Trimas initially challenged the 2002 assessment of their manufacturing facility. The PTABOA reduced the original assessment of $7,762,600 to $7,212,300. Trimas appealed the decision to the Indiana Board. 

Before the Indiana Board Trimas offered an appraisal estimating the value at $2,960,000. The assessor, on the other hand, offered an appraisal estimating the value at $8,000,000.  The large discrepancy in values resulted from, you guessed it, obsolescence. 

The Indiana Board found in favor of Trimas and reduced the assessment to $2,960,000. The assessor appealed to the Tax Court. 

At the heart of the case was the selection of the comparable sales used to value the subject property. Trimas’s expert relied on sales of vacant manufacturing properties, whereas the assessor relied on sales of occupied, owner/user manufacturing facilities. Then came the testimony. Trimas’s expert testified that: 

Trimas’s property suffered from external obsolescence because a loss of manufacturing jobs and companies within Indiana during the relevant time period saturated the market with manufacturing facilities for sale; that market, however, lacked buyers. (See Cert. Admin. R. at 273-74, 305, 827-28.) As a result, the sales prices for these facilities were low, particularly when compared to their respective replacement costs (i.e., the amount it would cost to construct facilities with similar utility). That market trend, noted Mitchell, affected what Trimas’s property would itself garner on the market: “[w]hen there’s an oversupply and a lack of demand, to remain competitive, if your neighbor drops their price, you have to drop your price.” (Cert. Admin. R. at 828.) 

The assessor claimed that vacant properties are not comparable to occupied properties and that the claim of external obsolescence was “absurd” because the comps relied upon were vacant and the Trimas property was occupied.  

In it’s decision the Tax Court stated: 

the Assessor misunderstands the concept of market value-in-use on its most basic level. Generally speaking, market value-in-use, as determined by objectively verifiable market data, is the value of a property for its use, not the value of its use. 

And there you have it. The taxpayer’s team was able to convince the deciding bodies that obsolescence existed. The assessor’s arguments, obviously, didn’t go over so well.

It is interesting to note that the BTA decided both the Target case and the Meijer case on the same day. The major difference being that in the Target case the school board did not appear and the county did not present any evidence to counter the appraisal and testimony of the taxpayer’s expert. 

So, I guess what the BTA and Supreme Court are saying is that if you want to make this argument you better hope that no one shows up to rebut the evidence.