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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. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  2. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

  3. Here's an idea...how about we MORE heavily regulate the law schools to reduce the surplus of graduates, driving starting salaries up for those new grads, so that we can all pay our insane amount of student loans off in a reasonable amount of time and then be able to afford to do pro bono & low-fee work? I've got friends in other industries, radiology for example, and their schools accept a very limited number of students so there will never be a glut of new grads and everyone's pay stays high. For example, my radiologist friend's school accepted just six new students per year.

  4. I totally agree with John Smith.

  5. An idea that would harm the public good which is protected by licensing. Might as well abolish doctor and health care professions licensing too. Ridiculous. Unrealistic. Would open the floodgates of mischief and abuse. Even veteranarians are licensed. How has deregulation served the public good in banking, for example? Enough ideology already!

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