world would hold that failed to its store, burden to show that its constructed in had become obsolete 2005. Rollman & See Sons Co. Hamilton 163 Ohio St. (“Where 56 O.O. paragraph syllabus one of the a taxpayer asserts that functional depreciation should be considered his taxation, for the the burden is upon taxpayer prove I depreciation”). also believe erred not giving weight sufficient light the cost of the case law. I Accordingly, would vacate the decision below and remand for in light consideration of Dinner Bell Meats and Meijer. respectfully therefore
Lundberg J., concurs in the foregoing opinion. Stratton, Co., L.P.A., Siegel, Siegel, Johnson & Jennings and Nicholas Ray, M.J. appellee. R. Gorry, appellants.
James Shisler, Appellant, v. Ohio Public ex rel. State Appellee.
Employees
System,
Retirement
Emps.
ex
State
rel. Shisler v.
Pub.
Ohio
Retirement
[Cite as
Sys.,
122