2000 Synopsis -- Commercial Chapter

Section 16-190 of the Property Tax Code

(35 ILCS 200/16-190, Illinois Compiled Statutes)

Official Rules - Section 1910.76

Printed by Authority of the State of Illinois

The subject property consists of a 1,147 square foot commercial office condominium building of frame construction. 

The appellant claimed overvaluation as the basis of the appeal. In support of his contention, the appellant submitted evidence indicating the subject property was purchased for $60,000 in May 1999. The appellant indicated the subject was listed through a Realtor on the open market for approximately one year. Based on this evidence, the appellant requested a reduction in the subject property’s total assessment. 

The board of review submitted its “Board of Review - Notes on Appeals,” wherein the subject property’s total assessment of $21,500 was disclosed. The subject property has an estimated value, as reflected by its assessment, of $64,506. In support of its assessment, the board of review offered evidence of five suggested comparable sales. These properties are also commercial office condominiums that range in size from 987 to 1,149 square feet of living area. The comparables were sold between September 1995 and May 1999 for prices ranging from $60,000 to $90,000 or from $42.37 to $77.71 per square foot of building area including land. The board of review also argued the recent purchase price of the subject property was not indicative of its true market value because it was not an arm’s length transaction. Furthermore, it noted the seller of the subject property was a bank that had previously obtained the property through a foreclosure sale. Based on the evidence contained in the record, the board of review requested confirmation of the subject property’s total assessment. 

After reviewing the record and considering the evidence, the Property Tax Appeal Board finds that it has jurisdiction over the parties and the subject matter of this appeal. The Property Tax Appeal Board finds the appellant sufficiently established overvaluation. 

In support of his overvaluation contention, the appellant submitted evidence indicating the subject property was purchased for $60,000 in May 1999. The Property Tax Appeal Board finds the evidence of the subject property’s sale is the best evidence contained in the record. The subject property’s market value, as reflected by its assessment, of $64,506 is slightly higher than the subject property’s recent sale price. The Property Tax Appeal Board finds the board of review’s contention, that the sale price should automatically be discounted because it was transferred through a special warranty deed from a banking institution, is without merit. The evidence disclosed the subject property was listed through a Realtor and was exposed to the open market for over a year. Based on the evidence contained in the record, the Property Tax Appeal Board finds the appellant sufficiently established overvaluation.

Therefore, the Property Tax Appeal Board finds the subject property’s assessment as established by the board of review is incorrect and a reduction is warranted.

The subject property consists of a two-story brick motel containing 216,929 square feet of building area with entrance canopy, restaurant, lounge and swimming pool.  The facility was originally constructed as a Ramada Inn and contains 123 units.  The improvements are situated on a 4.98 acre site located in Alton, Illinois.  The appellant purchased the property in May 1993 for a recorded price of $1,377,000.  The swimming pool was enclosed July 1995 for a cost of $319,300. 

The appellant appeared before the Board claiming both overvaluation and unequal treatment as the basis of the appeal.  In support of these arguments, the appellant presented the evidence and testimony of a tax consultant. 

With respect to the overvaluation argument, the witness explained that the purchase price of the subject property included $274,400 of personal property, which should be deducted to arrive at the value of the real estate.  However, there was no documentation submitted in support of this contention.  The appellant’s witness also submitted income and expense data for the subject for a period dating from April 1997 to April 1998.  These documents indicated “for internal use only”.  The Board finds the data to be an unaudited account of income and expenses attributed to the subject property prepared by the owner for income tax purposes and the data does not provide any substantive documentation in support of the subject property’s market value. 

In support of the equity argument, the appellant’s witness prepared a grid chart containing descriptions and assessment information on four suggested comparable motels that were compared to the subject property.  These properties consist of two story style motels of brick or brick and frame construction that range is size from 83,635 to 304,049 square feet of area.  The motels have between 59 and 199 units and are situated on sites ranging from 3.00 to 6.98 acres.  Three of the properties are located in Collinsville, one in Troy and they range between 20 and 25 miles from the subject property.  These motels have full values from $780,180 to $1,718,010; unit values between $9,545 and $13,431; and assessments from $3,182 to $4,477 per unit including land.  The subject property’s assessment of $575,650 equates to a full value of $1,731,800 using Madison County’s 1998 median level of assessments of 33.24%; a unit value of $14,080; and a per unit assessment of $4,693 including land. 

On the basis of this information, the appellant requested a reduction in the assessment of the subject property to $473,630.  This assessment equated to a full value of $1,424,880; a per unit value of $11,583; and a per unit assessment of $3,475 including land. 

In rebuttal, the board of review explained that none of the motels analyzed by the appellant’s witness are located in Alton Township.  Alton Township is one of the townships in Madison County that was reassessed in 1999.  The comparables are located in townships that were not reassessed in 1999.  Thus, the board contends, the equity analysis is flawed because the properties used by the appellant’s witness are located in townships that have different reassessment periods resulting in different valuations and assessments.  The board further argued that the motels compared to the subject have less desirable locations than the subject property.  The subject has a projected daily traffic count of 26,000 cars per day.  The comparables have projected traffic counts between 11,700 and 20,100 per day.  The board of review further contends that the construction quality of the subject is superior to the suggested comparables.  Finally, the board pointed out that the appellant’s comparative analysis did not contain adjustments for differences between the comparables and the subject property. 

The board of review presented its "Board of Review-Notes on Appeal" form wherein the final assessment of the subject property of $575,650 was disclosed.  The board of review submitted a summary equity report prepared by the supervisor of assessments office.  The report first reviewed the appellant’s evidence.  The data were analyzed and summarized to determine the comparability of the suggested motels presented by the appellant’s witness.  Based on the analysis, the board of review concluded none of the properties submitted were truly comparable to the subject property.  The report the also compared three additional motel properties located in Alton Township to the subject property.  These properties consist of motels of brick or frame and brick construction with similar or less amenities than the subject property.  They contain from 75 to 138 units and are located from 1/4 mile to two miles of the subject property.  These properties have full values that range between $1,067,000 and $3,359,370 including land; unit values between $16,937 and $24,343; and assessments ranging from $5,646 to $8,114 per unit.  After considering adjustments for differences in amenities, number of units, age and quality of construction, the board or review concluded the subject’s valuation of $14,080 and assessment of $4,693 per room is equitable based on the assessor’s valuations and assessments of comparable motels located in Alton.  Based upon this analysis, the board of review contends the subject property’s assessment is supported and requests confirmation of the final assessment to maintain equity within the township. 

In rebuttal, the appellant’s witness pointed out differences between the subject property and the comparables presented by the board of review that should be considered when computing the valuation of the subject property. 

After hearing the testimony and reviewing the record, the Property Tax Appeal Board finds that it has jurisdiction over the parties and the subject matter of this appeal.  Upon analysis of the evidence submitted by the parties, the Board further finds that no reduction is warranted. 

The appellant first argued overvaluation.  When overvaluation is the basis of an appeal, the appellant has the burden of proving through supporting documentation that the valuation of the property is excessive.  Proof of the market value of the property may consist of an appraisal of the subject property as of the assessment date; a recent arm's length sale of the subject property; documentation of recent sales of suggested comparable properties together with documentation of their similarity to the subject property; or documentation of recent construction costs of the improvements, including labor and the land value. 

Section 1910.63(b) of the Board's Official Rules states that under the burden of going forward, the contesting party must provide substantive documentary evidence or legal argument challenging the correctness of the assessment of the subject property. 

In this case, the evidence offered by the appellant did not provide enough data to refute the board of review’s valuation of the subject property.  As a result, the Property Tax Appeal Board finds that the valuation of the subject property as established by the board of review is confirmed. 

The appellant also argued unequal treatment.  The Illinois Supreme Court has held that taxpayers who object to an assessment on the basis of lack of uniformity bear the burden of proving the disparity of assessment valuations by "clear and convincing" evidence.  Kankakee County Board of Review v. Property Tax Appeal Board, 131 Ill.2d 1 (1989).  The evidence must demonstrate a consistent pattern of assessment inequities within the assessment jurisdiction.  The Board finds that the appellant has failed to overcome this burden. 

In support of the unequal treatment contention, the appellant submitted four suggested comparable properties for comparison to the subject property.  However, these properties are located between 20 and 25 miles from the subject property and in different townships.  As a result, valuations of these properties may reflect different market conditions due to inferior locations as compared to the subject property.  Furthermore, evidence in the record suggests that the comparables offered by the appellant have lower daily traffic counts than the subject property and are of lesser quality of construction. 

The board of review compared similar motels within Alton Township that are located in close proximity to the subject property.  These properties are valued between $16,937 and $24,343 per unit including land.  The subject property is valued at approximately $14,080 per unit including land, which is below the range of these comparables.  Upon reviewing these properties and considering any adjustments for differences in amenities, the Board finds the comparable motels submitted by the board of review best reflect the subject property and support its valuation and final assessment. 

The constitutional provision for uniformity of taxation and valuation does not require mathematical equality.  The requirement is satisfied if the intent is evident to adjust the burden with a reasonable degree of uniformity and if such is the effect of the statute enacted by the General Assembly establishing the method of assessing real property in its general operation.  A practical uniformity, rather than an absolute one, is the test.  Apex Motor Fuel Co. v. Barrett, 20 Ill.2d 395 (1960).  Although the assessment data for the comparables contained in the record disclosed that properties located in the same jurisdiction are not assessed at identical levels, all that the constitution requires is a practical uniformity, which appears to exist on the basis of the evidence submitted into the record. 

For the foregoing reasons, the Board finds that the appellant has not proven by clear and convincing evidence that the subject property is overvalued or unfairly treated in the valuation and assessment process.  Therefore, the Property Tax Appeal Board finds that the subject property’s final assessment, as established by the board of review, is supported and no reduction is warranted.

The subject property consists of a two acre parcel improved with a 448,134 bushel grain facility located in Irwin near Chebanse in Kankakee County.

The appellant appeared by counsel before the Property Tax Appeal Board arguing that the fair market value of the subject was not accurately reflected in its assessed value.  In support of that argument, the appellant presented several documents and testimony from a corporate economist.  The witness holds a Bachelor's of Science and both Master's and Ph.D. degrees in Agricultural Economics.  He is currently a candidate member of the American Society of Farm Managers and Rural Appraisers.  He is presently both Corporate Economist and Project Consultant for Advance Trading, Inc. in Bloomington.  The witness testified he has prepared appraisals on over 125 grain elevators.

The witness first introduced a market analysis report.  The analysis indicated the subject property was purchased by the appellant on September 11, 1998 for $215,000.  The purchase price included two other parcels containing two Quonset buildings and fifteen government bins with a combined total licensed capacity of 137,000 bushels of storage.  This storage capacity was removed from the license.  The market analysis indicated the subject was on the market for eighteen months with a real estate company and advertised in the local newspaper and trade journal.  Brochures were mailed to potential buyers.  One offer of $210,000 was submitted and rejected by the former owner prior to the appellant's offer of $215,000. 

Five comparable sales were included in the analysis.  The sales occurred from 1992 to 1994 with sale prices ranging from $.21 to $.50 per bushel.  The witness testified he reviewed the market analysis report and found it to be a fair analysis of the subject property.  He indicated four of the five comparables are relevant in estimating a value for the subject.  He indicated one property selling for $.30 per bushel may have been a distressed sale.  The report estimated a value for the subject of $.50 per bushel for the concrete and steel storage and $.05 per bushel for the wood storage for a total estimated value of $212,800. 

The economist also testified to an appraisal report he prepared on the subject property dated June 3, 1999.  He inspected the subject property in Irwin that has a population of approximately 100 residents.  The subject is strictly a truck facility as the rail access was taken out by the railroad some time ago.  He testified the narrower doors on the older subject facility are a disadvantage to taking in grain because newer facilities can accommodate the modern, larger equipment now on the market.  Also, barge loading stations can turn over their entire storage capacity from 10 to 50 times per year and inland terminals can turn over from 7 to 15 times per year.  Country elevators like the subject turn over their storage capacities only from one to at best two times per year.  Truck only country elevators are also limited to fewer market outlets and no longer send grain to inland elevators.  Data indicating these trends was included in the appraisal.  The witness concluded the subject's highest and best use as improved would be its continued use. 

In his cost approach, the appellant's economist utilized the Marshall Valuation Service, Boeckh Agricultural and Commercial Building Valuation Guide and information from suppliers and merchandisers to estimate reproduction costs new of $1,020,214.  Depreciation was determined using two facilities built and sold within eight and sixteen years of the construction dates.  Based on these sales an annual 4.5% rate of depreciation was determined for physical depreciation for the subject.  An additional 4% was taken for functional obsolescence for storage assets with ages of 12 years or less while an additional 2% was taken on those assets ranging from 12 to 20 years old. 

A list of all improvements, their ages, storage and depreciation was included in the report.  The total estimated depreciated cost of the improvements was $205,988.  Adding the land value estimate reflected in the assessment resulted in an estimated value under the cost approach of $217,934 or $.4596 per bushel excluding land. 

Under his income earnings approach, the witness indicated income of grain handling and storage facilities is attributable in large part to the expertise of management that is not a component of the real estate.  He used the net lease method whereby facilities are leased at a negotiated amount per bushel.  Nine facilities were utilized ranging in size from 250,000 bushel to 5,073,000 bushels of capacity.  All facilities had truck shipping while seven had rail shipping and one had barge shipping available.  Lease rates ranged from $25,000 to $500,000 or at a lease cost of $.03 to $.16 per bushel. 

In estimating an income for the subject, the economist further analyzed the comparables by storage type.  Steel and concrete were given income values of $.11 and $.14 per bushel respectively for truck shipping facilities.  Upright wood storage was found to have an income value of $.032 per bushel while flat wood and steel storage had an estimated income value of $.031 per bushel.  Using these rates and applying them to the subject property, Dr. Shonkwiler estimated rental income of $51,863 or $.1157 per bushel. 

A capitalization rate was derived using the sales in his sales comparison approach; deriving an income for each sale using the same rates for the various types of storage from his income comparables; and dividing the adjusted net income by the selling price.  Capitalization rates for the sales ranged from 13.70% to 34.56% with two sales having rates of 40.37% and 63.96%.  One sale was found to be most similar to the subject in size, drying capacity, drying to receiving, and drying to storage capacity.  This property had a capitalization rate of 25.03%.  Applying this rate to the subject resulted in an estimated value under the income earnings approach of $207,187 or $.46 per bushel. 

For his sales comparison approach, the witness utilized nineteen sales of truck-only grain facilities in Illinois that sold from 1990 to 1998.  These properties contained from 185,000 to 2,440,000 bushels of capacity.  One property was part of a liquidation proceeding and the witness did not analyze this property when finding a value for the subject.  The remaining eighteen properties sold for prices ranging from $181,000 to $1,560,000 or from $.23 to $.69 per bushel.  He further refined the sales by construction and type of storage.  Adjustments were also made for the land component value and drying capacities. 

After reviewing and adjusting the sales to the subject, the economist estimated the subject would have a value under the sales comparison approach of $195,630 or $.4365 per bushel.  In reconciling the three approaches to value and relying most heavily on the sales comparison approach, the economist estimated a final value for the subject of $195,630 or $.4365 per bushel. 

During cross-examination, the witness stated he is not a state certified appraiser.  He also testified there has been little appreciation in value from the January 1, 1998, assessment date at issue and the June 1999 effective date of the appraisal.  He also stated all of the subject storage is licensed and that he valued all of the storage on the site.  Storage capacity was measured by using the bin charts issued by the State of Illinois that indicate the total storage of each bin. 

The witness also testified that putting a new rail track to the subject would be cost prohibitive and in all likelihood not economically viable for this older facility.  He stated that in order for rail service to be economically viable, a facility must be able to ship 25 rail cars and he was doubtful the subject could handle that amount. 

The witness also discussed two letters to the board of review: one letter was from the Otto Township Assessor regarding the economist's report and one letter was his response to that letter.  The assessor indicated half the sales properties used by the appellant's economist are greater than seven years old and are much larger than the subject.  The assessor's letter claimed the estimated value of the subject would have been higher if the report had used comparably sized facilities with sale prices ranging from $.39 to $.59 per bushel.  He also pointed to an error in the subject's size on one page and indicated the subject has rail access. 

The assessor's letter also indicated the sales comparison method used by the economist may be unreliable.  In support, the assessor's letter noted a July 1999 sale of a grain facility from Continental Grain to Cargill, Inc. for $3,470,848.  Using the economist's method, the sale price divided by the 1,781,000 bushels of capacity would result in a sale price of $1.94 per bushel.  He also indicated the sale of the subject in September of 1998 for $215,000 was considerably less than the original asking price and therefore the need to sell the property indicated a distressed situation. 

The witness's reply letter and testimony indicated the assessor's evidence used eleven sales, all of which are seven years old or older.  Using the average sale price of the assessor's properties of $.39 per bushel and their average per bushel capacity of 556,000 bushels would result in a value for the subject of $174,772.  This value is lower than both the value reflected in the assessment and the economist's value.  He agreed with the assessor that a size error for the subject was made on one page, however, this size did not carry over into the calculations as can be verified and the proper size was listed numerous times throughout the report.  The subject does not have rail access as the tracks were removed and the assessor's own evidence states the rail service is inoperable. 

The witness also testified the Cargill facility the assessor referred to in his letter is not remotely similar to the subject.  The sale took place one and one half years after the assessment date.  He also stated he worked for the seller, Continental Grain for seven years and knows the facilities are very different.  The witness also stated there is no support for the seller's original asking price of the subject that would reflect a value over $.90 per bushel.  He testified he has never seen a truck-only facility like the subject bring $.90 per bushel.  They typically bring from $.30 to $.50 per bushel.  He indicated there was a prior offer to purchase the subject at $205,000 that was refused.  He indicated this offer plus the subject's actual selling price of $215,000 support the lower estimates of value. 

The vice president of the appellant company and manager of the subject property was called as the appellant's next witness.  He testified he was involved in the purchase of the subject property.  He indicated the subject was offered for sale through a real estate company and that an associate called and stopped to talk to him about buying the property.  The witness identified an open letter he wrote indicating the subject property was on the open market for over a year prior to the purchase.  His letter indicated another prospective purchaser looked at the property in December of 1997 and had an appraisal performed.  The appraisal amount was listed at $200,000.  Lambert Grain made an offer in August of 1998 for $210,000.  The witness described the condition of the facility as having old bins, old small legs, worn conveyors and a wooden head house that could not handle big wagons and large trucks.  It was his opinion the only way the elevator was worth what was paid was the size of the 1998 crop. 

A letter from Lambert Grain, Inc., dated November 17, 1999, affirmed that the company made an offer of $210,000 in August of 1998.  The letter stated the offer was made at that price because of the excellent anticipated crop for 1998 and that $210,000 was a fair price for a wooden elevator in the subject's location.  A closing statement for the subject dated September 11, 1998, for $215,000 and an undated listing sheet with an asking price of $499,000 were also submitted. 

The witness testified he operates four grain facilities and that the subject is just used at harvest time for storage.  He testified the leg can handle 2,000 to 2,500 bushels per hour and that if two to three semi-trucks came in, they would have to wait from one to one and one half hours to unload and would likely go elsewhere.  He stated both wagons and trucks have gotten bigger and the subject cannot handle them efficiently.  He testified it would be very expensive to get the rail service back to the subject.  The railroad would have to put in a crossing at the road and the subject does not move enough grain to support a rail service. 

During cross-examination, the witness testified he has installed rail service at another facility and knows the costs.  He also stated the subject turns over only three-fourths of its total capacity one time per year. 

The board of review presented "Board of Review Notes on Appeal" wherein the subject's final assessment of $162,594 was disclosed.  The assessment reflects an estimated value of $487,830 or $1.09 per bushel using the three year median level of assessments for 1998 for Kankakee County of 33.33%. The board also submitted a copy of the township assessor's letter regarding the appellant's economist's report. 

The board of review's first witness was the former owner of the subject property.  He testified he purchased the subject in 1967 and that the railroad took the rail out.  He agreed with the size capacity the economist used for the subject.  The witness stated he sold the subject property to his son in 1991 for $400,000 at nine percent interest on a thirty year contract.  He indicated after some time the bank would no longer extend any more credit.  He stated he built up the subject, operated it and wanted at least $500,000 for the operation.  He stated there was no appraisal done to support this value.  There was never a judgment or foreclosure action filed on the subject property.  During cross-examination, the witness stated the contract with his son for $400,000 was a big load for the property. 

The board of review also submitted a written statement from the former owner that indicated he originally asked $1,000,000 for the property but, due to time constraints on selling, he quickly reduced the asking price.  It was his belief the subject would have sold for at least $500,000 if not for the pressure to sell. 

The board of review next called the Otto Township Assessor as a witness.  He stated there are two grain elevators in the township, one being the subject.  The appellant owns the subject parcel and two vacant land parcels that complete the facility.  He agreed with the description of the subject property as indicated by the other witnesses.  He stated the assessed value for the subject was $150,500 in 1994 and only multipliers were added until 1998.  The assessor and the former owner's son agreed to a $.50 per bushel value for the assessment. 

During cross-examination, the township assessor testified he was not an appraiser.  He would not give an opinion of value for the subject. 

The board of review also submitted a seven page document prepared by the township assessor and dated February 25, 1994.  The document included valuations for the subject and the two vacant parcels.  Descriptions of the improvement sizes and ages were listed.  No indication as to where the costs new were arrived at were listed.  An effective age for 1993 of 29 years was found using the age-life method.  The information then indicated the original assessment was adjusted down from a value of $1.13 per bushel to $.50 per bushel.  Another cost approach used the costs for 1993 from the Marshall Valuation Service and the Real Property Appraisal Manual to arrive at a value of $.71 per bushel.  The report indicated there was not enough information to prepare an income approach to value. 

The next page in the report listed eleven sales of grain facilities in Illinois.  The sales occurred from 1984 to 1989 with the facilities having grain capacities ranging from 450,000 to 750,000 bushels.  All but three properties had rail service at the site.  The subject's rail was listed as inoperable.  The sale prices ranged from $.16 to $.90 per bushel.  The average sale price was $.39 per bushel while the assessment for the subject for that year reflected a value of $1.13 per bushel.  The subject was also listed as having more storage at 590,000 bushels of grain capacity.  Copies of the subject's closing documents for the 1998 sale to the appellant were also submitted. 

After hearing the testimony and reviewing the record, the Property Tax Appeal Board finds that it has jurisdiction over the parties and the subject matter of this appeal.  The Board also finds the record supports the appellant's claim the subject was overvalued.  The appellant presented evidence and testimony from its vice president indicating the subject was purchased in September of 1998 for $215,000.  The vice president was involved in the purchase and testified the subject was listed on the open market for over a year prior to its sale.  He also indicated a previous offer of $210,000 was rejected.  A letter from the unsuccessful bidder was also presented which supported the vice president's testimony and the sale price. 

The board of review presented testimony from a previous owner that he sold the property to his son on a contract for $400,000.  He testified at the hearing this price was a big load to handle.  The son could not manage the debt and no further loans were made from the bank.  He and his son put the subject up for sale and originally asked $1,000,000.  They later expected to realize $500,000 but due to financial problems, sold the property for $215,000. 

The Board finds there is no support in the record for the $1,000,000 or the $500,000 listing prices the prior owner was asking for the subject.  The subject was actively marketed for approximately eighteen months and there were no foreclosure proceedings or judgments against the property.  An earlier bid was for $210,000 and the subject sold for $215,000.  Both offers came from prospective buyers knowledgeable in the grain elevator business.  The Board also finds further support for the subject's actual sale price from the appraisal submitted by the appellant. 

The appellant submitted an appraisal prepared by a corporate economist.  The economist has prepared numerous grain facility appraisals and has worked within the field for many years.  The appraisal utilized all three approaches to value in estimating a value for the subject as of June 3, 1999 of $195,630 or $.4365 per bushel. 

In his cost approach, the economist used accepted industry cost manuals to develop total costs new for the improvements of $1,020,214.  He then depreciated the costs after reviewing similar sales along with the ages and capacities of the subject's various improvements.  Adding the land value as estimated through the assessment resulted in a value under the cost approach of $217,934 or $.4596 per bushel.  

The income approach in the economist's report utilized numerous facilities with various shipping abilities.  He reviewed these properties against the subject and then further refined the report to find lease rates for truck-only facilities most similar to the subject.  The net income arrived at was then capitalized by 25.03% based on the rates found most similar from the sales in his sales comparison approach.  The estimated value for the subject under the income approach was $207,187 or $.46 per bushel. 

The sales comparison approach utilized nineteen truck-only grain facility sales in Illinois.  One property was part of a liquidation sale and was not relied on in the report to estimate a value for the subject.  The sales were further refined by reviewing them by storage type; such as vertical concrete, steel and flat storage.  After adjusting the comparables, the estimated value under the sales comparison approach was $195,630 or $.4365 per bushel.  Relying most heavily on this approach in his reconciliation, the economist's final estimate of value for the subject was $195,630 or $.4365 per bushel. 

The board of review presented testimony from the Otto Township Assessor.  He presented one July 1999 sale of a 1,781,000 bushel capacity grain facility for $3,470,848 or $1.94 per bushel as a comparable to the subject.  The economist testified he had worked seven years for the seller, knows this particular property and testified it was not at all comparable to the subject.  The Board agrees with the economist and finds no further support in the record for an assessment for the subject anywhere near the $1.94 per bushel price of this property. 

The board of review also presented a report prepared by the assessor, dated February 25, 1994, four years prior to the assessment date at issue in this appeal.  The cost approach was very minimal and the income approach was not performed.  The sales in the sales comparison approach sold from 1984 to 1989, nine to fourteen years prior to the assessment date.  No data was updated past the 1994 effective date of the report.  Furthermore, the assessor indicated he would not give an opinion of value for the subject property for 1998.  Neither the assessor nor Dr. Shonkwiler are Illinois licensed appraisers. 

The Property Tax Appeal Board finds the report prepared by the appellant's economist is superior to the evidence prepared by the township assessor.  The appellant's report was prepared nearer the assessment date, contains all three approaches to value, each approach is fully detailed and explained and the conclusions lead logically to the estimated value results.  The comparables are more recent in time and the most similar properties were relied on the most.  The appellant's report estimated a value for the subject of $195,630 or $.4365 per bushel and the recent sale price was $215,000 or $.4797 per bushel.  The subject's assessment reflects an estimated value of $487,830 or $1.09 per bushel that is unsupported in the record. 

Based on this analysis of the record, the Property Tax Appeal Board finds the appellant has supported by a preponderance of the evidence that the subject property was overvalued.  The Board finds the subject property had a fair market value of $215,000 as of January 1, 1998.  Since fair market value had been established, the three year weighted average median level of assessments for Kankakee County of 33.33% shall apply.

The subject property consists of a 63-unit apartment complex located in Whiteside County, Illinois.

There is a preliminary issue regarding the appellant's standing to file an appeal with the Property Tax Appeal Board. The Whiteside County Board of Review filed a motion to dismiss the subject appeal based on the appellant's alleged failure to properly file an appeal with the board of review. The board of review claimed the appellant failed to comply with its procedures for filing appeals when the appellant filed a complaint that was neither signed by the owner of the property nor by an attorney with an attorney-client relationship with the owner. The appeal petition, was instead, signed by a member of an accounting firm that was hired by the appellant to provide support for the appeal. Because neither the owner nor an attorney signed the appeal, the board of review denied the petition and did not issue a final decision on the merits. Since the appellant's petition was denied and the appeal was not given consideration on its merits, the board of review argued the appellant has failed to exhaust its administrative remedies and claimed the Property Tax Appeal Board lacks jurisdiction to hear the appellant's claim for reduction.

In response to the board of review's motion, the appellant submitted a legal memorandum in support of its position. The appellant also provided the Whiteside County Board of Review's Complaint Procedures, two affidavits from individuals from the accounting firm hired by the appellant, and a revised complaint form that was filed with the board of review after the initial rejection of the previously filed appeal form. The appellant claimed that on two occasions a board of review representative told representatives of the accounting firm that an attorney's signature was not required. In fact, when the appeal form was filed a representative of the accounting firm notified the individual that he was not an attorney and indicated that he would be signing the form. The board of review's representative then accepted the appeal form as timely and properly filed. The appellant argued that if the board of review's representative had indicated that an attorney's signature was required the original appeal form, with the accountant's signature, would not have been filed.

The appellant also claimed that no state law or regulation requires an attorney's signature on the complaint form. The appellant argued that the requirements vary from county to county and are discretionary. Based on the facts involved in the case and the advice given to the appellant by the board of review's representative concerning the necessity of an attorney's signature, the appellant argued the board of review should be estopped from refusing to accept the appellant's appeal form as improperly filed. In conclusion, the appellant requested the Property Tax Appeal Board accept jurisdiction over the subject appeal and allow the presentation of evidence.

After reviewing the record and the parties' respective arguments, the Property Tax Appeal Board finds that it does not have jurisdiction over the subject appeal. The Board finds the appellant failed to comply with the Whiteside County Board of Review's Complaint Procedures when it submitted an appeal form that was not signed by either the owner of the subject property or an attorney representing the owner of the subject property. Due to this failure to comply with the board of review's complaint procedures and the board of review's subsequent refusal to consider the complaint, the Board finds the appellant failed to exhaust its administrative remedies and cannot file an appeal with the Property Tax Appeal Board. Lastly, the Board finds the board of review is not estopped from refusing to hear the appellant's complaint because of the statements made by one of its representatives that an attorney's signature was not required.

The first issue concerning the appellant's assertion is the board of review's authority to establish rules for the filing of assessment complaints. Section 9-5 of the Property Tax Code (35 ILCS 200/9-5) provides in part that: 

[e]ach county assessor, board of appeals, and board of review shall make and publish reasonable rules for the guidance of persons doing business with them and for the orderly dispatch of business. 

Here, both parties submitted a copy of the board of review's complaint procedures. Rule 6 on the Whiteside County Board of Review Complaint Procedures states that: "[t]he complaint must be signed by the owner of the subject property or by an attorney in an attorney-client relationship with the property owner." Clearly, the Property Tax Code provides boards of review the authority to create rules for the filing of assessment complaints and the submission of evidence in support of these complaints. The Board finds the board of review correctly applied its rules when it rejected the appellant's complaint form that was signed by an accounting firm's representative. 

A second issue regarding the appellant's complaint is the equitable doctrine of estoppel. The appellant claimed the board of review should be estopped from refusing to hear the appellant's complaint because of statements made to the appellant's accounting firm concerning signature requirements. The appellant offered two signed affidavits from employees of the accounting firm hired by the appellant. These affidavits disclosed that a representative of the board of review told them that an attorney's signature was not required. The board of review did not refute that the statements were made, but argued that representations of a clerk in the supervisor of assessments office do not usurp the procedures and guidelines established by the board of review. 

The Board finds the appellant's estoppel claim is without merit. In Hamwi v. Zollar, 299 Ill.App.3d 1088 (1^st Dist. 1998), a physician voluntarily agreed to a disciplinary reprimand by the Illinois Department of Professional Regulation. The physician, however, claimed that at the time he agreed to the disciplinary action, a Department attorney told him that if his conviction from another state, which led to the reprimand, was expunged from his record then the Department's disciplinary action would also be expunged. The attorney's alleged statement to the physician was later determined to be incorrect and his reprimand was not expunged even though the other state had expunged his conviction. In explaining its decision, the court held that: 

[t]o invoke equitable estoppel against a municipality there must be an affirmative act on the part of the municipality and the inducement of substantial reliance on the affirmative act. Id. at 1094. 

The court continued by holding that: 

[t]he affirmative act which prompts a party's reliance must be an act of the public body itself such as a legislative enactment rather than the unauthorized acts  of a ministerial officer or a ministerial misinterpretation. (Citations omitted) Id. at 1095. ... If a municipality were held bound through equitable estoppel by an unauthorized act of a governmental employee, then the municipality would remain helpless to remedy errors and forced to permit violations "to remain in perpetuity." (Citations omitted) Id.

As in the subject appeal, a governmental employee allegedly gave erroneous information to an individual who relied on the information to his detriment. The court, however, refused to apply the equitable doctrine of estoppel and gave the above-mentioned explanation. Here, the Property Tax Appeal Board finds there was not an affirmative act on the part of the board of review and a subsequent inducement of substantial reliance on the affirmative act by the appellant. In addition, there was not a reliance on an act of a public body itself such as a legislative enactment, but was an unauthorized act of a ministerial officer or a ministerial misinterpretation. As in Hamwi, the Board finds the alleged actions or statements made by the supervisor of assessment's clerk does not arise to the level of an affirmative act required to apply the equitable doctrine of estoppel against a municipality. 

The third issue raised by the subject appeal is whether the appellant adequately exhausted its administrative remedies at the board of review level enabling the Board to accept jurisdiction over the subject appeal. The Board finds that, because the board of review rejected the appellant's appeal and no final decision was issued on the merits, the appellant did not exhaust its administrative remedies. In Critton v. Gurrola, an Illinois Appellate Court held that: 

[t]ax objectors who fail to exhaust their administrative remedies by presenting their written complaints of improperly assessed real estate, including excessive and constructive fraud, with the Board in compliance with statutory procedure are precluded from seeking judicial determination or review. Critton v. Gurrola, 139 Ill.App.3d 719,722 (2^nd Dist. 1985) 

In Critton, the appellant purchased the subject property in February 1983 and subsequently filed an assessment appeal for 1993 with the Kane County Board of Review that resulted in a lowered assessment. The appellant then filed for relief for the 1982 assessment year. The board of review rejected the complaint because it had never received an objection from either the original owner or the appellant within the statutory prescribed filing period. The appellant, however, argued that it was impossible for them to file for the 1982 assessment year because it did not own the property. In conclusion, the appellate court held that the circuit court correctly dismissed the appellant's objection due to his failure to exhaust the administrative remedy of first filing with the board of review as provided by statute. Id. at 722.

As in Critton, the Property Tax Appeal Board finds the appellant failed to exhaust its administrative remedies when it did not properly file an appeal form with the board of review. Because the appeal form was rejected and a revised form was not filed within the statutory prescribed time period, a final decision on the merits was never rendered by the board of review. Thus, the appellant did not have a final decision to appeal to the Property Tax Appeal Board as required by Section 16-160 of the Property Tax Code. This section provides in part that taxpayers must file petitions with the Property Tax Appeal Board, ". . .within 30 days after the date of written notice of the decision of the board of review." (35 ILCS 200/16-160). Furthermore, Section 1910.30(a) of the Official Rules of the Property Tax Code provides in part: 

[i]n counties with less than 3,000,000 inhabitants, petitions for appeal shall be filed within 30 days after the postmark date or personal service date of the written notice of the decision of the board of review. 

Clearly, the appellant failed to file a petition with the Property Tax Appeal Board within 30 days of a final decision of the board of review. Therefore, the Board finds the appellant failed to exhaust its administrative remedies. 

In addition, another Illinois Appellate Court addressed both the issues of exhausting administrative remedies and estoppel. In Spiel, the court held that the doctrine of estoppel could not be applied against a governmental entity when the appellant failed to exhaust his administrative remedies. More specifically, the court also held that the Illinois Property Tax Appeal Board was not judicially estopped from arguing that it lacked subject mater jurisdiction over an appellant who failed to previously file an appeal with his county's board of review. Spiel v. Property Tax Appeal Board, 309 Ill.App.3d 373 (2^nd Dist. 1999). The court continued by holding that: 

[r]elief cannot be granted by courts where the complainants have failed to peruse their statutory remedy before the board of review, and "public policy forbids the application of the doctrine of estoppel to a sovereign State where the public revenues are involved." (Citations omitted) Id. at 378.  

In conclusion, the Board finds the board of review had the statutory authority to establish its own rules for the filing and acceptance of property assessment appeals. The record is clear that one of these rules required the appeal form to be signed by either the property owner or an attorney with an attorney-client relationship with the property owner. The record is also clear the appellant failed to submit a petition that contained a signature that complied with this rule. Instead, the appellant offered a petition that was signed by an accountant who was not a licensed attorney in the State of Illinois. The Board further finds that, since the appellant's petition was rejected and the board of review rendered no final decision, the appellant failed to exhaust its administrative remedies. Lastly, the Board finds the equitable doctrine of estoppel in not applicable to the subject appeal and the board of review was not estopped from rejecting the appellant's appeal form. 

Based on the evidence contained in the record, the Board finds that it does not have jurisdiction over the subject appeal.

The subject property consists of a part one and part two-story, pre-cast concrete constructed industrial building containing 164,238 square feet of building area.  The improvement was constructed in 1992 with an addition in 1998.  The finished office space consists of 17% of the building area.  The ceiling heights are between 17 feet and 21 feet, and the building has five docks.  The improvement is situated on three separate lots totaling 865,585 square feet with a land-to-building ratio of 5.27:1.

The appellant appeared by his attorney before the Property Tax Appeal Board claiming overvaluation as the basis of the appeal.  In support of this contention, the appraisal report and the supporting testimony of the MAI appraiser were presented.  The appraiser's qualifications were first presented.  He testified that he owns his own appraisal firm, which was started in 1974.  He testified that he is a member of the Appraisal Institute, the organization that conferred on him the MAI designation in 1974, and a member of the International Association of Assessing Officers. 

The appraiser next described the subject property, stating it was built in two stages with 65 percent of the building built in 1992 and an addition constructed in 1998.  The lot size consists of 865,585 square feet or 19.871 acres.  He stated the property is located in the southwest portion of the City of Waukegan in a small business park.  The appraiser was of the opinion the subject's building layout would have a negative influence on the property's market value.  He stated the property was built for the current owner, rather than for the general market.  Accordingly, the interior is divided into many separate segments.  In addition, he stated the subject's clear ceiling height of between 17 feet and 21 feet is low by today's standards of between 24 feet and 28 feet, especially for warehouse use; and the number of docks is inadequate. 

Utilizing the three traditional approaches to value, the appraiser estimated a market value of $8,950,000 for the subject property as of January 1, 1999.  Under the cost approach, the appraiser first valued the subject site.  Seven sales of vacant land were utilized that were located in the southwest portion of the City of Waukegan.  Four were located in the same industrial park as the subject property.  These properties ranged in size from 52,000 to 893,416 square feet; they sold for prices ranging from $3.95 to $5.40 per square foot and the transactions occurred from April 1996 to June 1999.  The land sales were adjusted for physical characteristics such as size, shape and topography, access and visibility.  The adjusted sales ranged between $3.78 and $4.70 per square foot.  By eliminating the property at the high end of the range the remaining sales had an adjusted range between $3.78 and $4.26 per square foot.  Based on this analysis, the appraiser estimated a value of $4.15 per square foot or $3,600,000, rounded, for the subject site.  The appraiser explained that two of the land sales were similar in size with the subject and five were smaller.  As a result, a downward adjustment was required for the five smaller sales.  The appraiser explained the subject property consists of three separate lots.  Lot five, the northernmost portion of the site, contains 10.31 acres and according to the appraiser, was purchased in 1997 for $4.00 per square foot.  He noted the sale price for this portion of the subject site was slightly less than the value estimated by him for the entire site. 

The replacement cost new of the subject improvements was estimated using the Marshall and Swift Commercial Estimator Program.  Under this program, the subject improvements were classified as an average Class C Light Industrial Building with a replacement cost new estimate of $6,846,702.  Physical deterioration was estimated at 10% using an effective age of five years and a total economic life of 50 years.  Functional obsolescence was estimated at 10% due to the low ceiling heights, the irregular interior layout and the inadequate number of shipping docks.  Deducting depreciation resulted in a value by the cost approach, including land, of $9,100,000. 

Under the income approach, the appraiser utilized five comparable rentals located in the City of Waukegan.  These properties ranged in size from 45,000 to 235,000 square feet and in age from new to 20 years.  One had a lease date of September 1999 and a rental rate of $3.25 per square foot.  The remainder properties had asking rates that ranged from $3.00 to $4.75 per square foot.  Consideration was given to these properties for size, age, condition, building factors and location.  As adjusted, the rentals indicated a rent range of between $4.45 and $5.00 per square foot net, annually.  Comparables four and five were considered most relevant due to their location, age and physical features.  Based thereon, the appraiser estimated a net rent for the subject property of $5.00 per square foot, annually and indicates a potential gross income of $821,190.  The vacancy and collection loss factor of 6.00% was deducted for an effective gross income of $771,919.  Expenses in the amount of $52,960 were deducted for a net operating income of $720,000, rounded.  Expenses included management at two percent of the effective gross income, reserves for replacements, expenses during vacancy, taxes and insurance.  Under cross-examination, the witness explained the taxes were calculated to cover 6% of the real estate taxes during the time when the property would be vacant.  The taxes for the excess land (see next paragraph) were not used in the calculation.  Capitalizing the net income by a rate of 9.5% resulted in a value by the income approach of $7,578,947 prior to the addition of an excess land value.  The appraiser testified the 9.5% rate was determined from long-term yield rates, market surveys and by direct capitalization, utilizing three sales from the sales comparison approach section of the report.  The sales indicated rates ranging from 9.25% to 11.00%. 

With respect to the excess land, the appraiser determined the subject's land-to-building ratio of 5.27:1 was excessive in comparison with the comparable properties contained in the sales comparison approach.  They had ratios ranging between 1.91:1 and 3.25:1.  As a result, the appraiser valued the property as if it had a ratio of 3.15:1, or excess land of 348,235 square feet.  The appraiser was of the opinion the excess land is located in the northerly portion of lot 5.  This area was described as being quite irregular in shape due mostly to the intrusion of the drainage retention pond.  The appraiser valued 234,000 square feet at $4.50 per square foot and the remaining 114,235 square feet at $2.00 per square foot for a value of the excess land of $1,280,000 or $3.68 per square foot for the total excess land parcel.  The appraiser was of the opinion the land valued at $4.50 per square foot was not as severely impacted as the land valued at $2.00 per square foot.  Under cross-examination, the appraiser explained the portion valued at $4.50 per square foot was perfectly rectangular in shape.  He stated, however, the entire site is very irregular in shape.  As a result, he explained this perfect rectangular shaped portion would carry a higher value than the site as a whole, which he valued at $4.15 per square foot.  The portion of the excess land valued at $2.00 per square foot was extremely irregular and curved around the detention pond.  With the inclusion of the value of the excess land, the value indicated by the income approach was $8,900,000, rounded. 

Under the sales comparison approach, the appraiser utilized seven sales of suggested comparable, industrial properties, mostly located in the southwestern portion of Lake County.  The appraiser testified that most of the properties were used as warehouses, while some were used as manufacturing facilities, the same as the subject property.  These properties ranged in size from 70,957 to 256,000 square feet and were constructed from 1984 to 1995.  They had land-to-building ratios ranging from 1.91:1 to 3.25:1.  Six had land-to-building ratios ranging from 3.03:1 to 3.25:1.  All had sprinkler systems, including the subject property and their ceiling heights ranged from 18 feet to 34 feet.  The properties had from zero percent to 20 percent of finished office space and their number of docks ranged from 6 to 20.  These properties sold for prices ranging from $3,550,000 to $11,610,000 or from $41.39 to $56.02 per square foot and the transactions occurred between February 1996 and August 1998.  The sales prices were adjusted for market conditions, locational differences and physical characteristics such as age, ceiling heights, docks, finished office space, overall condition and land-to-building ratios.  The adjusted sales prices ranged from $41.45 to $50.78 per square foot.  From this analysis, the appraiser selected a square foot price of $47.00 and applied this rate to the subject's building size for a value by the sales comparison approach of $7,719,186.  Adding in the value of the excess land of $1,280,000 results in a final value by this approach of $9,000,000, rounded. 

Under cross-examination, the appraiser testified that he inspected the exterior of the sale properties and took their pictures.  The descriptions of the sales comparables were taken from published information.  He explained that most of the sales information came from the Comps System, a subscription service.  Comparable one consists of three separate buildings.  The testimony disclosed that sales one, two, four and seven were not owner-occupied like the subject property.  Sales two, three and six were disclosed to be package sales.  Sales two and three consisted of a portfolio sale that included these two sales and two others located in Bolingbrook and Itasca.  Sale six was part of a two-property sale with the other property located in Naperville, Illinois.  The appraiser testified the fact these properties were purchased together would not have an effect on the price paid.  He stated the sales prices were obtained through the comp service and the service verifies the sales. 

Under the reconciliation and final estimate of value, with most weight on the sales comparison approach, the appraiser estimated a market value of $8,950,000 for the subject property as of January 1, 1999.  The appraiser testified that least weight was applied to the cost approach due to the difficulty in estimating depreciation. 

The board of review submitted "Board of Review Notes on Appeal" wherein the subject's assessments were disclosed.  Parcel number 11-01-101-006 had a total assessment of $2,942,207.  This assessment reflects a market value of $8,814,281 or $53.67 per square foot using the county's three-year median level of assessments for 1999 of 33.38%.  Parcel number 11-01-101-007 had a land assessment of $541,822.  There were no improvements on this parcel.  The market value reflected in this assessment was $1,623,194 or $3.54 per square foot of land area.  The total market value reflected in the assessments assigned to the subject property for both parcels was $10,437,475. 

The testimony of the township assessor was presented.  She explained she is a Certified Illinois Assessing Officer designated through the Illinois Property Assessment Institute.  The assessor put together a document indicating that in 1990, the appellant purchased lots six and eleven and the main building site for $1,474,292.  In September 1991 a building permit was issued for the foundation for $290,000.  In October 1991 a building permit was issued for new construction for $5,210,000.  In May 1996 lot five, 10.31 acres, was purchased for $1,828,776.  Finally, in June 1998 a building permit for the new addition was issued for $1,956,000 for a total amount for permits and land purchases of $10,759,068.  She explained the Marshall and Swift Cost Manual was used to value the subject improvements and the lots were assessed on an individual basis.  The lots located in the subject's industrial park were valued based on sales of vacant land located in industrial parks throughout the township.  The lots were then valued on a uniform basis of $3.62 per square foot.  The assessor was of the opinion the appellant's appraisal is void because the subject property was valued as a whole and uses an excess land value.  She explained in her documentation that office policy is to assess each parcel number individually.  She explained that if a property owner has lots that are contiguous and ask for relief based on excess land, she recommends that they consolidate the parcels.  Since the appellant was informed of this policy and never contacted her office regarding the consolidation of the two subject parcels, she feels the parcels should not be valued together as a whole. 

At the hearing, the assessor testified that a request was made by the appellant to consolidate the parcels in January 2000.  She explained the consolidation could result in an assessment reduction.  At this time, she explained the new assessment as consolidated had not been calculated.  The board of review's representative pointed out the subject's land assessment for the two parcels reflect a value of around $3,000,000 as compared with the appellant's appraiser's opinion of value of $3,600,000 for the land. 

The assessor submitted the Real Estate Transfer Declaration sheet for lots one through four in the subject's industrial park.  These four parcels contained 500,895 square feet in total and sold for $2,633,187.30 or $5.26 per square foot in April 1999.  The Real Estate Transfer Declaration sheet for the subject's 10.50 acre parcel, Lot 5, was also submitted documenting the May 1996 sale price of $1,828,776. 

After hearing the testimony and reviewing the record, the Property Tax Appeal Board finds that it has jurisdiction over the parties and the subject matter of this appeal.  The Board further finds that a reduction in the subject’s assessment based on the appellant’s overvaluation contention is supported by the data contained in the record.  The Board finds the appellant’s evidence documenting a market value of $8,950,000 as of the January 1, 1999 assessment date is the best evidence of the subject’s value contained in the record.  The appellant’s appraiser employed the three traditional approaches to value in his report.  The appraisal processes and the adjustment procedures were well documented.  Moreover, the appraiser was present at the hearing to explain his procedures and appraisal methodologies. 

The board of review claimed the appellant's appraisal should not receive any weight because the subject property was valued as a whole and the appraiser used an excess land value.  The Property Tax Appeal Board finds the method for valuing the excess land was appropriately applied by the appellant's appraiser.  The appraiser estimated the subject's excess land through an analysis of comparable sales.  The majority of the sales used in the appellant's sales comparison approach had land-to-building ratios ranging from 3.03:1 to 3.25:1.  The subject property had a land-to-building ratio of 5.27:1.  As a result, the appraiser used a land-to-building ratio of 3.15:1 for the subject property under the sales comparison approach and the income approach to value.  Once a value was estimated under these two approaches, the appraiser added the value of the excess land to these two estimates.  The excess land was valued at $3.68 per square foot.  Under the cost approach, the subject site, as a whole was valued at $4.15 per square foot.  The assessor valued the subject site at $3.46 per square foot. 

The Property Tax Appeal Board also gives little weight to the value derived by the township assessor using the subject's sales prices and building permits.  Two of the lots were purchased in 1990 and the building was constructed in 1991.  No deduction for depreciation was applied to the value indicated by the building permits. 

In conclusion, the Property Tax Appeal Board finds that the best indication of the subject's market value was the appellant's appraisal report.  In that report, a market value of $8,950,000 was documented for the subject property as of January 1, 1999.  Since market value has been established, the county's three-year median level of assessments for 1999 of 33.38% shall be applied.

The subject property consists of a 5.66-acre site improved with a two-story full service hotel complex.  The main building contains 116 rooms and there is a two-story freestanding annex housing 76 rooms.  Amenities at the facility include an indoor pool, whirlpool, fitness center, arcade game room, restaurant, lounge, and meeting rooms that can be converted into a banquet area.  Overall construction of the buildings is steel, masonry and wood frame with masonry exterior walls.  The complex was constructed in several stages starting in 1960 with the last major renovation occurring in 1983.  The annex building is in need of substantial renovation and was not being utilized as of the assessment date. 

The City of East Peoria intervened in the appeal and appeared by counsel.  The intervenor did not submit any evidence of value of the subject property but relied on the evidence presented by the board of review. 

The 1998 and 1999 appeals before the Property Tax Appeal Board were consolidated into one hearing since the evidence submitted by the parties for both years was the same. 

Appearing before the Property Tax Appeal Board was the taxpayer and counsel who argued the assessment of the subject property was excessive and not reflective of market value.  In support of this claim, the taxpayer submitted a self-contained appraisal report of the subject property. 

The first witness called was the taxpayer.  He explained the condition of the facility on January 1, 1998 and pointed out the annex building was in need of major repairs and not in service at that time.  He stated the main structure was in use, however it was also in need substantive renovation.  By affidavit dated March 31, 2000, the taxpayer stated that in   September 1998, 49% of the subject property that was not owned by G & G Hotel Investors, Inc. was purchased for $997,359. The taxpayer first asserted in his affidavit that no mortgage was assumed in connection with the purchase of the subject property.  However, the taxpayer testified during the hearing that he did assume a mortgage on the unpaid principal balance on the date of sale, which included $2,000,000 for renovation of the facility.  The taxpayer further explained the differences between a full service hotel and a limited service hotel and the risks inherent to operating a full service hotel. 

Under cross-examination, the taxpayer stated that his son-in-law is the General Manager of the subject facility and also President of G & G Management Company.  The fee for managing the subject property is paid to G & G Management Company, which is owned by his family. 

The taxpayer's appraiser was called as the next witness to give testimony concerning his appraisal and final conclusion of value of the subject property.  The appraiser is a certified general appraiser licensed by the State of Illinois.  The appraiser explained that he first estimated the "going concern" value of the subject property and then attempted to segregate the "business value" of the facility.  The appraiser claimed that determining the property's business value is necessary since the capitalization of an income stream includes more than just physical real estate.  It also includes other components, which may include fixtures, furniture, equipment and a "business value" component, which is an intangible value that is part of the net operating income.  Based on this contention, the appraiser submitted an appraisal report of the "going concern" value of the subject property and a report which attempts to segregate and value the personal property and the intangible "business value" from the real estate value of the facility. 

The appraiser explained that he inspected the subject facility in October 1999 after the property had undergone extensive remodeling.  Thus, in estimating the value of the facility, the appraisal reflects a "retrospective value" due to the significant changes made to the property after the assessment date.  The appraiser further concluded the highest and best use of the subject property was its current use as a full service hotel. 

In estimating the market value or "going concern value" of the subject property, the appraiser testified he performed a self-contained appraisal report that analyzed the three traditional approaches to value.  The appraiser noted that the valuation approaches were analyzed in order of significance to the property's value.  In the report, the appraiser stated that due to the condition of the masonry constructed 76-room annex, its value is not considered as part of the 116-room main hotel complex.  Instead, a contributory value of the annex is added to each approach to recognize that some value is associated with the structure. 

The appraiser first analyzed the income approach to value.  Based upon the rates charged at the subject facility versus rates charged at competing hotels in the market area, the appraiser concluded that the subject's rates are reflective of the market area for condition, services, and amenities provided by the hotel.  The appraiser developed a reconstructed income and expense statement using the subject property's income and expense statements from 1995, 1996 and 1997.  This analysis resulted in a projected stabilized gross income for the facility of  $1,960,000; stabilized expenses of $1,691,000 (86.2%); and a net operating income of $269,000. 

The appraiser next estimated a capitalization rate of 11.75% using the band of investment technique and upon consulting surveys of capitalization rates of hotels and motels.  To this rate, an effective tax rate of 1.53% was added to arrive at an overall capitalization rate of 13.28%.  Upon capitalizing the projected net operating income of $269,000, a value of $2,025,602 was indicated by the income approach to value.  As stated previously, a contributory value for the 76-room rear annex building was estimated from the market approach to be $6,500 per room or $468,000.  This amount was added to the estimate of value arrived at by the income approach for a final conclusion of value of $2,500,000. 

In the sales comparison approach to value, the appraiser utilized five (5) suggested comparable hotel/motel sales to estimate the subject property’s market value. Two of the properties are located in Effingham, Illinois; one in London, Kentucky; one in Springfield, Illinois; and one in Peoria, Illinois.  Four of the sales are full service hotels and one is a limited service motel.  Sale number one is a two-story masonry, steel, and brick constructed full service facility containing 119 rooms, restaurant, lounge and outdoor pool.  The facility was built in stages between 1972 and 1974 and is in average condition.  The property is located in Effingham, Illinois and sold in November 1998 for $2,750,000 or $23,209 per room.  Comparable sale number two is a three-story, full service hotel containing 124 rooms located in London, Kentucky.  This facility has similar amenities as the subject property and sold in January 1998 for $2,350,000 or $18,951 per room.  Sale number three is a two-story, full service facility located in Effingham, Illinois.  The hotel has 130 rooms, restaurant, lounge, outdoor pool and laundry area.  This property sold in April 1999 for $1,900,000 or $14,615 per unit. 

Comparable sale number four is a limited service facility that contains 154 rooms.  The building is located on land owned by the City of Springfield and is leased for an annual rent of $34,774.  The appraiser estimated the land value at $350,000 and added it to the sale price to arrive at an adjusted sale price of $3,050,000 or $19,805 per room.  Comparable sale number five is a part six and part nine story full service hotel containing 327 rooms located in downtown Peoria.  Amenities include a large capacity meeting and banquet center, restaurant, bar and grill, lounge, fitness center, outdoor pool, barber and beauty shop and a gift shop.  However, there is no on-site parking for this facility.  The property sold in October 1998 for $8,800,000 or $26,911 per unit. 

The appraiser noted the market comparables have selling prices from $14,600 to $26,900 per room.  Sale number five is physically the closest distance to the subject property, but this hotel is a substantially superior hotel in regards to condition, meeting space, and other amenities.  The appraiser concluded substantial downward adjustments were needed for this sale.  After considering adjustments for the physical features, conditions and amenities of the comparables as compared to the subject property, the appraiser concluded a value of $19,000 per room was supported for the 116 room main building of the subject facility or $2,204,000. 

With respect to the valuation of the 76-unit rear annex building that was out of service as of the assessment date, the appraiser estimated a contributory value of $6,500 per room or $468,000.  This contributory value was based upon two sales of properties that were in need of renovation.  The estimated value of the personal property involved in these two sales was deducted from the sale prices since the annex building did not have any personal property in the units as of the assessment date. 

Upon adding in the contributory value of the rear annex building of $468,000, the appraiser concluded a value of the subject property by the sales comparison approach of $2,672,000. 

Under the cost approach to value, the appraiser first estimated the value of the land as if vacant using five land sales of properties located in the area of the subject property.  These parcels ranged in size from 98,010 to 130,680 square feet of area and were sold between July 1997 and August 1998 for prices ranging from $1.42 to $8.49 per square foot.  After considering any necessary adjustments, the appraiser concluded the subject parcel had a market value of approximately $6.00 per square foot or $1,479,300. 

In estimating the replacement cost new of the improvements the appraiser consulted various nationally recognized building cost manuals.  Using this data the replacement cost new of the subject’s 116 unit main building facility was estimated to be $55,000 per room or $6,380,000.  In addition, the appraiser added an estimated value for "soft costs" of $647,800 that are attributed to franchise fees, initial working capital and pre-marketing advertising.  This resulted in a value of $7,027,800 for the main building facility.  Total accrued depreciation from all causes was estimated to be $4,633,061 and deducted to arrive at a depreciated replacement cost new of the 116-unit complex of $2,394,739.  The appraiser then added the estimated contributory value of the 76-unit annex of $468,000 and the estimated land value of $1,479,300 to arrive at a conclusion of value under the cost approach of $4,340,000 (rounded).  The appraiser testified during the hearing that little weight was given to this approach. 

In reconciling the three approaches to value the appraiser gave primary weight to the income approach.  Secondary weight was attributed to the sales comparison or market approach to value and the least weight was given the cost approach to value.  Based on the foregoing, the appraiser estimated the subject property had a "going concern" value of $2,600,000 as of January 1, 1998. 

In addition to the appraisal report, the appraiser prepared an analysis segregating the subject property's "business enterprise value" from its "going concern value". 

He stated that furniture, fixtures and equipment (FF&E) are personal property and it would be impossible for a hotel to generate income without those items.  A portion of the hotel's income stream as a going concern is attributable to the personal property.  The cost to furnish and equip the subject property with FF&E is estimated to be $1,160,000 or $10,000 per room.  The appraiser noted that this cost includes more than just room furnishings, but represents all FF&E that is required for a full service hotel facility.  The cost of the FF&E items was determined using the Marshall & Swift Cost Manual and other nationally recognized hotel/motel building cost manuals.  The appraiser depreciated the estimated value of the FF&E by 75% using the age/life method to arrive at a value of $290,000 to be deducted for these items. 

The appraiser next estimated the "business value" attributed to the subject property.  He pointed out that this value reflects intangible items of personal property such as a franchise cost, pre-opening and marketing expenses and a liquor license.  The appraiser stated that these costs are best estimated by determining what the start up costs is for similar hotel projects.  Using this method, the appraiser estimated the "business value" component of the subject property to be $381,250. 

The appraiser then deducted the estimated value of the FF&E and the estimated "business value" to arrive at a final estimate of value of the subject property's real estate of $1,928,750. 

Based on the foregoing, the appellant requested the subject property's final total assessment be reduced to $642,917. 

Under cross-examination, the appraiser explained the various adjustments, assumptions and conclusions considered in performing the valuation methodologies analyzed in estimating his final conclusion of value of the subject facility. 

The board of review submitted “Board of Review-Notes on Appeal” wherein the subject property's 1998 and 1999 final assessments were disclosed.  The 1998 assessment of $1,442,470 equates to a market value of $4,340,870 using the 1998 three year median level of assessments for Tazewell County of 33.23%.  The 1999 assessment of $1,551,590 equates to a value of $4,683,338 using the 1999 median level of assessments for Tazewell County of 33.13%. 

In support of its findings, the board of review submitted an appraisal report prepared by a real estate appraiser who was present at the proceeding.  The appraiser is licensed by the State of Illinois as a certified general real estate appraiser and is also a Member of the Appraisal Institute (MAI).  The appraiser testified that he performed the three traditional approaches to value in estimating the subject property had a market value of $3,800,000 as of January 1, 1998. 

The appraiser stated in his report that the appraisal is a "Complete Summary Appraisal” and reflects a retrospective value since there has been renovation and remodeling to the improvements since the date of valuation.  The subject property was inspected on February 3, 2000.  The appraiser determined the highest and best use of the site would be for commercial purposes or the current use as a full service motel as improved. 

The first approach to value developed by the board of review's appraiser was the cost approach to value.  The initial step was to estimate the value of the subject's land.  The appraiser analyzed four vacant land sales in the area.  The parcels range in size from 45,302 to 97,879 square feet of area and sold from December 1997 to March 1998 for prices ranging from $250,000 to $831,791 or from $4.79 to $8.50 per square foot of area.  After considering any necessary adjustments, the appraiser estimated the subject parcel had a market value of $1,232,750 or $5.00 per square foot of area. 

The appraiser consulted nationally recognized building cost publications to estimate the reproduction cost new of the subject property's improvements of $5,670,000.  Physical depreciation of the improvements was determined by their observed condition and age.  Using the age/life concept, the main portion of the subject complex and the common areas were estimated to have physical depreciation of 40%.  The rear annex portion of the complex was estimated to have physical depreciation of 80%.  After deducting the estimated amount attributed to depreciation of the building improvements and site improvements, the appraiser concluded a depreciated value of the subject property's improvements of $3,012,099.  Upon adding the estimated land value of $1,200,000, the appraiser determined the subject property had a depreciated value under the cost approach of $4,200,000.  The appraiser stated little weight was given this approach to value. 

The second valuation method analyzed by the board of review’s appraiser was the direct sales comparison approach.  In performing this approach to value, the appraiser compared six sales of motels/hotels located in the general area of the subject property and in surrounding areas.  Sale number one consists of a 123-room four-story, metal and frame limited service motel with meeting rooms, lobby/breakfast area, indoor pool and whirlpool.  This property is located in Springfield, Illinois, and sold in May 1999 for $3,270,000(excluding personal property) or for $26,585 per room.  Sale number two consists of a five-story, masonry and steel constructed limited service motel with 154 rooms, meeting rooms, lobby/breakfast area and an indoor swimming pool.  The property is located in East Peoria, Illinois, and sold in May 1999 for $4,960,000(excluding personal property) or for $32,208 per room.  Sale number three is the same as appellant's sale number five.  This property is a 327-room, multi-story full service hotel with a restaurant, lounge, meeting rooms and outdoor pool located in Peoria, Illinois.  There is no on-site parking for this facility.  It sold in October 1998 for $6,975,000(excluding personal property) or for $21,336 per room. 

Sale number four is a two-story frame and masonry constructed limited service motel containing 47 units, manager apartment and indoor pool.  This facility is located in Lincoln, Illinois, and sold in July 1998 for $965,000(excluding personal property) or for $20,532 per room.  Sale number five, also located in Lincoln, Illinois, consists of a two-story frame and masonry limited service motel containing 52 rooms, small meeting room, and an indoor pool.  This property sold in February 1997 for $1,570,000(excluding personal property) or for $30,192 per room.  The last sale considered is a part one and three story frame and masonry constructed full service hotel with 257 rooms, restaurant, lounge, meeting/banquet facilities and an enclosed pool.  The facility is located in Peoria, Illinois, and sold in April 1993 for $13,164,079(excluding personal property) or for $51,222 per room. 

The appraiser explained the differences between the subject facility and the comparable sales and pointed out items that he considered in determining any necessary adjustments. The estimated value of the personal property deducted from the sales was based on information contained on the Real Estate Transfer Declarations and by verifications with either the buyer or seller. 

After analyzing these properties and considering the necessary valuation adjustments, the appraiser estimated the subject property's 117 room main complex had a market value of $33,000 per room or a total of $3,850,000 including land by the market approach. 

The appraiser stated that he did not assign a specific value to the rear wing annex.  According to the Uniform Standard of Professional Appraisal Practice, it is totally inappropriate to assume the individual values of the parts of a property to arrive at the value of the whole property.  Thus he valued the subject property as a whole and did not assign a specific value to the rear annex but rather included a contributory value to this portion of the subject facility. 

The last valuation method analyzed by the board of review's appraiser was the income approach to value.  Under this approach the appraiser stated that he was provided with financial statements for the subject facility for the previous two years with the latest being December 1997.  In addition, information relative to average daily room rates and overall occupancy rates for the area were obtained from the Peoria Area Convention and Visitor's Bureau.  Other income sources consulted were; Underlying Valuation of Hotels and Motels published by the Appraisal Institute, as well as national statistical information available in nationally recognized publications. 

In estimating the room revenue, the appraiser gave considerable consideration to the existing rates being charge at the subject facility, as well as rates of competing properties throughout the area.  Based upon an investigation of competing hotel/motel rates and an analysis of the average daily rate achieved by the subject facility over the previous two years, an average daily rate of $65.00 was estimated for the subject property based on 65% overall occupancy.  Estimated revenue from food service, beverage, telephone and miscellaneous income is based upon the financial statements provided by the taxpayer.  This analysis resulted in a gross income of $2,023,000 attributed to the subject property. 

Stabilized operating expenses were estimated to be $1,307,000 (64.61%) and were based upon the financial history of the subject property and an investigation of expenses of similar facilities throughout the area.  This amount was deducted to arrive at a net income before replacement reserve of $716,000. 

The appraiser estimated the replacement cost for reserve of $93,600 based upon a cost new of $8,000 per room for furniture, fixtures and equipment and assuming a 10-year life.  After deducting this amount, the appraiser concluded a final net operating income attributed to the subject property of $622,400. 

The property residual technique was used by the appraiser to estimate the income value of the subject property.  This technique reflects the net income attributed and available to the real property.  The net income is then capitalized into an indication of value.  The subject's income before capital recapture, interest, and depreciation was estimated to be $622,400.  This includes a return on and a return of the investment of land, buildings and furniture and fixtures and equipment. 

The appraiser estimated the depreciated value of the furniture, fixtures and equipment to be $89,700 and deducted this amount to arrive at a net income attributed to land and improvements of $532,700. 

An overall capitalization rate of 14% was developed from an analysis of the mortgage equity technique and the market derived technique.  Upon capitalizing the estimated net operating income of the land and improvements of $532,700, the appraiser concluded a value for the subject property of $3,800,000 by the income approach. 

In reconciling the three approaches to value, the appraiser placed the least emphasis on the cost approach to value.  The sales comparison approach was given consideration due to the number of sales located in close proximity to the subject property.  The appraiser gave primary weight to the income approach to value as the property produces an income stream.  Based thereon, the appraiser estimated the subject property had a market value on January 1, 1998 of $3,800,000. 

In further examination, the appraiser stated that his conclusion of value of the subject facility did not include any form of personal property including a  "business value".  He agreed that in certain types of properties there might be what's been defined as "business value".  The appraiser contends that fair market value may include a "business value" but they are two totally different concepts.  He pointed out that "business value" may or may not include the value of the real estate.  If in fact, a property does have a "business value" present, the only way to distinguish that value from the real estate value is to specifically identify how much of the sale price is attributed to that "business value" by the purchaser.  If the purchaser does not attribute any value to the business enterprise, then it does not exist.  He felt that a "business value" concept is a value that needs to be considered for special purpose properties like the subject, but absent market support the estimate of value for the business enterprise is speculative. 

Under cross-examination, the board of review’s appraiser was questioned regarding his valuation methodologies, the adjustments considered and his assumptions in arriving at his final conclusion of value. 

After hearing the testimony and reviewing the record, the Property Tax Appeal Board finds that it has jurisdiction over the parties and the subject matter of this appeal.  The Board further finds that the evidence contained in the record supports a reduction in the valuation of the subject property.  The subject property has an assessment reflecting a valuation of $4,340,870 in 1998 and $4,683,338 in 1999 using the 1998 & 1999 median level of assessments for Tazewell County of 33.23% and 33.13%. 

The taxpayer and the board of review each presented an appraisal report of the subject property to estimate its market value as of the assessment date of January 1, 1998.  The Board notes that each appraiser considered the three traditional approaches to value to arrive at a final conclusion of value.  However, the appellant's appraiser also submitted an addition to his report that attempted to segregate the "business value" associated with the subject property.  This estimate of value was then deducted from the final conclusion of the "going concern value" derived in the appraisal report to arrive at a final value of the subject property's real estate.   

One of the primary issues involved in the subject appeal is whether the subject property has a business value component as claimed by the appellant.  The appellant's appraiser determined a reduction was necessary because the subject property is a unique form of real estate, which consists of four components: land, improvements, personal property and a going business concern.  Included in the personal property is an intangible business enterprise value.  Based on this assumption, the appraiser concluded a "business value" attributed to the subject facility of $381,250.  This estimate of value was then deducted along with a depreciated value of the FF&E ($290,000) from the going concern value arrived at by the appraiser of $2,600,000.  This calculation resulted in an estimate of value of the real estate of $1,928,750. 

The Property Tax Appeal Board finds the appellant's appraiser failed to provide any supporting documentation to justify the substantial "business value" deduction from his final estimate of the property's going concern value.  Even though the appraiser claimed there was a significant "business value" component included in the value of the subject property, he did not provide any definitive evidence showing the value was present.  For example, no evidence was offered to show the sales prices of the comparables contained in the appraisal report included a "business value" component.  In his report, the appraiser stated that accounting for a "business value" is controversial and there is no standardized, accepted method for accounting for this intangible value.  Devoid of any empirical evidence supporting or documenting the worth of the claimed business enterprise value, the Board finds the appellant's appraiser's deduction for a "business value" is speculative and given little credence. 

In the cost approach to value, both appraisers estimated the subject property's land value based on vacant land sales in the area.  In developing the replacement cost new of the subject property's improvements, the appraisers consulted nationally recognized building cost manuals.  After deducting for depreciation, the appellant's appraiser derived an indication of value of $4,340,000 while the board of review's appraiser concluded a value of $4,200,00.  Neither appraiser accorded much weight to the cost approach due to the difficulty in estimating the depreciated value of the improvements.  Likewise, the Property Tax Appeal Board places little emphasis on the cost approach to value. 

Each appraiser agreed that the income approach was the best method to estimate the subject property's market value because it is an income producing facility.  Under the income approach, both appraisers reached similar conclusions regarding the gross income that could be generated by the subject facility and also the capitalization rate, which should be applied to the net operating income.  Despite the similar values for gross income and capitalization rate attributed to the subject facility, the final estimates of value were $1,300,000 apart.  The primary difference between these opinions of value under the income approach results from a difference in the appraisers' treatment of the expenses related to the subject property.  The board of review's appraiser utilized stabilized expenses based upon a blending of the subject property's reported expense data, expense data from local competing facilities and national data from publications.  The appellant's appraiser relied primarily on the subject's expense history for three years preceding the assessment date.  The Board finds the expense methodology performed by the board of review's appraiser to be most reliable. 

When determining the value of property for assessment purposes, it is the capacity of the property to generate net income, which serves as the basis for valuation rather than the net income reported by the current owner of the property.  The Supreme Court of Illinois reaffirmed this principle in 1970 with its decision in Springfield Marine Bank v. Property Tax Appeal Board, 44 Ill.2d 428, 256 N.E.2d 334, when it stated as follows: 

As we have recognized in the past, many factors may prevent a property owner from realizing an income from property which accurately reflects its true earning capacity; but it is the capacity for earning income, rather than the income actually derived, which reflects "fair cash value" for taxation purposes. 

The Board further points out that the owner of the subject property testified that the management fee related to operations of the facility is paid to G & G Management Company which is owned by his family.  In fact, the President of G & G Management Company is also the General Manager of the subject property.  Because these two entities are related, the Board finds any transactions between these related parties may not be typical or reflective of the market.  Thus, the Board finds the income approach performed by the board of review's appraiser to be more credible since expenses were stabilized from a blend of the subject property's history, local market data and nationally recognized publications relating to hotel/motel operations. 

The appraisers gave secondary weigh to the sales comparison approach to value.  Under this approach, the appraisers were again different in their results.  The appellant's appraiser concluded a market value of $2,672,000 based on five sales of hotel/motel properties; one is located in the subject's market area.  The remaining four sales are located some distance away; one in Springfield, Illinois, two in Lincoln, Illinois and one in London, Kentucky.  Four of the sales are full service hotels and one is a limited service facility.  The board of review's appraiser relied on six sales to estimate the subject's market value of $3,850,000.  Three of the sales are located in the Peoria market area, one in Springfield, Illinois and two in Lincoln, Illinois.  Two of the sales are full service facilities and four have limited service.  The comparables selected by the respective appraisers reflect a difference of opinion as to which characteristics of similar properties provide a sound basis for estimating the value of the subject property.  The Board finds the best comparables are those that reflect local conditions, characteristics and proximity to local amenities that are also convenient to the subject facility.  After reviewing the comparables offered by the parties and considering adjustments for locations, land sizes, age, physical characteristics and other relative differences between the properties, the Board finds that the most comparable properties support a reduction in the valuation of the subject property.  Upon consideration of adjustments for differences between the suggested comparable properties and the subject property, the Property Tax Appeal Board finds that the market value estimate concluded by the board of review's appraiser lends support to the appraiser's conclusion of value under the income approach. 

Because of substantial adjustments necessary in comparing the subject property with the suggested comparable sales considered by the appraisers in performing the sales comparison approach, the Board finds most weight to be given the income approach to value.  Both appraisers also gave primary weight to this approach since the subject property is an income producing facility. 

Relying primarily on the income approach to value with support from the sales comparison approach, the Property Tax Appeal Board finds the market value of the subject property of $3,800,000 as of January 1, 1998 and January 1, 1999.

Since market value has been established the 1998 & 1999 Tazewell County median level of assessments of 33.23% and 33.13% shall apply.

The subject property consists of a Section 515 FmHA, low income housing complex.  The complex consists of three, two-story apartment buildings with a total of 18 units containing 15,288 square feet of building area known as J & J Apartments.  The apartment mix is 9, one-bedroom apartments; and 9, two-bedroom apartments.  The complex was constructed in 1985.  The apartment buildings are situated on three parcels that are identified as parcel numbers 304-006, 303-013, & 303-012.

The appellant appeared before the Property Tax Appeal Board and argued the fair market value of the subject property was not accurately reflected in its assessed valuation.  In support of his contention, the appellant submitted a narrative appraisal report prepared by a real estate appraiser.  In this appraisal report, the appraiser utilized one of the three traditional approaches to value in estimating the subject’s market value of $217,115 as of the January 1, 1999.

The report described the subject property and the workings of a Section 515 project. The report indicated that Section 515 projects are authorized by the Federal Housing Act of the Farmer's Home Administration. It was designed to provide senior citizens and other persons and families with low incomes in rural areas with affordable rental housing. Under this program, an owner agrees to operate each project on a limited income and rental basis for a period of not less than 20 years and more often for 30 years.  The project owner may not sell the property without permission from the FmHA and without FmHA approval of the buyer.  The rental rates per apartment and the net income the owner may receive are regulated by the federal government and the rents are based on their own derived formula. The profit which can be realized by the owners of these rural rental housing projects is limited to 8% of the owner's initial investment.  The initial investment is usually 5% to 8% of the total cost of the project.  The remaining 95% cost of the project is financed with a subsidized mortgage of 1%.  These restrictions and limitations must be transferred with the property if it is sold.

Under the income approach to value, the appraiser stated that under the section 515 system the subject property had restricted rents for 9, one-bedroom units of $270 per month; and 9, two-bedroom units at $300 per month. Using this data, the subject’s gross potential income was calculated at $61,560. Vacancy and collection loss was estimated at 5%, which resulted in an effective gross rental income of $60,082 and included miscellaneous income.  Expenses in the amount of $32,682 were estimated based on the subject’s actual income and expense statements.  The subject’s net operating income before taxes was estimated to be $27,400.  The appraiser next developed a capitalization rate to be applied to the net income.  The appraiser estimated the capitalization rate to be applied using the band of investment technique.  He indicated that he used the January 1999 National Mortgage Commitment Survey and determined that a loan equal to 70% of value at a rate of 8% was typical.  He also indicated that a buyer would accept an 8% return on equity portion of the investment as mandated by the FmHA program.  The resulting capitalization rate was estimated to be 12.62% and included a recapture rate of 2% and an effective tax rate of 2.62%.  The appraiser then capitalized the net income of $27,400 by the capitalization rate of 12.62% to arrive at an estimated value by the income approach of $217,115.

In the appendix of the appraisal report the appraiser included copies of Illinois House Bills 1261 and 1987.  House Bill 1987 amended Section 1-130 of the Property Tax Code (35 ILCS 200/1-130) and added Section 10-235 of the code (35 ILCS 200/10-235) dealing with Section 42 housing tax credits.  House Bill 1261, added Section 10-245 to the Property Tax Code (35 ILCS 200/10-245) and sets forth a method of valuation for Section 515 low-income housing projects.  Section 10-245 provides in part:

[T]o determine 33 and one-third percent of the fair cash value of any Section 515 low-income housing project, in assessing the project, local assessment officers must consider the actual or probable net operating income attributable to the project, capitalized at normal market values.

The appellant’s appraiser applied the appraisal methodologies recognized by these new Sections of the Property Tax Code for valuing Section 42 and Section 515 projects.  The appraiser was of the opinion that this new legislation clearly established specific guidelines for valuing low income housing for ad valorem tax purposes.  Therefore, based on this legislation the appraiser utilized only the income approach to value to estimate a market value for the subject property of $217,115 as of assessment date.

The board of review presented its "Board of Review Notes on Appeal" wherein the subject's assessment was disclosed.  The subject’s total assessment reflects a market value of $400,360 using the county’s three year median level of assessments for 1999 of 33.33%.  In addition, the board of review submitted property record cards of the subject property and a copy of a past Property Tax Appeal Board Decision in the Vandalia Limited Partnership, Docket 97-64-C-1 which consisted of a FmHA Section 515 housing project located in Vandalia, Fayette County, Illinois.  The appraiser was the same in that appeal as in the present appeal.  In that appeal, a cash equivalency adjustment was made to the sales prices of the comparable FmHA housing projects.  In that appeal, the Board found no reduction was warranted in the subject’s assessment based on the raw sales data submitted by the appellant.  The board of review also noted that the two House Bills submitted by the appellant were not effective as of the subject’s assessment date.  Based on the evidence contained in the record, the board of review requested confirmation of the subject property’s total assessment.

After hearing the testimony and reviewing the record, the Property Tax Appeal Board finds that it has jurisdiction over the parties and the subject matter of this appeal.  The Board further finds no reduction in the subject’s assessment is warranted.  The subject’s assessment currently reflects a market value of $400,360 using the county’s three year median level of assessments for 1999 of 33.33%.  The appellant’s appraiser estimated a market value of $217,115 for the subject property as of January 1, 1999.

The Board finds that the appellant’s appraiser only considered the negative aspects of the subsidy agreement in the income approach to value.  In developing the income approach the appraiser utilized the subject’s actual restricted income allowed by the Section 515 program, a negative aspect of the program.  The appraiser did not properly consider the positive aspect of the subsidy contract which was the 1% interest rate used to finance the majority of the costs of the project.  In developing the subject’s capitalization rate of 12.62%, the appraiser utilized the band of investment method and estimated a market driven mortgage rate of 8%.  The Board finds this capitalization rate to be excessive with respect to subject’s subsidy agreement.  In developing an income approach to value, it would have been more appropriate for the appraiser to capitalize the actual income generated by the project by a capitalization rate developed by the band of investment method using the terms of the subsidy agreement and adding components for a recapture rate and a effective tax rate.  Using this approach the subject property would have a discount rate of 1.35% which is developed by considering that 95% of the project is financed with a 1% mortgage while the owner is allowed an 8% return on his 5% equity interest.  Adding the appellant's appraiser’s estimated recapture rate of 2% and the effective tax rate of 2.62% results in an capitalization of 6%, rounded.  Capitalizing the subject’s net income of $27,400, as determined by the appellant's appraiser, by the capitalization rate of 6% results in and estimated value of $456,700, rounded.  This calculation is supportive of the subject’s assessment, which reflects a market value of $400,360.  Alternatively, the appraiser could have added the subsidy to the subject’s actual net income and used a market capitalization rate with this total income.  This type of approach would have more accurately considered the positive and negative aspects of the subsidy agreement on the property.  Therefore, the Board gives diminishing weight to the estimated value derived by the appraiser.

In addition, the Board finds that Section 10-245 of the Property Tax Code (35 ILCS 200/10-245), which deals with valuation of Section 515 housing projects, is not applicable to the subject property for the assessment year in question.  This statute has an effective date of January 1, 2000, whereas, the subject appeal concerns the 1999 assessment year.  In Kennedy Brothers, Inc. v. Property Tax Appeal Board, an Illinois Appellate Court held that:

“a legislative enactment cannot be given retroactive effect in the absence of a clear expression of legislative intent to do so.  In the absence of express language declaring otherwise, an amendatory act is ordinarily construed as being prospective in its operation.”  Kennedy Brothers, Inc. v. Property Tax Appeal Board, 158 Ill.App.3d 154 (2nd Dist. 1987). 

In Kennedy Brothers, the issue before the court was the application of a statute that would have had an impact on the subject property’s valuation.  The statute in question had an effective date in September 1993, while the appeal for the subject property was for the January 1, 1993, assessment year. The court held that the statute, which was not effective until September 1993, could not be applied retroactively to the subject appeal for the January 1, 1993, assessment year.  In conclusion, the Property Tax Appeal Board finds that, as in the Kennedy Brothers case, the recent legislation cannot be applied retroactively in the absence of express language declaring otherwise.  Section 10-245 of the Property Tax Code is absent of any language giving it any retroactive application.

The Board also finds that the appellant’s appraiser submitted Sections 1-130 and 10-235 of the Property Tax Code (35 ILCS 200/1-130 & 10-235), which both address the issue of Section 42 housing projects.  However, the subject property is a Section 515 housing project, thus, the Board finds that the appellant’s citation of an argument concerning Section 42 projects is without merit.

In conclusion, the Board finds that considering the cost approach as contained on the subject’s property record cards submitted by the board of review and developing the income approach, considering both the positive and negative aspects of the Section 515 subsidy agreement, the subject’s assessment is reflective of its market value.

Therefore, the Property Tax Appeal Board finds the subject property’s assessments as established by the board of review are correct and no reductions are warranted.

The subject property consists of a two-story, masonry, office building containing 7,348 square feet of building area.  The single building does not contain a basement and is located on 5,200 square feet of land.  The appellant through his attorney contends two issues:  that the fair market value of the subject is not accurately reflected in its assessed value and that the State Equalization Factor should not be applied to the subject property to determine the subject’s assessment.

In support of the appellant’s argument regarding the State Equalization Factor, the appellant submitted a written statement asserting that the application of the factor causes the subject’s market value to exceed the 1997 sale price.

In reviewing this argument, the Property Tax Appeal Board finds that it has no jurisdiction over the State’s Equalization Factor or the application thereof.

In support of the appellant’s market value argument, the appellant completed the affidavit portion of the Board’s appeal form.  The signed affidavit indicates that the subject property was purchased on March 14, 1997 for $600,000.  The affidavit also indicates that the sale was not between related parties and that the buyer did not assume the seller’s mortgage.  In addition, the appellant submitted a copy of the closing statement.  Based upon this analysis, the appellant requested a reduction in the assessment of the subject property.

The board of review presented "Board of Review Notes on Appeal" wherein the subject's final assessment of $169,161 was disclosed.  This final assessment reflects an improvement assessment of $150,833 and a land assessment of $18,328.

In addition, the board submitted the Cook County Real Property Assessment Classification Ordinance, which provides for an assessment level of 38% for Class 5A property such as the subject.  The board also submitted case law, In re Application of Rosewell v. U.S. Steel Corp., 106 Ill. 2d 311, 478 N.E.2d 343 (1985) and In re Application of County Treasurer v. Twin Manors West of Morton Grove Condominium Association, 175 Ill. App. 3d 564, 529 N.E.2d 1104 (1st Dist. 1988).  No brief with an explanation as to each case’s relevance in the present appeal was submitted.  In addition, the board of review submitted a report entitled The Illinois Ratio Study for Commercial and Industrial Properties:  Review and Recommendations, by Robert J. Gloudemans and Alan S. Dornfest [hereinafter, the "Dornfest report"].  The "Dornfest report" reviewed and evaluated the procedures and methodology used by the Illinois Department of Revenue in its annual sales ratio studies.

Furthermore, a narrative analysis was offered.  The board’s analysis asserted three points.  First, the board of review asserts that since the subject is an income producing property, the appellant should have provided market rental data using an income approach to value.  The second point raised in the board’s analysis was that the current market valuation reflects a fair cash value below the subject’s purchase price.  The third point raised in the board’s analysis is that the Property Tax Appeal Board lacks jurisdiction over the State Equalization Factor.  Based on this analysis, the board of review requested a confirmation of the subject’s 1997 assessment.

After reviewing the record and considering the evidence, the Property Tax Appeal Board finds that it has jurisdiction over the parties and the subject matter of this appeal.

When overvaluation is claimed the appellant has the burden of proving the value of the property by a preponderance of the evidence.  Property Tax Appeal Board Rule 1910.63(e).  Proof of market value may consist of an appraisal, a recent arm’s length sale of the subject property, recent sales of comparable properties, or recent construction costs of the subject property. Property Tax Appeal Board Rule 1910.65(c).

Having considered the evidence presented, the Board concludes that the appellant has met this burden, but that no reduction is warranted.

As to the appellant’s market value argument, the Board finds that the appellant submitted the best evidence of market value.  The appellant’s affidavit indicated that the subject property was purchased on March 14, 1997 for $600,000.  The affidavit also indicated that the sale was not between related parties and that the buyer did not assume the seller’s mortgage.  In addition, the appellant submitted a copy of the closing statement, which reflects the aforementioned sale price.

The Board must next determine the subject’s "correct assessment" based on "equity and the weight of the evidence."  35 ILCS 200/16-180 and 16-185.  The Illinois Constitution provides, in part, that "taxes upon real property shall be levied uniformly by valuation" and that, in counties which classify property, "assessments shall be uniform within each class."  Ill.Const. 1970, art.IX, sec. 4.  Assessments must be uniform at the county level and within the same class.  In re: Application of County Treasurer v. Twin Manors West of Morton Grove Condominium Association, 175 Ill. App. 3d 564, 529 N.E.2d 1104 (1st Dist. 1988).  Thus, the subject, a Class 5A property, must be assessed uniformly with other Class 5A property at the county level.

To uniformly assess the subject, the Board must determine the proper assessment level for Class 5A property.  In doing so, "the Board may consider competent evidence . . . under the Illinois Constitution, the Illinois Property Tax Code, and the Cook County Real Property Assessment Classification Ordinance." Property Tax Appeal Board Rule 1910.50(c)(3).  The Code directs the Department of Revenue to design and prepare sales ratio studies.  35 ILCS 200/17-10.  The studies’ results, which have been repeatedly validated by the courts, are used to adjust each county’s aggregate reviewed assessment in the state equalization process.  35 ILCS 200/17-5.  These equalization provisions apply in Cook County.  In re: Application of County Collector v. Johnson, 133 Ill. App. 3d 208, 478 N.E.2d 1119 (1st Dist. 1985).

The Board hereby takes official notice of the results of the Department’s 1997 sales ratio studies for Cook County as matters within the Board’s "specialized knowledge and expertise." Property Tax Appeal Board Rule 1910.90(i).  The courts have held that the Board is to use the Department’s sales ratio study for the three most recent years preceding the tax assessment year at issue.  Commonwealth Edison Co. v. Property Tax Appeal Board, 102 Ill. 2d 443, 468 N.E.2d 953 (1984); Board of Review of Grundy County v. Property Tax Appeal Board, 201 Ill. App. 3d 999, 559 N.E.2d 504 (3d Dist. 1990).  According to the Department, the 1997 Cook County three year average median level of assessment for Class 5A property was 31.03 percent.

The results of the Department’s sales ratio studies are prima facie evidence of the levels of assessment.  Will County Board of Review v. Illinois Property Tax Appeal Board, 100 Ill. App. 3d 506, 508, 426 N.E.2d 1238 (3d Dist. 1981).  The Board systematically uses the results to determine the proper assessment levels for properties located outside of Cook County.  Similarly, the Board has used the studies to determine the assessment level for Class 2 residential properties located in Cook County.  Property Tax Appeal Board Rule 1910.50(c)(1) and (2). (See Cook County Board of Appeals v. Property Tax Appeal Board and Lefkowitz, Gen No. 98 COTAB 0001, wherein the Circuit Court found that the Property Tax Appeal Board’s decision, in which the Board utilized the Department of Revenue’s three year median level of assessments for Class 2 property to determine the correct assessment, was not against the manifest weight of the evidence.)

As to the board of review’s report, the Board finds unpersuasive the "Dornfest report" submitted by the board evaluating the Department’s studies.  The report fails to present any "competent evidence" indicating the proper assessment level as required under the Board’s rules.  (Property Tax Appeal Board Rule 1910.50(c)(3).  The report also fails to present any empirical evidence indicating that the Department’s studies produced inaccurate assessment levels.  The report is merely an analytical review of the Department’s procedures and methodology.  Significantly, the report fails to present any evidence indicating that the Department’s studies would result in different outcomes if the report’s recommendations were implemented.  The Illinois Supreme Court has found such omissions fatal in proving the Department’s studies are flawed.  Further, the Court has found that most of the Department’s procedures criticized in the "Dornfest report" are in accord with the authority granted by the legislature.  Airey v. Department of Revenue, 116 Ill. 2d 528, 508 N.E.2d 1058 (1987); Advanced Systems, Inc. v. Johnson, 126 Ill. 2d 484, 535 N.E.2d 797 (1989).  Thus, the Board finds that the report fails to impeach the reliability of the Department’s studies.

The Board also finds unpersuasive the case law submitted by the board.  (Since no brief was submitted describing the relevancy of these cases, the Board will assume the cases were submitted to address the proper assessment level.)  The first case, In re: Application of Rosewell v. U.S. Steel Corp., 106 Ill. 2d 311, 478 N.E.2d 343 (1985), is factually distinguishable from the present matter.  In U.S. Steel, the only evidence presented concerning the Department’s studies indicated the studies were not reliable.  However, the Court specifically stated that it did not "mean to imply that assessment/sales ratio studies may not be used as evidence of valuation in Cook County under any circumstances."  Id. at 323, 348.  A subsequent Illinois Supreme Court case distinguished U.S. Steel and made use of the Department’s studies in Cook County.  In Airey, supra., the Court allowed the use of the Department’s studies where the evidence supported the studies and the objecting party failed to show that the studies should not be used.  As already stated herein, the "Dornfest report" is insufficient to impeach the reliability of the Department’s studies.  An administrative agency may rely on its own "experience, technical competence, and specialized knowledge."  5 ILCS 100/10-40; See Ekco Glaco Corp. v. Illinois Environmental Protection Agency, 186 Ill. App. 3d 141, 542 N.E.2d 147 (1st Dist. 1989).  In such circumstances, the Illinois Supreme Court has found the Department’s studies reliable in numerous cases.  People ex rel. Hillison v. Chicago Burlington and Quincy R.R. Co., 22 Ill. 2d 88, 174 N.E.2d 175, (1961); People ex rel. Wenzel v. Chicago and North Western Railway Co., 28 Ill. 2d 205, 190 N.E.2d 780 (1963); People ex rel. Musso v. Chicago Burlington and Quincy R.R. Co., 33 Ill. 2d 88, 210 N.E.2d 196 (1965); Airey, supra; Advanced Systems, supra.  Based on the Board’s "experience, technical competence, and specialized knowledge," the Board finds the Department’s studies reliable.

The Board’s decision herein is consistent with the second case submitted by the board, Twin Manors, supra.  In Twin Manors, the court held "that the proper geographic area [in Cook County for purposes of uniformity] is the county [level]."  Id. 529 N.E.2d at 1105.  In the present matter, the Board has taken official notice of the countywide assessment level as the court in Twin Manors held was proper.

Finally, the board submitted the Cook County Real Property Assessment Classification Ordinance, which provides for an assessment level of 38% for Class 5A property for consideration.  As noted herein, however, the Department’s studies indicate an assessment level of 31.03 percent.  As the Illinois Supreme Court stated in Airey, "this is an imperfect world; hence, assessment levels vary."  Airey, 508 N.E.2d at 1059.  In light of this, Illinois courts have recognized that, despite a statutory defined assessment level, "if property within the taxing district is assessed on a debased proportion of the fair market value, all property shall be assessed on the same basis."  People ex rel. Wangelin v. Gillespie, 358 Ill. 40, 192 N.E. 664 (1934); M.F.M. Corp. v. Cullerton, 16 Ill. App. 3d 681, 686, 306 N.E.2d 505, 508 (1st Dist. 1973) citing People ex rel. Rhodes v. Turk, 391 Ill. 424, 63 N.E.2d 513 (1945).  Thus, in order to determine the subject’s "correct assessment" in the present matter, the Board must debase the subject’s market value in the same proportion as property within its class.  No further evidence concerning the proper assessment level was presented in the record by the board in this matter.  As such, the Board finds that the proper assessment level in this matter are the results of the Department’s sales ratio studies.

Utilizing the Department’s 1997 three year median level of assessments for Cook County Class 5A property of 31.03%, the subject’s market value found herein should reflect a total assessment of $186,180.  Since the current total assessment of $169,161 is not greater than the assessment warranted by the subject’s market value, a reduction is not appropriate.

Considering all of the evidence, the Board finds that the subject’s assessment as established by the board of review supports the subject’s recent sale price and that no reduction is warranted.

The subject property consists of a 141-pad site manufactured home park containing a total of 33.32 acres.  The subject property is located in Frankfort, Will County, Illinois.

The appellant’s attorney appeared before the Property Tax Appeal Board claiming overvaluation as the basis of the appeal.  In support of this contention, an appraisal report was submitted estimating a market value of $2,850,000 for the subject property as of January 1, 1998.  From this amount, a deduction of $540,000 was employed to cure the cost of reported health code violations stemming from the fact the water and sewer lines were located too close together.  Therefore, the indicated market value of the subject property as of January 1, 1998, as encumbered by the health code violations was $2,310,000.  At the outset of the hearing the supervisor of assessments agreed to stipulate to a market value of $2,850,000 for the subject property.  However, the supervisor of assessments contested the $540,000 deduction for the cost to cure of the health code violations.  The appellant’s attorney contended the $540,000 deduction was appropriate and presented evidence in support of the contention.

The first witness presented was a certified public accountant.  He testified that he has done accounting work for the appellant and that he has been associated with the property since it was initially developed.  He stated that in 1996, subsequent to the development of the mobile home park, the Illinois Department of Public Health (IDPH) inspected the property and found the property to be in violation of the health code.  He explained the major violation was the distance between the sewer and water lines that go into each of the mobile homes was less than ten feet.  As a result, licensing to operate the mobile home park was denied by the State of Illinois.  The witness stated the appellant opted to take legal action rather than to comply with the requirements dictated by the IDPH.  The IDPH subsequently raised additional issues such as the proper installation of the underground sewer and water lines.  He explained that if both lines were placed in a single trench, they had to have an 18-inch separation.  He stated that if the underground installation was found to be faulty, the streets would have had to be taken out in order to properly install the sewer and water lines.

Finally, in November 1998, the owners of the park agreed to comply with the IDPH requirements.  At that time 15 units were chosen as test sites to examine or determine the extent of the violations of the underground lines.  It was found that there were no underground line violations from these test sites.  With respect to the lines that lead into the mobile homes, 135 of the 143 units were in violation and had to be corrected to a 10-foot separation between the lines.  He stated the estimated costs to repair the violations were $4,000 per unit.  Estimates of these costs were included in the addendum of the appraisal report.  Moving the sewer line in the 135 units was estimated at $3,000 per unit.  To restore grass areas and landscape plantings disturbed by excavation the cost was estimated at $1,000 per lot.  The witness testified that as of the January 1, 1998, assessment date, the costs could have been in excess of $1,000,000 if the underground lines had not been in compliance.  He stated that on January 1, 1998, the mobile home park was unlicensed with a large cost to cure the sewer and water line violations.  He testified that after remediation costs of $206,000 the mobile home park was licensed in March 1999.  He testified that a large portion of the remediation work was performed by the appellant using employees hired to develop a second mobile home park.

The landscaping contractor used by the appellant hired seasonal people to do the work in the off-season of November when the employees would normally have been unemployed.  He stated there was a substantial savings from doing the landscaping at this time.  Additional costs for legal and engineering amount to $50,000 for a total cost of remediation of $256,000.  In conclusion, the witness testified that as of January 1, 1998, with unknown costs of remediation and with the mobile home park unlicensed, the property would have been difficult to sell without a major discount.

Under cross-examination, the witness agreed that had the remediation of the water and sewer lines been employed in 1996 and 1997 when the violations were first discovered, the costs as of the January 1, 1998, assessment date would have been known.  The witness indicated the sewer problems prevented the owners of the mobile home park from increasing the rents.  He stated the mobile home park was never closed because of the violations.  However, the owners had to pay back licenses and permit fees in an amount of $4,000, which was not included in the $206,000 remediation costs.

The next witness called was a MAI appraiser.  The parties stipulated to the appraiser's appraisal qualifications.  She testified the remediation costs of $540,000 were determined from the cost estimates provided by the plumbing and landscaping contractors and included in the addendum of the appraisal report.  The estimates were then confirmed with cost manuals and interviews with other contractors.  Because of the cost to cure the water and sewer violations, she stated that it was reasonable to assume the subject’s sale price would be negatively impacted as well as the marketing time.  The appraiser testified that under the cost approach in developing the replacement cost new for the subject improvements, the unit base value costs were enhanced by a 15% entrepreneurial profit factor and a 12% development cost factor.  She was of the opinion it would be equally appropriate to add the profit and development cost factors to the actual remedial costs of $206,000 since the owner of the subject property was the developer and contractor of the project.  She stated it was also appropriate to take the actual cost estimates of remediation in estimating the cost to cure of the violations.  She stated that the estimates used in the appraisal were only for the above ground remediation and that if the underground costs had been considered or taken into account, the appraisal could very well had been less than the $2,310,000 estimate.

The board of review submitted "Board of Review Notes on Appeal" wherein the subject’s assessment totaling $1,022,028 was disclosed.  The subject’s assessment reflects a market value of $3,081,182 using the county’s three-year median level of assessments for 1998 of 33.17%.  The supervisor of assessments was present at the hearing and argued that a cost to cure for the sewer and water violations was not an appropriate deduction.  He noted that the assessments assigned to the subject property from 1995 to 1997 totaled from $374,000 to $394,000 and represented a large deduction to the property owners during this time period.  Because of the past lower assessments, he argued the subject property did not warrant a further discount for the 1998 assessment year.  He also argued that a cost to cure of $540,000 is not appropriate when the actual costs were approximately $256,000.  The evidence submitted by the supervisor of assessments indicated that based on the Marshall Valuation Service the cost to install sewer lines is $900 per space and with multipliers the cost per space is $1,429.20.  He noted the cost to cure estimate was twice as much as indicated in the cost manual.  A copy of the appropriate sheet from the cost manual was not submitted by the board of review.  Based on this data, the board of review requested an assessment reflecting the market value estimated by the appellant’s appraiser prior to the deduction of the cost to cure.

After hearing the testimony and reviewing the record, the Property Tax Appeal Board finds that it has jurisdiction over the parties and the subject matter of this appeal.  The Board further finds that a reduction in the subject property’s assessment is supported by the evidence contained in the record.  In this appeal, the appellant submitted an appraisal report estimating a market value of $2,850,000 for the subject property as of the January 1, 1998, assessment date.  The market value of the subject property as of January 1, 1998, as encumbered by the health code violations was $2,310,000.  The subject’s assessment reflects a market value of $3,081,182.  The board of review agreed to stipulate to a market value of $2,850,000.  However, it was of the opinion the deduction of $540,000 for the cost to cure the water and sewer line violations was inappropriate.  Thus, the crux of the appeal is whether or not the deduction for the cost to cure the water and sewer line violations was appropriate and if so, what amount should be used.

The cost to cure these violations was estimated at $540,000.  The testimony disclosed the actual costs, including legal and engineering fees were approximately $256,000.  The appellant argues the estimated costs were appropriate because as of the January 1, 1998, assessment date, the actual costs were unknown.  It also argued that if the actual costs were used, they should be factored for entrepreneurial and development costs since the appellant served as the general contractor and developer of the project.  The board of review argued that if the cost to cure these violations is deemed appropriate by the Property Tax Appeal Board, then the actual, known costs should be utilized.

At the outset, the Property Tax Appeal Board rejects the board of review’s claim that because the subject property had enjoyed lower assessments in the past it does not deserve a deduction for the cost to cure the health violations.  The Property Tax Appeal Board has no jurisdiction to review the assessments assigned to the subject property in 1995 and 1996 since an appeal had not been timely filed with the Board for those years.  The Board’s jurisdiction is limited to determining the correct assessment for the subject property as of the January 1, 1998, assessment date as appealed by the appellant.

With respect to the cost to cure the health violations, the Property Tax Appeal Board finds that based on typical appraisal practice it is appropriate to make a deduction for the cost to cure of items in need of repair as of the effective date of appraisal.  The board of review noted the costs obtained from a cost manual for installing sewer lines were less than the estimated costs as submitted by the appellant.  The Board places no weight on this argument.  The cost to cure must include the cost of removal of existing items and preparation for installation.  Therefore, the cost to cure is usually more than the cost new.  The appellant argues the estimates provided in the record for the cost to cure the health violations should be used because as of the assessment date, the actual costs were unknown and the cost to cure could have been higher if the underground lines were also in violation.  The Board finds that the actual costs of $206,000 plus the entrepreneurial profit and developer’s cost factors and the engineering and legal fees of $50,000 are the best evidence contained in the record to cure the health violations.  This results in a deduction of $315,328 for the cost to cure the water and sewer lines and a market value after the deduction of $2,534,672.  Therefore, since market value has been established, the county’s three-year median level of assessments for 1998 of 33.17% shall be applied.

The subject property consists of a 37-acre tract of land improved with a one and one half story, brick single-family dwelling and commercial buildings.  The parcel is located in Belleville, St. Clair County, Illinois.  The dwelling was constructed in 1947 and contains 2,044 square feet of living area.  The commercial buildings were built in 1970, 1976, and 1995 and contain square footage of

The appellant appeared before the Property Tax Appeal Board claiming that 20 acres of the subject’s land should be classified and assessed as agricultural use.  The appellant also claimed the assessment of the subject’s office building was excessive when compared to its recent construction costs.  She further claimed unequal treatment in the assessment of the workshop, rendering, and office buildings.  The appellant did not contest the assessment of the residence.  In support of these arguments, the appellant presented testimony, photographs, and assessment data on three suggested comparable properties.

The appellant testified that for the last 35 years, 20 acres of the subject parcel have been used to grow corn, beans, and wheat.  The appellant stated the remaining acreage, excluding the homesite, is used for a rendering business.  The appellant testified she has never received a farmland assessment on the subject parcel.  The appellant further testified the subject parcel was leased for the purpose of farming.  One photograph of the subject parcel was presented in support of her claim.  This photograph verified the subject property had been tilled for farming.

With respect to the recent construction issue, the appellant’s evidence indicated the subject office building was constructed in 1995 for a total cost of $96,825. The appellant also testified at the time of construction the subject property had an old office building.  She stated that the old building was demolished to make room to construct the current office building.  The appellant testified that the subject’s office building was completed in 1997, which is contrary to the date indicated on the subject’s property record cards.  The appellant did not submit any cost data or construction statements in support of this claim.

With respect to the equity issue, the appellant claimed that the buildings associated with the rendering business were inequitably assessed when compared to similar buildings in the area with similar uses.  In support of this argument the appellant submitted assessment data on three suggested comparable properties.  The appellant indicated that two of the three comparable properties were located in East St. Louis, St. Clair County, Illinois, and the other comparable was located adjacent to the subject. These comparable properties have total improvement assessments ranging from $8,505 to $223,335.  The appellant also noted she was unable to retrieve from the St. Clair County Assessor’s Office a building by building assessment breakdown for these comparable properties.  The appellant testified two of the comparables were utilized as rendering facilities and the other comparable was used as a protein blender business for the rendering industry.  Based on the evidence, the appellant requested a farmland classification for a portion of the land and a reduction in the subject’s improvement assessment.

The board of review presented "Board of Review Notes on Appeal" wherein the subject property’s final assessment was disclosed.  In addition, the board of review submitted assessment data and property record cards on the appellant’s three suggested comparable parcels.

With respect to the farmland issue, the board of review argued that the subject parcel was rural land and was not being farmed.  However, the board stated there was no inspection performed in order to determine whether there was any farming activity as of the assessment date.  The board also stated the appellant failed to submit any documentation that the subject property had been farmed.  The board further submitted assessment information on three rural land comparables, which were located in the same area as the subject property.  These land comparables ranged in size from .87 to 3 acres and had rural land assessments ranging from $1,329 to $4,504 or from $1,501 to $1,528 per acre.  The subject had a rural land assessment of $15,874 or $429 per acre.

With respect to the recent construction issue, the board of review indicated that the subject property received a building permit in 1995, which was supported by the subject’s property record card.  The board also noted that the appellant did not provide evidence of construction costs in this appeal.

With respect to the equity issue, the board of review submitted property record cards on the three comparable properties used by the appellant.  The first comparable property was improved with a one story single-family dwelling and three commercial buildings.  The dwelling contained approximately 1,200 square feet of living area.   The commercial buildings were constructed in 1952 and ranged in size from 3,264 to 12,616 square feet of building area.  The second comparable was improved with a one-story building containing 51,000 square feet of building area and was constructed in 1913.  The third comparable was improved with five buildings.  These buildings were constructed between 1970 and 1994 and ranged in size from 2,160 to 6,175 square feet of building area.  These comparable properties had total improvement assessments ranging from $8,505 to $223,335. The subject property had a total improvement assessment of $152,931.   The board’s representative stated two of the three comparables were receiving very low improvement assessments based on the age and poor condition of the comparable buildings.

In conclusion, the board of review indicated that it recalculated the subject’s assessment and offered to lower the subject’s total improvement assessment to $107,673 as of the assessment date.

After hearing the testimony and reviewing the evidence, the Property Tax Appeal Board finds that it has jurisdiction over the parties and the subject matter of this appeal.  The Board further finds that a reduction in the subject’s improvement assessment is warranted based on a recalculation of the subject’s assessment by the board of review.

The Board further finds that 20 acres of the subject’s land is entitled to a farmland classification and assessment.  Section 1-60 of the Property Tax Code (35 ILCS 200/1-60) defines "farm" in part as;

any property used solely for the growing and harvesting of crops; for the feeding, breeding and management of livestock; for dairying or for any other agricultural or horticultural use or combination thereof; including, but not limited to hay, grain, fruit, truck or vegetable crops, floriculture, mushroom growing, plant or tree nurseries, orchards, forestry, sod farming and greenhouses; the keeping, raising and feeding of livestock or poultry, including dairying, poultry, swine, sheep, beef cattle, ponies or horses, fur farming, bees, fish and wildlife farming..."  To qualify for an agricultural assessment, the land must be farmed at least two years preceding the date of assessment. (35 ILCS 200/10-110).

The appellant presented a photograph and testimony that a 20-acre portion of the subject parcel had been farmed for the past 35 years.  The appellant also submitted a photograph showing that the subject parcel was being tilled for agricultural purposes.  The appellant testified that a second party, hired by the appellant, was farming the subject parcel.  The Board finds the evidence presented by the appellant documents her contention that a portion of the subject parcel was used for agricultural purposes for two years preceding the assessment date of January 1, 1998.  In addition, the board of review failed to provide evidence to refute the appellant’s testimony that the land was used for farming purposes.  Based on the evidence and testimony by the appellant, the Property Tax Appeal Board finds that the 20-acre portion of the subject parcel is entitled to a farmland classification and farmland assessment.

The appellant also claimed the assessment of the subject’s office building was not reflective of its recent construction cost.  However, the Board finds that the appellant failed to submit any evidence or documentation to support this contention.  Therefore, the Board gives diminished weight to this argument.

The appellant also argued the subject’s improvement assessment was not equitable when compared to three suggested comparable properties.  The Board finds that two of the three comparables were not truly comparable to the subject improvements in age or condition.  Therefore, the Board finds that the evidence in the record does not establish unequal treatment in the assessment process.

However, as stated above the Board finds that a reduction is warranted based on the board of review’s recalculation of the subject’s improvement assessment to $107,673.  Therefore, the Board finds the subject property’s assessment as established by the board of review is incorrect and a reduction is warranted based on the board of review’s revisions.

In addition, the Property Tax Appeal Board finds that 20 acres of the subject parcel are entitled to a farmland classification and hereby orders the St. Clair Board of Review to compute a farmland assessment for these acres.  The agricultural assessment is to be certified to the Board within 15 days of the date of this decision.

The subject property consists of a Section 515 FmHA, low income housing complex. The complex consists of 12 units containing a total of 9,690 square feet of living area. The subject improvements are approximately five years old.

The appellant appeared before the Property Tax Appeal Board through its attorney and claimed the subject property’s assessed value should be decreased to reflect its true market value. In support of its contention, the appellant submitted an appraisal report estimating a market value of $170,000 as of January 1, 1998.

The report described the subject property and the workings of a Section 515 project. The report indicated that Section 515 projects are authorized by the Federal Housing Act of the Farmer's Home Administration. It was designed to provide senior citizens and other persons and families with low incomes in rural areas with affordable rental housing. Under this program, an owner agrees to operate each project on a limited income and rental basis. The project owner may not sell the property without permission from the FmHA and without FmHA approval of the buyer.  The rental rates per apartment and the net income the owner may receive are regulated by the federal government and the rents are based on their own derived formula. The profit, which can be realized by the owners of these rural rental housing projects, is limited to 8% of the owner's initial investment.

The appraiser initially testified that his appraisal report incorrectly detailed the subject property as having ten units. During the hearing, the appraiser corrected this error and stated that his final estimate should reflect a value of $204,000 for the 12-unit complex. Thus, the appellant also revised its assessment request from $56,666 to $68,000. The appraisal report contained two of the three traditional approaches to value.

The first approach performed by the appraiser was the income approach to valuation. The appraiser used the subject property’s income and expense statement for the 1997 and 1998 operating years to estimate the subject’s net income. After analyzing the income and expense statements and after considering the program’s required reserve account, the appraiser concluded a net income of (-$21,275) for the subject facility. The appraiser then explained that he used four methods, (build-up rate, safe rate, market rate and similar investment rate), for estimating a capitalization rate. These four methods established capitalization rates ranging from 9.0% to 11.5%. The appraiser chose a rate of 10% which he believed was most appropriate because it was market derived. To account for the effective tax rate, the appraiser also included a rate of .03% to reach a final rate of 13%. Applying the final capitalization rate to the estimated net income resulted in a final value of $163,600 through the income approach to value.

The appraiser also used the market approach to value. The sales comparison approach consisted of eight suggested sales of Section 515 housing projects located in Princeton, Winnebago, Dixon, Ohio, Wenona, and Farmersville, Illinois. These properties have between 8 and 40 units and were sold between February 1994 and August 1996 for prices ranging from $13,831 to $19,597. Four of these properties had gross rent multipliers ranging from 4.05 to 5.26. After considering these sales the appraiser estimated a per unit value of $17,000 to reach a final value of $170,000 through the market approach to value. Again, as previously acknowledged by the appraiser, the final estimate of value requires an adjustment to account for the subject’s 12 units. Thus, the final estimate of value through the sales comparison approach should be $204,000. In his reconciliation, the appraiser placed most emphasis on the market approach to value and estimated a final value of $204,000 as of January 1, 1998.

The appellant’s attorney also offered a copy of a recent piece of legislation which addresses the valuation of Section 515 housing facilities. The statute was passed on December 6, 1999, and has an effective date of January 1, 2000. The appellant claimed the legislation supports the appellant’s appraiser’s methodology for valuing the subject property. For example, the new law requires that local assessors consider the actual or probable net operating income for the project capitalized at normal market rates that was done by the appraiser in his income approach to value. Based on the evidence contained in the record, the appellant requested a reduction in the subject property’s total assessment.

The board of review submitted "Board of Review Notes on Appeal" wherein the subject property’s total assessment of $137,060 was disclosed. The subject’s assessment reflects a total market value of $412,335 using the Bureau County’s three-year median level of assessments for 1997 of 33.24%. In support of its assessment, the board of review performed all three of the traditional approaches to value using three of the appellant’s comparables that are also located in Bureau County, Illinois. The board of review also stated it would be willing to stipulate to a full value of $360,000 for the subject property.

In its cost approach, the board of review estimated the replacement cost new and depreciation for all three of the comparable properties and the subject property. Depreciation was estimated to be 3.0% per year, which was applied to the subject property’s replacement cost new of $410,270. After adding the estimated land value of $12,000, the board of review estimated a final value of $360,000 through the cost approach to value. The board of review then compared the comparable properties’ gross incomes to their sale prices to develop capitalization rates for the income approach to value. These rates ranged from 19.08% to 28.76%. A capitalization rate of 19.08% was estimated for the subject property, which was applied to its gross income of $53,515 resulting in a final value of $280,480 through the income approach to value.

The board of review also performed the market approach to value. Using the board of review’s comparables, the board of review estimated a gross rent multiplier of 6.51 for the subject property. The gross rent multiplier was then applied to the subject property’s gross income of $53,515. This resulted in a final value of $348,380 through the market approach to value. In conclusion, the board of review requested a reduction in the subject property’s total assessment to reflect a full value of $360,000.

After hearing the testimony and reviewing the record, the Property Tax Appeal Board finds that it has jurisdiction over the parties and the subject matter of this appeal.  The Board further finds that a reduction in the subject property’s assessment is warranted. In support of its assessment, the appellant submitted an appraisal that estimated a value of $170,000 as of January 1, 1998. Subsequently, during the hearing, the appellant’s appraiser revised his appraisal estimate to $204,000 to account for a miscalculation in his report concerning the number of units contained within the subject facility. The board of review also provided a market analysis wherein a value of $360,000 was offered as a stipulation to the appellant. Clearly, based on the subject property’s estimated value of $412,335, as reflected by its assessment, the Board finds that a reduction is warranted.

In discussing whether a government rental subsidy should be considered in valuing a property for assessment purposes, the Supreme Court of Illinois stated in Kankakee County Board of Review v. Property Tax Appeal Board, 136 Ill.Dec. 76, 131 Ill.2d 1, 544 N.E.2d 762 (1989), that “subsidized housing is conceived, constructed and operated outside the forces of the traditional marketplace.”  The court in Kankakee County, citing an earlier decision dealing with valuing a property constructed “under the sanction and by the exercise of the sovereign power of the State”, stated “that the fair cash value of property should be determined according to the use for which the property is designed and which produces its maximum income.”  Kankakee County, 131 Ill.2d at 18.  The subject property and the comparable sales used by the appraiser were constructed specifically for the use in the FmHA section 515 housing program.

The Property Tax Appeal Board finds the best evidence of value contained in the record is the sales comparables contained in both parties’ evidence. Sales data on eight FmHA Section 515 Housing projects were presented in the record. The Board also finds these sales are probative of the subject property’s market value due to their participation in the same government program as the subject property. The unadjusted sales prices of the appellant’s comparable sales ranged from a low of $13,831 to a high of $19,597 per unit. The board of review’s proposed stipulation for the subject reflects a market value of $30,000 per unit that is well outside the range established by the data in the record. The appellant’s appraisal estimate of $17,000 per unit falls in the middle of the range established by these comparables. The Board finds the appellant’s revised appraisal estimate of $204,000 or $17,000 per unit is well supported by the evidence contained in the record and is the best indication of value.

Therefore, the Property Tax Appeal Board finds that the subject's assessment as established by the board of review is incorrect and a reduction is warranted. Since market value has been established Bureau County’s 1998 three-year median level of assessment of 33.24% shall apply. 

The subject property consists of a three-story building of brick construction containing approximately 11,507 square feet of building area. The subject property was previously a school that was converted into an apartment complex with 17 rental units. The subject improvement also participates in the Section 42 subsidy program authorized by the federal government.

The appellant appeared before the Property Tax Appeal Board through its attorney and claimed the subject property’s assessed value should be decreased to reflect its true market value. In support of its contention, the appellant submitted a copy of a recently passed piece of Illinois legislation regarding the valuation of Section 42 housing projects. In addition, the appellant offered a legal memorandum arguing that this statute should apply to the subject for the 1999 assessment year and an operational statement for the subject’s 1997 and 1998 tax years.

During the hearing the appellant’s attorney focused on the application of the recently passed statute. The appellant noted that Section 10-235 of the Property Tax Code (35 ILCS 200/10-235) outlines the methodology for assessing Section 42 housing complexes. For example, it provides that: 

[i]n determining the fair cash value of property receiving benefits from the Low-Income Housing Tax Credit authorized by Section 42 of the Internal Revenue Code, 26 U.S.C. 42, emphasis shall be given to the income approach, except in those circumstances where another method is clearly more appropriate.

More importantly, the appellant argued that since this statute had an effective date upon becoming law, which was August 13, 1999, it should be applied to the subject property for the 1999 assessment year. In support of this contention, the appellant cited two Illinois cases. In Jacobson v. General Finance Corporation, 592 N.E.2d 1121, 227 Ill.App.3d 1089 (2nd Dist. 1992) and Citizens Utilities Company of Illinois v. Illinois Pollution Control Board, 478 N.E.2d 853, 133 Ill.App.3d 406 (3rd Dist. 1985), the courts held that the General Assembly is presumed to know the status of the law when enacting new legislation, including administrative regulations. Thus, the appellant claimed the General Assembly is presumed to know that property is assessed as of January 1 of each year, and that the effective date for a bill without an express effective date is January 1 of the following year. Therefore, the appellant further argued that if the General Assembly intended that the change in the law concerning low-income housing was to be effective for January 1, 2000, assessments, it did not need to provide for an express effective date. In conclusion, the appellant claimed that if the General Assembly had intended to have the new provision apply only to assessments beginning in January 1, 2000, they would have provided no immediate effective date, or specifically provided for one beginning in January 1, 2000.

In support of its valuation contention, the appellant provided evidence of the subject property’s 1997 and 1998 operation statements disclosing its income and expenses. In addition, the appellant offered the subject property's profit and loss statement as of December 31, 1999, and a Low-Income Housing Credit Allocation Certification into the record. Based on the evidence contained in the record, the appellant requested a reduction in the subject property’s total assessment. 

The board of review submitted "Board of Review Notes on Appeal" wherein the subject property’s total assessment of $195,638 was disclosed. The board of review was represented by the Mason County’s State’s Attorney. In support of its assessment of the subject property the board of review provided a copy of the subject’s property record card and a legal memorandum concerning the applicability of the statute referenced by the appellant. The board of review argued the statute should not be applied retroactively to the subject’s January 1, 1999, assessment date because the General Assembly failed to provide that the statute is to be applied retroactively. In its legal memorandum, the board of review cited two Illinois Supreme Court decisions, namely, People ex rel. Kassabaum v. Hopkins, 106 Ill.2d 473 (1985) and Doran v. Cullerton, 51 Ill.2d 553 (1972). In Doran, the court held that the, “date upon which real estate is assessed in the State of Illinois is January 1 of each year.” In Kassabaum, the court held in part that: 

... real estate shall be assessed in the name of the owner and at the value as of January 1. The status of property for taxation and the liability to taxation is fixed on that date, and property subject to taxation on assessment day in any year is liable for the taxes for that year even though it may subsequently, during that year, become exempt from taxation. Kassabaum, 106 Ill.2d at 476, 477.

The court in Kassabaum held the property was not entitled to a preferential tax status until the following assessment year (January 1, 1982) because the required certification had been filed in October 1981, which was ten months after the January 1, 1981, assessment date for the subject year. Id. at 477. Thus, the court held that this position, “is consistent with the authorities that hold that legislation creating exemptions will not be applied retroactively unless that purpose plainly appears.” Id. at 477. In conclusion, the board of review argued the General Assembly did not give any indication in its statutory language that the subject law was intended to be applied retroactively.

After hearing the testimony and reviewing the record, the Property Tax Appeal Board finds that it has jurisdiction over the parties and the subject matter of this appeal.  The Board further finds that no change in the subject’s assessment is warranted. As indicated by the arguments set forth by both parties, the primary issue involved in the subject appeal is whether Section 10-235 of the Property Tax Code (35 ILCS 200/10-235) should be applied retroactively to the valuation of the subject for assessment purposes.

The Property Tax Appeal Board finds that Section 10-235 of the Property Tax Code (35 ILCS 200/10-35), which deals with valuation of Section 42 housing projects, is not applicable to the subject property for the assessment year in question. This statute has an effective date of August 13, 1999, whereas the subject appeal concerns the subject’s valuation for the January 1, 1999, assessment year. As in the Kassabaum case cited by the board of review, an Illinois Appellate Court held that:

a legislative enactment cannot be given retroactive effect in the absence of a clear expression of legislative intent to do so. In the absence of express language declaring otherwise, an amendatory act is ordinarily construed as being prospective in its operation. Kennedy Brothers, Inc. v. Property Tax Appeal Board, 158 Ill.App.3d 154 (2nd Dist. 1987).

In Kennedy Brothers, the issue before the court was the application of a statute that would have had an impact on the subject property’s valuation. The statute in question had an effective date in September 1993, while the appeal for the subject property was for the January 1, 1993, assessment year. The court held that the statute, which was not effective until September 1993, could not be applied retroactively to the subject appeal for the January 1, 1993, assessment year. In conclusion, the Property Tax Appeal Board finds that, as in the Kennedy Brothers case, the recent legislation cannot be applied retroactively in the absence of express language declaring otherwise. Section 10-235 of the Property Tax Code is absent of any language giving it any retroactive application.

The appellant tried to distinguish the Kassabaum case by arguing that in the subject appeal the appellant had already filed the required certification by the January 1, 1999, assessment date, whereas in the Kassabaum case the certification was not filed until later in the year in October. The Board finds this distinction still does not alter the fact that the subject statute, which could possibly grant the relief requested by the appellant, was not passed until eight months after the January 1, 1999, assessment date. More importantly, the General Assembly failed to specifically grant the statute retroactive  application.

In regard to the current valuation of the subject property, the Board finds the appellant failed to offer any alternative evidence of value for the subject property. Even though the appellant introduced income and expense statements, as well as profit and loss statements, it neither integrated these figures into an income approach to value nor did it offer any alternative market valuation estimate. The only evidence of value contained in the record is the cost approach to valuation that is detailed on the subject’s property record card. The Board further finds this evidence is the best and only evidence of value contained in the record.

Based on the evidence contained in the record, the Property Tax Appeal Board also finds that the subject property’s assessment as established by the board of review is correct and no reduction is warranted.

The subject property consists of 14 parcels containing 2,270.47 acres of coal rights located in the northwest portion of Jefferson County, Illinois.

Appearing before the Property Tax Appeal Board on behalf of the appellant was its attorney.  He argued on behalf of the appellant (Peabody) that the market value of the subject coal rights was not accurately reflected in their assessed valuations.

The appellant's attorney argued that because the subject property consists of a large block of undeveloped coal rights that is not part of an operating mine or part of a mine plan, the property should have a nominal assessment of $1.00 per acre.  Exhibit B was submitted showing the Peabody holdings in Jefferson County.  The Department of Mines and Minerals Map 1 was submitted showing the Peabody holdings are not within the development area of the Sesser Mine owned by the Consolidated Coal Company at the southern end of Jefferson County, the only open mine in the county, also known as Rend Lake Mine.  The appellant's attorney also argued the current economic conditions in the coal industry have had a substantial adverse impact on the marketability of Illinois coal.  Thus, he claimed the undeveloped coal reserves at issue have no economic value.  A copy of an affidavit signed by the President of Peabody Development Company was submitted.  He states that he is responsible for the development of coal resources held by the company throughout the United States.  He further states that the current marketability of Illinois coal has seen a dramatic downturn over the past 10 years due, in part, to the 1990 Clean Air Act, imposing restrictions on power plant emissions of sulfur dioxide and nitrate dioxides.  Because Illinois coal contains large amounts of sulfur as compared with coal from the Western and Eastern United States, the market potential for Illinois coal has been greatly reduced.  As a result he concludes by stating current market conditions of Illinois basin coal are poor and in a declining position for the near future.  Publications relating to the Clean Air Act of 1990 were submitted.

The appellant also submitted a copy of the Property Tax Appeal Board’s 1995 decision on 19,985 acres of coal rights located in Macoupin County, Illinois.  Based on the evidence contained in the record of that appeal, the Board found there was little demand and virtually no market for the coal rights.  As a result, the Board found the value of the coal rights was nominal and should have an assessment of $1.00 per acre.  The appellant's attorney argued the same is true for the subject coal rights at issue.

As a further proof of the unmarketability of coal reserves in Southern Illinois, the appellant directed the Board to the Clinton County, Illinois, tax rolls.  The evidence indicated that in the past two years, Exxon Corporation has deeded back to Clinton County 55,189 acres of undeveloped coal rights.  In addition, the appellant's attorney noted that the Property Tax Appeal Board had issued a decision under Docket No. 97-999-C-1 et al., for Peabody Development Company in Clinton County establishing an assessment of $1.00 per acre for the appealed coal rights.

The appellant's attorney contends that based on this data, if undeveloped coal rights are separate from a mining activity, then the rights have no value.  He stated that because of the lack of marketability for undeveloped coal rights not tied to a mining operation; because of the unfair situation for Illinois coal; and because of the bleak future for developing Illinois coal; the subject parcels should be assessed at $1.00 per acre.

The board of review submitted "Board of Review Notes on Appeal" wherein the subject parcels’ assessments were disclosed.  The subject coal rights were assessed at $15 per acre for a market value of $45 per acre.  Appearing on behalf of the board of review was the special assistant state’s attorney.  The board's attorney argued there was no substantive evidence provided by Peabody to support an assessment of $1.00 per acre and the sales submitted by the county demonstrate that coal rights have marketability.  He also argued that the Property Tax Appeal Board’s decision of the value of the coal rights in Macoupin County is distinguishable from the instant case.  He noted there was no sales data of coal rights submitted by Macoupin County, while the instant case contains substantial evidence of the marketability of coal rights provided by the county.  The board's attorney did not dispute the fact the subject coal rights are in an undeveloped area, separated from any mining activity; and located in the northwest corner of the county.  He argued that some of the sales submitted on behalf of the board of review contain undeveloped coal rights, specifically exhibits C and H.  He stated the remainder of the evidence shows the significant value of developed coal rights.  He noted developed coal rights sold for approximately $1,000 per acre, while the subject coal rights were valued at a substantial discount at approximately 95% or $45 per acre.

The board's attorney submitted the evidence and testimony of the supervisor of assessments for Jefferson County.  He agreed there was a decline in the mining operations due to the Clean Air Act.  The supervisor of assessments explained the subject parcels’ assessments were based on Section 10-175 of the Property Tax Code, which states:

All undeveloped coal in property on which there has been no mining during the year immediately preceding the assessment date shall for the purposes of this Code have an undeveloped coal reserve economic value of no more than $75 per acre.  There shall be no per acre undeveloped coal reserve economic value for persons not in the business of mining who have not severed the coal from the land by deed or lease.  (35 ILCS 200/10-175)

The supervisor of assessments stated that coal rights located around or near an active mine are assessed at $25 per acre.  The subject coal rights are not near an active mine and are assessed at $15 per acre, based on a value of present worth of future benefits concept.  He stated that a mineral corporation has acquired a substantial number of acres of coal rights to the north of the subject parcels and that he considers the subject property to be the beginning of a block of coal.

The supervisor of assessments stated that Exxon conveyed a large amount of its coal rights to Jefferson County.  These coal rights were located in the same general area as the subject property.  He stated the reason Exxon quit claimed the coal rights to the county was because the company was no longer interested in Illinois mining.  To show that coal is currently being mined in Jefferson County, permits regarding the expansion of the Consolidated Coal Company mine at Sessor, Illinois, was submitted, marked Exhibit A.

To show that coal rights have marketability, 15 sales of coal rights were submitted located in Jefferson, Gallatin, Hamilton and Saline Counties.  Maps of the counties were submitted under Exhibit B.  Copies of the sales transfer declaration sheets for each of the sales were submitted.  Exhibit C consisted of a transfer between Exxon and Consolidated Coal Company for 7,665.25 acres of coal rights in Jefferson County.  The supervisor of assessments testified that although the coal rights are located to the East of Rend Lake Mine in Sessor, Illinois, a substantial amount of the coal conveyed in this transaction would not be in a position to be mined for many years.  The sale price was $3,457,000 or $451 per acre and the sale occurred in December 1998.  The supervisor of assessments stated that part of the coal rights associated with this sale are assessed at $25 per acre and part are assessed at $15 per acre.

Exhibit D was a Jefferson County sale of 5.625 acres of coal rights that sold for $3,937.50 or $700 per acre in December 1997.  The transfer was between an individual and Consolidated Coal Company.

Exhibit E, F, G and H consisted of sales of coal rights in Gallatin County.  Exhibit E consisted of 200 acres that sold for $50,000 or $250 per acre in January 1994.  The transfer was between an individual and Neco Land Company.  Exhibit F consisted of 90 acres that sold for $8,000 or $89 per acre in November 1997.  The transfer was between an individual and Sugar Camp Coal.  Exhibit G consisted of 20 acres of coal rights that sold for $2,000 or $100 per acre in December 1997.  The transfer was between an individual and Sugar Camp Coal.  Exhibit H consisted of 3,626 acres of coal rights and 1,692 acres of surface rights that sold for $8,990,000 in February 1998.  The transfer was between Peabody Coal and Black Beauty Coal, interrelated companies.  An appraisal report was submitted, Exhibit I, in which the value of the surface rights of Exhibit H was estimated to be $1,640,000.  This value estimate was deducted from the total sale price for a residual value of the coal rights of $7,350,000 or $2,027 per acre.  The appraiser was present at the hearing and testified to his appraisal procedures.  He stated that an active surface mine is located eight miles south of this property.  The existing mine is working its way in the direction of this property.  He stated there was no mining equipment or buildings on this property.  However, he did not know if a mining permit was included in the sale.

Exhibits J, K, L and M were sales of coal rights located in Hamilton County.  Exhibit J consists of 50 acres of coal rights that sold for $5,000 or $100 per acre in June 1996.  This transfer was between two individuals.  Exhibit K consists of a transfer of a 1/4th interest of 13 acres between an individual and Kerr McGee Coal.  The sale price was $3,250 or $250 per acre at a 1/4th interest and the transaction occurred in December 1996.  At full interest, the sale price represents a value per acre of $1,000.  Exhibit L consists of a transfer of a 1/8th interest of 140 acres between an individual and Kerr McGee Coal.  The sale price was $20,500 or $146.43 per acre at 1/8th interest and the transaction occurred in January 1997.  At full interest, the sale price represents a value per acre of $1,171.  Exhibit M consists of a transfer of a 1/2 interest of 40 acres between an individual and Kerr McGee.  The sale price was $20,000 or $500 per acre at 1/2 interest and the transaction occurred in January 1997.  At full interest, the sale price represents a value of $1,000 per acre.

Exhibits N, O, P, Q and R were sales of coal rights located in Saline County.  Exhibit N consisted of 23.22 acres that sold for $10,000 or $431 per acre in February 1998.  The transfer was between Peabody Coal and Black Beauty Coal.  Exhibit O consists of 20 acres that sold for $20,000 or $1,000 per acre in January 1998.  The transfer was between an individual and American Coal Company.  Exhibit P consists of a transfer of 1/10th interest of 22 acres between an individual and Kerr McGee.  The sale price was $2,200 or $100 per acre at 1/10th interest.  At full interest, the sale price represents a value of $1,000 per acre.  Exhibit Q consists of a transfer of a 1/20th interest of 22 acres between two individuals.  The sale price was $1,100 or $50 per acre at 1/20th interest.  At full interest the sale price represents a value of $1,000 per acre.  Exhibit R consists of a transfer of 1/12th interest of 240 acres between an individual and Kerr McGee Coal.  The sale price was $20,000 or 83.33 per acre at 1/12th interest.  At full interest the sale price represents a value of $1,000 per acre.

The evidence disclosed that the sales described under exhibits C and H and J consist of some undeveloped coal rights.  The supervisor of assessments was of the opinion that sales of developed coal rights are useful and establish the upper end of value.  He also was of the opinion that all coal rights have value regardless of the number of acres conveyed in the transfer.

At the hearing the board of review submitted Exhibit 1 which was a plat map showing the location of 4,906.41 acres of the coal rights sold by Exxon to Consolidated Coal Company (color code green) under Exhibit C in relationship to the location of the Consolidation Coal Company’s Sessor Mine in Jefferson County (color code orange).  Exhibit 2 consisted of plat maps showing the location of the subject coal rights and copies of property record cards showing the number of acres contained in each tract.  Exhibit 3 consisted of plat maps showing the location of the subject coal rights (color code orange), the location of coal rights that were conveyed by Exxon to Jefferson County (color code green) and the location of coal rights owned by Century Mineral Resource, (color code purple).  The exhibit shows the coal conveyed to the county by Exxon are interspersed within the same area as the subject coal rights.  The coal owned by Century Mineral Resource is located to the north of the subject property.  The county contends this area creates a potential coalfield.

In rebuttal, the appellant's attorney argued that 16 of the 17 sales presented by the board of review are either not the sales of large blocks of undeveloped coal such as the subject property or they are the sale of developed coal.  One of the transactions, County’s Exhibit J, consisted of a transfer between private parties to rejoin the surface rights with the mineral rights.  Peabody Exhibit C was submitted showing the relevant portion of the Illinois State Geological Survey Map of No. 6 seam coal.  Peabody Exhibit D consists of a rough calculation of the tons of coal that are available in each of the four counties in which the board of review offered sales comparisons.  The appellant's attorney claimed in the rebuttal data that Exhibit D demonstrates that the sales cited by the board of review are so minuscule compared to the available coal so as to be meaningless.  The appellant's attorney claimed that the two larger sales, board of review Exhibits C and H, transferring 7,665.25 and 3,624.04 acres of coal rights, respectively, are related to developed coal mines.

With respect to Exhibit C, the transfer of coal rights between Exxon and Consolidated Coal Company, the Department of Mines and Minerals Map 1 was submitted of the Rend Lake Mine operated by Consolidation Coal Company.  The appellant's attorney claimed the legal description on the deed covers an area recently permitted for coal development from the year 2000 to the year 2006 as shown by the map.  He indicated in the rebuttal data, the rest of the coal rights transferred is not shown as related to any permit, but there was no indication of the selling price of the undeveloped coal.  He suggested that the undeveloped coal rights may have been thrown in with the rest of the sale.  He indicated the county’s Exhibit D is located within the Rend Lake Mine and is not a sale of undeveloped coal.  Exhibits E, F and G in Gallatin County do not represent the sale of undeveloped coal.  With respect to Exhibit H, the appellant's attorney claimed this is a sale of part of a mine plan and tied to an existing development.  The Department of Mines and Minerals Map 2 was submitted.

He also argued the appraiser, in estimating the value of the surface rights in the sale, never assigned values to the mine improvements or the mine permits.  The County’s Exhibit J was a transfer between private parties to rejoin the surface with the mineral rights.  Exhibits K, L, M and N represent sales of small partial interests of coal rights and are not similar to the subject in size.  The appellant's attorney claimed the board of review’s Exhibits O, P, Q and R represent sales of coal rights within or immediately adjacent to the Gallatin Mine of the American Coal Company and submitted the Department of Mines and Minerals Map 3.

Peabody Exhibit F was submitted consisting of statistical tables prepared by both the University of Illinois College of Commerce from 1990 through 1995, and by the Department of Natural Resources overlapping 1994 but continuing through 1998.  The analysis showed there were 28 underground mines open in 1990 and 15 open in 1998.  There were 10,000 employed coal miners in 1990 and 4,259 employed in 1998.  There were 17 open surface mines in 1990, and only 7 open in 1998.

In conclusion, the appellant's attorney argued that Peabody’s coal rights are in an undeveloped state and are identical to the coal which some companies have given away to avoid the expense of ownership when there is no hope of realization of profit in the foreseeable future.  As a result, he requested an assessment of $1.00 per acre for the subject coal rights.

After hearing the testimony and reviewing the record, the Property Tax Appeal Board finds that it has jurisdiction over the parties and the subject matter of this appeal.  The Board further finds that reductions in the subject parcels’ assessments are not warranted.  The appellant contends the assessment of the subject property is not reflective of the market value of the undeveloped coal rights.

Section 10-175 of the Property Tax Code states:

All undeveloped coal in property on which there has been no mining during the year immediately preceding the assessment date shall for the purposes of this Code have an undeveloped coal reserve economic value of no more than $75 per acre.  There shall be no per acre undeveloped coal reserve economic value for persons not in the business of mining who have not severed the coal from the land by deed or lease.  (35 ILCS 200/10-175)

This provision provides the maximum amount that the undeveloped coal reserve economic value can be set at is $75.00 per acre.  The statute does not establish a minimum value for the undeveloped coal reserve nor does it define the term “coal reserve economic value”.  The Property Tax Code does state that property is to be valued at 33 1/3% of “fair cash value”.  (35 ILCS 200/9-145).  Fair cash value is defined in the Code as:

The amount for which a property can be sold in the due course of business and trade, not under duress, between a willing buyer and a willing seller.  (35 ILCS 200/1-50)

The Board finds that the term “coal reserve economic value” is equivalent to the amount for which the undeveloped coal reserves can be sold in the due course of business and trade, not under duress, between a willing buyer and a willing seller.

In this appeal, the appellant contends the subject property consists of a large block of undeveloped coal rights that is not part of an operating mine or part of a mine plan which has no marketability and requested a nominal assessment of $1.00 per acre.  To support this request the appellant submitted an affidavit filed by the president of the subject company explaining the reasons market conditions of Illinois basin coal are in a declining position.  Material was submitted relating to the Clean Air Act.  A copy of the Property Tax Appeal Board’s decision establishing an assessment of $1.00 per acre for coal rights located in Macoupin County was submitted.  The appellant’s attorney noted in the record another Property Tax Appeal Board decision where coal rights in Clinton County were assessed at $1.00 per acre.  The Board finds a review of these two appeals indicates evidence of market data was included in the Macoupin County appeal and the Clinton County appeal was resolved by a stipulation agreement between the parties.  In this instant appeal, the Board finds no evidence of the subject parcels’ market value was submitted by the appellant.  The supervisor of assessments also noted that 55,189 acres of undeveloped coal rights have been deeded back to Clinton County by Exxon Corporation.

The board of review claimed the subject property has marketability and submitted 17 sales of coal rights located in four different counties in Southern Illinois.  The appellant claimed, in its rebuttal data, that 16 of the 17 sales presented by the board of review are either not the sales of large blocks of undeveloped coal such as the subject property or they are the sale of developed coal.  Moreover, the appellant claimed the sales are either adjacent to or within the borders of an operating mine.  However, the appellant conceded that some of the coal rights transferred under board of review’s Exhibit C were undeveloped.  The appellant's attorney contends that the undeveloped coal rights may have been thrown in with the rest of the sale.  The Board notes that evidence supporting this contention was not submitted by the appellant.  The evidence disclosed that board of review Exhibit J was a transfer between private parties to rejoin the surface with the mineral rights.  Peabody argues that its coal rights are in an undeveloped state and are identical to the coal rights that some companies have given away.  Testimony disclosed that a large amount of acreage of coal rights was transferred from Exxon to Jefferson County.  The acreage was depicted in the board of review’s Exhibit 3.  The Board notes there was no evidence that Exxon had attempted to market the coal rights prior to its release of same to the county.

The board of review presented evidence and testimony to show the subject parcels were assessed within the statutory guidelines enunciated in Section 10-175 of the Property Tax Code.  The maximum assessment allowed under the Code for undeveloped coal is $25 per acre.  The board of review has placed a debased assessment of $15 per acre on the subject parcels.  The evidence presented by the board of review suggests that a market does exist for undeveloped coal rights at values far in excess of the value assigned to the subject parcels at $45 per acre.  The sales data submitted by the board of review indicated sales prices for coal rights ranging from $89 to $2,027 per acre.  The Board finds the sales demonstrate that coal has marketability regardless of the number of acres included in the transfer.  As a result, the Property Tax Appeal Board finds that the assessments of the subject parcels as established by the board of review are confirmed.

The subject property consists of a three-story brick bank and office building constructed in 1968 with 57,264 square feet of building area located in Belvidere, Boone County, Illinois. 

The appellant's president and its vice president appeared before the Property Tax Appeal Board arguing the fair market value of the subject was not accurately reflected in its assessed value.  In support of that argument, they submitted information pertaining to their recent purchase of the subject.  They indicated they purchased the property from National City Bank, Michigan/Illinois on January 31, 2000.  They indicated the property was listed with a real estate company and was advertised through the local newspaper and commercial mailings.  There was no mortgage assumption and the sale price was $300,000.  The appellant submitted the subject's Real Estate Transfer Declaration; settlement statement; buyer's closing statement; and limited warranty deed supporting this claim.

The appellant's officers testified a real estate agent contacted them to see if they were interested in purchasing the subject.  They were aware the seller was liquidating twenty to thirty properties nationwide. 

When asked about the terms of the sale, the witnesses testified the property was sold as a ten year sale and leaseback arrangement.  The seller leased back the subject for $9.00 per square foot for the first five years with an increase after five years.  There are three, five-year options to be negotiated after the lease expires.  The only limitations in the warranty deed are for utility easements.  The witnesses also indicated their lender required an appraisal to close the sale in order to determine the market value of the subject.  The appraisal was not presented, however, they testified the appraisal was considerably higher than the sale price.  Based on this evidence and testimony, the appellant requested a reduction in the assessment of the subject property to reflect the recent sale price.

The board of review did not present its "Board of Review Notes on Appeal".  Instead, the board argued in its evidence that the appellant lacked standing to appeal the 1999 assessment to the Property Tax Appeal Board.  The Boone County State's Attorney represented the board of review at the hearing.  The board of review argued the appellant was not the owner of the subject property at any time in the 1999 assessment year.  Therefore, the appellant has no standing to bring an appeal for the 1999 assessment year.  A portion of the purchase agreement was presented indicating the appellant was not responsible for any 1999 real property taxes.  The appellant's officers agreed they did not purchase the subject until January 31, 2000 and were not responsible for the real estate taxes for 1999. 

The board of review also argued the subject's sale and lease back transaction is not an arm's length transaction indicating true market value.  The property was also part of a nationwide liquidation that further negates the reliability of the sale price as an indicator of value.  The property also transferred by a limited warranty deed. 

The board of review indicated the Belvidere Township Assessor is a licensed real estate appraiser.  He found the income approach to be the most appropriate method to value the subject due to the lack of similar sales for a sales comparison approach.  The depreciation in the cost approach would be too speculative due to the age of the subject.  The board indicated actual income from commercial properties in Belvidere Township was used.  The board supplied photographs, a deed and a Real Estate Transfer Declaration for another property located in Winnebago County indicating a sale price of $2,000,000.  This property transferred by special warranty deed and the board argued it was an indication of what a buyer would pay for a property similar to the subject. 

The appellant supplied actual income to the board of review.  The board indicated all commercial property in the State Street area where the subject is located is assessed using actual income information supplied by the taxpayers.  Evidence of this methodology was presented along with various closing documents for the subject property that were also supplied by the appellant.  Based on this evidence, the board of review requested the Property Tax Appeal Board dismiss the appellant's appeal based on lack of standing.  If the Board finds it has jurisdiction, the board requested confirmation of the subject property's assessment. 

After hearing the testimony and reviewing the record, the Property Tax Appeal Board finds that the appellant does not have standing to appeal the 1999 assessment to the Property Tax Appeal Board.  Section 1910.10(c) of the Official Rules of the Property Tax Appeal Board states as follows: 

Only a taxpayer or owner of property dissatisfied with the decision of a board of review as such decision pertains to the assessment of his property for taxation purposes, or a taxing body that has a tax revenue interest in the decision of the board of review on an assessment made by any local assessment officer, may file an appeal with the Board.  (86 Ill.Admin.Code 1910.10(c)) 

In a recent opinion, the Appellate Court, Third District, discussed the concept of standing in conjunction with ownership and taxpayer status in a property tax appeal.  Kankakee County Board of Review v. Property Tax Appeal Board 735 N.E.2d 1011, 249 Ill.Dec. 186 (3 Dist. 2000).  The court stated that although the owner of real property as of January 1 of any given year is liable for the taxes on the property, that burden can be shifted to another party by an agreement that clearly indicates that intent.  Ownership is also comparable to control of the property. 

In the instant appeal, the appellant's representatives testified they were not responsible for the 1999 real estate taxes.  The record contains a portion of the real estate purchase agreement that states the previous owner is responsible for the 1999 real estate taxes.  Based on this analysis of the record, the Property Tax Appeal Board finds the appellant was not the owner or taxpayer of the subject property as of January 1, 1999.  The Board further finds there was no shifting of the 1999 tax liability from the previous owner to the appellant.  Therefore, the Property Tax Appeal Board finds the appellant lacked standing to bring the appeal and the appeal is hereby dismissed.

The subject property consists of a 12 story steel frame and masonry multi-tenant office building with a full-unfinished basement foundation.  The building contains 63,583 square feet of above grade finished office space and 6,111 square feet of basement area.  The building was constructed in 1927 with remodeling in 1986, 1995 and 1998 and covers the entire building site.  The appellant claims unequal treatment in the assessment of the building as the basis of the appeal. 

The appellant appeared before the Board by its attorney who presented an equity-assessment analysis comparing assessments of similar like-kind properties to the assessment of the subject property.  The preparer of the report was present at the proceeding for examination.  He stated his qualifications and experience in the real estate appraisal field. 

The witness first explained the difference between an appraisal report and an equity report.  An appraisal is typically done to estimate the market value of a property by analyzing the three traditional approaches to value: cost, market and income approach.  An equity report is not really an estimate of the property’s market value but an estimate of what the property should be equitably assessed at compared to assessments of like kind structures that have similar characteristics and use. 

With respect to his assessment-equity analysis, the appraiser explained that he inspected three similar multi-story office buildings located in the central business district of Capital Township for comparison to the subject facility.  Photographs, descriptive data of the improvements and a map depicting the properties locations in reference to the subject property were detailed along with each property’s assessment data.  Comparable one was an eight story, masonry building containing 43,440 square feet of above grade area and 5,920 square feet of unfinished basement area.  The building was constructed in 1914 with remodeling done in 1985, 1986 and 1992.  Comparable two was a seven story, masonry building containing 53,228 square feet of above grade area and 7,604 square feet of unfinished basement area.  The building was constructed in 1900 and has had significant remodeling over the years.  Comparable three is a nine story, masonry building containing 97,913 square feet of above grade area and 12,885 square feet of unfinished basement area.  This building was constructed in 1912 with the latest remodeling done in 1972 and 1978.  Using these three like-kind properties, the appraiser performed three methods of equity comparisons.  For purposes of this analysis, the appraiser included the basement areas of these properties in the computations of the total square footage of the buildings as well as for the subject property.  This method results in building areas ranging from 49,360 to 110,798 square feet for these three comparables and 69,694 square feet of area for the subject property.  The suggested comparables had building assessments ranging between $317,169 and $645,558.  The subject building is assessed at $1,096,349. 

The appraiser explained he performed four assessment equity calculations to estimate an equitable assessment for the subject building.  In the first equity analysis, the appraiser divided the comparables’ building assessments by their total square footage, including basement area.  This resulted in assessments ranging between $4.90 and $10.61 per square foot while the subject building was assessed at $15.02 per square foot.  Based on this method, the appraiser felt an assessment of $7.00 per square foot or $487,858 would be appropriate for the subject building.  He explained this assessment is near the mean and median assessments of the three comparables of $7.31 and $6.43 per square foot. 

Under the second equity analysis, the appraiser stated he looked at the relationship of the current assessment and the cost new of the building improvements for each of the three comparables and the subject property.  The calculation on the cost new estimate of the properties was derived from the Marshall and Swift Cost Manual.  The building assessments were then divided by the cost new calculation to derive a ratio.  The cost new estimates of the three comparables ranged between $4,194,563 and $9,083,919.  The ratios between the cost new and the buildings and their assessments ranged between 6.0% and 13.1%.  The subject’s cost new estimate was $6,041,733 with a ratio of 18.1%.  Based on this method, the appraiser felt a ratio of 8.25% should be applied to the subject building’s replacement cost new resulting in an assessment of $495,000. 

The third equity analysis employed by the appraiser analyzes two variables: the building assessment and the building size.  The assessments of the comparable buildings and their sizes were plotted on a graph along with the subject property.  Based on the trend line produced on the graph, the appraiser was of the opinion an equitable assessment of $470,000 was appropriate for the subject building. 

The final equity analysis performed calculates the relationship of the subject’s improvement assessment to the potential annual rent a like kind property is generating by means of rental data.  From this, a factor is concluded for what like kind property is assessed and compared to its estimated potential annual gross rent.  If an inequity is demonstrated, a conclusion of an equitable factor is then applied to the subject’s potential income to provide an equitable assessment.  This method developed factors for the three comparables of .65, .86 and 1.01; a mean of .86 and a median of .84.  The appraiser concluded an equitable factor to be applied to the subject’s potential gross rent of .85 resulting in an equitable building assessment of $616,250. 

Based on the foregoing methods, the appraiser concluded an equitable building assessment for the subject property ranged between $487,858 and $616,250.  Giving most weight to method #1 and #4, an equitable assessment of $550,000 was concluded for the subject building. 

Rebuttal evidence submitted the board of stated that the subject building has been issued building permits totaling over $720,000 since 1986 for remodeling and maintenance.  In contrast, the comparables offered by the appellant have had building permits totaling $69,500, $17,500 and $242,000 over the same time period.  Thus, the board of review contends the subject property’s condition and utility would be of superior value to the comparables offered by the appellant. 

The board of review submitted "Board of Review Notes on Appeals" wherein the subject property's final assessment totaling $1,124,585 was disclosed.  The subject property’s improvement assessment reflects a total of $1,096,349 or $17.24 per square foot area using a total above grade building area of 63,583 square feet. 

In support of the assessment of the subject property, the board of review presented the evidence and testimony of the deputy assessor of Capitol Township.  The assessor submitted descriptions and assessment data on seven office buildings considered to be comparable competing facilities to the subject property.  All are within eight blocks of the subject property but not all are within the central business district.  The assessor explained the main difference between his report and the appellant’s report is that he calculated an equivalent square footage for each building to account for the various differences among the properties for finished verses unfinished areas and basement verses above grade areas.  In contrast, he pointed out that the appellant’s tax consultant has lumped together all square foot areas including unfinished basement areas and above grade areas as though they had equal value in the market. 

The seven comparables offered by the assessor consist of steel frame structures that ranged from two, to sixteen stories with brick, concrete or steel and glass exteriors.  The construction dates ranged from 1905 to 1964 and some were remodeled since the construction date.  Based on the deputy assessor’s method of calculating the square feet of each building, they ranged in size from 27,507 to 379,382 square feet of finished building area.  Their building assessments ranged from $469,184 to $6,244,144 or between $15.30 and $20.27 per square foot.  The assessor noted the subject’s building assessment of $1,096,349 reflects $16.90 per square foot using his indicated square footage of the building.  This assessment, he contends, is well within the range of the assessments of the comparables.  In addition, the median assessment of these office buildings is $17.06 per square foot, which is within 1% of the per square foot assessment of the subject building.  In contrast, the assessor noted the appellant’s tax consultant is proposing an assessment of $8.65 per square foot, which is 80% below the lowest assessment per square foot of the seven office building assessments submitted. 

To further support the assessment of the subject property, a sales-ratio analysis of larger office buildings that sold in Capitol Township was submitted.  The median sale ratio of these properties is 32.57%, indicating that similar office buildings to the subject are assessed slightly below the statutory level of 33.33%.  The coefficient of dispersion (COD), which is used to measure equity and uniformity of assessments is 8.33 for these sales.  The COD required by the Department of Revenue to qualify for the assessor’s bonus is 15.00. 

As a result of the foregoing data, the board of review contends the subject property is equitably assessed when comparing assessments of finished area of comparable properties to the subject property’s finished area assessment.  Moreover, the board contends the sales ratio analysis documenting equity and uniformity in the assessments of comparable office buildings in Capitol Township further supports the assessment of the subject property. 

Under cross-examination, the witness was questioned about how the condition codes noted on the property record cards relate to the property.  He explained the letter codes reflect from excellent to very poor condition as observed by the assessor on inspection of the property.  He was further questioned about the use of building permits.  According to the witness, a building permit is used to notify the City that some form of construction is going to take place at that property.  It may be for an addition, remodeling or demolition.  Thus, the City is notified so that it can inspect the facility in order to verify the construction meets code regulations. 

After reviewing the record and considering the evidence, the Property Tax Appeal Board finds it has jurisdiction over the parties and the subject matter of this appeal.  The Property Tax Appeal Board further finds from its analysis of the evidence submitted by the parties, that the appellant has not supported the contention of unequal treatment in the assessment process. The Illinois Supreme Court has held that taxpayers who object to an assessment on the basis of lack of uniformity bear the burden of proving the disparity of assessment valuations by "clear and convincing" evidence.  Kankakee County Board of Review v. Property Tax Appeal Board, 131 Ill.2d 1 (1989).  The evidence must demonstrate a consistent pattern of assessment inequities within the assessment jurisdiction.  The Board finds the appellant has failed to overcome this burden. 

The appellant’s evidence consisted of a narrative equity-assessment analysis comparing the subject property to three suggested comparable properties.  This analysis contained four different methods of determining equity of the subject’s building assessment.  In the first method, the appellant’s appraiser divided the building assessment of each comparable by the total square feet of the building, including unfinished basement area, to arrive at a per square foot assessment to compare to the subject property.  In method two, the appraiser estimated the replacement cost new for the suggested comparable properties and compared this estimate with the building assessment to the subject building.  Method three plotted a line graph of the comparables and subject trending the assessed values compared to the building size.  Finally, in method four the appraiser calculated the relationship of the assessments to the estimated potential annual rent of the comparables to arrive at a factor for comparison to the subject property.  The Board finds method #1 to be the most reliable indication of determining unequal treatment in the assessment process.   The Board accords little weight to the other three methods because they are too speculative with respect to the assumptions and conclusions used in developing assessment equity of the subject property. 

The board of review submitted seven similar office buildings for comparison to the subject facility.  Unfinished basement areas were not included in the buildings’ square footage, but were considered in the overall valuation process.  As additional support of its assessment, the board of review submitted a sales ratio analysis consisting of 18 sales of office buildings in Capitol Township that occurred between May 1994 and September 1998.  This analysis resulted in a median sales ratio assessment of 32.57% for these properties and a COD of 8.33%. 

According to the size computations employed by the appellant’s appraiser and the assessor, the comparables ranged in size from 27,507 to 379,382 square feet and their building assessments ranged between $4.90 and $20.27 per square foot.  The subject’s building assessment reflects $15.73 per square foot by the appellant’s appraiser’s calculation method and $16.90 per square foot using the assessor’s method. 

The Board has reviewed the data presented by the parties.  In its analysis, the Board divided the building assessment by the above grade square footage to arrive at a per square foot assessment of each comparable and the subject property.  The buildings’ assessments ranged between $5.54 and $20.27 per square foot of above grade area.  The subject’s building assessment equates to $16.90 per square foot of above grade area.  The comparables suggested by the parties had differing degrees of comparability with the subject property.  Additional amenities such as finished and unfinished basement areas, unfinished above grade areas, parking garages and other improvements were taken into consideration.  The subject’s recent renovation costs of $720,000 were also taken into consideration when comparing its assessment with the comparables analyzed.  The Board’s analysis finds the buildings most comparable to the subject property are assessed similarly on a per square foot basis of finished area.  Thus, the Board finds the subject’s building assessment is within the per square foot assessment range of the most similar comparables submitted by the parties. 

In the context of an income producing property, the Supreme Court stated in Kankakee County the cornerstone of uniform assessments is the fair cash value of the property in question.  According to the court, uniformity is achieved only when all property with the same income earning capacity and fair cash value is assessed at a consistent level.  Kankakee County Board of Review, 131 Ill.2d at 21. 

The Board finds income potential and the market value of large commercial properties can vary significantly due to age, condition and location.  In the instant appeal, the Board finds that similarities in physical characteristics of the comparables were analyzed and compared to the subject property.  No evidence of the comparables’ market values or the market value of the subject property was contained in the record.  Without market value information regarding these types of commercial properties, the Board finds it is difficult to perform an equity assessment analysis of the buildings. 

The constitutional provision for uniformity of taxation and valuation does not require mathematical equality.  The requirement is satisfied if the intent is evident to adjust the burden with a reasonable degree of uniformity and if such is the effect of the statute enacted by the General Assembly establishing the method of assessing real property in its general operation.  A practical uniformity, rather than an absolute one, is the test.  Apex Motor Fuel Co. v. Barrett, 20 Ill.2d 395 (1960).  Although the assessment data for the comparables contained in the record disclosed that properties located in the same jurisdiction are not assessed at identical levels, all that the constitution requires is a practical uniformity, which appears to exist on the basis of the evidence, submitted into the record. 

For the foregoing reasons, the Property Tax Appeal Board finds the appellant has not proven by clear and convincing evidence that the subject property has been unfairly treated in the assessment process.  Therefore, the Board finds the subject’s assessment as established by the board of review is correct and no reduction is warranted. 

The subject property consists of a four-acre tract improved with a 290 foot guyed triangular microwave tower, a small equipment building and two farm structures. The microwave tower is 14 years old. 

The appellant claimed the subject property’s assessment was not reflective of its market value. In support of this argument, the appellant submitted an appraisal that estimated a market value of $94,200 as of January 1, 1999. The appellant also provided pictures depicting the subject tower and its structural design. The appraiser was also present during the hearing and testified to the methodology used to develop his appraisal estimate. The appraiser used the cost approach to value to estimate the value of the subject property. Initially, the appraiser estimated the value of the subject land. After examining sales of large tracts of farmland, the appraiser estimated a per acre value of $5,000 that resulted in a total value of $20,000 for the subject's four-acre tract.

The appraiser used the Marshall Valuation Service to estimate the replacement cost new of the subject improvements. Using this manual, the appraiser selected a per linear foot value of $215 for the subject tower. The appraiser noted that the manual had two different cost schedules for towers. One schedule was for self-supporting towers and one schedule was for triangular guyed towers. The appraiser stated that it was his opinion that the cost schedule for the triangular guyed tower was the most accurate representation for the subject tower. In addition, the appraiser estimated a value of $35.00 per square foot for the 200 square foot equipment building and estimated a value of $10.00 per linear foot for 190 feet of fencing. A current cost multiplier and a local multiplier were then used to adjust the replacement cost values for the tower, equipment building and fencing. After making these adjustments, the appraiser estimated a total replacement cost new of $89,199. 

The appraiser used the age/life method to estimate total depreciation for the subject tower. An effective age of 14 years and an estimate life of 50 years were estimated by the appraiser. This resulted in a total depreciation estimate of 28% or $24,975 and a depreciated value of $64,224 for the subject tower. The appraiser also estimated a total value of $10,000 for the two farm improvements. In conclusion, the appraiser estimated a total value of $94,200 (rounded) for the subject property. Based on this evidence, the appellant requested a reduction in the subject property’s total assessment. 

The Board of Review submitted its “Board of Review Notes on Appeals,” wherein the subject’s total assessment of $94,651 was disclosed. The subject property has an estimated value, as reflected by its assessment and Kankakee County’s 1999 three-year median level of assessments of 33.44%, of $283,047. In support of its assessment, the board of review presented the testimony of the Pilot Township Assessor and provided property record cards for two suggested comparable properties. The board of review also offered the subject's property record card detailing a cost approach to value. 

In regard to the subject's property record card, the board of review's witness testified to the methodology used to calculate the cost approach. He stated that a per linear foot value of $1,050 was selected for the subject tower that equates to a full value of $291,535. He further explained that, for purposes of valuing the subject tower using a cost manual, he classified the tower as a self-supporting structure. The witness stated that a self-supporting structure has a large concrete base or a pier type base where the wires are used merely for safety purposes, but are not used to actually support the structure. The board of review, however, failed to provide the pertinent sections of the actual cost manual used to value the subject tower. The board of review did introduce selected pages of the Marshall Valuation Service that were relied on by the appellant's appraiser. The witness then explained that depreciation in the amount of 14% was estimated for the subject tower and a final value of $250,720 was estimated for the subject tower. The remaining improvements were also estimated through the cost approach and were assigned the following depreciated values: equipment building, $11,249; fencing, $1,973; grain bin, $5,982; grain dryer, $2,068; and quonset building, $2,152. 

The board of review's suggested comparables consist of two towers that are approximately 250 feet in height. They have assessed values of $72,989 and $73,442 or $285 and $294 per linear foot, while the subject tower has an assessed value of $83,565 or $288 per linear foot. Photographs of these towers were also offered into the record. The board of review's witness testified that he believed that these towers are similar to the subject tower and are assessed in an equitable fashion. Thus, the board of review requested confirmation of the subject property’s final assessment. 

After reviewing the record and considering the evidence, the Property Tax Appeal Board finds that it has jurisdiction over the parties and the subject matter of this appeal. The Property Tax Appeal Board further finds that a reduction is warranted. In support of the overvaluation argument, the appellant submitted an appraisal that estimated a market value of $94,200 as of January 1, 1999. In support of its assessment, the board of review presented the testimony of the Pilot Township Assessor and provided property record cards for two suggested comparable properties. The subject property has an estimated value, as reflected by its assessment and Kankakee County’s 1999 three-year median level of assessments of 33.44%, of $283,047. 

The Property Tax Appeal Board finds the appellant's appraisal estimate for the subject tower is the best evidence of value contained in the record. The primary issue in the subject appeal is the manner in which to value the subject tower. The appellant argued that it should be valued as a guyed triangular tower that is supported by guyed wires. In contrast, the board of review claimed the subject should be classified and valued as a self-supporting structure wherein the guyed wires are used merely for safety purposes and are not for structural support. After reviewing the pictures submitted by the board of review and hearing the testimony of the witnesses, the Board finds the subject tower is a guyed wired tower and is not a self-supporting structure. 

The Board finds that one of the comparables used by the board of review is clearly a self-supporting structure. Unlike the subject tower, this comparable tower has no guyed wires and has a broad concrete base. The board of review's other suggested comparable is more similar to the subject property because it has guyed wires and has a small concrete base similar to the subject tower. After reviewing the pictures provided by the board of review, it is apparent this tower is not self-supporting, but is supported by the guyed wires. This tower, however, has a larger concrete base or pier when compared to the subject tower. According to the testimony of the township assessor, both of the suggested comparable towers were classified and assessed as self-supporting structures. The Board finds this to be incorrect and inconsistent. As noted earlier, the first comparable is clearly a self-supporting structure, while the other comparable is clearly not a self-supporting structure. Based on the evidence contained in the record, the Board finds the appellant's analysis and conclusion that the subject tower should be valued as a guyed tower is superior to the board of review's analysis and conclusion that the subject tower is a self-supporting structure. Thus, the Board finds the appellant's replacement cost new estimate of $62,350 for the subject tower is the most accurate representation of value contained in the record. 

In regard to the subject's depreciation calculation, the appellant's appraiser estimated total depreciation of 28% through the age/life method and the board of review estimated a total depreciation of 14% as reflected on the subject's property record card. No other documentation was provided in support of the board of review's depreciation calculation. The Board finds the appellant offered more supporting documentation concerning its depreciation calculation. The appellant's appraiser detailed his age/life method in the appraisal report and described in his testimony the methodology used to arrive at his estimation. In addition, the appellant's appraiser more accurately characterized the subject as a guyed wired tower and therefore, his depreciation analysis is deemed more accurate. Therefore, using the appellant's depreciation estimate and including the appraiser's local and current cost multipliers, the Board finds the subject tower's depreciated replacement cost new of $56,200 is the most accurate indication of value contained in the record. 

Both parties also provided different valuation estimates for the subject property's five additional improvements that consist of a 200 square foot commercial building, 190 linear feet of fencing, a grain bin and dryer, and a quonset building. The board of review estimated a total value of $23,424 for these additional improvements, while the appellant estimated a value of $18,020 for the additional improvements. The main difference in value between the two parties is attributable to their respective valuations of the 200 square foot commercial building. For example, the board of review estimated a depreciated cost new of $11,249 for this improvement and the appellant's appraiser estimated a depreciated cost new of $6,310 for this improvement. Again, the Board finds the appellant's appraisal is better supported and is a more representative estimation of value for the subject's additional improvements. 

Therefore, since the appellant’s appraisal estimate of $94,200 is lower than the estimated value of the subject property as reflected by its assessment, the Board finds the subject property’s total assessment as established by the board of review is incorrect and a reduction is warranted. Since market value has been established, Kankakee County’s 1999 three-year median level of assessments of 33.44% shall apply. 

The subject property consists of two, vinyl sided frame apartment buildings containing a total of 24 units.  The buildings were constructed in 1977 and each building has two laundry rooms.  The subject property is located in Rantoul, Illinois.

The appellant appeared before the Property Tax Appeal Board claiming the subject’s market value is not accurately reflected in its assessed valuation.  In support of this contention, the appellant submitted an appraisal report and recent sales data on the subject property.  The three traditional approaches to value were utilized in the appraisal report.  Under the cost approach, the total estimated cost new of the improvements of $1,322,644 included the cost new estimate of the stoves, refrigerators, washers and dryers at a price of $35,200.  The depreciated value of the improvements was $648,419.  The estimated site value of $56,800 was added for a value indicated by the cost approach of $700,000.  Under the supplemental addendum of the appraisal report for appliances, the appraiser stated the following:

“the appliances are included in the estimate of market value since it is necessary to have stoves and refrigerators to rent the units.  The estimated depreciated value of the appliances, including washers and dryers is $20,000.” 

Under the sales comparison approach, the appraiser utilized three sales comparables and after adjustments estimated a value by this approach of $600,000.  The indicated value by the income approach was $570,560.  Based on an analysis of the three approaches to value, the appraiser concluded a market value of $585,000 for the subject property as of July 30, 1998.

The appellant also submitted a settlement sheet evidencing the August 11, 1998, sale price of $584,000 for the subject property.  Based on this data, the appellant contends the cost new of the appliances of $35,200 as estimated by the appraiser should not be assessed as part of the real estate.  As a result, he requested an assessment reflecting the sale price of $584,000 minus the $35,200 of personal property.  The evidence further revealed that the appellant did not file a complaint with the board of review but filed an appeal directly to the Property Tax Appeal Board following receipt of the notice of an equalization factor.

The board of review submitted "Board of Review Notes on Appeal" wherein the subject’s assessment totaling $204,480 was disclosed.  The subject’s assessment reflects a market value of $617,578 using the county’s 1999 three-year median level of assessments of 33.11%.  The board of review offered to reduce the subject’s assessment to reflect the $584,000 sale price.  A copy of the subject’s Real Estate Transfer Declaration sheet was submitted and marked Board of Review’s Exhibit One.  This document indicated there was no amount of personal property included in the purchase price.  As a result, the board of review was of the opinion a deduction for the cost of the appliances should not be deducted from the sale price.  The board of review noted the $35,200 deduction requested by the appellant represented the cost new of the appliances.

In rebuttal, the appellant submitted a revised Illinois Real Estate Transfer Declaration sheet filed with the Champaign County Clerk on May 24, 2000.  The revised document indicated an amount of personal property included in the purchase price to be $35,200.  An unnotarized affidavit was submitted and signed by the appellant.  In the affidavit he states in part that at the time of said purchase an allocation for personal property with appraised value of $35,200 was omitted from the Revenue Transfer Declaration.

The board of review was of the opinion that both parties to the sale transaction should have signed the affidavit.  Thus, it maintained the amount for personal property should not be deducted from the sale price.

At the hearing, the hearing officer requested the sales contract to be submitted by the appellant.  Subsequently and within the time frame allotted, the appellant submitted a copy of the Deed in Trust, the Assignment and Assumption Agreement and the Bill of Sale contracted between the appellant and the previous owners.  The Bill of Sale indicated the following goods and chattels were sold:

(24) refrigerators, (24) range/ovens, (24) dishwashers, (24) disposals, (4) washers, (4) dryers, extra AC/furnace unit, and all of Seller’s extra maintenance materials currently located at 213-245 Keystone, Rantoul, Illinois.

A copy of this evidence was forwarded to the board of review with an opportunity to respond within 15 days of receipt of same.  Within the time frame allowed, the board of review responded and noted the value assigned to the goods and chattels as listed in the bill of sale was not listed.  The board of review submitted a copy of a Property Tax Appeal Board Decision, Docket Number 95-3786-R-1, in which the appellant in that appeal submitted a list of personal property items included in the sale of the subject property, but failed to submit the specific market value for each of the items considered to be personal property.  In that appeal, the Property Tax Appeal Board found the market value of the personalty items could not be estimated due to a lack of supporting documentation.

After hearing the testimony and reviewing the record, the Property Tax Appeal Board finds that it has jurisdiction over the parties and the subject matter of this appeal.  The Board further finds that a reduction in the subject’s assessment to reflect the recent purchase price of $584,000 is warranted.  The Board finds that a further reduction in the sale price to reflect the replacement cost new of the appliances as estimated by the appellant’s appraiser is not appropriate.  The Board placed little weight on the revised Real Estate Transfer Declaration sheet submitted by the appellant as this document was not filed with the County Clerk until May 24, 2000, and was subsequent to the assessment date in question.  Furthermore, the document was incomplete.  The space reserved for the County Recorder’s Office use for recording the county, date, document number, volume, page and other information was blank.  Finally, under step four of the document, there was no signature by the seller.

The Real Estate Transfer Declaration sheet originally filed by the appellant in August 1998 indicated there was no personal property in the purchase amount.  Furthermore, the appellant’s appraiser indicated the value estimated by him of $585,000 for the subject property included appliances since it is necessary to have stoves and refrigerators to rent the units.  Therefore, the Property Tax Appeal Board finds the subject property had a market value of $584,000 as of the January 1, 1999, assessment date.  Since market value has been established, the county’s three-year median level of assessments for 1999 of 33.11% shall be applied.  This results in an assessment of $193,360 and is below the assessment assigned to the subject property prior to application of the township equalization factor.

The record indicates the appellant did not file a complaint with the board of review but appealed the assessment directly to the Property Tax Appeal Board based on notice of an equalization factor.  Since the appeal was filed after notification of an equalization factor, the amount of relief that the Property Tax Appeal Board can grant is limited.  Section 1910.60(a) of the Official Rules of the Property Tax Appeal Board states in part:

If the taxpayer or owner of property files a petition within 30 days after the postmark date of the written notice of the application of final, adopted township equalization factors, the relief the Property Tax Appeal Board may grant is limited to the amount of the increase caused by the application  of the township equalization factor.  86 Ill.Admin.Code, Ch. II, sec. 1910.60(a).

Additionally, section 16-180 of the Property Tax Code (35 ILCS 200/16-180) provides in pertinent part:

Where no complaint has been made to the board of review of the county where the property is located and the appeal is based solely on the effect of an equalization factor assigned to all property or to a class of property by the board of review, the Property Tax Appeal Board may not grant a reduction in the assessment greater than the amount that was added as the result of the equalization factor. 

The Board has interpreted these provisions to mean that where a taxpayer files an appeal directly to the Property Tax Appeal Board after notice of application of an equalization factor, the Board cannot grant a reduction of assessment greater than the amount of increase caused by the equalization factor.  Based on a review of the evidence contained in the record, the Property Tax Appeal Board finds a reduction in the assessment of the subject property is supported.  However, the reduction is limited to the increase in the assessment caused by the application of the equalization factor. 

The subject property consists of a flat grain storage facility located in both Knox and Fulton Counties. According to both parties, 37.5% of the subject property is located in Fulton County and 62.5% is located in Knox County. The subject facility has approximately 1,370,000 bushels of storage capacity.

The appellant appeared before the Property Tax Appeal Board through its attorney and claimed the subject property’s assessment was not reflective of its market value. In support of this argument, the appellant submitted evidence of the subject property’s June 23, 1998, sale price of $222,250. The appellant included copies of the “Bill of Sale,” and the “Covenant Not To Solicit.” These documents indicated that $17,430 was attributed to personal property and $10,000 was attributed to the covenant not to solicit. Thus, the appellant claimed the total purchase for the real estate (land and buildings) was actually $194,820.

During the hearing, the Hearing Officer requested the appellant provide a copy of the Real Estate Transfer Declaration sheet for the subject transaction and gave the board of review a rebuttal period in which to respond only to the transfer declaration. The transfer declaration, which was for the Fulton County portion of the subject property, indicated a sale price of $94,456.25 with a $7,756.25 deduction for personal property. A letter, which was attached to the submission, explained that at the time of the transaction it was the appellant’s belief that approximately 42.5% of the subject property was located in Fulton County. The purchase price and personal property deduction were allocations based on this percentage. After an appraisal was made on behalf of the board of review, both parties agreed to a revised percentage.

In further support of its contention, the appellant offered the testimony of the manager of the grain department for the subject property. The witness testified that he was involved in the negotiation for the purchase of the subject property. In response to the board of review’s claim the purchase was not an arm’s length transaction, the manager detailed the events and the negotiation process that culminated in the sale of the subject property. He explained the two parties involved in the sale of the subject were not related in any way nor was there any duress involved in the negotiation process. The witness noted the negotiations took approximately 6-7 months. Based on the evidence contained in the record, the appellant requested a reduction in the subject property’s total assessment.

During cross-examination, the appellant’s witness was questioned about the circumstances surrounding the sale of the subject property. The witness stated the appellant and another grain company had previous negotiations regarding purchasing another facility and leasing the subject property. None of the negotiations were consummated into agreements between the parties. Lastly, the witness commented that none of the negotiations impacted the arm’s length nature of the subject transaction.

The board of review submitted its "Board of Review Notes on Appeal" wherein the subject property’s total assessment of $37,560 was disclosed. The subject property has an estimated value, as reflected by its assessment and Fulton County’s 1998 three-year median level of assessments of 33.77%, of $111,222. The board of review also offered property record cards for the subject property, sales and bushel capacity information regarding five suggested comparable properties, a narrative explaining the board of review’s methodology in assessing the subject property, and portions of a 1991 appraisal report prepared by the former supervisor of assessments.

The board of review’s comparable properties are located in Peoria County, Ogle County, and Warren County, Illinois. The board of review claimed these grain facilities were sold for per bushel prices ranging from $0.21 to $0.71. The board of review claimed the appellant stipulated to a per bushel assessment of $0.19 for the Knox County portion of the facility, but is now requesting a per bushel assessment of $0.16 in Fulton County. In conclusion, the board of review argued that a value of $0.24 per bushel or $108,000 is supported by the evidence contained in the record and requested confirmation of the subject property’s total assessment.

In rebuttal, the appellant presented the testimony of an appraiser to respond to the sales offered by the board of review. He claimed that some of the board of review’s information regarding these sales was incorrect. For example, the appraiser stated that several of the comparable sales had minimal flat storage areas and were not representative of the subject facility’s flat storage market value. Moreover, he noted the per bushel sales prices for two of the properties were also incorrectly calculated by the board of review.

After hearing the testimony and considering the evidence, the Property Tax Appeal Board finds that it has jurisdiction over the parties and the subject matter of this appeal. The Property Tax Appeal Board further finds that a reduction is warranted. In support of its overvaluation contention, the appellant submitted evidence of the subject property’s June 23, 1998, sale price of $222,250. The appellant included copies of the “Bill of Sale,” and the “Covenant Not To Solicit.” These documents indicated that $17,430 was attributed to personal property and $10,000 was attributed to the covenant not to solicit. In support of its assessment, the board of review provided property record cards for the subject property, sales and bushel capacity information regarding five suggested comparable properties, a narrative explaining the board of review’s methodology in assessing the subject property, and portions of a 1991 appraisal report prepared by the former supervisor of assessments.

The Property Tax Appeal Board finds the June 1998 sale of the subject facility is the best evidence of value contained in the record. The Board also finds the appellant provided adequate support for the $17,430 and $10,000 allocations for personal property and the covenant not to solicit. The board of review failed to offer any evidence refuting the arm’s length nature of the subject transaction nor was any evidence provided challenging the allocations for the personal property and covenant not to solicit. Based on the evidence contained in the record, the Board finds the appellant sufficiently established overvaluation.

Therefore, the Board finds the subject property’s assessment as established by the board of review is incorrect and a reduction is warranted. Because only 37.5% of the subject property is located in Fulton County, Illinois, the Board finds the subject property’s adjusted purchase price, considering the deductions for personal property, the covenant not to solicit and the percentage of the facility located within the subject county, is $73,058. Lastly, since market value has been established, Fulton County’s 1998 three-year median level of assessments of 33.77% shall apply.

The subject property consists of a one-story, commercial building located in Lakeview Township.  Due to the limited descriptive data from the parties, there is no further description that can be attributed to the subject property.  The appellant through his attorney argues two issues:  that the fair market value of the subject is not accurately reflected in its assessed value and that the assessment had increased by a large percentage.

In support of the appellant’s market value argument, the appellant’s attorney submitted copies of the appellant’s income and loss statements for the years 1994 through 1996 that had been previously submitted to the Internal Revenue Service.  In addition, the attorney submitted a brief statement asserting that under an actual income approach to value that the appellant’s average gross income was $108,710 with average expenses of $42,049.  This reflects a net income of $66,661, which is divided by a loaded capitalization rate of 18% to estimate a market value of $370,338 for the subject property.  The attorney asserts based upon this market value that the subject property should have a total assessment of $140,728 for the 1997 assessment year.

In support of the appellant’s percentage argument, the appellant’s attorney asserts that the subject’s 1997 assessment increased 28% from the 1994 assessment.  The subject’s 1994 assessment was $124,736, while the 1997 assessment is $159,243.  Based upon this analysis, the appellant requested a reduction in the assessment of the subject property.

The board of review presented "Board of Review Notes on Appeal" wherein the subject's final assessment of $159,243 was disclosed.

In addition, the board submitted the Cook County Real Property Assessment Classification Ordinance, which provides for an assessment level of 38% for Class 5A property such as the subject.  The board also submitted case law, In re Application of Rosewell v. U.S. Steel Corp., 106 Ill. 2d 311, 478 N.E.2d 343 (1985) and In re Application of County Treasurer v. Twin Manors West of Morton Grove Condominium Association, 175 Ill. App. 3d 564, 529 N.E.2d 1104 (1st Dist. 1988).  No brief with an explanation as to each case’s relevance in the present appeal was submitted.

The board of review then submitted two reports.  The first report is entitled The Illinois Ratio Study for Commercial and Industrial Properties:  Review and Recommendations, by Robert J. Gloudemans and Alan S. Dornfest [hereinafter, the "Dornfest report"].  The "Dornfest report" reviewed and evaluated the procedures and methodology used by the Illinois Department of Revenue in its annual sales ratio studies.  The second report is entitled IAAO Technical Assistance Project - Review of the Assessment/Sales Ratio Study Program for the Illinois Department of Revenue, by Roland Ehm [hereinafter, the "IAAO report"].  The purpose of the "IAAO report" was to ascertain compliance with IAAO standards and offer recommendations for improvement.

Furthermore, a narrative analysis was offered.  The board’s analysis asserted three points.  First, the board of review asserts that the appellant had failed to provide any market rental data.  The board’s analysis notes that the subject is an income producing property and that the appellant’s attempt at an income approach to value only relied upon actual income and expenses and did not reflect any market rental data.  The second point raised in the board’s analysis was that the appellant failed to submit any descriptive information regarding the subject, which is an essential element in any valuation determination.  The third point raised in the board’s analysis is that the appellant’s income approach to value is flawed.  Specifically, the analysis states that:  the contract rental information cannot support the appellant’s requested assessment; no occupancy data was submitted; management fees fluctuated widely per year; market rental data was not submitted; and there is a lack of explanation for the chosen capitalization rate.  Lastly, the board of review utilized some of the data supplied by the appellant to demonstrate that the subject’s assessment was not excessive.

Based on this analysis, the board of review requested a confirmation of the subject’s fair market value as of the 1997 assessment date.

After reviewing the record and considering the evidence, the Property Tax Appeal Board finds that it has jurisdiction over the parties and the subject matter of this appeal.

When overvaluation is claimed the appellant has the burden of proving the value of the property by a preponderance of the evidence.  Property Tax Appeal Board Rule 1910.63(e).  Proof of market value may consist of an appraisal, a recent arm’s length sale of the subject property, recent sales of comparable properties, or recent construction costs of the subject property. Property Tax Appeal Board Rule 1910.65(c).

Having considered the evidence presented, the Board concludes that the appellant has not satisfied this burden and that no reduction is warranted.

As to the appellant’s percentage argument, the Board finds that the appellant’s argument regarding an assessment increase of 28% over several years to be unpersuasive.  The cornerstone of uniformity in assessment is the fair market value of the Property.  Kankakee County Board of Review v. Property Tax Appeal Board, 131 Ill. 2d 1, 544 N.E.2d 771 (1989).  That is properties with similar market values should have similar assessments.  The mere contention that an assessment varied from one year to the next does not demonstrate that the property is assessed at a substantially different level of fair market value.  In this matter, the appellant’s attorney failed to submit any comparables to support such an assertion.

As to the appellant’s market value argument, the Board finds that the appellant failed to meet his burden.  The appellant failed to submit any comparable properties or market derived data to support the methodology and figures utilized in his income approach to value.   Therefore, the Board accords diminished weight to the appellant’s estimate of value under the attempted income approach to value.

The Board further finds that the data provided by the appellant supports the current assessment of the subject as demonstrated in the board of review’s analysis.

Considering all of the evidence, the Property Tax Appeal Board finds that the appellant has failed to demonstrate by a preponderance of the evidence that the subject property is overvalued.  Therefore, the Board finds that the subject’s market value as established by the board of review is correct and that no reduction is warranted. 

The subject property consists of a three-story, masonry, apartment building located on a 3,596 square foot site.  The building is 69 years of age and contains ten apartment units.  The appellant’s attorney argues that the fair market value of the subject is not accurately reflected in its assessed value and that there is unequal treatment in the assessment process of the subject.

The first issue before the Property Tax Appeal Board is the square footage of the subject property.  The appellant’s attorney asserts that the building contains 8,064 square feet without any corroborating data.  The board of review asserts that the building contains 7,035 square feet and submits a copy of the property characteristic printouts for the subject.  The Board finds that the board of review has submitted the best and only evidence regarding square footage.  Therefore, the Board finds that the subject property contains 7,035 square feet of area.

In support of the appellant’s market value argument, the appellant’s attorney submitted copies of the appellant’s supplemental income and loss statements for the years 1996 and 1997 that had been previously submitted to the Internal Revenue Service.  In addition, the attorney submitted a brief statement asserting that under an actual income approach to value that the appellant’s average gross income for 1997 was $47,250 with expenses of $17,219.  This reflects a net income of $30,031 which is divided by a loaded capitalization rate of 17% to estimate a market value of $176,652 for the subject property.  The attorney asserts based upon this value that the subject property should have a total assessment of $58,295 for the 1997 assessment year.

In support of the appellant’s equity argument, the attorney submitted a grid sheet with limited data on seven suggested equity comparables.  The grid included columns entitled:  property index number (PIN), assessed values, square footage, and improvement assessment per square foot.  The seven properties ranged in size from 8,658 to 9,570 square feet and contained improvement assessments that ranged from $60,172 to $69,197, or from $6.29 to $7.70 per square foot.  Unclear, photocopied pictures of the properties were also included.  Based upon this analysis, the appellant requested that the average improvement assessment per square foot of $7.17 be applied to the subject property.

The board of review presented "Board of Review Notes on Appeal" wherein the subject's final assessment of $75,900 was disclosed.

In addition, the board submitted the Cook County Real Property Assessment Classification Ordinance, which provides for an assessment level of 33% for Class 3 property such as the subject.  The board also submitted case law, In re Application of Rosewell v. U.S. Steel Corp., 106 Ill. 2d 311, 478 N.E.2d 343 (1985) and In re Application of County Treasurer v. Twin Manors West of Morton Grove Condominium Association, 175 Ill. App. 3d 564, 529 N.E.2d 1104 (1st Dist. 1988).  No brief with an explanation as to each case’s relevance in the present appeal was submitted.

The board of review then submitted two reports.  The first report is entitled The Illinois Ratio Study for Commercial and Industrial Properties:  Review and Recommendations, by Robert J. Gloudemans and Alan S. Dornfest [hereinafter, the "Dornfest report"].  The "Dornfest report" reviewed and evaluated the procedures and methodology used by the Illinois Department of Revenue in its annual sales ratio studies.  The second report is entitled IAAO Technical Assistance Project - Review of the Assessment/Sales Ratio Study Program for the Illinois Department of Revenue, by Roland Ehm [hereinafter, the "IAAO report"].  The purpose of the "IAAO report" was to ascertain compliance with IAAO standards and offer recommendations for improvement.

Furthermore, a market analysis was offered.  The board’s analysis contained copies of Comps sheets relating to seven suggested sales comparables.  The suggested comparables all contained two-story or three-story, masonry buildings that ranged:  in age from 28 to 86 years, in building size from 5,572 to 16,458 square feet, and in number of apartment units from seven to 15.  The properties sold from June, 1995, through May, 1997, for prices that ranged from $250,000 to $415,000, or from $21.27 to $56.89 per square foot, or from $23,333 to $39,625 per apartment unit.

In addition, the board of review’s notes indicated that the subject property had recently sold in October, 1996, for $230,000, or $32.69 per square foot, or $23,000 per apartment unit.  Based on this analysis, the board of review requested a confirmation of the subject’s fair market value as of the 1997 assessment date.

After reviewing the record and considering the evidence, the Property Tax Appeal Board finds that it has jurisdiction over the parties and the subject matter of this appeal.

When overvaluation is claimed the appellant has the burden of proving the value of the property by a preponderance of the evidence.  Property Tax Appeal Board Rule 1910.63(e).  Proof of market value may consist of an appraisal, a recent arm’s length sale of the subject property, recent sales of comparable properties, or recent construction costs of the subject property. Property Tax Appeal Board Rule 1910.65(c).

Having considered the evidence presented, the Board concludes that the appellant has not satisfied this burden and that no reduction is warranted.

As to the market value argument, the Board finds that the appellant failed to submit any comparable properties or market derived data to support the methodology and figures utilized in the income approach to value.   Actual income and expenses can be useful when shown that they are reflective of the market.  However, the appellant did not demonstrate that the subject’s actual income and expenses were reflective of the market.  Therefore, the Board accords diminished weight to the appellant’s estimate of value under the attempted income approach to value.

In contrast, the Board further finds that the sales comparables provided by the board of review support the current assessment of the subject property.

As to the equity argument, the Board finds that the appellant’s argument is unpersuasive.  The appellant's attorney submitted limited data on the suggested comparables.  Without complete data, the Board is unable to properly analyze the suggested comparables.  Therefore, the Board finds that the equity evidence does not demonstrate that the subject is assessed in excess of that which equity would dictate.

Considering all of the evidence, the Property Tax Appeal Board further finds that the appellant has failed to demonstrate by a preponderance of the evidence that the subject property is overvalued.  Therefore, the Board finds that the subject’s market value as established by the board of review is correct and that no reduction is warranted.

COMMERCIAL CHAPTER

Index

 SUBJECT MATTER

Arm's Length Nature of Transaction

Commercial Office Building – Equity Contention

Farmers Home Administration Section 515 Housing Complex Valuation

Farmers Home Administration Section 515 Housing – Retroactive Application of Legislation

Farmers Home Administration Section 42 Housing Complex Valuation
(35 ILCS 200/10-235), (35 ILCS 200/10-35)

Grain Storage Facility Valuation

Grain Storage Facility – Recent Sale Price, Personal Property and Covenant Not to Compete Allocations

Hotel Complex Valuation

Jurisdictional Issue – Exhaustion of Administrative Remedies
(35 ILCS 200/9-5), (35 ILCS 200/16-160),
 (Official Rules of the Property Tax Appeal Board 1910.30(a))

Jurisdictional Issue – Lack of Standing
(Official Rules Of the Property Tax Appeal Board 1910.10(c))

Manufactured Home Park, Recent Appraisal and Deduction For Costs to Cure Health Code Violations

Market Value Contention – Income Approach and Percentage of Assessment Increase
(Official Rules of the Property Tax Appeal Board 1910.63(e) and 1910.65(c))

Market Value Contention – Income Approach

Market Value Contention – Narrative Appraisal, Excess Land Treatment

Microwave Tower Valuation

Motel Valuation – Equity and Market Valuation Contentions

Multiplier Appeal
(35 ILCS 200/16-180),
(Official Rules of the Property Tax Appeal Board 1910.60(a))

Recent Construction Costs, Equity Contention, Land Classification

Recent Sale and Requested Deduction for Personal Property

Recent Sale and Median Level of Assessments Contention
(Official Rules of the Property Tax Appeal Board
1910.65(c), 1910.63(e), 1910.50(c)(3), 1910.90(i)),
(35 ILCS 200/16-180 & 185),  (35 ILCS 200/17-10 & 17-5)

Undeveloped Coal Rights
(35 ILCS 200/10-175), (35 ILCS 200/9-145), (35 ILCS 200/1-50)