The parties of record before the Property Tax Appeal Board are Lawrence and Patricia Burns, the appellant, and the Cook County Board of Review.

The subject of this appeal consists of two parcels.  Parcel 17-04-416-003 (Parcel #2) contains a 9,808 square foot mixed-use building composed of one store and seven apartments.  Parcel 17-04-416-002 (Parcel #1) is a vacant lot adjacent to Parcel #2.  The subject is located in North Chicago Township, Cook County.

In this appeal, the appellants' petition suggested that subject's market value is not accurately reflected in its assessment.  The appellants argued that the income generated by the subject does not warrant its high level of taxation, and therefore its excessive assessment.  The appellants assert that only five of the apartments generate income because they live in one apartment and a relative occupies another. 

In support of the request for relief due to the subject's diminished income, the appellants prepared and submitted an "income approach".  Using the subject's actual income and expenses for 2000.  The appellants indicated the subject property had an income of $62,860 and expenses of $26,578, resulting in a net income of $36,282.  A capitalization rate of 16.33% and a factor of 33%, which apparently represents the Cook County Real Property Classification level of assessment for Class 3 property, were applied to determine a requested total assessment for 2000 of $73,319.  The appellants also submitted copies of an affidavit of the subject's income and expenses and the 2000 rent roll presented at the board of review level.

The board of review submitted its "Board of Review Notes on Appeal" disclosing the subject's total assessment of $106,682.  In support of its assessment, the board of review offered a letter from the Office of the Cook County Assessor suggesting that the current assessment is correct based on the sales of seven retail/residential buildings located in the subject's general area.  The writer noted that the subject's total assessment reflects a fair market value of $367,169, or $37.44 per square foot.  This total assessment reflects the application of the Cook County Real Property Classification level of assessment codes of 16% (Class 2) for Parcel #1 and 33% (Class 3) for Parcel #2.  The writer further concluded that an unadjusted sales price range for these seven sales is $40.00 to $45.83 per square foot of building area, including land.  Included with the board's evidence were sale sheets describing seven sales from COMPS, a national sales reporting service.  Based on this documentation the board of review requested confirmation of the subject's 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 appellant's argued the subject's assessment is excessive given its diminished income, thus, its fair market value is not reflected in its assessment.

When overvaluation is claimed the appellant has the burden of proving the value of the property by a preponderance of the evidence.  National City Bank of Michigan/Illinois v. Illinois Property Tax Appeal Board, 331 Ill.App.3d 1038 (3^rd Dist. 2002); Winnebago County Board of Review v. Property Tax Appeal Board, 313 Ill.App.3d 179, 728 N.E.2d 1256 (2^nd Dist. 2000).  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. Section 1910.65 The Official Rules of the Property Tax Appeal Board (86 Ill.Adm.Code §1910.65(c)).

The Board finds the appellants' argument that the subject's assessment is excessive when applying an income approach based on the subject's actual income and expenses unconvincing and not supported by evidence in the record.  In Springfield Marine Bank v. Property Tax Appeal Board, 44 Ill.2d 428 (1970), the court stated:  

[I]t is the value of the "tract or lot of real property" which is assessed, rather than the value of the interest presently held. . .  [R]ental income may of course be a relevant factor.  However, it cannot be the controlling factor, particularly where it is admittedly misleading as to the fair cash value of the property involved. . .  [E]arning capacity is properly regarded as the most significant element in arriving at "fair cash value".

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. Springfield Marine Bank v. Property Tax Appeal Board 44 Ill.2d 428 at 431

Actual expenses and income can be useful when shown that they are reflective of the market.  The appellants did not demonstrate that the subject’s actual income and expenses were reflective of the market.  To demonstrate or estimate the subject’s market value using an income approach, as the appellants attempt, one must establish through the use of market data the market rent, vacancy and collection losses, and expenses to arrive at a net operating income.  Further, the appellant must establish through the use of market data a capitalization rate to convert the net income into an estimate of market value.  The appellants did not follow this procedure in developing the income approach to value; therefore, the Property Tax Appeal Board gives this argument no weight. 

The Board further finds that the board of review submitted information on seven comparables sales to support the subject's assessment.  The seven comparables had prices ranging from $40.00 to $45.53 per square foot of building area.  The subject assessment reflects a market value of $37.44 per square foot, which is below the range established by the comparable sales.

The parties of record before the Property Tax Appeal Board are Consumers IL Water Company, the appellant and the Vermilion County Board of Review. 

The subject property consists of a 117.23-acre parcel improved with a water retention dam that regulates the flow of water, which covers the majority of the parcel in the form of a lake.  

The appellant appeared before the Property Tax Appeal Board through its attorney claiming the subject parcel should be valued as open space pursuant to section 10-155 of the Property Tax Code (35 ILCS 200/10-155).  In support of this contention, the appellant offered a legal memorandum, photographs of the subject property, the subject's property record card, an aerial map of the subject property, and a receipt stamped Application for Valuation of Real Property used for Open Spaces.    

Section 10-155 of the Property Tax Code provides in pertinent part that: 

In all counties, in addition to valuation as otherwise permitted by law, land which is used for open space purposes and has been so used for the 3 years immediately preceding the year in which the assessment is made, upon application under Section 10-160, shall be valued on the basis of its fair cash value, estimated at the price it would bring at a fair, voluntary sale for use by the buyer for open space purposes.

Land is considered used for open space purposes if it is more than 10 acres in area and:

(a) is actually and exclusively used for maintaining or enhancing natural or scenic resources,

(b) protects air or streams or water supplies,

(c) promotes conservation of soil, wetlands, beaches, or marshes, including ground cover or planted perennial grasses, trees and shrubs and other natural perennial growth, and including any body of water, whether manmade or natural,

(d) conserves landscaped areas, such as public or private golf courses,

(e) enhances the value to the public of abutting or neighboring parks, forests, wildlife preserves, nature reservations, sanctuaries, or other open spaces, or

(f) preserves historic sites.

Land is not considered used for open space purposes if it is used primarily for residential purposes.

The appellant argued the subject parcel qualifies for an open space valuation pursuant to section 10-155 of the Property Tax Code (35 ILCS 200/10-155) because it: (1) consists of more than 10 acres; and (2) is not used primarily for residential purposes; and (3) the land protects air or streams of water supplies; and/or (4) the land includes a body of water, whether man-made or natural.  Furthermore, the appellant noted the record is clear that an application for an open space assessment was timely made as required by section 10-160 of the Property Tax Code (35 ILCS 200/10-160) and the parcel has been used for open space purposes for the 3 years immediately preceding the year in which the assessment is made.

The appellant next argued that, contrary to the board of review's assertion, section 10-155 of the Property Tax Code (35 ILCS 200/10-155) does not require that all four subsections (a) through (d), as well as either subsection (e) or (f), be met in order to qualify for an open space valuation.  The appellant argued that only one of these subsections must be met in order to qualify for the assessment and claimed the statute has never been construed to require more than one of the subsections.

With respect to the subject's improvements, the appellant cited Knox County Board of Review v. Property Tax Appeal Board and argued that, once land is found to qualify for an open space assessment, no additional ground improvements thereon should be taxed separately. Knox County Board of Review v. Property Tax Appeal Board, 185 Ill.App.3d 530 (3^rd Dist. 1989).  Based on this appellate court decision, the appellant claimed the subject property's dam and the ground which surround the land not only protect the lake, but also actually create and conserve the lake.  Since the subject dam is vital to the creation and conservation of the lake, the appellant claimed it should also be considered as part of the open space valuation.    

The appellant further claimed the subject's land assessment is excessive for open space purposes and valuation.  It noted the subject's total land assessment for the entire 117.23-acre area equates to a full value of approximately $1,458 per acre.  In its legal memorandum, the appellant claimed the board of review has failed to produce any documentation or information concerning the value attributed to properties classified as open space in Vermilion County.  Therefore, the appellant argued that in the absence of any open space valuation data for Vermilion County, the courts have held that a statewide search for open space valuation would be appropriate.  Illinois Country Club v. Property Tax Appeal Board, 263 Ill.App.3d 410 (4th Dist. 1994).     

The appellant cited two appellate court decisions, as well as the Knox County case, for proposed open space valuations.  In Lake County Board of Review v. Property Tax Appeal Board and Knox County Board of Review v. Property Tax Appeal Board, the courts affirmed open space valuations of $368.39 and $500 per acre respectively for the subject properties.  Lake County Board of Review v. Property Tax Appeal Board, 192 Ill.App.3d 605 (2^nd Dist. 1989) and Knox County Board of Review v. Property Tax Appeal Board, 185 Ill.App.3d 530 (3^rd Dist. 1989).  Thus, based on these two cases, the appellant argued there is sufficient evidence and precedent to justify a $500 per acre full valuation for the subject's land assessment. 

The appellant next called a real estate appraiser, who had prepared an affidavit contained in the record, as a fact witness.  The appraiser testified that he was familiar with the Danville community and stated the subject lake was used for recreational purposes.  He further stated the Consumers Illinois Water Company (the appellant) leased the subject property to the Vermilion County Conservation District. Based on this evidence, the appellant requested a reduction in the subject's total assessment.

The board of review submitted its "Board of Review Notes on Appeal" wherein the subject's final assessment of $1,437,411 was disclosed.  In support of its assessment, the board of review offered a legal memorandum detailing its argument, as well as the testimony of the Vermilion County Supervisor of Assessments.  The Supervisor of Assessments testified that he was familiar with the lake and dam that creates the lake.  He stated the majority of the subject's assessment is attributed to the improvements creating the dam.  The witness stated it as his opinion the primary use of the dam and lake was to provide a water supply for a privately owned company, who then sells the water to the public for a profit.   

During cross-examination, the witness agreed the primary use of the lake was not for residential purposes although there are a number of residential dwellings on the lake.  He also agreed the open space valuation for neighboring golf courses was $400 to $500 per acre.

The board of review next detailed its legal argument concerning the denial of the open space valuation for the subject property.  The board of review cited section 10-155 of the Property Tax Code (35 ILCS 200/10-155) and claimed the appellant must establish all the requirements listed in subsections (a) through (d).  The board of review argued the subject does not meet subsections (a) because it is not used exclusively for scenic or conservation purposes, but is used predominately for the commercial sale of water.  Subsection (b) refers to the protection of air or streams or water supplies, which the appellant claimed was not occurring at the subject property.  The board of review claimed subsection (c), which requires that the area promote conservation, is not being met by the subject property. Lastly, it claimed the appellant failed to show the subject property conserves landscaped areas as required in subsection (d); does not enhance the value to the public of abutting areas as required in subsection (e); nor does it preserve historic sites as required by subsection (f).  Based on this evidence, the board of review requested confirmation of the subject property’s assessment.

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.  The Board finds the primary issue in the appeal is whether the subject property qualifies for an open space classification pursuant to section 10-155 of the Property Tax Code (35 ILCS 200/10-155). 

Section 10-155 of the Property Tax Code provides in pertinent part that:

In all counties, in addition to valuation as otherwise permitted by law, land which is used for open space purposes and has been so used for the 3 years immediately preceding the year in which the assessment is made, upon application under Section 10-160, shall be valued on the basis of its fair cash value, estimated at the price it would bring at a fair, voluntary sale for use by the buyer for open space purposes.

Land is considered used for open space purposes if it is more than 10 acres in area and:

(a) is actually and exclusively used for maintaining or enhancing natural or scenic resources,

(b) protects air or streams or water supplies,

(c) promotes conservation of soil, wetlands, beaches, or marshes, including ground cover or planted perennial grasses, trees and shrubs and other natural perennial growth, and including any body of water, whether manmade or natural,

(d) conserves landscaped areas, such as public or private golf courses,

(e) enhances the value to the public of abutting or neighboring parks, forests, wildlife preserves, nature reservations, sanctuaries, or other open spaces, or

(f) preserves historic sites.

Land is not considered used for open space purposes if it is used primarily for residential purposes.

The Board finds the record is clear the subject is not used primarily for residential purposes and is over 10 acres in area.  Moreover, the record is clear the appellant correctly and timely applied for the open space valuation for the 2002 assessment year pursuant to section 10-160 of the Property Tax Code (35 ILCS 200/10-160).  Lastly, the Board finds the subject property has been used for the same purpose for the three years immediately preceding the year in which the assessment request is made.  Thus, since both parties agreed that all of these requirements have been satisfied, the Board finds the only issue to be determined is whether the subject property meets all of the requirements set forth in section 10-155 of the Property Tax Code (35 ILCS 200/10-155).  This issue must be determined by analyzing subsections (a) through (f).

During the hearing and in its legal memorandum, the board of review argued the subject property must meet each of the subsections (a) through (d) and either (e) or (f), while the appellant claimed the subject property must only satisfy one of these subsections (a) through (f).  The Board finds the board of review's contention is without merit and finds the appellant must only establish that the subject property meets one of the six subsections outlined in section 10-155 of the Property Tax Code (35 ILCS 200/10-155).  In Knox County Board of Review v. Property Tax Appeal Board, 185 Ill.App.3d 530, 533 (3^rd Dist 1989), the court held that a land owner must prove the land, "serve at least one of the six enumerated functions described in the statute."  Thus, based on the decision in Knox County Board of Review v. Property Tax Appeal Board, the Board finds the appellant must only establish the subject property meets one of the requirements set forth in subsections (a) through (f).

The Board finds the appellant sufficiently established the subject property meets subsection (c) contained within section 10-155 of the Property Tax Code (35 ILCS 200/10-155).  The Board finds the subject property, which is dam and lake, is a manmade body of water specifically referenced in subsection (c).  The Board also finds the subject property protects air or streams or water supplies referenced in subsection (c) through the containment of the lake or body of water by the dam.

The Board finds the next issue that must be addressed pertains to the valuation of the subject property.  The appellant claimed the entire property, the 117.23-acres of land and all the improvements including the dam, should be classified as open space with a correlating open space valuation.  In support of this contention, the appellant cited Knox County Board of Review v. Property Tax Appeal Board, 185 Ill.App.3d 530 (3rd Dist. 1989).  According to this decision, the appellant argued that, once land is found to qualify for an open space assessment, no additional ground improvements thereon should be taxed separately. 

The Board first finds this argument is without merit and finds that only the 117.23-acres of land qualify for the open space valuation as contemplated by section 10-155 of the Property Tax Code (35 ILCS 200/10-155).  The Board finds the open space statute itself speaks only of land as receiving the open space valuation.  In Knox County, the court held that additional ground improvements, such as golf greens and tees, were not to be included in the value of the land under the statute.  The court held that the statute contemplates a single assessed value for the open space land.  Id. at 534.  The Board, however, finds the final assessment in the Knox County appeal included an improvement assessment for a building and house, as well as a land assessment recognizing the open space valuation for the land. 

The appeal in the Knox County case originated out of the county's separate valuation of the golf greens and tees from the golf course as a whole, which was then lumped onto the overall improvement value.  In that case, the Property Tax Appeal Board removed the value of the golf greens and tees from the improvement value holding these items were ground improvements to the golf course, which was affirmed by the appellant court.  The court held that:

the improvements to open space land that enhance or conserve the natural scenic beauty of that land, such as greens, tees and fairways, are not separately assessable under the Act. Id. at 534.

Although the court held these additional ground improvements to the golf course should not be separately assessed, the Board finds the court in the Knox County decision did not hold that there could not be any type of improvement assessment for the subject parcel once it was demonstrated that it was entitled to an open space valuation and assessment. 

The Board finds the statute and applicable case law does not stand for the proposition that once a parcel is entitled to or qualifies for an open space valuation and assessment that no other value or assessment can be attributed to other improvements located on the parcel.  If this were the case, clubhouses and other improvements located on golf course properties would not receive improvement assessments.  The Property Tax Appeal Board finds the extensive improvements located on the subject parcel that are used as part of the dam are not similar ground improvements as contemplated in the Knox County decision.  Thus, the Board finds the appellant failed to establish that a reduction is warranted for the subject's improvement assessment.

With respect to the subject's land valuation, the Board finds the entire 117.23-acre parcel is entitled to an open space assessment.  During the hearing there was testimony from the Vermilion County Supervisor of Assessments wherein he agreed the open space valuation for neighboring golf courses within Vermilion County was $400 to $500 per acre.   In Lake County Board of Review v. Property Tax Appeal Board, the court held the:

statute in issue is not ambiguous and clearly expresses the legislative intent to afford a uniform valuation to all land actually used for one or more of the open-space purposes enumerated therein regardless of whatever other actual use or improvements the land supports.  Lake County Board of Review v. Property Tax Appeal Board, 192 Ill.App.3d 605 (2^nd Dist. 1989).

The subject property has an estimated land value, as reflected by its land assessment, of $176,876 or $1,511 per acre.  Based on the evidence and testimony contained in the record, the Board finds the appellant sufficiently demonstrated the subject's current land value estimate as established by the board of review is considerably higher than the market value for other open space properties within the county.  Therefore, the Board finds the subject property's land meets the qualifications for an open space assessment and its current land assessment as established by the board of review is incorrect and a reduction is warranted. 

The parties of record before the Property Tax Appeal Board are Garrison Group, Inc., the appellant, and the Sangamon County Board of Review.

The subject property consists of a 4.06-acre site improved with various commercial buildings.  The subject property was formally operated as an automobile dealership. 

The appellant, through counsel, appeared before the Property Tax Appeal Board arguing the subject's assessment is not reflective of its fair market value.  In support of this claim, the appellant submitted photographs, a copy of a sales contract that was never closed, and the testimony of a state licensed appraiser.  The appraiser was qualified and tendered as an expert witness without objection. 

The witness testified he inspected the subject property at the time it was under contract to be purchased.  He also testified the subject property had been listed for sale on the open market for approximately one year.  The sales contract, which was signed in September 2001, revealed a negotiated contract price of $675,000.  Possession of the subject property would be transferred in October 2001 with the final closing on January 3, 2002.  However, an amendment to the sales contract was attached indicating the closing of the transaction would not occur until 3 days after approval of a rezoning application.  The appraiser testified the transaction was not completed because the buyer was unable to secure financing and subsequently filed for bankruptcy.  He also testified that although the sale was not consummated, the terms of the contract are of an arm's length nature as an indicator of fair market value.  He also noted the owner of the subject property is a commercial broker. 

The witness next testified he contacted the owner of the subject property, Glen Garrison, on January 7, 2004.  The witness testified the Mr. Garrison indicated the subject property is still listed for sale on the open market for $650,000, less than the aforementioned sales contract.  The witness also pointed to photographs depicting a sign located on the subject property advertising "FOR SALE OR LEASE" by the Garrison Group and a contact phone number.  Subsequent to the hearing at the Board's request for documentation, the appellant submitted a listing flier for the subject property disclosing an offering sale price of $650,000 or a leasing option for $6,500 per month on a net basis.  Based on this evidence, the appellant requested a reduction in the subject's assessment to reflect its advertised listing price of $650,000.

Under cross-examination, the witness testified he did not appraise the subject property.  The witness testified he spoke with Mr. Garrison, the owner, but did not speak to the buyer regarding the sales contract.  He also testified he reviewed the Real Estate Transfer Declaration between Lincoln Land Development Corporation and Glenn Garrison for the subject property and an adjoining property that was submitted by the board of review. 

Under further examination, the witness testified that generally in the subject's market a listing price sets the upper limit of value.  In addition, he testified a prospective buyer would not necessarily be willing to pay a higher price than a property's listing or offering price. 

The board of review submitted its "Board of Review Notes on Appeal" wherein the subject's final assessment of $462,301 was disclosed.  The subject property's assessment reflects an estimated market value of $1,385,379 using Sangamon County's 2002 three-year median level of assessments of 33.37%. 

In support of the subject's assessment, the board of review presented a Real Estate Transfer Declaration between Lincoln Land Development Corporation and Glenn Garrison for the subject parcel and an adjoining improved parcel.  This documentation shows a transfer price of $877,500 for both properties.  The documentation further disclosed these properties were not advertised for sale and the transaction was a simultaneous exchange of property. 

An affidavit was also submitted by the board of review signed by Glenn Garrison indicating the sale price disclosed on the Real Estate Transfer Declaration represented 81.81% partial interest of the properties.  The board of review also submitted a letter and a document labeled "Breakdown of January 2001 Sale of the Subject Property".  This document concludes a value for the subject property of $1,386,903 based on some type of allocation of its 2001 sale price and using the assessments of the properties.  However, the board of review's representative could not explain the meaning of this documentation, the data utilized or final value conclusion.  Furthermore, the board's representative testified the Capital Township Assessor prepared this evidence, but was not present at the hearing to provide testimony or to be cross-examined.  Based on this evidence, the board of review requested confirmation of the subject's assessments.

Under cross-examination, the board's representative agreed that the Real Estate Transfer Declaration shows the subject's 2001 transfer was not advertised for sale and was part of a simultaneous trade of real property (a 1031 exchange) as opposed to a typical cash transaction.  The board of review did not investigate the properties transferred in the 1031 exchange.  In addition, the board's representative testified he did not consider the 1031 exchange an arm's-length transaction.  Finally, the board of review agreed that generally a listing price sets the upper limit of value for a given property and it is highly unlikely a prospective buyer would offer a higher purchase price than an offering price.

In rebuttal, the appellant's appraiser testified during his investigation concerning the subject's January 2001 transfer, the property was involved in several transactions and trades.  He added that the $877,500 value listed on the Real Estate Transfer Declaration was an arbitrary value listed for income tax purposes.  He again reiterated this transfer was not an arm's-length transaction. 

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 a reduction in the subject property's assessment is warranted. 

The appellant argued the subject property's assessment was not reflective of its fair market value.  When market value is the basis of the appeal, the value must be proved by a preponderance of the evidence. Winnebago County Board of Review v. Property Tax Appeal Board, 313 Ill.App.3d 179, 183, 728 N.E.2d 1256 (2nd Dist. 2000).  The Board finds the appellant has overcome this burden. 

The Board gave little weight to the evidence submitted by the board of review.  The Board finds both parties agreed the transfer of the subject property in January 2001 as depicted on the Real Estate Transfer Declaration was not an arm's-length transaction.  The two properties involved in this transaction, one of which is the subject of this appeal, were not listed for sale on the open market.  Furthermore, the parties agreed the 1031 exchange involved in this case was not of an arm's-length nature and therefore not representative of fair market value. 

The Board also gave no weight to the document labeled "Breakdown of January 2001 Sale of the Subject Property".  This document concluded a value for the subject property of $1,386,903 using its January 2001 transfer price and some type of allocation of the properties' assessed values.  The Board finds the board of review's representative could not explain the meaning of this documentation.  Moreover, the person from the Capital Township Assessor's Office who prepared this evidence was not present at the hearing to present direct testimony or to be cross-examination explaining the valuation technique to support the final opinion of value, which renders this evidence meaningless.

The Illinois Supreme Court defined fair cash value as "what the property would bring at a voluntary sale where the owner is ready, willing, and able to sell but not compelled to do so, and the buyer is ready willing and able to buy but not forced to do so." Springfield Martine Bank v Property Tax Appeal Board, 44 Ill.2d. 428, (1970).  Furthermore, section 1-50 of the Property Tax Code defines fair cash value 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 Property Tax Appeal Board finds the best evidence of the subject's fair market value contained in the record is its $650,000 listing price.  The record is clear that the subject property is listed for sale on the open market for $650,000 subject to negotiation.  Furthermore, the contract for the subject property for $675,000 in September 2001 that was never closed appears to meet the criteria of an arm's-length agreement.  Although the contract was not consummated, it is probative, creditable evidence that the subject's assessment as established by the board of review, which reflects an estimated market value of $1,385,379, is not an accurate indication of value.

In conclusion, the Board finds the appellant has demonstrated the subject property is overvalued by a preponderance of the evidence.  Therefore, the Board finds the subject's assessment as established by the board of review is incorrect and a reduction is warranted. 

The parties of record before the Property Tax Appeal Board are Lake Carroll Property Owners Association, the appellant, and the Carroll County Board of Review.

The subject property consists of a private residential and recreational community complex known as Lake Carroll located in Carroll County.  The property in question in this complex consists of an L-shaped conference center building where the administrative offices, lobby and conference room are located (01-07-000-002); two golf cart storage sheds and the clubhouse/restaurant (01-07-000-001); and a golf course (01-07-000-003, 07-07-31-113, 04-12-000-001 and 04-12-000-002).

The appellant appeared before the Property Tax Appeal Board by its general manager arguing that the homeowners of the association are being subjected to double taxation.  More specifically, the appellant argues the common areas of the subject development consisting of the administration/conference building, clubhouse/restaurant, golf storage sheds and golf course should have assessments of $1.00 based on section 10-35 of the Property Tax Code.  (35 ILCS 200/10-35).  The appellant argued these areas are common areas and amenities for the use and enjoyment of the property owners, their families and guests.

The appellant indicated the administration offices are used by the association to conduct the business of the association and consist of the general manager's office, office of personnel and accounting, security office, building inspector's office, accounts receivable office and newsletter office.  The conference room, which was an addition, is receiving the $1.00 assessment because it is only used by members for membership meetings and for card games.  There is also a lobby between the offices and conference room where the front desk is located.  The appellant argued you must be invited back to the office areas and therefore it is not open to the general public.  The appellant is arguing the entire building, minus the lobby area, should have a $1.00 assessment because it is strictly used for association business.

The appellant stated there are two golf cart storage sheds on the property.  The manager stated that one half of one shed is used for golf course maintenance and the other half is used primarily for member cart storage.  The other shed is members-only cart storage.  The appellant argued one half of one shed and all of the second shed should have a $1.00 assessment. 

The appellant indicated the clubhouse/restaurant also contains a pro shop within the building.  The building is open for use by the public.  The appellant argued this building should have a proportional assessment reduction based on the percentage of use by members versus non-members.  However, the manager testified that it would be difficult to determine exactly the percentage of patronage by the members and non-members to arrive at a proportionate assessment of one third fair market value versus a $1.00 assessment.  He stated the restaurant has comment cards and from them he has determined that 25% of the whole restaurant use is by the public and 75% of the whole restaurant is used by members.  From that he felt the board of review could determine a proportionate assessment breakdown for this building.

The appellant's manager then further dissected this building by arguing the 9,500 square foot unfinished basement is only partially used for storage of restaurant supplies.  He argued that 8,000 square feet of the basement is not being used for anything and therefore the basement should be considered members-only use and have a $1.00 assessment.  Later in his testimony he argued that if the 1,500 square foot portion of the basement used for restaurant storage is considered commercial use, he wanted a proportional assessment of the 8,000 square feet of basement area that is not currently being used assessed at $1.00 and the 1,500 square feet of storage assessed at one third of market value.

The witness then discussed the golf course.  He testified the course is used by both association members and the general public.  He stated the percentage of the whole that is used by members versus non-members can clearly be established through the fees paid.  He stated 17% was public use and the remainder was member use.  He argued that the assessor could use 17% of the assessment based on one third of full market value for the whole golf course and then add $1.00 to account for the remainder of the assessment.  When asked how the assessor was supposed to figure this out each year, the witness stated the assessor would have to rely on the appellant's records.

An employee of the appellant was called as the next witness.  The witness gave his interpretation of Section 10-35 of the Property Tax Code.  (35 ILCS 200/10-35).  He also gave his interpretation of some of the legislative history behind the statute.

The appellant then presented the manager of the Galena Territory Association to discuss a 1994 appeal to the Property Tax Appeal Board from another county.  The witness testified there was no appeal to the Property Tax Appeal Board in 1994.  The hearing officer also sustained the board of review's objection to Mr. Jansen testifying to assessment practices in another county based on relevancy.  The board of review argued the issue is whether Carroll County properly applied section 10-35 to the subject property.  It was also noted that the decision from the other county was based on a stipulation between the parties and not on a practice or statute.

The appellant referenced a 1991 Property Tax Appeal Board decision for the subject property.  The correct year of the appeal was 1989.  The appellant stated it appealed on the $1.00 assessment but did not appeal a division of a building into proportionate assessments based on use by members versus non-members.  The witness testified that in the 1989 appeal, the Property Tax Appeal Board did not include anything about double taxation which was the basis of the appeal.  He stated the Board upheld the board of review's assessment of the subject property.  The appellant's manager stated the appellant is arguing the same double taxation but is also requesting the assessments of the buildings be split up based on the percentage of the whole used by members and the percentage of the whole used by the public.

The appellant's manager testified the clubhouse/restaurant and golf course both collect money and make up the deposit slips that are then picked up by security that is for the whole facility and is located in the administration building.  The accounting department in the administration building does the final bookkeeping for the restaurant and golf course.

The appellant submitted numerous documents it suggested further support the argument.  Some of the documents were golf course use for 2001 and 2002, tally of restaurant comment cards, photographs and record cards for the various buildings, by-laws of the association and newspaper articles.

The board of review presented "Board of Review Notes on Appeal" wherein the subject's final assessments were disclosed.  The board of review argued the issue in the appeal is the correct interpretation of section 10-35 of the Property Tax Code and whether the board of review correctly applied the statute to the subject property.  The board of review argued the statute refers to common areas as those "reserved in whole" for the use of the owners of the association.  The exclusive use of the members is the key element in determining if the statute applies.  The board of review noted that the appellant is not disputing the actual assessment or valuation of the subject but that buildings should have a full assessment reduced by a proportionate figure as determined by the appellant, not the assessor.

The board of review's counsel indicated that Lake Point Tower Garage Association v. Property Tax Appeal Board, 804 N.E.2d 717 (1^st Dist 2004), also reviews the Condominium Property Tax Act and states that exclusive use is the key element in determining whether or not the $1.00 assessment is to be applied.  If a member of the public uses the area, it precludes use of the $1.00 assessment.  The board of review also argued that although there is a twist of proportionate assessment included in this appeal, the appellant's argument is the same as in its 1989 appeal wherein the Property Tax Appeal Board found no change in the assessment was warranted based on that argument. 

The board of review indicated there is no dispute that the clubhouse/restaurant and the golf course are open to the general public, advertised to the public and earn revenue from the public use.  The board argued the administration/main lobby/conference building has only one physical section or room that is used for recreational purposes by members only, the lobby where the public is invited in, and the remainder of the building used for the administration of both public and private use of the facility.  The members-only room has a $1.00 assessment.  The board of review argued this is entirely different than the appellant's argument that even though a building is used by both members and non-members in contravention of the statute, the statute still should apply because the assessor should somehow be able to discern how much of the time and how many members of the public use the area and how much of the time and how many association members use a portion of an area.

The board of review argued the same rational applies to the golf course.  There are not two or four holes available for members only that can be given a $1.00 assessment.  Rather, the appellant is arguing that even though the entire course is open to the public and is not used solely by the members, the assessor should value the whole course using a proportional use scale of members and the general public.  The board of review argued that the appellants made the trade-off to allow public use to gain more revenue which then removes the areas from the $1.00 assessment allowed by section 10-35.  The board of review argued the appellant wants it both ways:  to allow the public into generate revenue and to retain the $1.00 assessment that is supposed to be reserved for exclusive use in whole by members only.

The board of review also argued the same applies to the other areas argued by the appellant.  For example, the kitchen of the restaurant is used to prepare food for both members and the public.  The basement of the restaurant is used to store food and other items used for the restaurant that serves the public.  The maintenance areas are used to maintain the golf course that is used by members and the public.  The board of review argued that to agree with the appellant would result in illogical conclusions such as the bartender side of the bar is for members only and receives a $1.00 assessment while the patron side of the bar is open to the public and gets a full value assessment.  The board argued this is clearly not the intent of the statute.

The board of review next discussed some areas of the numerous pages of evidence presented by the appellant.  The board indicated the 1989 Property Tax Appeal Board decision on the subject property, docket nos. 89-1856-C-3 through 89-1859-C-3, did in fact state the appellant argued double taxation and that the Board rejected this argument.  The decision states the appellant "failed to demonstrate that the beneficial use and enjoyment of the subject properties were reserved in whole to the separately owned lots within the development" and therefore the exclusive use by the owners requirement of the statute was not met.

Appellant's Exhibits F and I show that the public is invited by the appellant to use the clubhouse/restaurant and golf course.  The board argued the appellant stated in its own brief that it recognizes the public use precludes entitlement to the full $1.00 assessment under section 10-35.  The board of review argued that since the course is tainted any other areas pertaining to the course are likewise tainted with regard to receiving a $1.00 assessment.  The board argued it is not a requirement that to preclude the $1.00 assessment the public is to have access to each and every foot of land or building space.  Rather, since the course and clubhouse/restaurant are open to the public, all areas used in conjunction with these areas are also considered used for the public. 

The board of review argued Exhibit I also contains a letter from the appellant's food and beverage manager, dated July 17, 2003, indicating the difficulty in using comment cards in trying to determine the number of members and the public that eat at the restaurant.  Only 50% of the comment cards were returned and tallies on customer counts were not maintained.  They were also making assumptions on mixed parties as to how many were members, guests and the general public.  The board argued the statute does not allow percentage reductions and the evidence shows the appellant cannot even reliably determine as assessment in this matter.

Exhibit J contains a letter from the appellant's manager which states the golf pro operates out of the pro shop and retains the revenues, therefore indicating the pro shop produces revenue for the appellant and is open to the public.  Other documents were discussed that the appellant submitted indicating public use of the facility.  Specifically, page 6 of Exhibit K states "[t]he problem is Sec. 10-35 takes no notice of the relative level of general public support."  The board of review argued the appellant recognizes it does not qualify for section 10-35 as written and therefore is seeking to derive an alternative method to get a tax break.  The board argued that Exhibit K on page 8 indicates the real problem is that the appellant is trying to balance its budget.

Carroll County Supervisor of Assessments was called as a witness for the board of review.  She testified she knows members of the appellant association and has been on the subject property.  She has eaten at the restaurant, attended events and watched golfing on the course.  She testified she is familiar with section 10-35 and has asked advice from the state's attorney and from the Illinois Department of Revenue to make sure she is applying the statute correctly to the subject property.  She stated that to meet the requirements of section 10-35 to be considered a common area and receive a $1.00 assessment, the property must be reserved in whole for recreational use or similar recreational purposes for the owners. 

The witness testified the restaurant is assessed at one third of market value because it is open to the public and therefore not reserved in whole for the property owners.  The kitchen services the restaurant and the basement is part of the building.  She stated the conference center/administration building originally did not include the private, members-only room and is assessed at one third of market value.  The general manager's office is there and he oversees all areas, including those open to the public.  The new members-only addition is assessed at $1.00 as it is reserved in whole for the members. 

The supervisor of assessments testified she has reviewed the statutes and has not found anything that envisions a partial reduction based on percentage of public versus private use for restaurants and golf courses.  She also testified she could not see how a partial assessment based on percentage of use could be administered by the assessor's office.  She also testified neither she nor any of her staff that has been to the subject property has been asked if they were members or members of the public.

During cross-examination, the supervisor of assessment was asked if she was assessing the entire clubhouse/restaurant basement as if for public use.  She stated she was assessing the basement as an unfinished basement under a one-story frame building at one third of market value.

In rebuttal, the appellant's manager testified the weekend tee times for the golf course are reserved for members only.  However, he also testified that if there are timeslots not used by members, the general public is allowed to take those times.  He argued that the definition of reserved in whole is still met under these circumstances.  He also continued to argue the administration/conference building should be broken down and have a $1.00 assessment for two-thirds of the administration offices, a $1.00 assessment for the members-only addition and a reduced assessment based on percentage of private versus public use for other areas.  However, he did not have any square footage analysis.  He agreed that the security office picks up revenues from the restaurant and clubhouse and the accounting supervisor and his own management office deal with paperwork from these areas.  However, he argued they are still private and should receive a $1.00 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 appellant argued the subject property is being double taxed.  It argued the subject's assessment should be calculated using a proportionate method under section 10-35 of the Property Tax Code.  35 ILCS 200/10-35.

Section 10-35(a) states as follows:

(a) Residential property which is a part of a development, but which is individually owned and ownership of which includes the right, by easement, covenant deed or other interest in property, to the use of any common area for recreational or similar residential purposes shall be assessed at a value which includes the proportional share of the value of that common area or areas. 

The parties of record before the Property Tax Appeal Board are LaQuinta Inns, Inc., the appellant, and the Rock Island County Board of Review.

The subject property consists of a 125 room, two-story motel facility of frame, stucco, and concrete construction.  The subject was built in 1975 and contains approximately 58,946 gross square feet of building area.  The entire facility was renovated between 1997 and 1998.  Amenities include a 75,000 square foot paved parking lot, a meeting room, and an outdoor swimming pool. The subject property is situated on a lot containing approximately 2.65 acres located in Moline, Rock Island County, Illinois.

At the hearing, the Assistant States Attorney on behalf of the board of review made a motion for default judgment pursuant to the Section 1910.69(b) of the Official Rules of the Property Tax Appeal Board, which provides:

When a hearing is ordered by the Property Tax Appeal Board, all parties shall appear for the hearing on the appeal on the date and at the time set by the Property Tax Appeal Board. Failure to appear on the date and at the time set by the Property Tax Appeal Board shall be sufficient cause to default that party. (86 Ill.Adm.Code §1910.69(b)).

The board of review argued the appellant's counsel was approximately one hour late for the hearing and is grounds to be found in default.  The appellant's counsel responded and explained that he became lost en-route to the hearing.  He also telephoned the Board's Hearing Officer and indicated he would arrive shortly.  After considering the facts and arguments of the parties, the Board hereby denies the board of review's motion for default judgment.  The Board finds that this provision of its rules is discretionary and is not mandatory.

The appellant appeared before the Property Tax Appeal Board through counsel suggesting that the fair market value of the subject property is not accurately reflected in its assessed valuation.  In support of the overvaluation claim, the appellant submmited an appraisal in which a fair market value for the subject property was estimated to be $1,700,000 as of January 1, 2000 using the three traditional approaches to value.  The appraiser was present at the hearing and offered testimony in support of his final value conclusion.  The appraiser was qualified as a witness to give testimony in this appeal.  The appraiser testified he inspected the interior and exterior of the subject property in April 2001.  He described the subject's market area as being the "Quad Cities", but specifically in close proximity around the subject or across the street from the airport. He also testified he subsequently performed another appraisal as of January 1, 2003, resulting in no significant change in value from the January 1, 2000 appraisal.

The parties of record before the Property Tax Appeal Board are New Plan Excel Realty Trust c/o Schnuck Markets, the appellant, and the Monroe County Board of Review.

The subject property consists of a one-story commercial building containing 32,879 square feet of building area that is situated on a 3.51-acre site.  The subject is utilized as a grocery store. The subject building was constructed in 1981 and has a reinforced concrete foundation, steel framing, and a flat roof over steel decking with a membrane covering.  The exterior walls are of concrete block construction.  Clear ceiling heights vary within the building.  Amenities included zoned heating and cooling and two bathrooms.  Site improvements include a parking lot, curbs, and guttering.  The subject property is located in Waterloo, Monroe County, Illinois.

The appellant appeared before the Property Tax Appeal Board through counsel suggesting that the fair market value of the subject property is not accurately reflected in its assessed valuation.  In support of this claim, the appellant submitted an appraisal report performed by a state licensed appraiser.  The appraiser was present at the hearing to present testimony in support of the appraisal methodology and value conclusion.  The appraiser was qualified as a witness without objection.  Using the three traditional approaches to value, the appraiser estimated a fair market value for the subject property of $1,320,000 as of January 1, 2001.

The appraiser first provided testimony regarding the appraisal technique and analysis.  He testified that part of his examination pertained to the construction of a new Super Wal-mart that is located on Illinois Route 3.  He indicated that Wal-Mart vacated a building that adjoins the subject property when the new Super Wal-Mart was constructed.  A Rural King now occupies the property.  The appraiser testified he has performed numerous appraisals in communities that have had Super Wal-Marts built.  The appraiser indicated that in every city a Super Wal-Mart is built a false market is created.  He contends land values that surround a newly constructed Super Wal-Mart generally increase, but stabilizes shortly thereafter.  He also testified that a Super Wal-Mart generates more traffic flow, but does not generate more jobs and growth for of the community.  He argued the downside of a new Super Wal-Mart in a community is the business impact on grocery stores, which at least one closes due to the increased competition.  He noted the grocery stores that remain competitive are similar in size to a Super Wal-Mart.  Based on his experience, he concluded that there has been a trend to build larger grocery stores.  He testified that 20 years ago a typical grocery store contained approximately 30,000 square feet of building area, whereas modern grocery stores have from 50,000 to 70,000 square feet of building area.  

The appraiser first discussed the sales comparison approach to value.  The appraiser utilized seven suggested comparable sales including the subject property.  The comparables consist of one-story style commercial buildings that were built between 1965 and 1983.  Exteriors varied from masonry, concrete panel or block, and steel frame construction.  The comparables are located in the Illinois communities of Waterloo, Alton, Effingham, Springfield, Danville, and Mundelein.  The comparables range in size from 28,819 to 102,201 square feet of building area and are situated on sites containing form 2.09 to 10.32 acres.  Land to building ratios ranged from 1.46:1 to 4.91:1.  Features have varying degrees of similarity to the subject, but are similar in many respects.  Amenities include but are not limited to sprinkled fire protection, office, retail, and warehouse space, heating and cooling systems, and parking lots.  They sold for prices ranging from $742,000 to $3,900,000 or from $16.46 to $51.82 per square foot of building area including land.  The transactions occurred between August 1993 and May 2002.  The appraiser also noted that comparable 2, which sold for $2,400,000 in June 2001 and is located next to the subject, sold in June 2002 for $845,000 or $14.12 per square foot of building area including land.  This property was leased at the time of sale for $2.00 per square foot of building area.  The leased transferred to the buyers. 

The appraiser testified he would not normally use comparable sale 1, the subject property, because it occurred ten years prior to the valuation date.  However, since the sale was the subject property he included the data for informational purposes.  He also noted the subject property had a long-term lease remaining at the time of sale and the sale was basically a leasehold transaction. 

The appraiser noted sale 2 adjoins the subject property and was a former Wal-Mart.  Rural King now occupies this property.  The appraiser testified Wal-Mart purchased this property to buy-out the remaining lease term on their existing lease.  He explained Wal-Mart had two options; they could either buy the property, which would allow them to control their own lease or they could continue to pay the lease payments for the remainder of the term.  Thus, this sale was essentially a buy-out of and existing lease with the prior owner.  Subsequent to the sale, Wal-Mart attempted to sell or lease the property. As previously noted, this property was subsequently leased Rural King for $2.00 per square foot of building area. 

Sale 3 was leased at the time of sale for $6.00 per square foot of building area.  Sale 5 contained six units and is anchored by a Save-A-Lot grocery store.  The five tenants lease a total of 14,765 for prices ranging from $4.62 to $6.90 per square foot on a net or triple net basis.  Sale 6 contained 4 units and is located on a busy thoroughfare near a regional shopping mall in Alton, Illinois.  Two major tenants are Big Lots and Shop-N-Save.  The appraiser indicted comparable 7, a Jewel-Osco, was actually a pending sale.  This property sold through an auction in May 2002 for $742,000 or $16.46 per square foot of building area including land. 

The appraiser testified there are a limited number of comparable sales in the marketplace.  Thus, market extracted dollar values or percentage adjustments are difficult to measure.  Thus, the appraiser made +, -, or = qualitative adjustments for differences to the subject.  The appraiser considered various adjustments to the comparables for differences to the subject in location, size, condition, land to building ratio, age, and date of sale.  After adjustments, the appraiser concluded the subject property has a per square foot market value including land of $40.00 or $1,320,000, rounded. 

The appraiser next discussed the income approach to value. Under this approach, the appraiser utilized rental data from four comparables including the subject property.  In addition, two lease offerings were utilized.  Three of the comparable rentals were also properties used in the sales comparison approach.  The properties are located in the Illinois communities of Waterloo, Mahomet, Springfield, Alton, Taylorville, and Bloomington.  All the comparable rentals are utilized as grocery stores.  They range in size from 21,520 to 50,000 square feet of building area.  One comparables was proposed construction and the remaining comparables were built between 1968 and 1982.  Two properties were remodeled in 1993, 1995 and 1997.  The terms of some of the leases were also discussed.  The properties were leased or offered for lease for prices ranging from $4.95 to $6.95 per square foot of building area on a net or triple net basis.  After considering adjustments to the rental comparable for differences to the subject in location, age, size, and rental terms, the appraiser concluded a rental value for the subject property of $5.00 per square foot.  As a result, the appraiser concluded the subject property has a potential gross annual income of $164,395. Vacancy and collection was estimated to be 5% or $8,220 resulting in an effective gross income of $156,175.  Expenses were estimated to be 10% or $15,618, resulting in a net operating income of $140,557. 

The report and testimony indicate the capitalization rate was calculated using some of sale comparables, which ranged from 8% to 10.5%.  He also consulted the National Strip Shopping Center Market, which indicated an overall capitalization rates from 8.5% to 12%.  Real Estate Outlook, published by the Appraisal Institute, indicated an overall capitalization rates from 8% to 11.5%.  Finally he consulted Retail Market-Power Centers and Big Box, which provided overall capitalization rates from 8.8% to 12.5%. Using an overall capitalization rate of 11%, the appraiser concluded a value under the income approach of $1,300,000, rounded. 

Under the cost approach, the appraiser used 10 suggested land sales to estimate the subject's land value.  The land comparables are located in close proximity to the subject and range in size from 33,977 to 118,919 square feet of land area.  They sold for prices ranging from $180,000 to $683,326 or from $2.35 to $8.99 per square foot of land area.  After considering adjustments to the land comparables for differences to the subject, the appraiser estimated the subject’s land value of $600,000 or $4.00 per square foot of land.   The replacement costs new of the improvements were estimated to be $1,666,308 using the Marshall Valuation Service.  Site improvements were estimated to have a value of $437,000 for total replacement cost new of $2,103,308.  Depreciation from all causes was estimated to be 64% or $1,346,117.  The depreciation amount was abstracted from four of the sales used in the sales comparison approach to value.  Based on this data, the appraiser concluded the subject property has a depreciated market value of $1,360,000 under the cost approach. 

In reconciliation of the three valuation methods, the appraiser placed least weight on the cost approach due to estimating depreciation. Since he had reliable rental data, he placed moderate weight on the income approach.  Most weight was placed on the sales comparison approach to value.  As a result, the appraiser concluded the subject property has a fair market value of $1,320,000 as of January 1, 2001. 

The appraiser further testified the subject property sold subsequent to completing his appraisal.  He testified he has not reviewed any documentation regarding the sale, but was informed the sale price was $1,800,000.  He testified he was not surprised by the sale price because the sale most likely was a leased fee interest transaction.  He explained that since the subject property is currently being leased on a long-term basis at above market rent, the purchaser was buying the income stream.  The subject property is being leased for $6.30 per square foot of building area whereas the appraiser concluded the subject's market rent to be $5.00 per square foot of building area.  Thus, he opined the sale price represents the leased fee interest rather than a fixed sale of the fee simple interest.  The appellant's counsel cited Springfield Marine Bank v. Property Tax Appeal Board, Ill.2d 428, 256 (1970), in support of the appraiser's conclusion regarding the subject's sale.  The Illinois Supreme Court held:

It is clearly the value of the 'tract or lot of real property' which is assessed, rather that the value of the interest presently held by the owner.  In determining the value of the property, income may be a relevant factor, particularly where it is admittedly misleading as to fair cash value of the property involved.  In such situation, earning capacity is properly regarded as the most significant element in arriving at 'fair cash value. . . [I]t is the capacity for earning income, rather than the income actually derived, which reflects 'fair cash value' for taxation purposes.  

Under cross-examination, the appraiser testified he used a cost multiplier of .979 in the cost approach from the Marshall & Swift valuation Manual. The appraiser testified he referenced the manual and determined he used the May 2002 version in calculating the cost approach.  He testified he checked to what the factor would be from January 2001 to May 2002 and interpolated to find it would be a negative adjustment retrospectively from the May 2002 factor amount.  He could not recall how he determined the local multiplier.  The appraiser was also questioned about the subject's 1992 sale price and his negative adjustments for market conditions.  The appraiser argued that although the real estate market as a whole has been positive, he believes the economic situation for smaller grocery stores had changed since 1993.  He argued any new grocery store built by present standards would be much larger than he subject.  He also argued that in 1993, Wal-Mart was the anchor generating a high traffic count.  The appraiser was also questioned about the adjustment methodology used throughout the appraisal.  

The board of review offered its "Board of Review Notes on Appeal" wherein the subject's final assessment of $868,460 was disclosed. The subject’s assessment reflects an estimated market value of $2,635,690 including land using Monroe County’s 2001 three-year median level of assessments of 32.95%.

In support of the subject’s assessment, the board of review submitted an appraisal performed by a state licensed appraiser.  The appraiser was present at the hearing.  However after ample opportunity given by the Board, the board of review did not call its appraiser to provide direct testimony or be cross-examined regarding the appraisal methodology, technique, and final value conclusion.  Using the three traditional approaches to value, the board of review's appraiser estimated a fair market value for the subject property of $1,800,000 as of January 1, 2001.  The appraisal supports a reduction in the subject's assessment as established by the board of review.

Instead of presenting its appraisal, the board of review submitted a Real Estate Transfer Declaration detailing the subject's April 2003 sale price of $1,800,000.  As noted at hearing, this document indicates that the subject property was not advertised for sale or sold using a real estate agent.  

Under cross-examination regarding the arm's-length nature of the subject's 2003 sale, the board of review member testified that "I think when you're dealing with that kind of money, both parties would certainly be informed".  The board of review member was refreshed as to the traditional criteria of an arm's-length transaction.  The board of review member testified he did not know if the subject property was exposed to the open market prior to its 2003 sale.  Furthermore, the board of review presented no evidence or testimony indicating the subject's 2003 sale was an arm's-length transaction reflecting fair market value. 

In closing, the appellant made various comments pertaining to perceived flaws in the board of review's appraisal regarding some rental comparables, the highest and best use of the property, and some of the comparable sales used in the market approach. 

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 a reduction in the subject property’s assessment is warranted. 

The appellant argued the subject property is overvalued.  When market value is the basis of the appeal, the value must be proved by a preponderance of the evidence. Winnebago County Board of Review v. Property Tax Appeal Board, 313 Ill.App.3d 179, 183, 728 N.E.2d 1256 (2nd Dist. 2000). In support of the overvaluation claim, the appellant submitted an appraisal and testimony from the appraiser estimating that the subject property has a fair market value of $1,320,000 as of January 1, 2001.  The board of review submitted an appraisal report indicating the subject property had an estimated market value of $1,800,000 as of January 1, 2001, which supports a reduction in the subject's assessment as established by the board of review.  In addition, the board of review presented documentation detailing the subject's April 2003 sale price of $1,800,000.

The Board finds the best evidence of the subject's fair market value is the appraisal submitted by the appellant.  The Board finds the appellant's appraiser provided competent, profession, and logical testimony in support of his appraisal methodology, the data used in the three approaches to value, the adjustment process, and final value conclusion.  The appraiser concluded the subject property has a fair market value of $1,320,000 as of January 1, 2001.

The Board gave less weight to the appraisal and final value conclusion as determined by the board of review's appraiser.  The board of review's appraiser was present at hearing for direct or cross-examination regarding the appraisal methodology and final value conclusion.  However, the board of review, after given many opportunities, failed to call the appraiser at a witness to present testimony.  Illinois courts have held that where hearsay evidence appears in the record, a factual determination based on such evidence and unsupported by other sufficient evidence in the record must be reversed. LaGrange Bank #1713 v. DuPage County Board of Review, 79 Ill.App.3d 474 (1979); Russell v. License Appeal Comm., 133 Ill.App.2d 594 (1971).  With respect to these decisions, the Property Tax Appeal Board finds the absence of corroborating testimony, the weight and credibility of the evidence and opinion of value is significantly diminished. 

Rather than relying on the appraisal submitted, the board of review presented a Real Estate Transfer Declaration detailing the subject's sale price of $1,800,000 in April 2003, two years and three months subsequent to the subject's January 1, 2001 assessment date.  The Board accords this evidence little weight. After reviewing the document, as noted at hearing, the Board finds the subject sale does not appear to be an arm's-length transaction.  The Property Tax Code defines "fair cash value" 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 willing seller. (35 ILCS 200/9-145).  Similarly, the Illinois Courts has stated fair cash value is synonymous with fair market value and is defined as the price a willing buyer would pay a willing seller for the subject property, there being no collusion and neither party being under any compulsion. Springfield Marine Bank v. Property Tax Appeal Board, 44 Ill.2d 428, 256 (1970) and Ellsworth Grain Company v Property Tax Appeal Board, 172 Ill.App.3d 552, 526 (4^th Dist. 1988).  Additionally, the Property Assessment Valuation, 2^nd edition, states:

Market value is most probable price, expressed in terms of money, that a property would bring if exposed for sale in the open market in an arm's-length transaction between a willing seller and a willing buyer, both whom are knowledgeable concerning all the uses to which it is adapted and for which it is capable of being used. International Association of Assessing Officers, Property Assessment Valuation, 2^nd edition, Pg. 35, (1996). 

Since the board of review presented no credible evidence showing the subject property was advertised for sale or exposed to the open market in an arm's-length transaction or explaining the circumstances surrounding the sale, the subject's 2003 sale price is given little weight for market value considerations.

In addition, the Board finds there is other evidence indicating the subject's April 2003 sale price may not have reflected its fair market value and further calls into question the arm's-length nature of the subject's sale.  The appellant's appraiser testified the subject's 2003 sale most likely reflected the leased fee interest of the subject property rather than the fee simple interest.  He explained that since the subject property is leased on a long-term basis at above market rent, the purchaser was buying the income stream.  The subject property is being leased for $6.30 per square foot of building area whereas the appraiser concluded the subject's market rent to be $5.00 per square foot of building area.  The appraiser also indicated the adjoining building is being leased for $2.00 per square foot of building area, considerably less that the subject's actual per square foot lease price. 

The Property Assessment Valuation, 2^nd edition, states: 

It is necessary to list all pertinent information connected with a sale. . . Sources of information includes recorded deeds; newspaper reports; published sales listings, such as those published By Multiple Listing Services (MLS), and interviews with brokers, attorneys, and bankers.  It is a preferred practice to verify every sale with the buyer, seller, broker, or attorney involved. Knowledge of the motives of buyers and sellers is mandatory.  A verified sale is more reliable than an unverified sale.   Ideally, transactions should be verified with both buyer and seller, because time may obscure the recollection of the details of the transaction.  Sometimes the buyers and sellers are the only ones who know the true motivating factors of the transaction.  International Association of Assessing Officers, Property Assessment Valuation, 2^nd edition, Pg. 72, 102, (1996). 

The Board finds the board of review failed to provide adequate details and evidence regarding the subject's transaction, such as documentation explaining the motivation of the sale or a copy of the sales agreement or contract detailing the terms of the transaction.

In conclusion, the Property Tax Appeal Board finds the best evidence of the subject's fair market value presented in this appeal is the appraisal submitted by the appellant.  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.  Since fair market value has been established, the three-year median level of assessments for Monroe County of 32.95% shall apply.

The parties of record before the Property Tax Appeal Board are Bill Plank, the appellant, and the Cook County Board of Review.

The subject property is improved with a mixed-use building containing two commercial spaces and three apartments.  The subject is located in Leyden Township. 

As the basis of this appeal, the appellant's petition suggests that the subject's classification as determined by the Cook County Classification Ordinance is not appropriate to the use of the subject and, therefore, the subject is inequitably assessed.  The appellant's evidence suggests that the subject should be classified under the Cook County Classification Ordinance as a Class 2 residential property rather than a Class 5 commercial property.  In support of this contention, the appellant submitted two properties classified as 2-18 and 2-20 residential as comparable to the subject.  The Cook County Real Property Classification Ordinance describes the classifications as follows:

The parties of record before the Property Tax Appeal Board are Sullivan Foods, the appellant, and the Carroll County Board of Review.

The subject property consists of a 1.56 acre commercial parcel located in Savanna, Illinois.  The site is improved with a 6,456 square foot commercial building constructed in 2000.  The building is being used as a gas station and fast food restaurant.  The appellant argued overvaluation and unequal treatment as the bases of the appeal.

A hearing was set by the Property Tax Appeal Board for July 12, 2004 at 2:00 pm at the Carroll County Courthouse in Mt. Carroll.  All parties were notified in writing by letter from the Property Tax Appeal Board on June 1, 2004.  The appellant failed to appear at the hearing on the date set and did not request a postponement or notify the Board of its intent not to participate in the hearing.  The board of review's attorney indicated at the hearing that the appellant's attorney called him one hour prior to the hearing and indicated the appellant would not be coming to the hearing.  The board of review's attorney requested that the hearing proceed as his client has come to the hearing with its witnesses and is ready to proceed with its case.

The appellant had previously presented a 1998 sale of the subject property for $335,000.  The appellant had indicated the sale was a contract for deed that was not advertised for sale on the open market.  The appellant argued $100,000 of the sale price was to be held in escrow for environmental remediation of the property.  The appellant argued that the buyer assumed the seller's remediation liability and the sale price should be reduced to $235,000 for the real property to reflect this amount.  An equity analysis was also submitted wherein the assessments of four properties were compared to the subject property.  However, the assessment information was for the 2000 assessment year.  As indicated, no one was present at the hearing for the appellant to testify to any of this evidence.

The board of review presented "Board of Review Notes on Appeal" wherein the subject's final assessment of $184,494 was disclosed.  The assessment reflects an estimated value of $558,734 using the three year median level of assessments for Carroll County for 2001 of 33.02%. 

The board of review presented the testimony of the Carroll County Supervisor of Assessments.  She testified that she previously testified at the Property Tax Appeal Board hearing for the appellant's 2000 appeal on the subject property, docket number 00-01892.001-C-1.  In that appeal, the Property Tax Appeal Board made no change to the assessment.  She stated her testimony was accurate and her answers would be the same for 2001. 

The board of review further presented an appraisal of the subject property with an effective date of January 1, 2002.  The appraiser was present at the hearing and testified to his report.  He testified there would be no real change in his estimated value for January 1, 2001.  He testified the subject's highest and best use as improved is the current use.  He developed the cost and income approaches to value and presented five sales of gas stations and six sales of restaurants.

The appraiser first estimated a value for the subject land of $5.00 per square foot or $340,000 utilizing seven land sales ranging from $1.55 to $5.81 per square foot.  Adding the depreciated costs to the estimated value of the site improvements and the contributory cost of the canopy resulted in total costs of $997,173.  Adding the land value estimate of $340,000 resulted in a total estimated value under the cost approach of $1,340,000.

The appraiser's income approach utilized rental rates from gas station/convenient stores and fast food restaurants to arrive at a total potential gross income of $154,590.  Vacancy and collection loss of 5% was deducted to arrive at an effective gross income of $146,861.  Expenses of 5% were taken to arrive at an estimated net operating income of $137,258.  A capitalization rate of 10% was determined from the Realty Rates Investor Survey.  Applying this rate to the net operating income resulted in an estimated value under the income approach of $1,375,000.

The appraiser included raw sales data but did not adjust the sales to the subject.  He indicated he did not perform a sales comparison approach because there were no sales in the subject's market area and that the sale prices of these types of properties was directly related to the sales volume of the facility.  He included the raw sales data to indicate that sales are occurring that are similar to the value conclusions in his cost and income approaches. 

The sales of gas station/convenience stores ranged from $940,000 to $2,232,234.  The sales of fast food restaurants ranged from $548,591 to $1,255,000.  After reviewing these sales and reconciling the cost and income approaches, the board of review's appraiser estimated a final value for the subject property of $1,355,000.  Based on this evidence, the board of review requested an increase in the subject property's assessment to reflect the appraisal value of $1,355,000.

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 appellant argued overvaluation and unequal treatment as the bases of the appeal.  When market value is the basis of the appeal the value must be proved by a preponderance of the evidence.  Winnebago County Board of Review v. Property Tax Appeal Board, 313 IllApp.3d 179 (2^nd Dist. 2000), National City Bank of Michigan/Illinois v. Property Tax Appeal Board, 331 Ill.App.3d 1038 (3^rd Dist. 2002). 

The appellant requested a hearing before the Property Tax Appeal Board.  A hearing was set and the parties were notified by letter of the date, time and location of the hearing more than 20 days in advance of the hearing as required by section 1910.67(b) of the Official Rules of the Property Tax Appeal Board.  86 Ill.Adm. Code 1910.67 (b).  The Board also finds section 1910.69(b) of the Official Rules states that failure to appear at a hearing shall be sufficient cause to default that party.  86 Ill.Adm. Code 1910.69(b).  The Board finds the appellant failed to appear at its requested hearing after proper notification and was therefore not present to discuss its evidence or to have any witnesses cross-examined as to the evidence it submitted. 

The Board finds the board of review was present at the hearing and presented witnesses in support of its evidence.  The board of review presented an appraisal and testimony from the appraiser preparing the report.  The appraiser prepared two approaches to value and included raw sales data to conclude an estimated value for the subject as of January 1, 2002 of $1,355,000.  He testified there would be no change in his estimated value for January 1, 2001.  There was no cross-examination of the appraiser.  The Board therefore finds the board of review has proven by a preponderance of the evidence that the subject property was under-valued and an increase in the assessment is warranted.

The appellant also argued the subject property was inequitably assessed.  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.  After an analysis of the assessment data, the Board finds that the appellant has failed to overcome this burden.  The appellant presented assessment information on four suggested comparable properties.  The Board finds the appellant's assessment information is for the 2000 assessment year.  The assessment year at issue in this appeal is 2001.  Therefore the Board places no weight on assessments that were made for the year prior to the assessment date at issue.

Based on the aforementioned evidence and analysis of the record, the Property Tax Appeal Board finds that the subject had a fair market value of $1,355,000 as of January 1, 2001.  Since fair market value had been established, the three year weighted average median level of assessments for Carroll County of 33.02% shall apply.