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2007-0347. Polaris Amphitheater Concerts, Inc. v. Delaware Cty. Bd. of Revision, Slip Opinion No. 2008-Ohio-2454.
Board of Tax Appeals, No. 2004-V-1294. Decision reversed and cause remanded.
Moyer, C.J., and Pfeifer, Lundberg Stratton, O'Connor, O'Donnell, Lanzinger, and Cupp, JJ., concur.
Opinion: http://www.supremecourtofohio.gov/rod/docs/pdf/0/2008/2008-Ohio-2454.pdf
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(May 29, 2008) The Supreme Court of Ohio ruled 7-0 today that when an appeal of a ruling by the State Board of Tax Appeals (BTA) challenges only the valuation of the land portion of an owner’s property, and no party appeals the board’s valuation of the structures and other improvements on the property, the Supreme Court has jurisdiction to review only the BTA’s valuation of the land portion.
Pursuant to that holding, the Court reversed a ruling by the BTA affirming the Delaware County Board of Revision’s land valuation of a tract of property at $13.8 million in a case where the expert appraisals submitted to the BTA by the parties estimated the land-only value of the property at $7.2 million and $8.6 million respectively.
The case involved a dispute between Polaris Amphitheater Concerts, Inc. and the Delaware County Board of Tax Revision (BOR) over the tax valuation of five parcels of land near Delaware that include a large outdoor concert amphitheater. Polaris disputed the Delaware County Auditor’s 2003 valuation of its property for tax purposes at $20,734,700. The Olentangy Local School District, a major beneficiary of property taxes assessed on the amphitheater, filed a counter-complaint in support of the auditor’s valuation. The BOR affirmed the auditor’s valuation, which set an estimated value of $13,799,110 for the land itself and a value of $6,935,590 for structures and improvements. Polaris appealed the BOR ruling to the State Board of Tax Appeals (BTA).
In their written pleadings and testimony before the BTA, Polaris and the school district presented separate expert appraisals of the current market value of the property. Following the statutory format for such appraisals, each party’s estimate was broken down into two component figures: an estimated value of the land and a separate estimate of the value of the structures and other improvements on the property. Polaris’ appraiser set an estimated value of the land component of the property at $7.2 million. The school district’s expert set an estimated value of the land at $8.6 million, but arrived at a total valuation of the property, including all improvements, of about $21 million. The BTA ruled that the school district’s appraisal supported the county auditor’s overall valuation of the property, and adopted the auditor’s valuation of $20,734,700 as the true value of the Polaris property. Polaris exercised its right to appeal the BTA’s ruling to the Supreme Court. In its appeal, Polaris challenged the board’s valuation of the land portion of its property, but did not challenge the valuation of the improvements portion.
In today’s decision, written by Justice Paul E. Pfeifer, the Court reversed the BTA and remanded the case with a directive to reevaluate the property consistent with the expert appraisals of the land portion, without changing the present valuation of the improvements portion.
In rejecting the school district’s argument that an appeal of a BTA ruling automatically places the entire valuation of the subject property at issue, Justice Pfeifer cited a 2007 decision, Dayton-Montgomery Cty. Port Auth. v. Montgomery Cty. Bd. of Revision, in which this Court held that when reviewing a ruling of the BTA, the Supreme Court is authorized to consider only the claims of error raised by the parties in a formal notice of appeal or cross-appeal. Quoting from that decision, Justice Pfeifer wrote: “‘Our revisory jurisdiction over BTA decisions depends upon compliance with the statute, R.C. 5717.04, which requires that the appellant set forth in the notice of appeal the errors complained of in the BTA decision. Failure to so specify deprives the court of jurisdiction to grant a party relief on that ground.’ ... Dayton makes clear that an appeal from the BTA’s determination of the value of real property does not necessarily place both the land and the building values at issue. Consistent with Dayton, we hold that Polaris acted within its rights as a litigant to file a notice of appeal that challenged only the land valuation as a method of reducing the total valuation of the property.”
With regard to a second argument advanced by the school district, Justice Pfeifer wrote: “ ... (T)he BOE (board of education) asserts a defense against the appeal by asserting that, even if the allocation (of value to land rather than to improvements) is wrong, the total ‘true value’ found by the BTA would still be correct, and the resulting taxes Polaris owes would not change. ... Polaris argues that the BOE may not defend this appeal by arguing that any error in valuing the land is offset by an error in valuing the improvements. To do so, Polaris contends, the BOE would have had to file a cross-appeal. We agree. ... If the BOE wanted to invoke our jurisdiction to consider whether the BTA erred by assigning too little value to the improvements, then it had to file a cross-appeal setting forth that error pursuant to R.C. 5717.04. ... Our cases do not permit us to rectify an alleged error of the BTA unless that error was set forth in a proper notice of appeal ... ”
Finally, in addressing the BTA’s valuation of the land portion of the Polaris property, Justice Pfeifer wrote: “(T)he BTA adopted the auditor’s determination that the land was worth $13,799,100. Both appraisals controvert that determination. Polaris’s appraisal expert determined a land value of $7,200,000, but perhaps more importantly, the BOE’s own appraisal expert had fixed the value of the land at $8,600,000. ... Although the BTA’s finding of total value was supported by the BOE appraisal, its allocation of value to land was not. ... Because the record in this case contains no support for, and indeed contradicts, the BTA’s finding of land value, we must reverse it. As in Dayton, we remand for additional factual determination based upon the evidence in the record.”
All six of the other justices joined Justice Pfeifer’s opinion.
Justice Evelyn Lundberg Stratton also entered a concurring opinion in which she recognized that, as in this case, because of tax reform measures that phase out tax on personal property, property owners are motivated to have improvements to their real property classified as personal property to avoid taxation. “As a result, the improvements were not, under the owner’s theory, subject to real property tax at all. The BTA ruled against the owner’s position on that issue, and then determined the value of the land and the improvements based on the evidence presented. When the owner assigned error only as to the valuation of the land in its notice of appeal, and when neither the board of education nor the county cross-appealed the value assigned to the improvements, the owner placed the land-value at issue while foreclosing a comprehensive valuation of the property.”
Thus, Justice Stratton cautions that pursuant to R.C. 5717.04 parties opposing such an appeal in this court must file a protective cross appeal to preserve their right to challenge the value of the property as a whole.Contacts
Todd W. Sleggs, 216.771.8990, for
Polaris Amphitheater Concerts Inc.
Jeffrey A. Rich, 614.228.5822, for Olentangy Local Schools Board of Education.
Christopher Betts, 740.833.2690, for the Delaware County Auditor and Board of Revision.