Oakwood Club v. Cuyahoga Cty. Bd. of Revision

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Oakwood Club, Appellant, v. Cuyahoga County Board of Revision

et al., Appellees.

[Cite as Oakwood Club v. Cuyahoga Cty. Bd. of Revision

(1994), Ohio St.3d .]

Taxation -- Real property valuation -- Board of Tax Appeals'

decision will not be disturbed, when.

(No. 93-519 -- Submitted December 20, 1993 -- Decided

September 14, 1994.)

Appeal from the Board of Tax Appeals, Nos. 90-M-1446 and

90-M-1459.

The issue in this appeal is the true value of the Oakwood

Club, a private country club, which occupies approximately one

hundred fifty-six acres of land, ninety-four acres in the city

of Cleveland Heights and sixty-two acres in the city of South

Euclid. Oakwood's facilities include an eighteen-hole golf

course, driving range, swimming pool, eight outdoor tennis

courts, an indoor tennis facility with four tennis courts, a

clubhouse and several auxiliary buildings.

Oakwood's clubhouse, originally built as a private

residence around 1900, has been remodeled since, with major

restorations done in 1971 and 1973. The clubhouse has

administrative offices, men's and women's locker rooms, various

card and meeting rooms, a living room, a barroom, a kitchen and

a large dining facility. On the lower level are service areas,

squash courts, an indoor golf teaching area, saunas and a

tennis lounge. Additional auxiliary buildings are the pro

shop, office, drink house, and buildings for maintenance, golf

cart storage, and summer day camp. There is also an extensive

asphalt parking area.

For tax year 1988, the Cuyahoga County Auditor assessed

the true value of the property at $3,373,950. Upon complaint

by Oakwood, the Cuyahoga County Board of Revision agreed with

that valuation and Oakwood appealed to the Board of Tax Appeals

("BTA").

The evidence presented at the BTA consisted of the expert

appraisal reports and testimony of Richard Van Curen, for

appellant Oakwood, and Charles Braman, for appellee board of

revision. The appraisers agreed that the income approach to

value was inappropriate and each of them utilized the cost

approach and the market comparison approach. Van Curen

estimated the true value at $2,600,000, while Braman said the

property was worth $4,500,000 under the cost approach and

$4,410,000 under the market approach. The BTA determined the

true value to be $4,410,000 and Oakwood appealed.

The cause is now before this court upon an appeal as of

right.

Kahn, Kleinman, Yanowitz & Arnson Co., L.P.A., and Thomas

L. Dettlebach, for appellant.

Stephanie Tubbs Jones, Cuyahoga County Prosecuting

Attorney, and Saundra Curtis-Patrick, Assistant Prosecuting

Attorney, for Cuyahoga County Board of Revision and Cuyahoga

County Auditor.

Per Curiam. The decision of the BTA is affirmed.

This appeal presents a typical valuation dispute based

upon conflicting appraisals. Oakwood contends that the BTA's

decision is unreasonable and unlawful because (1) it accepts

Braman's testimony, which failed to adjust for improvements

made to the subject property subsequent to tax lien date, or

for the subsequent sale of excess land from his principal

comparable sale, and (2) it did not determine the true value of

the subject property but instead determined the "value in use"

of the property, contrary to law.

While the appraisers disagreed on several points, they did

agree that the highest and best use of the property was as a

private country club and that the use of the income approach to

value was inappropriate. Both appraisers used the Marshall

Evaluation Service, but disagreed regarding costs of

replacement and depreciation deductions.

Braman testified about the market approach and the cost

approach. He made adjustments based upon the time of sale of

comparable properties, location, building size, site

improvement and the indoor tennis facility. He structured the

appraisal by computing a per-hole value of the selected

comparable country club properties and of the subject

property. He estimated the adjusted value of the comparables

at $236,500 to $261,750 per hole and Oakwood's at $245,000 per

hole. On that basis Braman concluded that the true value of

the subject property was $4,410,000. This evidence did not

constitute "the forbidden 'current use method'" discussed in

Dinner Bell Meats, Inc. v. Cuyahoga Cty. Bd. of Revision

(1984), 12 Ohio St.3d 270, 271, 12 OBR 347, 348, 446 N.E.2d

909, 910.

The BTA's use of the market method of determining value

was proper. The BTA was authorized to find, as it did, that

the market approach was appropriate and the cost approach was

not. See Cincinnati Milacron Industries, Inc. v. Brown Cty. Bd.

of Revision (1988), 35 Ohio St.3d 32, 517 N.E.2d 896. See,

also, R.R.Z. Assoc. v. Cuyahoga Cty. Bd. of Revision (1988),

38 Ohio St.3d 198, 527 N.E.2d 874.

We again endorse paragraphs three and four of the syllabus

in Cardinal Fed. S. & L. Assn. v. Cuyahoga Cty. Bd. of Revision

(1975), 44 Ohio St.2d 13, 73 O.O.2d 83, 336 N.E.2d 433:

"3. The Board of Tax Appeals is vested with wide

discretion in determining the weight to be given to evidence

and the creditability of witnesses which come before the board.

* * *

"4. The fair market value of property for tax purposes is

a question of fact, the determination of which is primarily

within the province of the taxing authorities, and this court

will not disturb a decision of the Board of Tax Appeals with

respect to such valuation unless it affirmitavely appears from

the record that such decision is unreasonable or unlawful."

The BTA's acceptance of Braman's appraisal, adjusted as it

was for costs of improvements since the tax lien date, and in

view of Braman's explanation of why the sale of excess lands

does not affect the true value of comparable properties, is not

unreasonable or unlawful.

Oakwood's argument on value in use is not persuasive. In

Dinner Bell Meats, Inc., supra, 12 Ohio St. 3d at 271-272, 12

OBR 348-349, 446 N.E.2d at 910-911, we said:

"Appellant contends that the appraisal of William Kaplan

was based on the forbidden 'current use method,' and, as such,

should not have been considered by the board * * *.

"* * *

"Initially we note that Section 2, Article XII of the Ohio

Constitution mandates that valuations of property cannot be

limited to considerations of current use only to the exclusion

of all other relevant factors. It does not prohibit altogether

any consideration of the present use of a property. A review

of the two appraisals before the Board of Tax Appeals reveals

that each appraiser viewed the property as being 'special

purpose' in nature. * * *

"It therefore appears, that in utilizing the 'cost

approach' for a 'special purpose' building, Kaplan simply

considered the utility of the properties in conjunction with

the highest and best use of the meatpacking facility. The

record supports the conclusion that Kaplan's report was a

proper 'cost approach' appraisal, not a 'current use' appraisal

as proscribed under the Park Investment Co. series of cases

[culminating in State ex rel. Park Invest. Co. v. Bd. of Tax

Appeals (1972), 32 Ohio St.2d 28, 61 O.O.2d. 238, 289 N.E.2d

579]. Accordingly, the appraisal was properly considered by

the board."

From the record before us, we find that Oakwood failed to

present evidence to establish that the decision of the BTA was

unreasonable or unlawful. We affirm the BTA's decision.

Decision affirmed.

Moyer, C.J., A.W. Sweeney, Douglas, Wright, Resnick and

Pfeifer, JJ., concur.

F.E. Sweeney, J., dissents.