Submitted February 14, 2018
from the Board of Tax Appeals, No. 2016-414.
& Gillis Law Group, L.L.C., Mark H. Gillis, and Karol C.
Fox, for appellee Worthington City Schools Board of
Sater, Seymour & Pease, L.L.P., Nicholas M.J. Ray, Steven
L. Smiseck, and Lauren M. Johnson, for appellant.
1} This property-tax appeal involves the
tax-year-2014 valuation of a parcel of land with a
supermarket owned by appellant, the Kroger Company. The
supermarket sits on an unusually small parcel of real
property compared to parcels owned by similar retail
establishments. Kroger does not have a parking lot on its
parcel, but it does have the benefit of a parking easement
that allows its patrons to park on adjacent property. The
ultimate question is how to value the parcel Kroger owns. And
the answer to that question hinges on how we understand an
adjustment to the property's valuation made by
2} The Franklin County Board of Revision
("BOR") reached a tax-year-2014 valuation of $2,
390, 000 by relying on Kroger's appraiser's
valuation, which was primarily based on using the sale prices
of comparable retail properties and then making adjustments
to reflect the unique characteristics of the smaller Kroger
3} The Board of Tax Appeals ("BTA")
reversed the decision of the BOR and determined the true
value of the property to be $3, 950, 000. The BTA concluded
that Kroger's appraiser's adjustment to account for
the parking situation improperly removed the benefit of the
parking easement from the value of Kroger's parcel.
4} We hold that the BTA erred and that Kroger's
appraiser's valuation conforms to R.C. 5713.03, which
requires a determination of "the true value of the fee
simple estate, as if unencumbered." We reverse the
BTA's decision and reinstate the BOR's tax-year-2014
OF PROCEEDINGS AND APPRAISAL EVIDENCE
5} Kroger's property is located adjacent to the
Shops at Worthington Place, a shopping mall in northern
Franklin County. For tax year 2014, a triennial update year
in Franklin County, the Franklin County auditor assigned a
value of $3, 000, 000 to the subject property, which is a
1.699-acre site improved with a 56, 154-square-foot store
building. Kroger filed a complaint seeking a tax-year-2014
valuation of $2, 000, 000. Appellee Worthington City Schools
Board of Education ("BOE") filed a countercomplaint
seeking to retain the auditor's valuation.
6} The BOR convened a hearing on February 8, 2016,
and both sides presented appraisal reports along with
testimony of the appraisers.
7} Kroger presented the testimony and written
appraisal of Curtis P. Hannah, a member of the Appraisal
Institute. To value Kroger's property, Hannah used two
approaches to value: the sales-comparison approach and the
income-capitalization approach. His sales-comparison analysis
yielded a tentative value of $3, 930, 780; his
income-capitalization analysis yielded a tentative value of
$3, 995, 247. He then adjusted each value to account for the
fact that Kroger's ...