State ex rel. Geipel v. City of Milwaukee

• Decision Date: 03 June 1975
• Docket Number: No. 333,333
• Citation: 68 Wis.2d 726,229 N.W.2d 585
• Parties: STATE ex rel. Harvey GEIPEL et al., Appellants, v. CITY OF MILWAUKEE et al., Respondents.
• Court: Wisconsin Supreme Court

Page 585

229 N.W.2d 585

68 Wis.2d 726

STATE ex rel. Harvey GEIPEL et al., Appellants, v. CITY OF MILWAUKEE et al., Respondents.

No. 333.

Supreme Court of Wisconsin.

June 3, 1975.

The judgment appealed from quashed a writ of certiorari to review the proceedings and decision of the Milwaukee board of review in refusing to set aside 1970 tax assessments on two parcels of real property owned by appellants Harvey and Caroline Geipel.

The parcels of land involved in this case are located in the city and county of Milwaukee, and are adjacent to one another. One is located at 9701 West Fairy Chasm Road, Tax Key No. 034--9994, described as the NW 1/4 of the SE 1/4 of Section 5, T8N, R 21 E and is composed of about 40 acres. The other tract is located at 9700R West Brown Deer Road, Tax Key No. 034--9999--100, described as the N 1/2 of the SW 1/4 of the SE 1/4 of Section 5, T8N, R 21 E, composed of about 20 acres.

As of May 1, 1970, the date of the disputed assessment, the land was unimproved, with the exception of the appeallants' home which was located on the 20-acre tract. Neither tract was within 600 feet of a public road, sewer or water supply. The only access to the land was over a private gravel road.

In 1969, the assessment for the 20-acre tract was $25,410 on the land and $17,860 for the improvements. In 1970, the assessment was $80,850 for the land and $17,860 for the improvements. The assessments for the 40-acre tract were $48,400 in 1969, and $132,000 in 1970.

The significant increase in assessment, which was arrived at by computing 55 percent of fair market value, resulted from the district assessor's determination that as of May 1, 1970, the fair market value of the property was $6,000 per acre for the 40-acre lot and $7,000 per acre for the 20--acre lot. That determination, which was contested by the appellants, was upheld by both the Milwaukee board of assessors and the board of review.

Three witnesses testified at the hearing before the board of review on November 9, 1971. Alan Retzlaff, a Milwaukee real estate developer, testified that on December 1, 1967, Skyline Realty, Inc., a corporation of which he was president and sole stock-holder, entered into an exclusive option agreement with the appellants to purchase 304 acres of their land, including the 60 acres involved here, over a ten and one-half year period. The agreement provided that at the end of each year at least 10 percent of the total acreage had to have been purchased for each year that had elapsed or the option would be extinguished. The land was to be used for a planned development, including residential, recreational and industrial uses.

Under the terms of the agreement, the purchase price for the land was to be $3,305 per acre plus or minus adjustments based on fluctuations in the Consumer Price Index. As of May 1, 1970, the contract purchase price per acre was $3,837.

Retzlaff further testified that several sales had been consummated under the terms of the agreement. On October 1, 1968, 94.5 acres were purchased for $3,335 per acre. On March 4, 1969, 89.3 acres adjacent to the objected-to 60 acres were purchased for $3,335 per acre. On August 27, 1970, 1.1 acres of the objected-to 60 acres were purchased for $3,851 per acre. On September 29, 1971, 4.5 acres of the objected-to 60 acres were purchased for $4,022 per acre.

Retzlaff also testified that development costs for the objected-to 60 acres (i.e., for sewers, pavements and utilities) would be approximately $500,000.

Appellant Harvey Geipel testified that before entering into the agreement with Skyline Realty, Inc., he had had the subject property for sale 'for a good many years' and had 'several realtors work on it,' but had never received an offer higher than that from Skyline Realty, Inc. There had been on offer of $2,000 per acre from another party the year before.

Lawrence Ternes, the district assessor who appraised the appellants' property, testified that although he was aware of the option agreement and the sales made thereunder, he based his valuation of the property solely on sales of what he considered to be comparable properties, all about five miles from the disputed property. The first of these 'comparables' was a sale on September 8, 1966 of 16.13 acres at 7023 West Brown Deer Road for $6,000 per acre. Ternes conceded that unlike the disputed property, which was 600 feet from the nearest public street, sewer or water supply and was about three miles from the nearest expressway interchange, the property at 7023 West Brown Deer Road had about 600 feet of road frontage, a sewer available, was three blocks from a major expressway interchange, and three blocks from a major shopping center.

The second 'comparable' involved a sale in January, 1970 of 26.7 acres at 1200 West Mill Road for $8,266 per acre. Ternes admitted that such property had road frontage and was within a mile and a half of an expressway interchange.

The third 'comparable' involved the sale of 7.69 acres at 7276 and 7530 North Lovers Lane Road for $28,479 per acre. Such property had road frontage, sewer and water available, and was within one-half mile of four major highways. The sale price included all development costs and the property had a higher permissible density than any of the others.

Ternes testified that the comparable sales method of valuation was the only one used and that these were the only comparable sales he considered. He testified that he did not rely on the price in the option agreement because such agreement did not contemplate a 'sale' of property, but rather a 'development agreement' between the parties and hence was not representative of fair market value. Ternes' testimony reveals two reasons for this conclusion: (1) The option agreement provided that the appellants could repurchase their house, valued at about $32,500, and two acres of land, all for $6,670; (2) the contract grants the appellants a right of first refusal with respect to the purchase of industrial buildings constructed on the 304 acres.

Finally, Ternes testified that he did not consider the $500,000 development costs in arriving at his valuation because in his opinion such figure also included development costs for other parcels of land.

The appellants petitioned the circuit court for Milwaukee county for a writ of certiorari to review the proceedings of the board of review. Such writ was issued but was quashed upon the respondents' motion, the circuit court being of the opinion that the option agreement was not a 'sale' in that it 'lacks the arm's length characteristics necessary to constitute a true sale.'

Niebler & Niebler, John H. Niebler, Menomonee Falls, for appellants.

James B. Brennan, City Atty., and William J. Lukacevich, Asst. City Atty., Milwaukee, for respondents.

BEILFUSS, Justice.

The basic issue is whether the assessor's method of valuation was proper under the facts of this case.

The scope of review by certiorari is strictly limited in Wisconsin. As stated in State v. Goulette (1974), 65 Wis.2d 207, 215, 222 N.W.2d 622, 626, the reviewing court may consider only:

'. . . (1) Whether the board kept within its jurisdiction; (2) whether it acted according to law; (3) whether its action was arbitrary, oppressive or unreasonable and represented its will and not its judgment; and (4) whether the evidence was such that it might reasonably make the order or determination in question. State ex rel. Ball v. McPhee (1959), 6 Wis.2d 190, 94 N.W.2d 711; State ex Rel. Wasilewski v. Board of School Directors (1961), 14 Wis.2d 243, 111 N.W.2d 198; State ex rel. Kaczkowski v. Fire & Police Comm. (1967), 33 Wis.2d 488, 148 N.W.2d 44, 149 N.W.2d 547; State ex rel. Hippler v. Baraboo (1970), 47 Wis.2d 603, 178 N.W.2d 1. . . .'

In the context of property assessment for purposes of taxation the court may determine whether the assessment was made on the statutory basis, for such inquiry involves a question of law. State ex rel. Garton Toy Co. v. Mosel (1966), 32 Wis.2d 253, 257, 145 N.W.2d 129; State ex Rel. Boostrom v. Board of Review (1969), 42 Wis.2d 149, 156, 166 N.W.2d 184; State ex rel. Markarian v. Cudahy (1970), 45 Wis.2d 683, 686, 173 N.W.2d 627. If the proper basis was used, however, and the valuation was not made arbitrarily or in bad faith, the reviewing court must sustain the valuation if there is any evidence to support it. State ex rel. Pierce v. Jodon (1924), 182 Wis. 645, 648, 197 N.W. 189; State ex rel. Dane County Title Co. v. Board (1957), 2 Wis.2d 51, 63, 85 N.W.2d 864; State ex rel. Garton Toy Co., supra.

The pertinent statute, sec. 70.32(1), Stats., provides in part:

'Real estate, how valued. (1) Real property shall be valued by the assessor in the manner specified in the Wisconsin property assessment manual provided under s. 73.03(2a) from actual view or from the best information that the assessor can practicably obtain, at the full value which could ordinarily be obtained therefor at private sale. In determining the value the assessor shall consider, as to each piece, its advantage or disadvantage of location, quality of soil, quantity of standing timber, water privileges, mines, minerals, quarries, or other valuable deposits known to be available therein, and their value; but the fact that the extent and value of minerals or other valuable deposits in any parcel of land are unascertained shall not preclude the assessor from affixing to such parcel the value which could ordinarily be obtained therefor for at private sale. . . .'

The proper statutory basis for assessment has been set forth repeatedly by this court:

'The valuation of real estate tax purposes is governed by sec. 70.32(1), Stats., which requires it to be valued from the best information at 'the full value which could ordinarily be obtained therefor at a private sale.' Commonly stated, sec. 70.32(1) requires real estate to be...