The
McKeemans have asked this Court to reverse the final determination of the
Indiana Board for three main reasons. The McKeemans first contend that the
Indiana Board erred in disregarding their claim concerning the establishment of
their neighborhood. The McKeemans also contend that the Indiana Board erred in
rejecting their base rate claim. Lastly, the McKeemans contend that the Indiana
Board erred in concluding that their sales comparison analysis lacked probative
value.
1.
The Neighborhood
Indiana’s
assessment guidelines provide that assessing officials must establish specific “neighborhoods”
within each township for purposes of assessment.3 See Guidelines, Bk. 1, Ch. 2
at 8. In establishing these neighborhoods, assessing officials must consider:
(1)
common development characteristics; (2) the average age of the majority of improvements;
(3) the size of lots or tracts; (4) subdivision plats and zoning maps; (5)
school and other taxing district boundaries; (6) distinctive geographic
boundaries; (7) any manmade improvements that significantly disrupt the
cohesion of adjacent properties; (8) sales statistics; and (9) other
characteristics deemed appropriate to assure equitable determinations.
Id.
On
appeal, the McKeemans maintain that the Indiana Board’s final determination is
erroneous because the properties within their neighborhood demonstrate that the
Assessor must have ignored Indiana’s assessment guidelines in establishing
their neighborhood. (See Oral Arg. Tr. at 102-03; Pet’rs’ Reply Br. at 4-9; Pet’rs’
Br. at 3, 10-11, 13-16.) (See also Cert. Admin. R. at 116-21, 203-08.) For
example, the McKeemans explain that certain properties in their neighborhood
had access to paved roads while others did not, that significant size (i.e.,
depth) differences existed between some of the properties, and that a large,
commercial, youth camp/retreat center bisected the entire neighborhood thereby
destroying any real sense of cohesiveness.4 (See, e.g., Cert. Admin. R. at 55,
76-88, 91-95.)
The
assessment guidelines, however, clearly indicate that a neighborhood may contain
properties that vary with respect to road access, size, and use type. See
Guidelines, Bk. 1, Ch. 2 at 8. Thus, those types of differences simply are not
per se indicators of an improperly constituted neighborhood. Consequently, the
Court cannot say the Indiana Board erred in rejecting the McKeemans’ claim
regarding the establishment of their neighborhood.
2.
The Base Rate
The
McKeemans also maintain that the Indiana Board’s final determination is
erroneous because the Assessor’s evidence, in and of itself, demonstrated that
several properties that are not comparable to their own were used to establish
their land’s base rate. (See Pet’rs’ Reply Br. at 7-8; Pet’rs’ Br. at 3, 6-29.)
This, however, is incorrect.
Indiana’s
assessment guidelines call for the development of neighborhood valuation forms
that establish “base rates” for commercial, industrial, and residential land in
each of the townships throughout the county. See generally Guidelines, Bk. 1,
Ch. 2; IND. CODE § 6-1.1-4-13.6 (2006) (explaining the base rate establishment
process). In this case, the administrative record reveals that the Assessor
introduced the McKeemans’ neighborhood valuation form and their property record
cards, which demonstrated that the McKeemans’ land was assessed consistent with
the established base rate of $5,900 per front foot. (See Cert. Admin. R. at
157-59, 164.) The administrative record, however, does not disclose what
properties were actually used in developing that base rate. (See generally
Cert. Admin. R.) Consequently, the McKeemans have not shown that the Indiana
Board erred in upholding the $5,900 base rate applied to their land.5
3.
The Sales Comparison Analysis
During
the Indiana Board hearing, the McKeemans presented a sales comparison analysis
that valued their two parcels of residential land at $62,3416 using data from
seven sales transactions in which ten properties were conveyed (“the Comps”).7 (See
Cert. Admin. R. at 53.) In arriving at this value, the McKeemans:
(1)
Determined the land value of each of the Comps by deducting from their total
sales prices the assessed value of their improvements;
(2)
Calculated the front foot values of each of the Comps by dividing their land
values in Step 1 by their actual frontage/width;
(3)
Computed the Comps’ average front foot value to be $2,969;
(4)
Determined the front foot value of their own land to be $92,047 (by multiplying
the Comps’ average front foot value of $2,969 by the actual frontage/width (31)
of their land);
(5)
Adjusted their land’s front foot value to account for differences between their
land and the Comps ($92,047 - $29,706).
(See
Cert. Admin. R. at 53-56, 97-115, 132-40, 198-212.) The Indiana Board determined
the analysis lacked probative value because six of the Comps’ sales prices were
not reliable indicators of those properties’ market value-in-use. (See Cert.
Admin. R. at 35-36.) The Indiana Board also explained that in the two instances
where the Comps’ sales prices were indicative of those properties’ market
value-in-use, the McKeemans quantification of the differences between those
properties and their own land simply did not indicate that their assessment was
too high.12 (See Cert. Admin. R. at 36-37.)
On appeal, the
McKeemans contend that the Indiana Board erred in concluding that their sales
comparison analysis lacked probative value because the Indiana Board relied on
the Assessor’s mistaken claim that Comp 10 was not in their neighborhood.13 (See
Oral Arg. Tr. at 38-39; Pet’rs’ Br. at 3-5.) Although the Indiana Board’s final
determination indicates that the Assessor claimed Comp 10 was not in the
McKeemans’ neighborhood, it does not indicate whether the Indiana Board relied
on the Assessor’s erroneous claim. (Compare Cert. Admin. R. at 29 with 31-38.)
Nonetheless, even if the Indiana Board had relied on the Assessor’s mistaken
claim, that alone would not warrant a reversal of the Indiana Board’s final
determination. Indeed, the Indiana Board’s final determination explained that
Comps 2 through 6, and Comps 8 through 9, lacked probative value for reasons
unrelated to the Assessor’s erroneous claim. See supra notes 8, 11. Moreover,
the Indiana Board explained that the McKeemans valuation of the remaining
Comps, Comps 1 and 7, also failed to demonstrate that their assessment was too
high. See supra note 12. Consequently, the McKeemans have not shown that the
Indiana Board erred in concluding that their sales comparison analysis lacked
probative value.
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