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Tax tribunal adopts sale-approach valuation of retail property to determine property tax assessment

The court held that the TT "properly exercised its discretion and expertise in weighing and assessing the evidence" presented at the hearing on the petitioner-retail store's challenge to the respondent-city's ad valorem tax assessment. It also held that "competent, material, and substantial evidence" supported the TT's methodological choices, and it did not misapply the law or adopt wrong principles in making those choices. Finally, it held that the TT did not "misapply the law or appropriate wrong principles in determining the property's existing use, present economic income, or highest and best use, nor in hypothesizing a sale of the property in order to determine its TCV under the sales-comparison approach." Petitioner challenged respondent's ad valorem property tax assessment. After hearings on the issue, the TT rejected respondent's assessment and found for petitioner. It determined that "the sales-comparison approach was the valuation methodology most useful in assisting it to make an independent determination" of the property's TCV, and that "the most weight should be given to three of the parties' four mutual comparables, excluding one as an outlier, and that primary consideration should be given to petitioner's adjusted sales prices because they were 'better supported by the record.'" Based on these guidelines, the TT found "a rounded TCV of $4,485,000 for 2011, and $4,440,000 for 2012." On appeal, the court rejected respondent's argument that the TT erred by relying primarily on the sales-comparison approach in making its own determination of the property's value and by refusing to consider leased fee transactions. "The record shows that the [TT] considered the general relevance of the three . . . traditional approaches to valuing the subject property, analyzed the strengths and weaknesses of each appraiser's particular calculations under the different approaches, and explained the reasoning behind its independent determination of value." It assessed the witnesses' credibility, weighed the documentary evidence, and drew on its own expertise to conclude that the property's TCV "could most accurately be determined by relying primarily on the sales-comparison approach, using specified comparables." The court also rejected respondent's argument that the TT violated MCL 211.27(1) by failing to consider "the existing use and present economic income" of the property "as a continuously occupied, successful home improvement store, erroneously presuming that the highest and best use of the property could not be its existing use, and hypothesizing a sale" that petitioner had no intention of making. The TT "did not misapply the law or adopt a wrong principle when, in the context of the sale-approach valuation of the property, it did not consider the store's customer sales receipts." Affirmed.


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