In re Appeal of Lowe's Home Centers, LLC, 020618 NCCA, COA17-220

Docket Nº:COA17-220
Opinion Judge:BERGER, JUDGE.
Party Name:IN THE MATTER OF THE APPEAL OF: LOWE'S HOME CENTERS, LLC From the decision of the Forsyth County Board of Equalization and Review concerning the valuation of certain real property for tax year 2013.
Attorney:Bell, Davis & Pitt, P.A., by John A. Cocklereece, Bradley C. Friesen, and Justin M. Hardy, for Appellant-Lowe's Home Centers, LLC. Attorney for Forsyth County, by Assistant County Attorney B. Gordon Watkins III, for Appellee-Forsyth County.
Judge Panel:Chief Judge MCGEE and Judge DIETZ concur.
Case Date:February 06, 2018
Court:Court of Appeals of North Carolina
 
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IN THE MATTER OF THE APPEAL OF: LOWE'S HOME CENTERS, LLC From the decision of the Forsyth County Board of Equalization and Review concerning the valuation of certain real property for tax year 2013.

No. COA17-220

Court of Appeals of North Carolina

February 6, 2018

          Heard in the Court of Appeals 21 August 2017.

         Property Tax Commission Sitting as the State Board of Equalization and Review, No. 13 PTC 0904

         Appeal by Lowe's Home Centers, LLC from a final decision entered 24 August 2016 by the North Carolina Property Tax Commission.

          Bell, Davis & Pitt, P.A., by John A. Cocklereece, Bradley C. Friesen, and Justin M. Hardy, for Appellant-Lowe's Home Centers, LLC.

          Attorney for Forsyth County, by Assistant County Attorney B. Gordon Watkins III, for Appellee-Forsyth County.

          BERGER, JUDGE.

         Lowe's Home Centers, LLC ("Lowe's") appeals from the Final Decision of the North Carolina Property Tax Commission ("Commission") that affirmed the decision of the Forsyth County Board of Equalization and Review concerning Forsyth County's (the "County") ad valorem tax assessment of Lowe's real property located in Kernersville, North Carolina. Lowe's contends its evidence produced in the May 17-19, 2016 hearing before the Commission was sufficient to rebut the presumption of correctness for the County's assessment, thereby shifting the burden of proof to the County to prove that its method of assessing Lowe's property produced a true value of that property. We agree and therefore reverse the decision of the Property Tax Commission.

         Factual and Procedural Background

         The County assessed Lowe's commercial property at 145 Harmon Creek Road, Kernersville, North Carolina ("Property") at $14, 572, 900.00, or $107.43 per square foot as of January 1, 2013. The Property was constructed in 2001 with 135, 652 gross leasable square footage on 19.6 acres of land. On December 2, 2013, Lowe's contested the County's valuation of the Property by appealing the valuation to and requesting a hearing before the Commission. Prior to Lowe's appeal, both parties conducted independent appraisals. The County's assessor reappraised the Property at $16, 100, 000.00 or $118.69 per square foot, while Lowe's appraisal was $6, 340, 000.00 or $46.74 per square foot. As a result of the County's higher appraisal, the County abandoned the former assessment of $14, 572, 900.00 and adopted its expert's latter appraisal of $16, 100, 000.00.

         Lowe's was granted a hearing before the Commission in its appeal of the County's tax assessment. During the May 17-19, 2016 hearing, Lowe's introduced four expert witnesses who testified to factors used in the valuation process, as well as their valuation of the subject Property.

         Lowe's first expert was David Lennhoff, a real estate appraiser and consultant, experienced in valuating 'big box' retail real estate. Lennhoff testified to the average price per square foot of other Lowe's properties in North Carolina, finding that the valuations per square foot ranged "from $18.48 a square foot to $39.34."

         Lowe's second expert to testify was Charles Williamson, Director of Real Estate for Lowe's. He testified that the County's appraisal of $118.69 per square foot is the highest valuation of any Lowe's in the United States, the average valuation being $29.59 per square foot. Williamson also testified about deed restrictions placed on the resale of 'big box' properties and those restrictions' effect on valuation. His valuation of similar 'big box' properties ranged from $21.63 to $49.00 per square foot, well below the County's valuation.

         Robert Meiers also testified on Lowe's...

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