ILNews

Judge affirms assessment of theater

Back to TopCommentsE-mailPrint

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.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Frankly, it is tragic that you are even considering going to an expensive, unaccredited "law school." It is extremely difficult to get a job with a degree from a real school. If you are going to make the investment of time, money, and tears into law school, it should not be to a place that won't actually enable you to practice law when you graduate.

  2. As a lawyer who grew up in Fort Wayne (but went to a real law school), it is not that hard to find a mentor in the legal community without your school's assistance. One does not need to pay tens of thousands of dollars to go to an unaccredited legal diploma mill to get a mentor. Having a mentor means precisely nothing if you cannot get a job upon graduation, and considering that the legal job market is utterly terrible, these students from Indiana Tech are going to be adrift after graduation.

  3. 700,000 to 800,000 Americans are arrested for marijuana possession each year in the US. Do we need a new justice center if we decriminalize marijuana by having the City Council enact a $100 fine for marijuana possession and have the money go towards road repair?

  4. I am sorry to hear this.

  5. I tried a case in Judge Barker's court many years ago and I recall it vividly as a highlight of my career. I don't get in federal court very often but found myself back there again last Summer. We had both aged a bit but I must say she was just as I had remembered her. Authoritative, organized and yes, human ...with a good sense of humor. I also appreciated that even though we were dealing with difficult criminal cases, she treated my clients with dignity and understanding. My clients certainly respected her. Thanks for this nice article. Congratulations to Judge Barker for reaching another milestone in a remarkable career.

ADVERTISEMENT