Following a commercial tax appeal to the State Tax Commission, Cinema 16, LLC (“Cinema”), a sixteen screen movie theater in Springfield, Missouri (Greene County), convinced a hearing officer to dramatically lower the tax assessment set by Greene County and, subsequently, the Board of Equalization. At the hearing, both Cinema and Greene County presented experts, and the hearing officer’s opinion highlights the importance of vetting an appraisal expert prior to trial.
Here, primarily adopting the income approach, the hearing officer concluded that the County’s expert’s methodology was unreliable:
Respondent’s income approach is not reliable inasmuch as Respondent’s appraiser based his opinion of value of the averaged rent per screen. This is not an acceptable appraisal methodology. As indicated by Respondent’s appraiser, the value was more than $3,000,000 different between the low end of the range and high end of the range. The appraiser’s job was to study the various comparables and follow some logical analysis tending to demonstrate where the characteristics of the subject would place it within the range of possible values. This cannot be accomplished by merely determining the mathematical average of possible values.
Unlike the Greene County’s appraiser, Cinema’s appraiser presented reliable data for both the income approach and sales comparison approach. As a result, the assessed value set by the Greene County Board of Equalization was set aside and the fair market value of the property was set at $4,300,000.00.
Case Reference: Cinema 16, LLC v. Rick Kessinger
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