IN THE SUPREME COURT OF OHIO Olentangy Local Schools Board of Education,

Appellant,

v.

Delaware County Board of Revision, Delaware County Auditor, and The Algoma Group

Appellees.

CaseNo.

Appeal from the Ohio Board of Tax Appeals - Case No. 2012-4555 [:3

~~ HAND DELlVE'RE§ 5

"

NOTICE OF APPEAL OF THE BOARD OF EDUCATION OF THE OLENTANGY LOCAL SCHOOLS

Mark Gillis (0066908) COUNSEL OF RECORD Rich & Gillis Law Group, LLC 6400 Riverside Drive, Suite D Dublin, Ohio 43017 (614)228-5822 Fax (614) 540-7474 mgillis@richgillislawgroup.com

Attorneys for Appellant Board of Education of the Olentangy Local School District

Mike Dewine (0009181) Ohio Attorney General 30 East Broad Street, 17th Floor Columbus, Ohio, 43215 Attorney for Appellee Tax Commissioner~

~~ JUL 21 2015 CLERK OF COURT

SUPREME COURT OF OHIO

~~ ~~ ~~

Thomas W. Palmer (0072816) COUNSEL OF RECORD Thompson Hine, LLP 41 South High St. Suite 1700 Columbus, Ohio 43215 (614) 469-3200 (614)469-3361 tom.palmer@thompsonhine.eom

Attorney for Appellee The Algoma Group

Carol O’Brien (0026965) Delaware County Prosecuting Attorney Mark W. Fowler (0080955) COUNSEL OF RECORD Assistant Prosecuting Attorney 140 N. Sandusky St., 3“‘ Floor Delaware, Ohio 431015 (740) 833-2701

Attorneys for Appellees County Auditor and Board of Revision

04>’%

IN THE SUPREME COURT OF OHIO Olentangy Local Schools Board of Education,

Case No. Appellant,

v.

Appeal from the Ohio Board of Delaware County Board of Revision, Tax Appeals — Case No. 2012-4555 Delaware County Auditor, and :

The Algoma Group

Appellees.

NOTICE OF APPEAL OF THE BOARD OF EDUCATION OF THE OLENTANGY LOCAL SCHOOLS

Now comes the Appellant, the Board of Education of the Olentangy Local School District, and gives notice of appeal to the Supreme Court of Ohio from the decision of the Ohio Board of Tax

Appeals in the case of Olenlangz Local Schools Board of Education v. Delaware County Board of

Revision, Delaware County Auditor, and The Algoma Group, BTA Case No. 2012-4555, rendered on June 22, 2015, a copy of which is attached hereto as Exhibit B. The Errors complained of therein are

set forth herein as Exhibit A.

Respe fully submitted,

Mark Gillis (0066908) Rich & Gillis Law Group, LLC 6400 Riverside Drive, Suite D Dublin, Ohio 43017 (614)228-5822

Attorneys for Appellant Board of Education of the Olentangy Local School District

EXHIBIT A - STATEMENT OF ERRORS (1) The BTA erred in failing to independently determine the value of the subject property; (2) The BTA erred by failing to recognize that as the Appellant before it, the Board of

Education could meet its burden of going forward with evidence by cross—examination of the original

complainant’s witnesses and written legal arguments demonstrating that the decision of the board of

revision was not supported by competent and probative evidence contained in the record;

(3) The BTA erred by giving the board of revision’s decision a presumption of validity. (4) The BTA erred by giving the board of revision’s decision any deference. (5) The BTA erred in retaining an otherwise unsupported reduction in value by the Delaware

County Board of Revision.

(6) The BTA erred in accepting an appraisal which valued the subject property “as encumbered” instead of in its unencumbered fee estate.

(7) The BTA erred in accepting an appraisal which valued the subject property “as encumbered” instead of in its unencumbered fee estate when the appraiser specifically testified that

he would have appraised property differently had he not been directed by the property owner’s

counsel to appraise the subject property as encumbered.

(8) The BTA erred in accepting an appraisal which valued the subject property “as encumbered” instead of in its unencumbered fee estate when the appraiser admitted that this

improper approach had an effect on his final opinion of value;

(9) The BTA erred in basing its decision on a single unadjusted sale contained within the appraisal which valued the subject property “as encumbered.”

(9) The BTA erred in failing to reinstate the Auditor’s original Value because the property owner failed to affirmatively negate the Auditor’s original valuation before the BOR or the BTA.

PROOF OF SERVICE ON THE OHIO BOARD OF TAX APPEALS I hereby certify that a true and complete copy of the foregoing notice of appeal was served

upon the Clerk of the Ohio Board of Tax Appeals, as is evidenced by its filing stamp set forth

hereon. K, Mark Gillis (0066908) Attorney for Appellant

CERTIFICATE OF SERVICE BY CERTIFIED MAIL I hereby certify that a true and complete copy of the foregoing notice of appeal was sewed on

the following by certified mail, return receipt requested, with postage prepaid, this 2 1 st day of J uly,

2015.

Thomas W. Palmer Thompson I-line, LLP 41 South High St. Suite 1700 Columbus, Ohio 43215

Mike Dewine Appellee Ohio Attorney General 30 East Broad Street, 17th Floor Columbus, Ohio, 43215

Carol O’Brien Delaware County Prosecuting Attorney Mark W. Fowler Assistant Prosecuting Attorney 140 N. Sandusky s:., 3" Floor Delaware, Ohio 431015

Mark Gillis (0066908) Attorney for Appellant

IN THE SUPREME COURT OF OHIO Olentangy Local Schools Board of Education,

Case No. Appellant,

v.

. Appeal from the Ohio Board of Delaware County Board of Revision, Tax Appeals - Case No. 2012-4555 Delaware County Auditor, and :

The Algoma Group

Appellees.

REQUEST TO CERTIFY ORIGINAL PAPERS TO THE SUPREME COURT OF OHIO TO: The Clerk of the Ohio Board of Tax Appeals:

The Appellant, who has filed a notice of appeal with the Supreme Court, makes this written

demand upon the Clerk and this Board to certify the record of its proceedings and the original papers

of this Board and statutory transcript of the Board of Revision in the case of Olentangx Local

Schools Board of Education v, Delaware County Board of Revision, Delaware CountyAua’itor, and

and The Algoma Group, BTA Case No. 2012-4555, rendered on June 22, 2015, to the Supreme Court ofOhio within 30 days of service hereofas set forth in RC. 5717.04.

Respectfully submitted, C_\ Mark Gillis (0066908) Rich & Gillis Law Group, LLC Attorneys for Appellant Board of Education

OHIO BOARD OF TAX APPEALS

OLENTANGY LOCAL SCHOOLS BOARD OF CASE NO(S). 2012-4555 EDUCATION, (et. 111.),

Appel|ant(s). (REAL PROPERTY TAX) vs. DECISION AND ORDER

DELAWARE COUNTY BOARD OF REVISION, (et. al.),

Appe1lee(s).

APPEARANCES: For the AppeIIanl(s) - OLENTANGY LOCAL SCHOOLS BOARD OF EDUCATION

Represented by: KELLEY A. GORRY RICH & GILLIS LAW GROUP, LLC 6400 RIVERSIDE DRIVE, SUITE D DUBLIN, OH 43017

For the Appellec(s) — DELAWARE COUNTY BOARD OF REVISION Represented by: MARK W. FOWLER ASSISTANT PROSECUTING ATTORNEY DELAWARE COUNTY 140 NORTH SANDUSKY STREET PO. BOX 8006 DELAWARE. OH 43015 THE ALGOMA GROUP Represented by; THOMAS WYATT PALMER THOMPSON HINE LLP 4] SOUTH HIGH STREET. SUITE 1700 COLUMBUS, OH 43215

Entered Monday, June 22, 2015

Mr. Williamson. Ms. Clements, and Mr. Harbarger concur.

This matter is before the Board of Tax Appeals upon remand from the Supreme Court of Ohio, which issued ajudgment entry in Olentangy Local Schools Bd. of Edn. v. Delaware Cty. Bd. of Revision, Sup. Ct. No. 20141674, 02/03/2015 Case Announcements, 2015-Ohio~370, remanding this matter with instructions to issue a detailed decision on two specific issues. The appellant appealed this board's decision dated August 29, 2014, which accepted the property owner's appraisal evidence. While the matter was pending, the parties jointly agreed to remand the matter to this board with instruction to issue a more detailed decision, which addressed specific issues raised by the parties: (1) "whether an

appraisal which values the property ‘as encumbered’ for tax year 2011 can be considered as competent and probative evidence" and (2) "whether the law promulgated by the Tax Commissioner pursuant to the General Assembly's grant of rulemaking authority requires real property to be valued as encumbered for tax year 2011." In consideration of the joint motion, the court remanded the matter to this board. Giving effect to the court's decision, we proceed, therefore, to consider this matter based upon the notice of appeal, the transcript certified by the BOR pursuant to KC. 5717.01, the record developed at this board's hearing, any written argument submitted by the parties, and the court's decision.

The appellant board of education ("BOE") appeals a decision of the board of revision ("BOR") which determined the value of the subject real property, parcel number 419-420-01-109-009, for tax year 2011. The subject's total true value was initially assessed at $654,100. The property owner, Algoma Group ("Algoma") filed a decrease complaint with the BOR, which requested that the subject property be valued at $360,000. The BOE filed a counter-complaint, which objected to the request. At the hearing before the BOR, Algoma submitted the testimony of an appraiser, Samuel Koon, MAI, who testified that the subject property was comprised of 22.27 acres of land, of which 6.337 acres were encumbered with a common access driveway and 4.959 acres were encumbered with a pond easement (collectively "deed restrictions"). Koon relied solely on the sales comparison approach to value, which compared the subject property to six vacant land sales located in the same vicinity as the subject property between March 2008 and July 2012. After making qualitative adjustments to account for differences between the subject property and the comparable properties, and considering the deed restrictions, Koon derived a per acre value of $26,000 for a total value of $580,000, rounded, as of the tax lien date. Counsel for the BOE cross~examined Koon about the nature of the deed restrictions and the adjustments made to the comparable sales from which he derived his opinion of value. The BOR issued a decision, which reduced the subject property's true value to $580,000, consistent with Koon's appraisal report, and this appeal ensued.

At this board's hearing, Algoma supplemented the record with additional testimony from Koon. On cross-examination, Koon testified that for ad-valorem tax purposes, he would normally appraise real property in its unencumbered state. However, at the direction of Algoma, Koon appraised the subject property to include the effect of the deed restrictions, which Algoma argued was consistent with the Tax Commissioner's ("Commissioner") directive to county auditors to consider all facts relevant to the value of real property. Following the hearing, the parties supplemented the record with written argument that expounded on their respective positions.

When cases are appealed from a board of revision to this board, an appellant must prove the adjustment in value requested. See, eg, Shinkle v. Ashtobula Cty. Bd. of Revision, 135 Ohio St.3d 227, 20l3—Ohio~397. Arr appellant may meet this burden of proof by showing that the BOR erred when it reduced a property's value from the amount first determined by the auditor. Vandalio-Butler City School Dist. Bd. of Edn. v. Montgomery Cty. Bd. of Revision, 106 Ohio St.3d 157, 2005-Ohio-4385. A party's election not to present its own evidence of value, however, is not without risk if another party's evidence is found competent, probative, and sufficiently persuasive‘ See, e.g., Westhoven, Inc. v. Wood Cty. Bd. o/‘Revision (1998), 81 Ohio SL3d 67.

As the Supreme Court of Ohio has consistently held, "[t]he best method of determining value, when such information is available, is an actual sale of such property between one who is willing to sell but not compelled to do so and one who is willing to buy but not compelled to do so. *** However, such information is not usually available, and thus an appraisal becomes necessary." State ex rel. Park Invest. Co. v. Bd. ofTax Appeals (1964), 175 Ohio St. 410.

Such is the case in this matter, as the record does not indicate that the subject property “recently” transferred through a qualifying sale. We proceed, therefore, to consider Algoma's appraisal evidence and the parties’ arguments.

Algoma argues that this board should follow the Ohio Administrative Code, specifically 5703-25-06(A) and 5703-25-1 l(B), as promulgated by the Commissioner, which directs county auditors to consider all facts, including restrictions and easements, to value real property. Algoma further argues that the Commissioner's rules have the force of law and that this board is required to follow such rules unless a conflict exists with statutory authority, citing Maralgate LLC v. Greene Cty. Bd. of Revision, 130 Ohio St.3d 316, 2011~Ohio~5448. According to Algoma, no such conflict exists.

The BOE argues that the Supreme Court's decision in a factually similar matter, Muirfield Assn., Inc. v. Franklin Cty. Bd. of Revision (1995), 73 Ohio St.3d 710, dictates the outcome in this appeal. There, the court concluded that a subdivision common area should not be valued to consider easements granted to owners of lots in the subdivision. In reaching its conclusion, the court relied on its prior holdings that "'[f]or real property tax purposes, the fee simple estate is to be values as if unencumbered,‘ subject only to the limitations caused by involuntary, governmental actions, such as eminent domain, escheat, police power, and taxation." Id. at 711.

As of the relevant tax lien date, RC! 5713.03 provided that: "The county auditor, from the best sources of information available, shall determine, as nearly as practicable, the true value of each separate tract, lot, or parcel of real property and of buildings, structures, and improvements located thereon and the current agricultural use value of land valued for tax purposes in accordance with section 5713.31 of the Revised Code, in every district, according to the rules prescribed by this chapter and section 5715.01 of the Revised Code, and in accordance with the uniform rules and methods of valuing and assessing real property as adopted, prescribed, and promulgated by the tax commissioner."

RC. 5713.03 has since been twice amended to also direct that the fee simple estate is to be valued as if unencumbered.

Promulgated pursuant to R.C. 5713.03, Ohio Adm. Code 5703-25—11(B) provides that: "All relevant facts tending to influence the market value of land should be considered, including, but not limited to, size, shape, topography, soil and subsoil, drainage, utility connections, street or road, land pattern, neighborhood type and trend, amenities, zoning, restrictions, easements, hazards, etc."

We acknowledge the Commissioner's rules directing county auditors to consider all relevant facts that influence market value; however, nothing in the rule required county auditors to value real property as encumbered for tax year 2011. We conclude, therefore, that "the law promulgated by the Tax Commissioner pursuant to the General Assembly's statutory grant of rulemaking authority" did not "require[] real property to be value as encumbered for tax year 2011." Compare Woda Ivy Glen Ltd. Partnership v. Fayette Cty. Bd. of Revision, 121 Ohio St.3d 175, 2009—0hio-762 (holding that governmental restrictions must be taken into account).

We further acknowledge the court's holding in Alliance Towers, Ltd. v. Stark Cty. Bd. of Revision (1988), 37 Ohio St.3d 16, paragraph one of its syllabus, that "[flor real property tax purposes, the fee simple estate is to be valued as if it were unencumbered." See, also, Muirfield Assn, supra. It is undisputed that the common access driveway and pond easement were private encumbrances. However, we

find that the data and analysis in K00n's appraisal report properly supports his ultimate opinion of value, even if the deed restrictions on the subject property are not considered. Koon‘s value of $26,000 per acre is bracketed by his sale comparables even in the absence of any adjustment made for the restrictions on the subject property. Indeed, Koon testified that the private encumbrances had very little effect on his opinion of value. At this board's hearing and in the appraisal report, Koon placed the most emphasis on sale comparable number 4, which sold for $1 1,914 per acre, before adjusting for site utility.

Finally, we acknowledge Algoma's argument that our failure to conclude that real property should be valued to include private encumbrances violates sections of the Ohio constitution, which guarantee equal protection of the laws and requires that real property be valued by uniform rule. While the Ohio Supreme Court has authorized this board to accept evidence on constitutional points, it has clearly stated that this board has no jurisdiction to decide constitutional claims. Cleveland Gear Co. v. Limbach (1988), 35 Ohio St.3d 229; MCI Telecommunications Corp. v. Limbach (1994), 68 Ohio St.3d 195. Therefore, we acknowledge Algoma's constitutional claims on appeal, but make no findings in relation to such claims.

It is therefore the order of this board that the true and taxable values of the subject property, as of January 1, 2011, were as follows:

TRUE VALUE $5 80,000 TAXABLE VALUE $203 ,000

It is the order of the Board of Tax Appeals that the subject property be assessed in conformity with this decision and order.

~ ‘ " W " I hereby certify the foregoing to be a true

. . V. V 7 . » » — . .7 . . and complete copy of the action taken by ,

the Board of Tax Appeals of the State of 'RE5UL'-r {)';:’v0-1-E ‘

YES No '

Ohio and entered upon its joumal this day, ,

with respect to the captioned matter. Mr. Williamson fivl Ms. Clement?

‘

i. ,«

\

'

Mr. Harbarger

~ Kathleen M. Crowley, Board Secretary

IN THE SUPREME COURT OF OHIO Olentangy Local Schools Board of Education,

Appellant,

V.

Delaware County Board of Revision, Delaware County Auditor, and The Algoma Group

Appellees.

15-1192 Case No.

Appeal from the Ohio Board of Tax Appeals - Case No. 2012-4555

NOTICE OF APPEAL OF THE BOARD OF EDUCATION OF THE OLENTANGY LOCAL SCHOOLS

Mark Gillis (0066908) COUNSEL OF RECORD Rich & Gillis Law Group, LLC 6400 Riverside Drive, Suite D Dublin, Ohio 43017 (614)228-5822 Fax (614) 540-7474 mgillis@richgillislawgroup.com

Attorneys for Appellant Board of Education of the Olentangy Local School District

Mike Dewine (0009181)

Thomas W. Palmer (0072816) COUNSEL OF RECORD Thompson Hine, LLP 41 South High St. Suite 1700 Columbus, Ohio 43215 (614) 469—3200 (614)469-3361 tom.palmer@thompsonhine.com

Attorney for Appellee The Algoma Group

Carol O’Brien (0026965) Delaware County Prosecuting Attorney Mark W. Fowler (0080955)

Ohio Attorney General COUNSEL OF RECORD 30 East Broad Street, 17th Floor Assistant Prosecuting Attorney Columbus, Ohio, 43215 140 N. Sandusky St., 3'" Floor Attorney for Appellee Tax Commissioner Delaware, Ohio 431015

(740) 833-2701 “E ‘Lee JUL '21zu15

ax or COURT _

supgiine COURT or OHIO

Attorneys for Appellees County Auditor and Board of Revision

IN THE SUPREME COURT OF OHIO Olentangy Local Schools Board of Education,

Case No. Appellant,

V.

. Appeal from the Ohio Board of Delaware County Board of Revision, Tax Appeals - Case No. 2012-4555 Delaware County Auditor, and :

The Algoma Group

Appellees.

NOTICE OF APPEAL OF THE BOARD OF EDUCATION OF THE OLENTANGY LOCAL SCHOOLS Now comes the Appellant, the Board of Education of the Olentangy Local School District,

and gives notice of appeal to the Supreme Court of Ohio from the decision of the Ohio Board of Tax

Appeals in the case of Olentangy Local Schools Board of Education v. Delaware County Board of Revision, Delaware Count)/Auditor, and T heAlgoma Group, BTA Case No. 2012-4555, rendered on June 22, 2015, a copy of which is attached hereto as Exhibit B. The Errors complained of therein are

set forth herein as Exhibit A.

Respe fully submitted,

Mark Gillis (0066908) Rich & Gillis Law Group, LLC 6400 Riverside Drive, Suite D Dublin, Ohio 43017 (614) 228-5822

Attorneys for Appellant Board of Education of the Olentangy Local School District

EXHIBIT A — STATEMENT OF ERRORS (1) The BTA erred in failing to independently determine the value of the subject property; (2) The BTA erred by failing to recognize that as the Appellant before it, the Board of

Education could meet its burden of going forward with evidence by cross—exarnination of the original

complainant’s witnesses and written legal arguments demonstrating that the decision of the board of

revision was not supported by competent and probative evidence contained in the record;

(3) The BTA erred by giving the board of revision’s decision a presumption of validity. (4) The BTA erred by giving the board of revision’s decision any deference. (5) The BTA erred in retaining an otherwise unsupported reduction in value by the Delaware

County Board of Revision.

(6) The BTA erred in accepting an appraisal which valued the subject property “as

encumbered” instead of in its unencumbered fee estate.

(7) The BTA erred in accepting an appraisal which valued the subject property “as encumbered” instead of in its unencumbered fee estate when the appraiser specifically testified that he would have appraised property differently had he not been directed by the property owner’s

counsel to appraise the subject property as encumbered.

(8) The BTA erred in accepting an appraisal which valued the subject property “as encumbered” instead of in its unencumbered fee estate when the appraiser admitted that this improper approach had an effect on his final opinion of value;

(9) The BTA erred in basing its decision on a single unadjusted sale contained within the appraisal which valued the subject property “as encumbered.”

(9) The BTA erred in failing to reinstate the Auditor’s original value because the property owner failed to affinnatively negate the Auditor’s original valuation before the BOR or the BTA.

PROOF OF SERVICE ON THE OHIO BOARD OF TAX APPEALS I hereby certify that a true and complete copy of the foregoing notice of appeal was served

upon the Clerk of the Ohio Board of Tax Appeals, as is evidenced by its filing stamp set forth hereon.

&\, Mark Gillis (0066908) Attorney for Appellant

CERTIFICATE OF SERVICE BY CERTIFIED MAIL I hereby certify that a true and complete copy of the foregoing notice of appeal was served on

the following by certified mail, return receipt requested, with postage prepaid, this 21st day of July,

2015.

Thomas W. Palmer Thompson Hine, LLP 41 South High St. Suite 1700 Columbus, Ohio 43215

Mike Dewine Appellee Ohio Attorney General 30 East Broad Street, 17th Floor Columbus, Ohio, 43215

Carol O’Brien Delaware County Prosecuting Attorney Mark W. Fowler Assistant Prosecuting Attorney 140 N. Sandusky St., 3"’ Floor Delaware, Ohio 431015

Mark Gillis (0066908) Attorney for Appellant

IN THE SUPREME COURT OF OHIO Olentangy Local Schools Board of Education,

Case No. Appellant,

v. Appeal from the Ohio Board of

Delaware County Board of Revision, Tax Appeals - Case No. 2012-4555 Delaware County Auditor, and :

The Algoma Group

Appellees.

REQUEST TO CERTIFY ORIGINAL PAPERS TO THE SUPREME COURT OF OHIO TO: The Clerk of the Ohio Board of Tax Appeals:

The Appellant, who has filed a notice of appeal with the Supreme Court, makes this written

demand upon the Clerk arid this Board to certify the record of its proceedings and the original papers

of this Board and statutory transcript of the Board of Revision in the case of Olentangy Local

School: Board of Education v. Delaware C ounly Board of Revision, Delaware CauntyAua'itor, and and The Algoma Group, BTA Case No. 2012-4555, rendered on June 22, 2015, to the Supreme

Court of Ohio within 30 days of service hereof as set forth in R.C. 5717.04.

Respectfully submitted,

Mark Gillis (0066908) Rich & Gillis Law Group, LLC Attorneys for Appellant Board of Education

OHIO BOARD OF TAX APPEALS

OLENTANGY LOCAL SCHOOLS BOARD OF CASE NO(S). Z012-4555 EDUCATION, (et. al.),

Appe1lant(s), (REAL PROPERTY TAX) vs. DECISION AND ORDER

DELAWARE COUNTY BOARD OF REVISION, (et. al.),

Appellee(s).

APPEARANCES: For the Appellant(s) - OLENTANGY LOCAL SCHOOLS BOARD OF EDUCATION

Represented by: KELLEY A. GORRY RICH & GILLIS LAW GROUP, LLC 6400 RIVERSIDE DRIVE, SUITE D DUBLIN, OH 43017 DELAWARE COUNTY BOARD OF REVISION Represented by: MARK W. FOWLER ASSISTANT PROSECUTING ATTORNEY DELAWARE COUNTY 140 NORTH SANDUSKY STREET P.O. BOX 8006 DELAWARE, OH 43015

For the AppelIee(s)

THE ALGOMA GROUP Represented by: THOMAS WYATI‘ PALMER THOMPSON HINE LLP 41 SOUTH HIGH STREET, SUITE 1700 COLUMBUS, OH 43215

Entered Monday, June 22, 2015

Mr. Williamson, Ms. Clements, and Mr. Harbarger concur.

This matter is before the Board of Tax Appeals upon remand from the Supreme Court of Ohio, which issued a judgment entry in Olentangy Local Schools Ba’. of Edn. v. Delaware Cty. Bd. of Revision, Sup. Ct. No. 2014-1674, 02/03/2015 Case Announcements, 2015-Ohio-370, remanding this matter with instructions to issue a detailed decision on two specific issues. The appellant appealed this board's decision dated August 29, 2014, which accepted the property owner's appraisal evidence. While the matter was pending, the parties jointly agreed to remand the matter to this board with instruction to issue a more detailed decision, which addressed specific issues raised by the parties: (1) "whether an

appraisal which values the property ‘as encumbered‘ for tax year 2011 can be considered as competent and probative evidence" and (2) "whether the law promulgated by the Tax Commissioner pursuant to the General Assembly's grant of rulemaking authority requires real property to be valued as encumbered for tax year 2011." In consideration of the joint motion, the court remanded the matter to this board. Giving effect to the court's decision, we proceed, therefore, to consider this matter based upon the notice of appeal, the transcript certified by the BOR pursuant to R.C. 5717.01, the record developed at this board's hearing, any written argument submitted by the parties, and the court's decision.

The appellant board of education ("BOE") appeals a decision of the board of revision ("BOR") which determined the value of the subject real property, parcel number 419-420-01-109-009, for tax year 2011. The subject's total true value was initially assessed at $654,100. The property owner, Algoma Group ("Algoma") filed a decrease complaint with the BOR, which requested that the subject property be valued at $360,000. The BOE filed a counter-complaint, which objected to the request. At the hearing before the BOR, Algoma submitted the testimony of an appraiser, Samuel Koon, MAI, who testified that the subject property was comprised of 22.27 acres of land, of which 6.337 acres were encumbered with a common access driveway and 4.959 acres were encumbered with a pond easement (collectively "deed restrictions"). Koon relied solely on the sales comparison approach to value, which compared the subject property to six vacant land sales located in the same vicinity as the subject property between March 2008 and July 2012. After making qualitative adjustments to account for differences between the subject property and the comparable properties, and considering the deed restrictions, Koon derived a per acre value of $26,000 for a total value of $580,000, rounded, as of the tax lien date. Counsel for the BOE cross—examined Koon about the nature of the deed restrictions and the adjustments made to the comparable sales from which he derived his opinion of value. The BOR issued a decision, which reduced the subject property's true value to $580,000, consistent with Koon's appraisal report, and this appeal ensued.

At this board's hearing, Algoma supplemented the record with additional testimony from Koon. On cross—examination, Koon testified that for ad-valorem tax purposes, he would normally appraise real property in its unencumbered state. However, at the direction of Algoma, Koon appraised the subject property to include the effect of the deed restrictions, which Algoma argued was consistent with the Tax Commissioner's ("Commissioner") directive to county auditors to consider all facts relevant to the value of real property. Following the hearing, the parties supplemented the record with written argument that expounded on their respective positions.

When cases are appealed from a board of revision to this board, an appellant must prove the adjustment in value requested. See, eg., Shinkle V. Ashtabula Cty. Bd. of Revision, 135 Ohio St.3d 227, 2013—Ohio-397. An appellant may meet this burden of proof by showing that the BOR erred when it reduced a property's value from the amount first determined by the auditor. Vandalia-Butler City School Dist. Bd. of Edn. v. Montgomery Cty. Bd. of Revision, 106 Ohio St.3d 157, 2005-Ohio-4385. A party's election not to present its own evidence of value, however, is not without risk if another party's evidence is found competent, probative, and sufficiently persuasive. See, e.g., Westhaven, Inc. v. Wood Cty. Bd. of Revision (1998), 81 Ohio St.3d 67.

As the Supreme Court of Ohio has consistently held, "[t]he best method of determining value, when such information is available, is an actual sale of such property between one who is willing to sell but not compelled to do so and one who is willing to buy but not compelled to do so. *** However, such information is not usually available, and thus an appraisal becomes necessary." State ex rel. Park Invest. Co. v. Bd. of Tax Appeals (1964), 175 Ohio St. 410.

Such is the case in this matter, as the record does not indicate that the subject property “recently” transferred through a qualifying sale. We proceed, therefore, to consider Algoma's appraisal evidence and the parties’ arguments.

Algoma argues that this board should follow the Ohio Administrative Code, specifically 5703-25-06(A) and 5703-25-11(B), as promulgated by the Commissioner, which directs county auditors to consider all facts, including restrictions and easements, to value real property. Algoma further argues that the Commissioner's rules have the force of law and that this board is required to follow such rules unless a conflict exists with statutory authority, citing Maralgate LLC v. Greene Cty. Bd. of Revision, 130 Ohio St.3d 316, 2011-Ohio-5448. According to Algoma, no such conflict exists.

The BOE argues that the Supreme Court's decision in a factually similar matter, Muirfield Assn., Inc. v.

Franklin Cry. Bd. of Revision (1995), 73 Ohio St.3d 710, dictates the outcome in this appeal. There, the court concluded that a subdivision common area should not be valued to consider easements granted to owners of lots in the subdivision. In reaching its conclusion, the court relied on its prior holdings that "'[f]or real property tax purposes, the fee simple estate is to be values as if unencumbered,’ subject only to the limitations caused by involuntary, governmental actions, such as eminent domain, escheat, police power, and taxation." Id. at 711.

As of the relevant tax lien date, R.C. 5713.03 provided that:

"The county auditor, from the best sources of information available, shall determine, as nearly as practicable, the true value of each separate tract, lot, or parcel of real property and of buildings, structures, and improvements located thereon and the current agricultural use value of land valued for tax purposes in accordance with section 5713.31 of the Revised Code, in every district, according to the rules prescribed by this chapter and section 5715.01 of the Revised Code, and in accordance with the uniform rules and methods of valuing and assessing real property as adopted, prescribed, and promulgated by the tax commissioner."

R.C. 5713.03 has since been twice amended to also direct that the fee simple estate is to be valued as if unencumbered.

Promulgated pursuant to R.C. 5713.03, Ohio Adm. Code 5703-25-11(B) provides that: "All relevant facts tending to influence the market value of land should be considered, including, but not limited to, size, shape, topography, soil and subsoil, drainage, utility connections, street or road, land pattern, neighborhood type and trend, amenities, zoning, restrictions, easements, hazards, etc."

We acknowledge the Commissioner's rules directing county auditors to consider all relevant facts that influence market value; however, nothing in the rule required county auditors to value real property as encumbered for tax year 2011. We conclude, therefore, that "the law promulgated by the Tax Commissioner pursuant to the General Assembly's statutory grant of rulemaking authority“ did not "require[] real property to be value as encumbered for tax year 201 1." Compare Woda Ivy Glen Ltd. Partnership v. Fayette Cty. Bd. of Revision, 121 Ohio St.3d 175, 2009-Ohio—762 (holding that governmental restrictions must be taken into account).

We further acknowledge the court's holding in Alliance Towers, Ltd. v. Stark Cty. Bd. of Revision (1988), 37 Ohio St.3d 16, paragraph one of its syllabus, that "[f]or real property tax purposes, the fee simple estate is to be valued as if it were unencumbered." See, also, Muirfield Assn., supra. It is

undisputed that the common access driveway and pond easement were private encumbrances. However, we

find that the data and analysis in Koon's appraisal report properly supports his ultimate opinion of value, even if the deed restrictions on the subject property are not considered. Koon's value of $26,000 per acre is bracketed by his sale comparables even in the absence of any adjustment made for the restrictions on the subject property. Indeed, Koon testified that the private encumbrances had very little effect on his opinion of value. At this board's hearing and in the appraisal report, Koon placed the most emphasis on sale comparable number 4, which sold for $11,914 per acre, before adjusting for site utility.

Finally, we acknowledge Algoma's argument that our failure to conclude that real property should be valued to include private encumbrances violates sections of the Ohio constitution, which guarantee equal protection of the laws and requires that real property be valued by uniform rule. While the Ohio Supreme Court has authorized this board to accept evidence on constitutional points, it has clearly stated that this board has no jurisdiction to decide constitutional claims. Cleveland Gear Co. v.

Limbach (1988), 35 Ohio St.3d 229; MC! Telecommunications Corp. v. Limbach (1994), 68 Ohio St.3d 195. Therefore, we acknowledge Algoma's constitutional claims on appeal, but make no findings in relation to such claims.

It is therefore the order of this board that the true and taxable values of the subject property, as of January 1, 2011, were as follows:

TRUE VALUE $5 80,000 TAXABLE VALUE $203 ,000

It is the order of the Board of Tax Appeals that the subject property be assessed in conformity with this decision and order.

1

BOARD OF TAX APPEALS I hereby certify the foregoing to be a true ,._..___.... and complete copy of the action taken by l the Board of Tax Appeals of the State of SEESULT OF vo-1-E

A yE§"'5 N0 Ohio and entered upon its joumal this day, ,

with respect to the captioned matter.

;Mr. Williamson

ljvls. Clements r%__ M :Mr. Harbarger

Kathleen M. Crowley, Board Secretary