ILNews

Judge affirms assessment of theater

Back to TopCommentsE-mailPrintBookmark and Share

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. The child support award is many times what the custodial parent earns, and exceeds the actual costs of providing for the children's needs. My fiance and I have agreed that if we divorce, that the children will be provided for using a shared checking account like this one(http://www.mediate.com/articles/if_they_can_do_parenting_plans.cfm) to avoid the hidden alimony in Indiana's child support guidelines.

  2. Fiat justitia ruat caelum is a Latin legal phrase, meaning "Let justice be done though the heavens fall." The maxim signifies the belief that justice must be realized regardless of consequences.

  3. Indiana up holds this behavior. the state police know they got it made.

  4. Additional Points: -Civility in the profession: Treating others with respect will not only move others to respect you, it will show a shared respect for the legal system we are all sworn to protect. When attorneys engage in unnecessary personal attacks, they lose the respect and favor of judges, jurors, the person being attacked, and others witnessing or reading the communication. It's not always easy to put anger aside, but if you don't, you will lose respect, credibility, cases, clients & jobs or job opportunities. -Read Rule 22 of the Admission & Discipline Rules. Capture that spirit and apply those principles in your daily work. -Strive to represent clients in a manner that communicates the importance you place on the legal matter you're privileged to handle for them. -There are good lawyers of all ages, but no one is perfect. Older lawyers can learn valuable skills from younger lawyers who tend to be more adept with new technologies that can improve work quality and speed. Older lawyers have already tackled more legal issues and worked through more of the problems encountered when representing clients on various types of legal matters. If there's mutual respect and a willingness to learn from each other, it will help make both attorneys better lawyers. -Erosion of the public trust in lawyers wears down public confidence in the rule of law. Always keep your duty to the profession in mind. -You can learn so much by asking questions & actively listening to instructions and advice from more experienced attorneys, regardless of how many years or decades you've each practiced law. Don't miss out on that chance.

  5. Agreed on 4th Amendment call - that was just bad policing that resulted in dismissal for repeat offender. What kind of parent names their boy "Kriston"?

ADVERTISEMENT