The Respondent’s witness first argues that the Petitioner’s property was valued correctly based on the sale price of a former Ritters frozen custard store, which was purchased vacant and remodeled as a Starbucks coffee shop. Surface argument. In making this argument, the Respondent’s witness essentially relies on a sales comparison approach to establish the market value-in-use of the property. See MANUAL at 3 (stating that the sales comparison approach “estimates the total value of the property directly by comparing it to similar, or comparable, properties that have sold in the market.”) In order to effectively use the sales comparison approach as evidence in a property assessment appeal, however, the proponent must establish the comparability of the properties being examined. Conclusory statements that a property is “similar” or “comparable” to another property do not constitute probative evidence of the comparability of the properties. Long, 821 N.E.2d at 470. Instead, the proponent must identify the characteristics of the subject property and explain how those characteristics compare to the characteristics of the purportedly comparable properties. Id. at 471. Similarly, the proponent must explain how any differences between the properties affect their relative market values-in-use. Id.
Here, Mr. Surface merely observed that the “comparable” property was a Ritters frozen custard shop before closing and being reopened as a Starbucks. However, it is not clear that a property is comparable to the subject property simply because it is a fast food restaurant. The property’s size, location, visibility, traffic and access would all play a major role in the value of a commercial property. As the Indiana Tax Court stated in Fidelity Federal Savings & Loan v. Jennings County Assessor, 836 N.E.2d 1075, 1082 (Ind. Tax Ct. 2005), “the Court has frequently reminded taxpayers that statements that another property ‘is similar’ or ‘is comparable’ are nothing more than conclusions, and conclusory statements do not constitute probative evidence. Rather, when challenging an assessment on the basis that the comparable property has been treated differently, the taxpayer must provide specific reasons as to why it believes the property is comparable. These standards are no less applicable to assessing officials.” 836 N.E.2d at 1082 (citations omitted and emphasis added).
The Respondent also argues that the subject property is assessed correctly based on the assessed values of four other McDonalds restaurants in the county. Pursuant to Indiana Code § 6-1.1-15-18(c), “To accurately determine market-value-in-use, a taxpayer or an assessing official may … introduce evidence of the assessments of comparable properties located in the same taxing district or within two (2) miles of a boundary of the taxing district…” Ind. Code § 6-1.1-15-18. In support of its contention, the Respondent submitted property record cards for the subject property and the other McDonalds restaurants. But the property record cards provide no way to compare the assessed values of each of the properties. The subject property’s land value is based on $80,000 an acre with a 125% influence factor; and the comparable properties’ land values ranged from $375,000 an acre to $675,000 an acre – which only supports a finding that different neighborhoods have different land values. Similarly, the building on the subject property was assessed for $565,400; whereas the buildings on the “comparable” properties ranged from $219,000 to $515,700, with no explanation of how the assessor arrived at any of the values. Because the assessor chose not to apply one of the Guidelines models to any of the properties, the Board cannot compare the assessed values of the structures. Thus, the assessed values of the other McDonalds restaurants do not support a finding that the Petitioner’s property was assessed like other properties. Moreover, “the determination of whether properties are comparable shall be made using generally accepted appraisal and assessment practices.” Ind. Code § 6-1.1-15-18. As noted above, a property’s size, location, visibility and access all play major roles in the value of a commercial property. Thus, without evidence that the McDonalds restaurants were similarly located with similar visibility, access and traffic, simply pointing to another McDonalds’ assessment is insufficient to prove the assessment was correct.
There is little question that, had the Petitioner had the burden of proof in this appeal, the case presented by its representative would have fallen far short of the burden to prove the Petitioner’s property’s assessment was in error. As discussed above, however, Indiana Code § 6-1.1-15-17.2 places the burden of proof on an assessor when the assessed value of a property increases by more than five percent between assessment years. Where the assessor fails to support the assessment at issue with probative evidence, the taxpayer has no duty to support its claims with substantial evidence unless it seeks a lower value for the property than the previous year’s assessment. See e.g. Lacy Diversified Indus. v. Department of Local Government Finance, 799 N.E.2d 1215, 1221-1222 (Ind. Tax Ct. 2003) (holding that where a taxpayer with the burden fails to support his claim with probative evidence, the Respondent’s duty to support the assessment with substantial evidence is not triggered).
