Anyone that has been involved in property tax appeals in Ohio is, most likely, aware of the deciding bodies’ affection for using a property’s purchase price to establish it’s True Value.  Sometimes the decisions make sense, sometimes they’re questionable and sometimes they will leave you scratching your head. The recently decided case of FirstCal Industrial 2 Acquisitions, L.L.C. v. Franklin Cty. Bd. of Revision Et Al. falls into the latter bucket.

In October 2005 (approx. 10 months after the tax lien date) FirstCal purchased 72 warehouse buildings in Ohio. Five of the properties were located in Franklin County. FirstCal filed a conveyance-fee statement reporting a bulk sale price of approx. 34.3 million for the five Franklin County properties. This, of course, represented an allocation of the total price paid for the entire 72 property portfolio. There was no allocation per property on the conveyance-fee statement or in the purchase contract.

The School Boards in the districts where the properties were located appealed the auditor’s value and sought increases. In their complaints the School Boards arrived at new values by:

(1) determining each parcel’s percentage of the aggregate value assessed as to all parcels by the auditor and then (2) applying that percentage to the $34,336,121 sale price.

The BOR, BTA and the Supreme Court all agreed that this was an appropriate way to arrive at the value of the properties for tax purposes.

Really? No appraisals, no allocation on either the buyer or seller’s part, and applying an allocation of an allocation  according to a flawed formula is an appropriate way to arrive at the fair market value of a property?

If, after reading The Supreme Court’s decision, you find yourself wanting to read the BTA decision as well, you can find it here

In the recent post A Good Big Box Property Tax Appeal Case I discussed a decision by the Supreme Court of Ohio that I thought was a taxpayer friendly opinion that accurately reflected the realities of the big box retail market. Well, it appears as though the Supreme Court has said, “not so fast” with the decision of Meijer Stores Ltd. V. Franklin Cty. Bd. of Revision, in which an almost complete reversal of position was taken regarding obsolescence and the market for big box retail stores. 

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.