Real Estate Transfers Cuyahoga County Ohio - PDF by wfd16828

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									Somerset, Inc.,                     )
               Appellant,           )
         vs.                        )        CASE NO. 96-P-1813
Cuyahoga County Board of            )        (REAL PROPERTY TAX)
Revision, Cuyahoga County           )
Auditor, and the Garfield           )        DECISION AND ORDER
Heights Board of Education,         )
               Appellees.           )


           For the Appellant      - Fred Siegel
           Property Owner           Annrita S. Johnson
                                    Fred Siegel Co., L.P.A.
                                    National City Center
                                    Suite 2700
                                    1900 East Ninth Street
                                    Cleveland, Ohio 44114-3499

           For the Appellee       - Stephanie Tubbs Jones
           County                   Cuyahoga County Prosecuting
                                    By: Saundra Curtis-Patrick
                                    Assistant Prosecuting Attorney
                                    Courts Tower - Eighth Floor
                                    1200 Ontario Street
                                    Cleveland, Ohio 44114

           For the Appellee       - Timothy J. Armstrong
           School District          Armstrong, Mitchell, Damiani
                                    and Zaccagnini
                                    1725 The Midland Building
                                    101 Prospect Avenue, West
                                    Cleveland, Ohio 44115-1091

           Entered:   November 28, 1997

Mr. Johnson, Ms. Jackson and Mr. Manoranjan concur.

           This is an appeal from a valuation determination of

the Cuyahoga County Board of Revision.             Somerset appeared at

our merit hearing on October 30, 1997, and presented valuation

testimony through its president, Mr. David Snider.               But, the

school   district   and   the   county   elected    not   to   attend   our
hearing.     Thus, the question is whether Somerset has satisfied

its evidentiary burden.            Upon careful review, we find that it


             The    property      that    comprises      the    subject     of    this

appeal consists of three contiguous tax parcels which were

vacant as of the tax lien date of January 1, 1994.                      They front

upon    Turney     Road    in   Garfield      Heights,   Ohio,    and     are    zoned

within the commercial zoning district.                   Together they consist

of a little less than half of an acre.                    Mr. Snider testified

that he had hoped to develop a small four to five thousand

square foot strip shopping center when he acquired the property

in   1990.       His     plans,   however,      never    materialized       and    the

property was placed back on the market for resale.                              As all

three parcels adjoin one another, are under unified ownership

and would likely be developed for one single integrated use, we

find that these three tax parcels constitute a single economic

unit.      See     our    decision   in       Strongsville      Bd.   of    Edn.    v.

Cuyahoga Cty. Bd. of Revision (November 24, 1995), B.T.A. No.

94-P-409, unreported; affirmed in Strongsville Bd. of Edn. v.
Cuyahoga Cty. Bd. of Revision (1997), 77 Ohio St. 3d 402.                          See

also Park Ridge Co. v. Franklin Cty. Bd. of Revision (1987), 29

Ohio St. 3d 12.            Both the Cuyahoga County Auditor and the

Cuyahoga County Board of Revision placed the same value upon

these tax parcels.          They are:

Parcel No. 542-21-013:

                                  TAXABLE VALUE                TRUE VALUE

Land                                 $29,400                      $84,000

Building                    $ -0-              $ -0-
Total                       $29,400            $84,000

Parcel No. 542-21-014:

                          TAXABLE VALUE     TRUE VALUE

Land                         $9,140            $26,110
Building                     $ -0-             $ -0-
Total                        $9,140            $26,110

Parcel No. 542-21-015:

                         TAXABLE VALUE      TRUE VALUE

Land                         $9,520            $27,200
Building                     $ -0-             $ -0-
Total                        $9,520            $27,200

           Somerset then perfected this appeal before us.   In

its notice of appeal it asserts that the correct true and

taxable values are:

Parcel No. 542-21-013:

                          TAXABLE VALUE     TRUE VALUE

Land                        $12,850            $36,710
Building                    $ -0-              $ -0-
Total                       $12,850            $36,710

Parcel No. 542-21-014:

                          TAXABLE VALUE     TRUE VALUE
Land                         $3,990            $11,400
Building                     $ -0-             $ -0-
Total                        $3,990            $11,400

Parcel No. 542-21-015:

                                 TAXABLE VALUE            TRUE VALUE

Land                                 $4,160                    $11,890
Building                             $ -0-                     $ -0-
Total                                $4,160                    $11,890

              This matter is now submitted for our consideration

based upon the statutory transcript, the notice of appeal, the

certified copy of the record of the hearing we conducted on

October 30, 1997, and the exhibits introduced at that hearing.

No briefs have been submitted.

              We begin by observing that a party who asserts a

right   to    an   increase     or   a   decrease   in   the   value     of   real

property has the burden of proving its right to the value

asserted.       Cleveland Board of Education v. Cuyahoga County
Board of Revision (1994), 68 Ohio St. 3d 336,Crow v. Cuyahoga

County Board of Revision (1990), 50 Ohio St. 3d 55, Mentor

Exempted Village Board of Education v. Lake County Board of

Revision (1988), 37 Ohio St. 3d 318.                It is incumbent upon a

party challenging the decision of a board of revision to come

forward and offer evidence which demonstrates its right to the

value sought.      Cleveland Board of Education, supra, Springfield
Local Board of Education             v. Summit County Board of Revision

(1994), 68 Ohio St. 3d 493.              But, once competent and probative

evidence of value is presented by an appellant, other parties

asserting a different value then have a corresponding burden to

provide      evidence   which    rebuts      the   appellant's    evidence     of

value.     Springfield Local Board of Education, supra, Mentor

Exempted Village Board of Education, supra.

            Article XII, Section 2, of the Constitution of Ohio

requires    land   and    improvements    to   be   taxed   according   to


                 "Land and improvements thereon shall
            be taxed by uniform rule according to value
            * * * ."

            R.C.   5713.03    further    mandates   that    each   separate

tract be valued according to its "true value:"

                 "The county auditor, from the best
            sources of information available, shall
            determine, as nearly as practicable, the
            true value of each separate tract, lot, or
            parcel of real property and of buildings,
            structures,   and   improvements   located
            thereon * * * ."

            The best evidence of true value is an actual, recent

sale of the property in an arm's length transaction negotiated

in the open market between a willing seller and a willing

buyer.     Zazworsky     v. Licking County Board of Revision (1991),
61 Ohio St. 3d 604, Hilliard City School Board of Education v.

Franklin County Board of Revision (1990), 53 Ohio St. 3d 57,

Conalco v. Board of Revision (1977), 50 Ohio St. 2d 129, State

ex. rel. Park Investment Co. v. Board of Tax Appeals (1964),

175 Ohio St. 410, Board of Education of the Princeton City

School District v. Board of Revision of Butler County (December

20, 1991), B.T.A. No. 90-J-829, unreported, Board of Education

of the Princeton School District v. Board of Revision of Butler

County (May 8, 1992), B.T.A. No. 90-C-820, unreported.                   But,

any evidence of a recent sale is inconclusive.                 The property

record card for parcel number 542-21-013 does report a transfer

on December 14, 1992, for a sales price of $84,000.                     There

appears to be no other confirming evidence, however, that this

sale ever actually took place.           Next to the memorandum of this

transaction appears the notation: "UNABLE TO VERIFY."               We must

conclude that this alleged transaction is uncorroborated by any

other   probative   or   credible       evidence   in   the   record.     The

Metroscan Property Profile submitted by Somerset to the board

of revision also reports certain transfers on January 13, 1994.

But, these show the property being conveyed from Mr. Snider's

father's trust to Somerset, Inc. for no consideration.                   Mr.

Snider testified his father was also a shareholder in Somerset,

Inc.    Upon   careful   review     of    these    transactions,   we    must

conclude that we have no reliable evidence of a recent arms

length sale before us.

           In Ratner v. Stark County Board of Revision (1986),

supra, the Supreme Court held that appraisal evidence may be
used to determine value where it is shown that a sale price

does not reflect true value:

           "Although the sale price is the 'best
           evidence' of true value of real property
           for tax purposes, it is not the only
           evidence.     A   review   of  independent
           appraisals based upon factors other than
           the sale price is appropriate where it is
           shown that the sale price does not reflect
           true value."

But, other than the written owner's opinion of value submitted

by Somerset to the board of revision (which document does not

constitute    an   appraisal),    no   appraisal   evidence    has    been


             Thus, we are left primarily with the owner-opinion

testimony    offered   by   Mr.   Snider.   The    Supreme    Court   gave

consideration to the owner-opinion rule in Smith v. Padgett

(1987), 32 Ohio St. 3d 344, 347, 348, holding that an owner of

real property is competent to offer testimony as to its market


                  "Ohio law has long recognized that an
             owner of either real or personal property
             is, by virtue of such ownership, competent
             to testify as to the market value of the
             property. In Morris v. Huber (App. 1933),
             15 Ohio Law Abs. 71, 73, a case involving
             real property, the court quoted with
             approval from 22 Corpus Juris (1920) 586-
             587, Evidence, Section 685, which reads:

                  "'The owner of real estate is assumed
             to possess sufficient acquaintance with it
             to estimate the value of the property, and
             his estimate is therefore received although
             his knowledge on the subject is not such as
             would qualify him to testify if he were not
             the owner.'" (Emphasis added.) (Footnotes
             omitted.)   See, also, Beddard v. Protetch
             (App. 1955), 78 Ohio Law Abs. 508, 511, 5
             O.O. 2d 277, 279, 151 N.E. 2d 773, 775-776,
             quoting with approval from 20 American
             Jurisprudence (1939) 751, Evidence, Section

                  "This court and various Ohio courts of
             appeals have applied this so-called 'owner-
             opinion rule' in cases involving personal
             property.   See, e.g., Bishop v. East Ohio
             Gas Co. (1944), 143 Ohio St 541, 28 O.O.
             470, 56 N.E. 2d 164;      Butram v. Blair
             (1958), 106 Ohio App. 57, 6 O.O. 2d 312,
             148 N.E. 2d 502; Groves v. Gray (1942), 74
             Ohio App. 384, 29 O.O. 580, 59 N.E. 2d 166;

          Detroit & Ironton RR. Co. v. Vogeley
          (1925), 21 Ohio App. 88, 153 N.E. 86.

               "There   is  no  logical   basis  for
          distinguishing between owners of freehold
          estates in land and owners of personal
          property, on the one hand, and owners of
          leasehold estates in land, on the other.
          Because the owner-opinion rule applies to
          owners of both real and personal property,
          it should apply as well to an owner of a
          leasehold estate.

               "We hold that a lessee of real
          property is competent to give opinion
          testimony as to the rental value of the
          leased premises.   The weight accorded to
          such testimony is, of course, a matter to
          be determined by the trier of fact.
          Bishop, supra, at 546, 28 O.O. at 472, 56
          N.E. 2d at 166."

          The    Supreme   Court    offered   further   direction

concerning the application of the owner-opinion rule to an

officer or shareholder in a closely held corporation in   Tokles

& Sons, Inc. v. Midwestern Indemnity Company (1992), 65 Ohio

St. 3d 621, holding that under proper circumstances, such an

officer or shareholder is competent to render an opinion of


               "An examination of the many cases
          regarding ownership testimony from various
          jurisdictions indicates that owners of
          property have been permitted to testify not
          merely because they are owners, but rather
          because, due to that ownership, they are
          presumed to have special knowledge of the
          value of their own property.

          "***                ***                 ***

               "This means that the witness must show
          that he is familiar with the property
          itself and that he has current sufficient
          knowledge of the value of the item by, for
          example,    demonstrating    a    firsthand

              knowledge of the characteristics of the
              property, its actual and potential uses and
              its    condition  or   by   showing   other
              meaningful experience in dealing with the

              Mr.   Snider    satisfies       this   criteria.           He     and   his

family have been in the real estate development business for

forty five years.          Mr. Snider testified that Somerset, Inc. is

a closely held corporation, all of the shares of which are

owned by himself and his father.                  He serves as president.             In

that capacity he is directly involved in buying and selling

real property on behalf of Somerset.                    Mr. Snider has been in

the   real    estate      business    for   more     than       ten   years,     having

attended Arizona State University where he took a number of

college level real estate courses.                   He testified he normally

participates in approximately twenty real estate transactions

per year, including acquisition, sale and lease transactions.

He is responsible for four to five sales transactions each

year,   and    testified      that    he    was    "the       deal    maker     for   our

company, and I do that on a daily basis."                             Somerset, Inc.

manages approximately half a million square feet of commercial

property      for   its    own   account.          In     addition,       Mr.    Snider

demonstrated        his    familiarity       with       the     subject       property,

explaining it was acquired in 1990 for $70,000, but that he had

been unable to develop it in the manner originally contemplated

because the neighborhood was in a state of decline.                           (R - 19.)

He has been unable to attract the necessary tenants, and as a

consequence     believes      the    market    value      has    gone    down.        Mr.

Snider indicated that all three tax parcels taken together had,

in his opinion, a fair market value of $60,000.                 In rendering

this opinion, Mr. Snider discussed the locational aspects of

the property and its relationship to other parcels and other

transactions he had considered in formulating his opinion of

value,     demonstrating    a   thorough     knowledge    of    the   subject

property and the influences upon its value.

             We turn now to the appellees' case.               The appellees

have elected not attend the merit hearing or to present any

evidence bearing upon the value of these parcels of property.

The statutory transcript certified to the Board by the county

auditor, which is intended to provide the evidence considered

by   the   board    of   revision   in    making   its   determination,    is

lacking any evidence of value.            As a consequence, and from a

careful review of the record before us, we conclude that the

evidence of value as submitted by Mr. Snider on behalf of

Somerset,    Inc.    constitutes    the    only    probative   and    credible

evidence of value in the record of this matter, and satisfies

the burden placed upon it.

             Accordingly, we find and determine that the true and

taxable value of these parcels of real property is:

Parcel No. 542-21-013:
                                TAXABLE VALUE            TRUE VALUE

Land                              $12,850                   $36,710
Building                          $ -0-                     $ -0-
Total                             $12,850                   $36,710

Parcel No. 542-21-014:

                          TAXABLE VALUE       TRUE VALUE

Land                         $3,990              $11,400
Building                     $ -0-               $ -0-
Total                        $3,990              $11,400

Parcel No. 542-21-015:

                          TAXABLE VALUE       TRUE VALUE

Land                         $4,160              $11,890
Building                     $ -0-               $ -0-
Total                        $4,160              $11,890

           The Cuyahoga County Auditor is ordered to cause these

values to be reflected upon his records, and the same shall be

carried forward in accordance with applicable law.         ohiosearchkeybta


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