...
On appeal, the Assessor asserts
that by failing to use the contractual rent of $27.20 per square foot in the
income approach, the Indiana Board has completely ignored the subject
property’s utility as a fully-functioning CVS store. (See Pet’r Br. at 1-2.) In
other words, the Assessor asserts that because the subject property is tailored
specifically to the wants and needs of CVS, its market value-in-use can only be
measured in relation to other CVS stores, not to participants in
commercial/retail market generally. (See Pet’r Br. at 6, 8.) The Assessor
accordingly argues that the Indiana Board’s final determination is erroneous and must be
reversed.
In its final
determination, the Indiana Board explained that CVS provided probative evidence
demonstrating that there was a significant difference between the subject
property’s market rent and contractual rent. (See Cert. Admin. R. at 79-80 ¶¶
68, 70.) The Indiana Board noted that this difference was consistent with CVS’s
claim that it used sale-leaseback transactions to sell more than just the
ownership rights in its properties; rather, it used those types of transactions
as a means to generate additional business capital from investors. (See Cert.
Admin. R. at 79-80 ¶¶ 68-70.) Given this evidence, the Indiana Board found that
the Assessor’s use of the subject property’s contractual rent in her income
approach likely was capturing more than the value of the real property (i.e.,
the “sticks and bricks”) in her computation. (See Cert. Admin. R. at 80-81 ¶¶
69-72.) The Indiana Board therefore concluded that it could not give the
Assessor’s income approach any weight. (See Cert. Admin. R. at 81 ¶¶ 72-73.)
This Court’s case law supports that conclusion. See Kerasotes, 955 N.E.2d at
882-83. See also Stinson v. Trimas Fasteners, Inc., 923 N.E.2d 496, 500-502
(Ind. Tax Ct. 2010) (explaining that market value-in-use, “as determined by
objectively verifiable market data, is the value of a property for its use, not
the value of its use”); Meijer Stores Ltd. P’ship v. Smith, 926 N.E.2d 1134,
1137 (Ind. Tax Ct. 2010) (recognizing that the market value-in-use of a
property should be measured against properties with a comparable use, as
opposed to properties with identical users).
...
http://www.in.gov/judiciary/opinions/pdf/09231301tgf.pdf
The Board Determination may be found here:
http://www.in.gov/ibtr/files/CVS_Pharmacy_6637-02_73-002-07-1-4-12801_et_al.pdf
The Board Determination may be found here:
http://www.in.gov/ibtr/files/CVS_Pharmacy_6637-02_73-002-07-1-4-12801_et_al.pdf
