Submitted April 4, 2017
from the Board of Tax Appeals, No. 2012-4862.
& Gillis Law Group, L.L.C., Mark H. Gillis, and Karol C.
Fox, for appellant.
R. Koverman Jr., for appellee Carmax Auto Superstores, Inc.
1} Appellant, West Carrollton City Schools Board of
Education ("BOE"), challenges the decision of the
Board of Tax Appeals ("BTA"), which retained the
auditor's update-year valuation of $4, 716, 690 for 2011.
The BOE argues that the subject property, two contiguous
parcels developed by appellee Carmax Auto Superstores, Inc.,
should be valued by reference to the 2008 purchase of the
land for $5, 850, 000 along with actual construction costs of
$7, 015, 740 for subsequent improvements. Appellee Montgomery
County Board of Revision ("BOR") and the BTA both
disagreed and retained the auditor's value.
2} On appeal to this court, the BOE argues that the
BTA acted unreasonably and unlawfully by refusing either to
rely on the land-sale price and actual-cost evidence to value
the property or to perform an independent valuation of the
property. We disagree, and we therefore affirm the decision
of the BTA.
3} On January 9, 2008, the two parcels at
issue-vacant land at that time, amounting to about 15
acres-were purchased by Carmax for $5, 850, 000. The BOE
filed a complaint seeking an increase in the value for tax
year 2008 of the land from the $578, 100 valuation determined
by the auditor to its sale price. The BOR ordered an increase
but not to the full amount of the sale price, and the BOE
appealed to the BTA, which found that the sale was a recent
arm's-length transaction. BTA No. 2009-K-3910, 2012 WL
4338747, *7 (Sept. 11, 2012). On that basis, the BTA granted
the requested increase to $5, 850, 000. Id. at *8.
4} During 2008 and 2009, Carmax constructed on the
subject property a used-car sales center comprising about 45,
435 square feet of interior space. Construction records
indicate actual costs, and Carmax spent a total of $7, 015,
740.76 to construct the building and other improvements.
5} 2011 was a triennial update year in Montgomery
County, and the auditor set the value of the subject property
at $4, 716, 690-the components of the valuation being $52,
460 for the smaller, undeveloped parcel and $4, 664, 230 for
the main parcel (a land value of $2, 476, 800 plus
improvements valued at a "replacement cost new"
amounting to $2, 187, 430).
6} The BOE filed a complaint seeking an increase to
the 2008 land-sale price of $5, 850, 000. At the BOR hearing,
the BOE relied on evidence of the sale and Carmax presented
sworn testimony from its counsel. The BOR retained the
auditor's valuation, and the BOE appealed to the BTA,
where the BOE presented cost evidence along with Carmax's
stipulation that it spent $7, 015, 740.76 to construct the
building and other improvements. Carmax presented the
testimony of an appraiser, Michael N. Moorhead, who had
appraised the unimproved property as of January 1, 2008. That
appraisal had been admitted in the prior case but was not
7} As for the tax-year-2011 valuation, Moorhead did
not perform a complete new appraisal but reviewed additional
market data at Carmax's request. One comparable land sale
for $1, 800, 000 for approximately 14 acres occurred in
January 2014. As for the value of the improvements, Moorhead
testified that a cost approach would be appropriate only in
conjunction with using the market-sales and income
approaches. Moorhead also opined that the facility was a
special-purpose building. Lastly, Moorhead pointed out that
additional costs do not necessarily add to the market value
of a property.
8} In its decision, the BTA made no mention of
Carmax's construction costs as a basis for determining a
value for the improvements. The BTA rejected using the sale
price to value the land because the sale occurred more than
24 months before the January 1, 2011 update valuation,
relying on the authority of Akron City School Dist. Bd.
of Edn. v. Summit Cty. Bd. of Revision, 139 Ohio St.3d
92, 2014-Ohio-1588, 9 N.E.3d 1004. BTA No. 2012-4862, 2015 WL
750651, *2 ...