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Vandalia-Butler City Schools Board of Education v. Montgomery County Board of Revision et al

October 5, 2011

VANDALIA-BUTLER CITY SCHOOLS BOARD OF EDUCATION,
APPELLANT,
v.
MONTGOMERY COUNTY BOARD OF REVISION ET AL.,
APPELLEES.



APPEAL from the Board of Tax Appeals, No. 2007-M-1022.

Per curiam.

Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as Vandalia-Butler City Schools Bd. of Edn. v. Montgomery Cty. Bd. of Revision, Slip Opinion No. 2011-Ohio-5078.]

NOTICE

This slip opinion is subject to formal revision before it is published in an advance sheet of the Ohio Official Reports. Readers are requested to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65 South Front Street, Columbus, Ohio 43215, of any typographical or other formal errors in the opinion, in order that corrections may be made before the opinion is published.

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as Vandalia-Butler City Schools Bd. of Edn. v. Montgomery Cty. Bd. of Revision, Slip Opinion No. 2011-Ohio-5078.]

Taxation -- Real-property valuation -- Board of Tax Appeals erred in deferring to Board of Revision's decision to order the value reduction, rather than relying on its own independent valuation of the evidence as required by law -- Decision of Board of Tax Appeals vacated, and cause remanded.

August 8, 2011

{¶1} In this appeal the Vandalia-Butler City Schools Board of Education ("school board") challenges a decision of the Board of Tax Appeals ("BTA") in which the BTA affirmed and adopted the Montgomery County Board of Revision's ("BOR's") reduced valuation of a hotel. The school board contends that the BTA erred by according deference to the BOR's decision rather than relying on its own independent weighing of the evidence.

{¶2} We agree with the school board. We therefore vacate the BTA's decision and remand so that the BTA can determine whether there is sufficient evidence to permit it to perform an independent valuation of the property.

Facts

{¶3} The property at issue consists of 1.8210 acres improved with a 32,060-square-foot hotel. The auditor assigned a true value of $2,096,320 for tax year 2006. The owner, Bajarangi Corporation, filed a complaint against valuation on March 28, 2007, seeking a reduction of true value to $1,468,000. The school board filed a countercomplaint seeking to retain the auditor's valuation. Prior to the BOR hearing, Ratilal Patel, who identified himself as the owner and president of Bajarangi, submitted a letter dated March 9, 2007, setting forth general contentions in support of the complaint and attaching an "[a]ppraisal report as of 2007."

{¶4} On August 2, 2007, the BOR held a hearing on the complaint. The record of that hearing consists of terse handwritten notes, which indicate that the owner presented an appraisal that certified an opinion of $1,488,000 "exclusive of FFE (i.e., the furniture, fixtures, and equipment)."*fn1 Patel appeared on behalf of the owner to present the appraisal and to offer testimony. According to the handwritten notes, Patel testified that "[h]otel performance [was] going down every year" and that the subject property had incurred "exorbitant expenses." The hearing notes assert that the property is "[c]urrently listed at 1.5 million" and indicate that Patel would be "happy to sell at 1.3 million." In June 2007, a prospective buyer offered $1.4 million, but the offer was contingent on $150,000 of improvements, and the deal fell through. The property was purchased in 2002 for $1.9 million, an allegedly fair price at that time. Occupancy was said to be approximately 35 percent.

{¶5} The notes reflect that the school board objected to the appraisal report as hearsay "because the appraiser wasn't here to question." The notes then state that "P&L" (presumably profit and loss) documentation is contained in the appraisal report and that the occupancy rate was 46 percent "[w]hen purchased."

{ΒΆ6} The BOR's September 7, 2007 decision is documented by the hearing notes. The BOR decided to assign a value of $1,499,080 to the property, "per CLT review & recommendation." At oral argument counsel for the county explained that "CLT" refers to the appraisal firm used by the county in valuing real property. The ...


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