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Judge affirms assessment of theater

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The Indiana Tax Court affirmed the 2006 assessment of a Marion movie theater, finding the Grant County assessor is essentially asking the court to reweigh the evidence, which it cannot do.

The Grant County assessor appealed the determination by the Indiana Board of Tax Review that the 2006 assessment for Kerasotes Showplace Theatres’ Grant County location is $4.2 million. Kerasotes had the theater built, and several years later the company sold the Marion property and sixteen others in the Midwest in a portfolio transaction. Kerasotes agreed to lease back the properties it sold to Crest Net Lease Inc. and paid $17.70 per square foot for the Marion property.

Originally, the 2006 assessment was $7,821,000. Kerasotes appealed to the Board of Tax Review. Both Kerasotes and the Grant County assessor presented appraisals that greatly varied in their value. Kerasotes’ appraisal determined that the market value-in-use of the subject property was $4.2 million. In arriving at that value, Kerasotes’ appraiser gave the subject property’s allocated sales price and contract rent little weight. He used the market rent of $11 per square foot instead of the actual contract rent of $17.70. The assessor’s appraisal estimated the market value-in-use of the property at $7.45 million, relying heavily on the allocated sales price and contractual rent.

The issue presented to the Indiana Board of Tax Review to decide was whether, under Indiana’s market value-in-use standard, the subject property should be valued according to the terms of its lease – such as the contract rent – or according to what other similar properties would garner in rent – the market rent. The Board of Tax Review based its conclusion on the fact that the evidence did show that the theater’s contract rent was significantly higher than the industry’s market standard. It also found that the evidence didn’t show how Crest Net actually came up with the allocated sale price. It found Kerasotes’ appraisal to be more probative as to the theater’s market value-in-use than the assessor’s appraisal.

The Grant County assessor argued that because a property’s market-in-value use reflects the “ask price by its owner,” Kerasotes wouldn’t have taken less for the sale of its property than the price equal to the utility it gained, which was the $7,821,835 sale price.

In Grant County Assessor v. Kerasotes Showplace Theatres, LLC, No. 49T10-0908-TA-47, Senior Tax Judge Thomas Fisher found the assessor’s argument to miss the mark.

The tax board relied on a Wisconsin Supreme Court case for its decision because it couldn’t find any Indiana cases to provide guidance. That Wisconsin case found that under the income approach, leased properties were to be valued in accordance with market rents despite the fact that their contract rents were much higher.

Fisher agreed with the tax board’s decision and noted that the Grant County assessor has essentially asked the Tax Court to reweigh the evidence.
 

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  1. Well, maybe it's because they are unelected, and, they have a tendency to strike down laws by elected officials from all over the country. When you have been taught that "Democracy" is something almost sacred, then, you will have a tendency to frown on such imperious conduct. Lawyers get acculturated in law school into thinking that this is the very essence of high minded government, but to people who are more heavily than King George ever did, they may not like it. Thanks for the information.

  2. I pd for a bankruptcy years ago with Mr Stiles and just this week received a garnishment from my pay! He never filed it even though he told me he would! Don't let this guy practice law ever again!!!

  3. Excellent initiative on the part of the AG. Thankfully someone takes action against predators taking advantage of people who have already been through the wringer. Well done!

  4. Conour will never turn these funds over to his defrauded clients. He tearfully told the court, and his daughters dutifully pledged in interviews, that his first priority is to repay every dime of the money he stole from his clients. Judge Young bought it, much to the chagrin of Conour’s victims. Why would Conour need the $2,262 anyway? Taxpayers are now supporting him, paying for his housing, utilities, food, healthcare, and clothing. If Conour puts the money anywhere but in the restitution fund, he’s proved, once again, what a con artist he continues to be and that he has never had any intention of repaying his clients. Judge Young will be proven wrong... again; Conour has no remorse and the Judge is one of the many conned.

  5. Pass Legislation to require guilty defendants to pay for the costs of lab work, etc as part of court costs...

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