Selig v. Board of Revision, Mahoning County
| Decision Date | 21 November 1967 |
| Citation | 12 Ohio App.2d 157,231 N.E.2d 479 |
| Parties | , 41 O.O.2d 232 SELIG, Appellant, v. BOARD OF REVISION, MAHONING COUNTY et al., Appellees. McCRORY CORP. et al., Appellants, v. BOARD OF REVISION, MAHONING COUNTY et al., Appellees. WATERS et al., Appellants, v. BOARD OF REVISION, MAHONING COUNTY et al., Appellees. |
| Court | Ohio Court of Appeals |
Dargusch & Day, Columbus, for appellants.
Thomas L. Corroto, Youngstown, for appellees.
These cases concern appeals from decisions of the Mahoning County Board of Revision from the assessed values for real estate taxes of three downtown retail stores, namely: McCrory Stores Corporation, Hamilton Lerner Shops, Inc., and F. W. Woolworth Company, located on West Federal Street, Youngstown, Ohio, for the years 1961, 1962, 1963 and 1964. The thirty-six cases filed in the Common Pleas Court were consolidated into three cases for purposes of trial. The trial court heard all cases at the same time and found the values of these properties set by the County Auditor, and affirmed by the Board of Revision, were the true values of these properties for the tax years 1961, 1962, 1963 and 1964. These cases come to this court as three separate appeals, but they involve the same basic issue, and they were presented to this court at the same time.
The problem in these cases is the relative degree of the decline in downtown real estate values. Both sides recognize the fact that these downtown real estate values have been declining. The County Auditor had hired Cole-Layer-Trumble, a reputable firm of tax appraisal experts, for the reappraisal of Mahoning County real estate in 1959, which set the tax values for the year 1960. As a result of this reappraisal, the tax assessed values for real estate taxes of the properties involved in the three instant cases were decreased from twenty-eight to thirty-one percent. However, plaintiffs, appellants herein, contend that their properties have declined in value by even greater percentages.
In each of the complaints as to the assessment of their real property, which plaintiffs filed for the years 1961, 1962 and 1963, they stated that their properties were overassessed by certain amounts. No explanation was given as a basis for any of these complaints, but a hearing was requested so that plaintiffs could furnish a complete appraisal of the property in question. The complaints filed for the 1964 tax assessments stated that the County Auditor's valuation did not reflect the change in business conditions which have made the property obsolete and which should result in a decrease in both the building (for functional depreciation) and land values.
The first hearing before the Mahoning County Board of Revision was on March 13, 1963, for the 1961 tax year complaints. Plaintiffs were represented by counsel, who requested that Cole-Layer-Trumble Company be asked to take another look at these properties. Plaintiffs' counsel cited the well-known conditions causing the decline of downtown real estate values. The only specific statement that he made as to these properties was that the sales of Lerner Shops had declined forty percent from 1950 to 1961; that McCrory Corporation had shown losses from 1956 through 1961; and that F. W. Woolworth had losses for all five years between 1958 through 1962. Cross-examination brought out that McCrory Corporation and F. W. Woolworth were losing money even though their sales had actually increased and their real estate taxes had been decreased.
Plaintiffs were also represented by counsel at the next hearing on June 17, 1964, for the 1963 tax year, but nothing new was said at this hearing.
Plaintiffs waived a hearing before the Mahoning County Board of Revision for the 1962 tax year complaints.
The hearing before the Mahoning County Board of Revision for the 1964 tax year complaints was held January 17, 1966. The decision of the Mahoning County Board of Revision was rendered January 21, 1966, and the appeal to the Common Pleas Court was filed January 26, 1966. The cases in the Common Pleas Court were heard between February 7, and 9, 1966, which was before the time required by Section 5717.05, Revised Code, for the Mahoning County Board of Revision to certify the transcript of the proceedings before it. Plaintiffs' motion to consolidate the 1964 tax year cases with the other cases was sustained over the objection of defendants, who pointed out that the transcript of the Mahoning County Board of Revision for the 1964 tax year cases was not before the court. An examination of the record of this case reveals that the transcript of the Mahoning County Board of Revision for the 1964 tax year cases was not incorporated as a part of the record of this case.
The specific factual question to be decided by the trial court was a determination of the true value in money for these properties on four different dates, namely: January 1, 1961; January 1, 1962; January 1, 1963; and January 1, 1964.
At the trial of these cases, testimony regarding values of this real estate was given by a reputable real estate expert on each side: Mr. A. E. Reinman, on behalf of the plaintiffs, and Mr. Russell Hahn, District Supervisor of the Cole-Layer-Trumble Company, on behalf of the defendants. Mr. Hahn used the appraisal of Cole-Layer-Trumble Company in 1959 as his valuation of these properties for the dates already mentioned, and he explained the method used to arrive at the valuation for each property. Mr. Hahn further testified that there was no appreciable change in real estate values for these properties from 1959 through 1964.
Mr. Reinman made his appraisals in January 1966, but adjusted them to January 1, 1964. He also testified that basically the real estate values of 1959 were the same as in 1964 except that more data was available in 1964.
In Mahoning County, the taxable value of real estate is forty-five percent of its true value.
The testimony of Mr. Reinman and Mr. Hahn as to the true value of the properties involved in these cases before the forty-five percent adjustment for taxable values is summarized as follows:
MR. REINMAN
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Buildings Total Land
----------- ----------- -------------
McCrory Corp. $312,716.00 $422,800.00 $ 755,516.00
Hamilton-Lerner Shops 144,500.00 130,500.00 275,000.00
F. W. Woolworth Co. 149,500.00 196,500.00 346,000.00
MR. HAHN
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Buildings Land Total
----------- ----------- -------------
McCrory Corp. $443,470.00 $609,050.00 $1,052,520.00
Hamilton-Lerner Shops 210,060.00 371,930.00 581,990.00
F. W. Woolworth Co. 197,180.00 534,610.00 731,790.00
Both appraisers agreed on the approaches that have to be taken in determining true value of real estate, but they used different methods to consider the various approaches, such as the determination of reproduction cost of building. There were discrepancies on the reproduction cost of the buildings, but the great variations affecting value were in the areas of judgment such as the value per front foot of the land, and the percentage of depreciation to apply on the reproduction cost of the buildings. The reason why judgment played such a part in determining front-foot values of land is the scarcity of comparable sales of downtown real estate for the dates at issue in this case.
The evidence reveals that a decline in downtown real estate values has been occurring in Youngstown, but the decline started much earlier than 1958, which defendants contend was the peak year of real estate values for downtown Youngstown. The County Auditor recognized the decline in the 1959 appraisal and allowed substantial reduction in the assessed values of downtown real estate for tax purposes.
Mr. Reinman's testimony indicates that further decline of downtown real estate values has occurred between 1959 and January 1966, when he made his appraisals, and the issue is whether the degree of such decline in values is properly reflected in the appraisal of these properties for each tax lien date.
The Common Pleas Court of Cuyahoga County had the same problem with the declining values on Euclid Avenue in Cleveland, Ohio, in the case of Payne-Bingham Co. v. Tax Commission, 2 Ohio Supp. 275, 27 Ohio Law Abst. 283, and we agree with its holding that it is the duty of the court to exclude from consideration all evidential matters postdating the time of the assessment. The Court Auditor makes appraisals on the basis of information available at the time of the tax assessment date, and he cannot be held responsible to detect a decline in real estate values that becomes evident by subsequent events.
A substantial part of Mr. Reinman's appraisals is based on recent information that is not a proper consideration in this case. Out of fifteen comparable sales used by him, only four occurred prior to January 1, 1961, and these four occurred in the period from 1951 to 1954. One comparable sale occurred April 2, 1962, and could be considered for the 1963 and 1964 tax cases, and three comparable sales occurred in 1963 and could be considered for the 1964 tax cases. Seven of these sales occurred after January 1, 1964, which is the latest time that appraisal information on the 1964 tax cases could be considered. Furthermore, Mr. Reinman relied heavily on the cost approach and some of the comparable sales relied on by Mr. Reinman in his testimony as a basis of his valuations occurred after January 1, 1964.
Mr. Reinman's data on comparable rentals is similarly based on recent information.
The next reappraisal of Mahoning County property is scheduled for 1968 and is...
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