The Indiana Tax Court Wednesday affirmed the decision by the state Board of Tax Review to reduce Kokomo Mall LLC’s commercial property assessments for the 2007-2009 tax years.
Three parcels are at issue in Howard County Assessor v. Kokomo Mall, LLC, 49T10-1109-TA-56. Parcel 20, which contains the mall and a movie theatre, was assessed at nearly $7 million in 2007, all three parcels at more than $8.23 million in 2008, and all three parcels at more than $7.4 million in 2009.
Kokomo Mall appealed and presented an appraisal completed in conformance with the Uniform Standards of Professional Appraisal Practice valuing Parcel 20 at $4.96 million in 2007, and all three parcels at $6.08 million in 2008 and $3.99 million in 2009. The assessor claimed the mall’s evidence was riddled with errors and unreliable. She claimed the appraisal failed to comply with USPAP because it lacked transparency and did not use sufficiently reliable data in estimating the subject property’s value.
In 2011, the Indiana Board of Tax Review found, despite certain errors, that the mall’s evidence was probative as to the property’s market value-in-use and, therefore, it had presented a prima facie case that its assessments were incorrect.
The board found Parcel 20 should be assessed at a little more than $6.2 million for 2007, all three parcels at $6.08 million for 2008 and at $3.99 for 2009.
The assessor appealed, arguing that the finding the mall made a prima facie case must be reversed. The Tax Court heard arguments in April 2012.
The assessor claimed that the board did not adequately scrutinize Kokomo Mall’s unreliable evidence, but simply deferred to the appraiser’s testimony and adopted her appraisal even though it did not comply with USPAP. But Senior Judge Thomas Fisher pointed out the assessor has done nothing more than invite the court to ignore the established rule that it may not reweigh evidence nor judge the credibility of the witnesses who testified before the board.
The assessor also wants the court to reconsider the policy arising from caselaw that the mere presentation of a USPAP appraisal establishes a prima facie case.
“Even assuming arguendo that such a policy exists, the administrative record in this case reveals that the Indiana Board’s ability to independently gauge the qualitative value of the evidence and select the evidence that best reflects a property’s market value-in-use was not impeded,” Fisher wrote. “Furthermore, the Court finds that the decision to hire an appraiser or submit a USPAP compliant appraisal is more likely a litigation strategy, not the latent result of a purportedly inequitable policy.”