Indianapolis Racquet Club, Inc. v. Marion Cnty. Assessor
| Decision Date | 21 August 2014 |
| Docket Number | No. 49T10–1201–TA–1.,49T10–1201–TA–1. |
| Parties | INDIANAPOLIS RACQUET CLUB, INC., Petitioner, v. MARION COUNTY ASSESSOR, Respondent. |
| Court | Indiana Tax Court |
Stephen E. DeVoe, Bose McKinney & Evans LLP, Indianapolis, IN, Attorney for Petitioner.
John C. Slatten, Marion County Assessor's Office, Indianapolis, IN, Attorney for Respondent.
FISHER
, Senior Judge.
In this case, the Court must examine whether the Indiana Board of Tax Review erred when it found that the Indianapolis Racquet Club, Inc. failed to establish a prima facie case that its land assessments were excessive or that they were not uniform and equal. The Court finds that it did not.
The Racquet Club owns and operates a commercial tennis club located in Washington Township, at 8249 Dean Road on the north side of Indianapolis. In 2002, the Racquet Club's facility, which consisted of indoor and outdoor tennis courts, locker rooms, and associated retail and administrative space, sat on three contiguous parcels of land: Parcel # 8048124, Parcel # 8049954, and Parcel # 8051129. For the March 1, 2002 assessment, these parcels were valued as follows:
(See, e.g., Cert. Admin. R. # 1
at 3, 5 –6, 83; Cert. Admin. R. # 2 at 3, 5, 111–12; Cert. Admin. R. # 3 at 3, 5, 110.)1
Believing these assessments to be too high, the Racquet Club filed three petitions for review with the Marion County Property Tax Assessment Board of Appeals. When it was not successful at that level, the Racquet Club filed three petitions for review with the Indiana Board. The Indiana Board consolidated the petitions and held an administrative hearing on June 15, 2011.
On November 30, 2011, the Indiana Board issued a final determination upholding all three assessments. In its final determination, the Indiana Board explained that the Racquet Club failed to establish a prima facie case that its parcels were over-valued.
On January 17, 2012, the Racquet Club initiated three original tax appeals. The Court consolidated the appeals and then heard oral argument on November 7, 2012. Additional facts will be supplied when necessary.
The party seeking to overturn an Indiana Board final determination bears the burden to demonstrate that it is invalid. Hubler Realty Co. v. Hendricks Cnty. Assessor, 938 N.E.2d 311, 313 (Ind. Tax Ct.2010)
. Consequently, the Racquet Club must demonstrate to the Court that the Indiana Board's final determination is arbitrary, capricious, an abuse of discretion, not in accordance with the law, or unsupported by substantial or reliable evidence. See Ind.Code § 33–26–6–6(e)(1), (5) (2014).
In Indiana, real property is assessed on the basis of its market value-in-use: the value “of a property for its current use, as reflected by the utility received by the owner or a similar user, from the property.” 2002 Real Property Assessment Manual (Manual) (incorporated by reference at 50 Ind. Admin. Code 2.3–1–2 (2002 Supp.)) at 2. Assessing officials determine the market value-in-use of non-agricultural land by examining the sales data of similar properties in the area. See generally Real Property Assessment Guidelines For 2002–Version A (Guidelines) (incorporated by reference at 50 I.A.C. 2.3–1–2), Bk. 1, Ch. 2. See also Ind.Code § 6–1.1–31–6(c) (2002)
(amended 2004). More specifically, assessing officials develop land orders that establish a range of base rates to be applied to land in each of the townships throughout a county. See generally Guidelines, Bk. 1, Ch. 2. See also Ind.Code § 6–1.1–4–13.6 (2002) (amended 2008). Those base rates reflect the recent sales prices of land within a designated neighborhood2 and if the land is commercial, what its use categorization is (e.g., “primary,” “secondary,” or “usable undeveloped”).3
See Guidelines, Bk. 1, Ch. 2 at 85–86.
When assessing commercial land pursuant to a land order, it might be necessary for an assessing official to adjust the applicable base rate in order to arrive at a more accurate result. See, e.g., Manual at 2; Guidelines, Bk. 1, Ch. 2 at 16 (). See also Hurricane Food, Inc. v. White River Twp. Assessor, 836 N.E.2d 1069, 1074 (Ind. Tax Ct.2005)
(). Consequently, an assessing official may apply an influence factor to an assessment to account for an increase or decrease in the land's value due to a unique or peculiar condition. See Guidelines, Bk. 1, Ch. 2 at 89–90, 93–96.
A land assessment made in accordance with a land order is presumed to be accurate. See Manual at 5. Nonetheless, a taxpayer may rebut this presumption with other market-based evidence that indicates that the assessment does not accurately reflect the land's market value-in-use. See id. See also Eckerling v. Wayne Twp. Assessor, 841 N.E.2d 674, 677–78 (Ind. Tax Ct.2006)
(). For example, the taxpayer may present sales information on comparable properties, appraisals, or any other information compiled in accordance with generally accepted appraisal principles. Id.
On appeal, the Racquet Club argues that the Indiana Board's final determination must be reversed because it is not supported by the evidence nor is it in accordance with the law. (See, e.g., Pet'r V. Pet. Judicial Review ¶ 7.) More specifically, the Racquet Club claims that the Indiana Board simply ignored the unrebutted evidence it offered during the administrative hearing that demonstrated (1) that each parcel's assessed value exceeded its market value-in-use and (2) what the proper assessed value of each parcel should be. (See, e.g., Pet'r Br. at 8.)
During the Indiana Board hearing, the Racquet Club's entire evidentiary case was presented through the testimony of its attorney, who is also the Racquet Club's President. Through his testimony, the Racquet Club conceded that the base rates applied to its land were within the specified ranges under the applicable portion of the Washington Township (Marion County) Land Order. (See, e.g., Cert. Admin. R. # 1
at 109, 114, 119.) (See also Pet'r Br. at 10.) Nonetheless, the Racquet Club argued that the application of those rates to its land was improper because its property differed significantly from the other commercial properties in its neighborhood and with which it had been grouped under the Land Order. (See, e.g., Cert. Admin. R. # 1 at 119–22.) For instance, the Racquet Club explained that it is the sole tennis facility among high-priced, high-density retail properties, restaurants, banks, and gas stations that populate the 82nd/86th Street corridor. (See Cert. Admin. R. # 1 at 107, 109, 119–20.) Moreover, the Racquet Club's property—unlike the others in its designated neighborhood—does not have direct access to, or visibility of, 82nd/86th Street. (Cert. Admin. R. # 1 at 103–04, 120.) Finally, the Racquet Club's property is the only one in its neighborhood that is zoned “SU–3.” (Cert. Admin. R. # 1 at 117, 120–21.) Consequently, the Racquet Club claimed that when the Assessor valued its land pursuant to the Land Order, he was relying on sales information for properties that were not comparable. (See, e.g., Cert.
Admin. R. # 1
at 110, 112, 118–19.) (See also Pet'r Br. at 8, 10–11.)
The Racquet Club acknowledged that it bore the burden to present more relevant sales data, but asserted that it was nearly impossible to meet that burden because there were only three other tennis clubs in the greater Indianapolis area (one in Lawrence Township, one in Pike Township, and one in Hamilton County) and none of them had ever been sold. (See Cert. Admin. R. # 1
at 107–08, 111–12, 122.)4 Consequently, the Racquet Club argued that the land assessments of the other three tennis clubs should be sufficient to demonstrate that its land assessments were incorrect. (See Cert. Admin. R. # 1 at 124–25.) (See also Pet'r Br. at 12–14; Oral Arg. Tr. at 26, 28 –29.) To that end, the Racquet Club explained that while its primary land was assessed at $348,000 an acre under the Land Order (i.e., $8.00 per square foot x 43,560 square feet), the primary land at the three other tennis clubs was assessed between $55,000 and $150,000 an acre under their respective land orders.5 (See Cert. Admin. R. # 1 at 125–27, 134–35.) The Racquet Club argued that not only did this evidence show that its land assessments were incorrect, but also that they violated the Indiana Constitution's “uniform and equal” requirement. (See Cert. Admin. R. # 1 at 6, 110, 124–27.)
In turn, the Racquet Club's attorney testified that the proper assessed value of Parcel # 8048124 should be no more than $218,800 an acre (for a total of $956,375), Parcel # 8049954 should be no more than $14,115, and Parcel # 8051129 should be no more than $161,050 (or...
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Peters v. Garoffolo, 49T10–1207–TA–42.
...pursuant to the guidelines, her assessment is presumed accurate. Manual at 5. See also Indianapolis Racquet Club, Inc. v. Marion Cnty. Assessor, 15 N.E.3d 150, 153 (Ind. Tax Ct.2014). That presumption may be rebutted, however, with other market-based evidence (e.g., sales data, appraisals, ......