Summary
affirming fact-finder's decision to adopt taxpayer's valuation
Summary of this case from In re Equalization Appeals of Walmart Stores, Inc.Opinion
520036
06-25-2015
In the Matter of HOME DEPOT U.S.A. INC., Respondent, v. ASSESSOR OF THE TOWN OF QUEENSBURY et al., Appellants. (And Another Related Proceeding.).
Muller, Mannix, Schachner & Hafner, LLC, Glens Falls (Leah Everhart of counsel), for Assessor of the Town of Queensbury and others, appellants. Bartlett, Pontiff, Stewart & Rhodes, P.C., Glens Falls (Karla Williams Buettner of counsel), for Queensbury Union Free School District, appellant. Cronin, Cronin, Harris & O'Brien, P.C., Uniondale (Erin O'Brien of counsel), for respondent.
Muller, Mannix, Schachner & Hafner, LLC, Glens Falls (Leah Everhart of counsel), for Assessor of the Town of Queensbury and others, appellants.
Bartlett, Pontiff, Stewart & Rhodes, P.C., Glens Falls (Karla Williams Buettner of counsel), for Queensbury Union Free School District, appellant.
Cronin, Cronin, Harris & O'Brien, P.C., Uniondale (Erin O'Brien of counsel), for respondent.
Before: PETERS, P.J., GARRY, EGAN JR. and LYNCH, JJ.
Opinion
PETERS, P.J.Appeal from an order of the Supreme Court (Krogmann, J.), entered January 28, 2014 in Warren County, which granted petitioner's applications, in two proceedings pursuant to RPTL article 7, to reduce the 2007 and 2008 tax assessments on certain real property owned by petitioner.
Petitioner operates a Home Depot retail store on a 10.62–acre parcel of real property in the Town of Queensbury, Warren County. The property includes a 93,065 square-foot building with an attached 18,720 square-foot garden center and parking area. After respondent Assessor of the Town of Queensbury assessed the property at $8,737,000 for both the 2007 and 2008 tax years, petitioner commenced these RPTL article 7 proceedings to challenge those assessments. At the ensuing trial, the parties presented the testimony and competing reports of their respective appraisers concerning the property's fair market value. Petitioner's appraiser, Chris Harland, used the comparable sales and income capitalization methods to value the property at $5,000,000 for 2007 and $5,050,000 for 2008. Respondents' appraiser, Neil Cherkosly, valued the property at $12,200,000 for both tax years using the comparable sales, income capitalization and reproduction cost methods. Supreme Court adopted the values set forth in Harland's appraisal and granted petitioner's applications. Respondents appeal.
A local tax assessment is presumptively valid and, to overcome that presumption, a petitioner must present substantial evidence that the property is overvalued (see Matter of Board of Mgrs. of French Oaks Condominium v. Town of Amherst, 23 N.Y.3d 168, 174–175, 989 N.Y.S.2d 642, 12 N.E.3d 1072 [2014] ; Matter of Niagara Mohawk Power Corp. v. Assessor of Town of Geddes, 92 N.Y.2d 192, 195, 677 N.Y.S.2d 275, 699 N.E.2d 899 [1998] ; Matter of Highbridge Dev. BR, LLC v. Assessor of the Town of Niskayuna, 121 A.D.3d 1324, 1325–1326, 995 N.Y.S.2d 305 [2014] ). Petitioner met this threshold burden here through its submission of the detailed appraisal of Harland, a certified real estate appraiser with considerable experience, who utilized accepted methodologies and adequately set forth his calculations and the necessary details regarding the properties (see Matter of Clara Welch Thanksgiving Home v. Board of Assessment Review for the Town of Otsego, County of Otsego & State of N.Y., 123 A.D.3d 1313, 1314, 999 N.Y.S.2d 247 [2014] ; Matter of Highbridge Dev. BR, LLC v. Assessor of the Town of Niskayuna, 121 A.D.3d at 1326, 995 N.Y.S.2d 305 ; Matter of Eckerd Corp. v. Semon, 44 A.D.3d 1232, 1233, 844 N.Y.S.2d 468 [2007] ). The appropriateness of the comparable properties used by Harland in his analysis goes to the weight to be given to his appraisal, not, as respondents contend, the appraisal's competency to raise a valid dispute regarding valuation (see Matter of FMC Corp. [Peroxygen Chems. Div.] v. Unmack, 92 N.Y.2d 179, 188, 677 N.Y.S.2d 269, 699 N.E.2d 893 [1998] ; Matter of Rite Aid of N.Y. No. 4928 v. Assessor of Town of Colonie, 58 A.D.3d 963, 966, 870 N.Y.S.2d 642 [2009], lv. denied 12 N.Y.3d 709, 881 N.Y.S.2d 17, 908 N.E.2d 925 [2009] ; Matter of Eckerd Corp. v. Semon, 35 A.D.3d 931, 933, 829 N.Y.S.2d 238 [2006] ).
With petitioner having rebutted the presumptive validity of the assessments, Supreme Court was obligated to “weigh the entire record, including evidence of claimed deficiencies in the assessment, to determine whether petitioner has established by a preponderance of the evidence that its property has been overvalued” (Matter of FMC Corp. [Peroxygen Chems. Div.] v. Unmack, 92 N.Y.2d at 188, 677 N.Y.S.2d 269, 699 N.E.2d 893 ; accord Matter of Board of Mgrs. of
French Oaks Condominium v. Town of Amherst, 23 N.Y.3d at 175, 989 N.Y.S.2d 642, 12 N.E.3d 1072 ; Matter of Village Sq. of Penna, Inc. v. Board of Assessment Review of Town of Colonie, 123 A.D.3d 1402, 1404, 999 N.Y.S.2d 610 [2014], lv. denied 25 N.Y.3d 903, 2015 WL 1471834 [2015] ). “Where, as here, conflicting expert evidence is presented, we defer to the trial court's resolution of credibility issues, and consider whether the court's determination of the fair market value of the subject property is supported by or against the weight of the evidence” (Matter of Lowe's Home Ctrs., Inc. v. Board of Assessment Review and/or Dept. of Assessment Review of Tompkins County, 106 A.D.3d 1306, 1307, 965 N.Y.S.2d 657 [2013] [internal quotation marks and citations omitted]; see Highbridge Dev. BR, LLC v. Assessor of the Town of Niskayuna, 121 A.D.3d at 1327–1328, 995 N.Y.S.2d 305 ).
Respondents' primary objection to Harland's appraisal concerns the comparable properties employed in his analysis, which focused on the fee simple value of the property unencumbered by any leases. Whereas Cherkosly used two big-box store sales encumbered by long-term leases in his sales comparison analysis, Harland utilized the sales of seven vacant big-box stores located outside of the Capital District. For his income capitalization approach, Harland chose as comparable properties six second-generation lease properties—that is, retail leases of buildings formerly occupied by big-box retailers. Harland explained that, unlike Cherkosly, he did not use any properties subject to build-to-suit leases because such leases are typically above market and encompass land acquisition, development and construction costs that do not reflect the actual market value of the property. Harland declined to consider the properties utilized as comparables by Cherkosly on this basis, opining that the sale and lease of large retail stores on the open market were more reflective of true market value.
We have repeatedly found Harland's rationale for excluding properties subject to build-to-suit leases to be plausible (see Matter of Eckerd Corp. v. Burin, 83 A.D.3d 1239, 1242–1243, 920 N.Y.S.2d 824 [2011] ; Matter of Rite Aid of N.Y. No. 4928 v. Assessor of Town of Colonie, 58 A.D.3d at 966, 870 N.Y.S.2d 642 ; Matter of Brooks Drugs, Inc. v. Board of Assessors of City of Schenectady, 51 A.D.3d 1094, 1095, 856 N.Y.S.2d 304 [2008], lv. denied 11 N.Y.3d 710, 872 N.Y.S.2d 72, 900 N.E.2d 555 [2008] ; Matter of Eckerd Corp. v. Semon, 44 A.D.3d at 1234, 844 N.Y.S.2d 468 ; Matter of Eckerd Corp. v. Semon, 35 A.D.3d at 934, 829 N.Y.S.2d 238 ; see also Matter of Kohl's Ill., Inc., # 691 v. Board of Assessors of the Town of Clifton Park, 123 A.D.3d 1315, 1317, 999 N.Y.S.2d 250 [2014] ), and find no reason to reach a different conclusion here. While most of the comparable properties utilized by Harland are outside the immediate geographic vicinity of the subject property, the decision whether to accept such evidence rests within the sound discretion of the trial court (see Matter of General Elec. Co. v. Town of Salina, 69 N.Y.2d 730, 731, 512 N.Y.S.2d 359, 504 N.E.2d 686 [1986] ; Matter of Great Atl. & Pac. Tea Co. v. Kiernan, 42 N.Y.2d 236, 241–242, 397 N.Y.S.2d 718, 366 N.E.2d 808 [1977] ; Matter of General Elec. Co. v. Assessor of Town of Rotterdam, 54 A.D.3d 469, 473, 863 N.Y.S.2d 121 [2008], lv. denied 11 N.Y.3d 711, 872 N.Y.S.2d 73, 900 N.E.2d 556 [2008] ; Welch Foods v. Town of Westfield, 222 A.D.2d 1053, 1054, 635 N.Y.S.2d 400 [1995] ). We find no abuse of that discretion here, as the record reflects that the number of reasonably similar home improvement stores in the vicinity was limited, and Harland explained the basis for his decision not to consider such nearby properties, set forth relevant demographic data and traffic counts to support the comparable markets he relied on and provided detailed adjustment grids together with explanations for the adjustments made so as to permit a meaningful comparison to the subject property (see Matter of United Parcel Serv. v. Assessor of Town of Colonie, 42 A.D.3d 835, 838, 840 N.Y.S.2d 222 [2007] ). Emphasizing that the primary comparable relied upon by Cherkosly was not the product of an arm's length transaction and noting the absence of any factual support or explanation for the admittedly “subjective” adjustments that he made to his comparable properties, Supreme Court ultimately found the comparable properties used by Harland to be superior to those used by Cherkosly. Upon our review of the record and according appropriate deference to Supreme Court's assessment of credibility, we cannot say that its decision to credit the findings and conclusions set forth in Harland's appraisal was contrary to the weight of the evidence (see
Matter of Gran Dev., LLC v. Town of Davenport Bd. of Assessors, 124 A.D.3d 1042, 1047, 2 N.Y.S.3d 237 [2015] ; Matter of Highbridge Dev. BR, LLC v. Assessor of the Town of Niskayuna, 121 A.D.3d at 1327–1328, 995 N.Y.S.2d 305 ; Matter of Eckerd Corp. v. Burin, 83 A.D.3d at 1243, 920 N.Y.S.2d 824 ; Matter of Rite Aid of N.Y. No. 4928 v. Assessor of Town of Colonie, 58 A.D.3d at 966, 870 N.Y.S.2d 642 ; Matter of Eckerd Corp. v. Semon, 35 A.D.3d at 934, 829 N.Y.S.2d 238 ).
ORDERED that the order is affirmed, with costs.
GARRY, EGAN JR. and LYNCH, JJ., concur.