The
Hearns relied on two items: (1) sales prices from two auctions of nearby
lakefront properties, and (2) Ms. Ostrowski’s appraisal report. As to the
auction sales, Mr. Hearn did very little to compare the sold properties to the
subject property. See Long, 821 N.E.2d at 470-471 (explaining that the
taxpayers needed to compare their property’s characteristics to those of the
purportedly comparable properties and explain how any differences affected the
properties’ relative market value-in-use). Also, both of the auction sales
occurred more than a year after the relevant March 1, 2011 valuation date at
issue in this appeal. Mr. Hearn did not explain how those sale prices related
to the subject property’s value as of March 1, 2011 other than to conclusorily
assert that property values had not changed since 2008. Under those
circumstances, the sale prices for the two properties have little or no
probative weight.
Ms.
Ostrowski’s appraisal is a different matter. That appraisal is precisely the
type of market-value-in-use evidence contemplated by the Manual and Tax Court.
Ms. Ostrowski certified that she performed her appraisal in accordance with the
Uniform Standards of Professional Appraisal Practice (“USPAP”). And she based
her opinion on two generally accepted appraisal approaches—the sales-comparison
and cost approaches. Finally, Ms. Ostrowski estimated the property’s value as
of February 14, 2011, just a few weeks before the relevant March 1, 2011
valuation date.
But,
as the Assessor pointed out, Ms. Ostrowski purported to value only two of the
three parcels that make up the subject property. The subject property consists
of the following parcels, listed by two different parcel numbering systems:
Petition
# Parcel # Local Parcel #
43-016-11-1-5-00020
43-07-12-300-420.000-016 2972600724
43-016-11-1-5-00021
43-07-12-300-187.000-016 2972600725
43-016-11-1-5-00022
43-07-12-300-418.000-016 2970302170
The
first page of Mr. Ostrowski’s appraisal report, however, shows only two parcel
numbers: 43-07-12-300-187.000-016 (2972600725) and 46-07-12-300-420.000-016
(2972600724) and gives legal descriptions matching the descriptions contained
on the Form 115 determinations for those two parcels. Ms. Ostrowski did not
mention the third parcel, 43-07-12-300-418.000-016 (2970302170). The Form 115
determination for that parcel contains the following legal description: “Pt
OL 1 Brocks SD Oswego Lake.” Pet’rs Ex. 6B (emphasis added). The
third parcel appears to be a portion of what the Hearns’ survey refers to as
“Out Lot 1.” See Pet’rs Ex. 7.
Thus,
the Hearns made a prima facie case for reducing the combined assessment for the
two parcels that Ms. Ostrowski addressed in her appraisal but did not make a
prima facie case for reducing the third parcel’s assessment.
The
burden therefore shifted to the Assessor to impeach or rebut Ms. Ostrowski’s
appraisal. To that end, the Assessor’s witness, Mr. Beer, challenged Ms.
Ostrowski’s valuation opinion along three lines: (1) Ms. Ostrowski’s decision
to use acreage rather than frontage to adjust site values, (2) her failure to
appropriately adjust sale prices for differences in design and construction
quality, and (3) her failure to adjust the sale prices of several homes that
were in worse condition than the subject home.
Mr.
Beer’s first point has some merit. Mr. Beer, who is a certified appraiser,
persuasively testified that a lakefront property’s relative amount of lake
frontage likely influences the property’s value more than its overall size
does. Thus, the Board has at least some doubts about whether Ms. Ostrowski’s
site adjustments accurately reflect the full extent to which differences between
the appraised parcels‟ site and the sites of her comparable properties affect
the properties‟ relative values.
That
being said, Mr. Beer did not convincingly show the extent to which Ms.
Ostrowski’s less than ideal approach to site adjustments affected her valuation
opinion. Mr. Beer used the neighborhood base rate for each comparable property
to estimate the property’s site value and then to quantify an adjustment that
would make that site value comparable to the site value that Ms. Ostrowski
estimated for the two parcels that she appraised. But with the possible
exception of the subject property’s neighborhood, Mr. Beer did not offer
support for any of those neighborhood base rates.
Mr.
Beer did even less to support his criticisms of Ms. Ostrwoski’s adjustments, or
lack thereof, for differences in design, construction quality, and condition.
He offered nothing to explain how any differences in construction materials
affected the relative values of the homes, much less to show that Ms.
Ostrowski’s adjustments were inaccurate. Similarly, while the photographs that
Mr. Beer offered tend to show that the subject home had a higher-pitched roof
and more varied roof lines than most of Ms. Ostrowski’s comparables, he offered
nothing to explain the extent, if any, to which those differences affected the
homes‟ relative values. Finally, although Mr. Beer asserted that some of the
comparable homes were in worse condition than the subject home, the photographs
do not readily support that contention and Mr. Beer did not provide any
specifics.
Finally,
the Assessor did not really offer her own evidence to independently value the
subject property. At most, Mr. Beer pointed to the average and median extracted
land values for five sales. But like Mr. Hearn, Mr. Beer did very little to
compare the sold properties to the subject property or to explain how any
relevant differences affected the properties‟ relative values. His sales data
therefore has little or no probative value.
In
sum, although the Assessor impeached Ms. Ostrowski’s valuation opinion to some
extent, the Board still finds her opinion generally reliable. And the Assessor
did not offer her own probative valuation evidence. Thus, the Board finds that
the parcels covered in Ms. Ostrowski’s appraisal (parcels 2972600724 and
2972600725) were assessed too high and that their combined true tax value was
$600,000.
