Bedford Board of Education, Appellant, vs. Cuyahoga County Auditor, and Cuyahoga County Board of Revision, Appellees, and Dayton Hudson Corp., Thomas Holmes, Appellee. APPEARANCES:
For the Appellant - Joanne C. Brady Attorney at Law 12665 Gwendolyn Farms Road Chardon, Ohio 44024 - Timothy Kollin Assistant Prosecuting Attorney The Justice Center – Courts Tower 1200 Ontario Street Cleveland, Ohio 44113 - Thomas Holmes 777 Nicolet Mall Minneapolis, MN 55402

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For the County Appellees

For the Property Owner

Entered July 28, 2000 Mr. Johnson, Ms. Jackson, and Mr. Manoranjan concur.

The Board of Tax Appeals is considering this matter pursuant to a notice of appeal filed by the Bedford Board of Education. (“Appellant”)

Appellant has appealed from a decision of the Cuyahoga County Board of Revision (“BOR”) that determined the value of the subject real property for tax year 1997. The property is located in the Bedford taxing district and is identified on the auditor’s records as parcel 813-04-061. The value determined by the auditor and the board of revision is as follows: TRUE VALUE $ 533,310 $3,595,000 $4,128,310 TAXABLE VALUE $ 186,660 $1,258,250 $1,444,910

Land Building Total

In the notice of appeal the appellant has alleged that the correct value is as follows: TRUE VALUE $1,212,090 $5,363,910 $6,576,000 TAXABLE VALUE $ 424,231 $1,877,369 $2,301,600

Land Building Total

The matter has been submitted to the Board of Tax Appeals upon the notice of appeal and the statutory transcript certified by the board of revision including the electronic record of the BOR hearing. evidentiary hearing here. In considering the record before us, we acknowledge the affirmative burdens that exist in an appeal to this Board from a decision of a county board of The parties waived an


revision finding value. While a determination of value of real property by a board of revision is entitled to consideration, such determination is not presumptively valid. Amsdell v. Bd. of Revision (1994), 69 Ohio St.3d 572. On appeal a party may successfully challenge a determination of a board of revision where the party produces competent and probative evidence which establishes its right to the value asserted. Rocco v. Cuyahoga Cty. Bd. of Revision (1994), 71 Ohio St.3d 103; Springfield Local Bd. of Edn. v. Summit Cty. Bd. of Revision (1994), 68 Ohio St.3d 493, 495; Cleveland Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision (1994), 68 Ohio St.3d 336, 337. Accordingly, this Board will proceed to examine the available record and determine value based upon the record before us. Coventry Towers, Inc. v. Strongsville (1985), 18 Ohio St.3d 120. The subject property is a 119,569 square foot, one story brick and block Target Department Store constructed in 1995 upon 12.12 acres at the southeast quadrant of Rockside Road and Northfield Road in Bedford, Ohio. The board of education’s increase complaint was based upon an appraisal report of Sam D. Canitia. Mr. Canitia analyzed the property’s value using the market and income approaches to value.1 His market approach analyzed eight sales that

occurred between October 1988 and August 1997. The sales ranged between

Ohio Adm. Code 5705-3-03 (D) provides that in the absence of a recent arm’s-length sale, “true value in money” may be arrived at by an appraisal which considers any or all of the following recognized valuation approaches: (1) the market approach, in which recent sales of comparable properties are analyzed; (2) the income approach, in which net income from the property is capitalized; and (3) the cost approach, which adds the depreciated cost of the improvements to the land to the value of the land itself.


$41.48 per square foot paid in October 1988 for a Gold Circle department store, to $75.59 per square foot paid for a Guitar Center in September 1996. He opined that the most comparable sale was the $74.12 per square foot paid for a K Mart in August 1996. Based upon these sales he concluded that a value of $55.00 per square foot would be reasonable for the subject. His income approach multiplied the subject’s 119,569 square feet by a rental value of $5.75 per square foot2 producing a total of $787,521 for potential gross income. From this figure he deducted three percent for vacancy and rent loss, or $20,625, leaving $666,896 as effective gross income. He deducted an estimate of ten percent for expenses, producing net income of $600,207. He capitalized this figure by 9.25 percent producing a value of $6,489,000 via the income approach, or $54.27 per square foot. The Board notes that the property was less than two years old on tax lien date. The auditor and board of revision’s valuation, as evidenced in the property record card, was based upon the construction cost data and replacement cost computations. The cost approach is especially persuasive when the property

is relatively new.3 Mr. Canitia did not perform a cost approach analysis, nor does he explain its absence.


He justified his $5.75 rental value by analyzing five market rentals in the subject’s vicinity. These ranged between $3.55 per square foot and $6.83 per square foot.

See The Appraisal of Real Estate, Eleventh Edition, p. 338.


In addition the Board is unable to verify the accuracy of the estimates used in the income approach analysis. The source of the underlying data supporting the capitalization rate, the income and expense estimates, and the vacancy and rent loss estimate has not been disclosed. The Board is unable to verify whether the market supports the estimates used. The record is equally silent regarding the age, condition, and overall similarity of the comparable properties used in the market approach analysis. It is in situations such as this that the Board is particularly mindful that expert opinion evidence, under all circumstances is but an opinion and the reliability of that opinion depends upon the basic competence, skill and ability demonstrated by the witness and probative quality of the expert’s testimony. To make this judgment the Board is vested with wide discretion in determining the weight to be given to the evidence and the competence and credibility of the witness. Wynwood Apartments v. Bd. of Revision (1979), 59 Ohio St.2d 34; Cardinal Federal S. & L. Assn. v. Bd. of Revision (1975), 44 Ohio St.2d 13. Based upon the foregoing we conclude that the appellant has failed to sustain its burden of proving that the value of the property is other than that established by the Cuyahoga County Auditor and the Cuyahoga County Board of Revision. The evidence is insufficient to support a value other than that found by the board of revision. We therefore approve the value determined by the board of revision. See, Corporate Exchange Bldgs. IV & V, L.P. v. Franklin Cty. Bd. of


Rev. (1 998), 82 Ohio St.3d 297; Simmons v. Cuyahoga Cty. Bd. of Rev. (1998), 81 Ohio St.3d 47; Luken v. Miami Cty. Bd. of Rev. (Sept. 19, 1997), B.T.A. No 96-G976; unreported. Accordingly, the Board finds that the value of the subject

property as of January 1, 1997 is as follows: TRUE VALUE $ 533,310 $3,595,000 $4,128,310 TAXABLE VALUE $ 186,660 $1,258,250 $1,444,910

Land Building Total

The auditor of Cuyahoga County is hereby ordered to cause his records to reflect the value determined herein for the subject real property and to assess the same in accordance therewith as provided by law.



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