Executive Square Ltd. Partnership v. Board of Tax Review of Town of Wethersfield

• Citation: 528 A.2d 409,11 Conn.App. 566
• Decision Date: 21 July 1987
• Docket Number: No. 4920,4920
• Parties: EXECUTIVE SQUARE LIMITED PARTNERSHIP v. BOARD OF TAX REVIEW OF the TOWN OF WETHERSFIELD.
• Court: Appellate Court of Connecticut

Page 409

528 A.2d 409

11 Conn.App. 566

EXECUTIVE SQUARE LIMITED PARTNERSHIP v. BOARD OF TAX REVIEW OF the TOWN OF WETHERSFIELD.

No. 4920.

Appellate Court of Connecticut.

Argued March 12, 1987.

Decided July 21, 1987.

John F. Harvey, Jr., with whom, on brief, was Michael Barry, Wethersfield, for appellant (plaintiff).

M. Jane Christensen, Hartford, with whom, on brief, was Robert B. Sweig, for appellee (defendant).

Before HULL, SPALLONE and BIELUCH, JJ.

BIELUCH, Judge.

The plaintiff appeals from the judgment of the trial court denying the plaintiff relief on appeal from the Wethersfield board of tax review (board). The plaintiff sought a reduction of the assessment for tax purposes of certain improved real estate. See General Statutes § 12-118. ¹ The plaintiff claims error in the trial court's finding that the plaintiff failed to establish that the assessment of its land was not the true and actual value of the property. It also claims that the court erred in not following the mandate of General Statutes § 12-63b in its determination of fair market value for rental housing. We find no error.

The trial court made detailed findings of facts from which the following is a brief summary. The plaintiff owns a 240 unit apartment building situated on 8.55 acres of land and located at 100 Executive Square, Wethersfield. The land is located in a planned development--elderly housing zone. By the special permit of the town zoning commission and by covenants and restrictions running with the land in favor of the town, which are recorded on the land records as a condition of that permit, the use of the land is restricted as follows: "the land and any buildings or other structures located thereon shall be designed, used, occupied and maintained as housing for elderly and handicapped persons, as such terms are from time to time defined by Connecticut and United States government programs for the assistance, sponsorship and provision of such housing upon the land." The building was constructed by the plaintiff in 1982 and 1983 and financed by a $12,838,000 construction loan from the Connecticut housing finance authority (CHFA). Pursuant to a regulatory agreement with CHFA, the plaintiff agreed that it would limit admission to the project to those persons and families whose incomes do not exceed the limits prescribed from time to time by CHFA, that it would limit itself to a 6 percent return on its initial equity, and that it would not, without prior approval of the CHFA, transfer any part of the project. Although financing was provided by CHFA, a rental subsidy is paid for all tenants by the United States department of housing and urban development under the terms of Section 8 of the Housing Act of 1937, as amended. See 42 U.S.C. § 1437f.

On October 1, 1984, the town assessor valued the property using the following methods of appraisal: (1) replacement cost less depreciation, plus the market value of the land, adjusted for the town's base valuation year, October 1, 1978; and (2) the capitalization of net income based on market rent for similar property, also as of the base year. See General Statutes § 12-63b(a). Under the cost method he calculated the fair market value of the property to be $9,992,952. Under the income approach, he found the fair market value of the property to be $9,900,000. With minor adjustments to these valuations, he applied the uniform rate of 70 percent to arrive at a total assessment of $6,801,500. See General Statutes § 12-62a(b).

The plaintiff thereafter appealed to the Wethersfield board of tax review. After the board made no change in the assessment, the plaintiff then appealed pursuant to General Statutes § 12-118 to the Superior Court, claiming that the assessment of the property determined by the assessor was not the uniform percentage of its true and actual value on October 1, 1984, the assessment date, but was grossly excessive, disproportionate and unlawful. The plaintiff later amended its appeal to seek a reduction of the identical assessment for October 1, 1985. ² The trial court concluded that the plaintiff failed to sustain its burden of proof and found the issues for the defendant. The plaintiff then took this appeal.

The plaintiff's first claim is that the trial court failed to apply the proper standard of review for an appeal from a board of tax review. See General Statutes § 12-118. Specifically, the plaintiff claims that it was error for the trial court to conclude that taxable property must be substantially overvalued, as opposed to mere overvaluation, before a taxpayer is entitled to judicial relief.

On appeal from a decision of a board of tax review, "[t]he court shall have power to grant such relief as to justice and equity appertains, upon such terms and in such manner and form as appear equitable...." General Statutes § 12-118. "Only when the court finds that the action of the board will result in the payment of an unjust and, therefore, illegal tax, can the court proceed to exercise its broad discretionary power to grant such relief as is appropriate." Gorin's, Inc. v. Board of Tax Review, 178 Conn. 606, 608, 424 A.2d 282 (1979). In accordance with such review, the law contemplates that a wide discretion is to be accorded to assessors. An assessor's valuation should control for taxation purposes unless it is discriminatory or unreasonable. See Uniroyal, Inc. v. Board of Tax Review, 182 Conn. 619, 633 n. 8, 438 A.2d 782 (1981); Federated Department Stores, Inc. v. Board of Tax Review, 162 Conn. 77, 86, 291 A.2d 715 (1971).

"In the appeal to the court, the ultimate question is the ascertainment of the true and actual value of the plaintiff's property. Dickau v. Glastonbury, 156 Conn. 437, 441, 444, 242 A.2d 777 [1968]; Burritt Mutual Savings Bank v. New Britain, 146 Conn. 669, 673, 154 A.2d 608 [1959]. If the court finds that the property has been in fact overvalued, it has the power to, and should, correct the valuation. Connecticut Savings Bank v. New Haven, [131 Conn. 575, 584-86, 41 A.2d 765 (1945) ]." Hutensky v. Avon, 163 Conn. 433, 436-37, 311 A.2d 92 (1972). "Mere overvaluation is enough to justify redress under § 12-118." Hutensky v. Avon, supra, 436, 311 A.2d 92.

Our review of the trial court's memorandum of decision reveals no indication that the trial court used an improper standard of review. The trial court found a variance of 4.8 percent, or $473,000, between the plaintiff's valuation and that of the town assessor. It is clear, however, that the trial court did not find the plaintiff's appraisal credible. Faced with conflicting testimony, the court expressed its belief that the plaintiff's valuation was based upon an approximation of economic rental value that was too low, and a capitalization rate that was too high.

The plaintiff seizes upon the court's statement that "the appraisal process is at best one of approximation and judgment ... [and] it is at least questionable whether a 4.8 percent variance between the assessor's valuation and an appropriate valuation posited on open market considerations is so substantial as to warrant judicial intervention." The plaintiff characterizes this statement as suggesting the use of an unspecified variance percentage threshold to determine whether an assessor's overvaluation is substantial enough to warrant judicial relief. The court's statement was a comment on the appraisal process generally. It did not, as the plaintiff claims, indicate a finding that the plaintiff's property was in fact...