Summary
affirming BTA decision that rejected an income approach that relied in part on actual rent
Summary of this case from Woda Ivy Glen Ltd. Partnership v. Fayette County Board of RevisionOpinion
No. 92-657
Submitted December 1, 1992 —
Decided June 16, 1993.
APPEAL from the Board of Tax Appeals, No. 88-G-926.
Appellant, Loveland Pines, appeals the valuation of its real estate for the tax year 1987. The subject property, a federally subsidized housing project located in Loveland, Ohio, consists of five two-story apartment buildings and one ranch-style apartment building. The complex includes thirty-four two-bedroom townhouses, two two-bedroom handicapped units and one two-bedroom flat, situated on 3.876 acres of land. The appellee Hamilton County Auditor determined the true value of the property to be $1,011,430. The appellee Hamilton County Board of Revision agreed with this valuation, and Loveland Pines appealed to the Board of Tax Appeals ("BTA").
At the BTA hearing, appellant's appraiser, John R. Garvin, used the cost and income approaches to determining true value but rejected the market approach because he could not find sales of comparable subsidized housing. In any event, he stated that sales of such property which might exist would be inapplicable because they would be influenced by extraneous factors which bear no relationship to economic value. For his cost approach, he deducted fifty-one percent depreciation in the form of market obsolescence. The BTA refused to accept Garvin's use of the fifty-one percent figure as market obsolescence because the units he analyzed were not comparable in size. Garvin determined the true value of the subject property, using the most reliable approach, income, to be $771,000.
Marlene M. McDaniel, an employee of the Hamilton County Auditor's Office, relied on the market approach and also utilized the income approach in her appraisal. Appellant challenged the validity of McDaniel's evidence because of her lack of education and outside experience. The BTA accepted McDaniel's appraisal and agreed with her true value determination of $929,810, and ordered the county auditor to assess appellant accordingly.
The BTA rejected the income approach because each appraiser used comparable market rents, but also used actual costs, in determining the operating expenses of the federally subsidized property.
The cause is now before this court upon an appeal as of right.
Fred Siegel Co., L.P.A., Fred Siegel, Karen H. Bauernschmidt, Steven R. Gill and Todd W. Sleggs, for appellant.
Joseph T. Deters, Hamilton County Prosecuting Attorney, and Thomas J. Scheve, Assistant Prosecuting Attorney, for appellees.
The thrust of appellant's argument is that the BTA erred in applying this court's decisions in Alliance Towers, Ltd. v. Stark Cty. Bd. of Revision (1988), 37 Ohio St.3d 16, 523 N.E.2d 826; Canton Towers, Ltd. v. Stark Cty. Bd. of Revision (1983), 3 Ohio St.3d 4, 3 OBR 302, 444 N.E.2d 1027; and Oberlin Manor, Ltd. v. Lorain Cty. Bd. of Revision (1989), 45 Ohio St.3d 56, 543 N.E.2d 768. All these cases dealt with subsidized apartment projects. The essence of these opinions is, as set forth in Alliance Towers, supra, that "* * * property built and operated under the auspices of HUD is to be valued, for real property tax purposes, with due regard for market rent and current returns on mortgages and equities," id., 37 Ohio St.3d at 24, 523 N.E.2d at 833, and "[i]t is to be valued free of the ownerships of lesser estates such as leasehold interests, deed restrictions, and restrictive contracts with the government," id., 37 Ohio St.3d at 23, 523 N.E.2d at 832.
Viewing the BTA's action accepting McDaniel's appraisal in the light most favorable to the appellant, the decision of the BTA was reasonable. As we said in Witt Co. v. Hamilton Cty. Bd. of Revision (1991), 61 Ohio St.3d 155, 158, 573 N.E.2d 661, 663: "All these facts bear on the witness' credibility, which is within the sound discretion of the BTA to determine."
The BTA appropriately exercised its discretion in this case. Moreover, it properly applied the standards in Alliance Towers, supra, et al. Its decision was not unreasonable or unlawful and it is affirmed.
Decision affirmed.
MOYER, C.J., A.W. SWEENEY, DOUGLAS, WRIGHT, RESNICK, F.E. SWEENEY and PFEIFER, JJ., concur.