About this Event
Square 74 Associates, LLC, leases retail space on the first floor of the World of Wonders garage at the Circle Centre Mall in Indianapolis. For the 2010 through 2018 assessment years, Square 74’s space was assessed between $4.7 million and $5.2 million.
Square 74 subsequently challenged those assessments. To demonstrate that the assessments were incorrect, Square 74 presented an appraisal report to the Indiana Board of Tax Review that valued the property between $3.3 and $3.6 million for each of the assessment years at issue. Square 74’s appraisal report valued the improvements only, alleging that because the owner/lessor of the underlying land was a tax-exempt entity, the land had zero value.
In response, the Assessor did not offer an appraisal of the subject property. Instead, he argued that Square 74 1) failed to raise the issue of valuation in its appeal and 2) failed to adhere to the standards for valuing property in Indiana.
In its final determination, the Indiana Board stated that while it found Square 74’s appraisal valuation of the improvements probative, the appraisal report was inconsistent with Indiana Code § 6-1.1-10-37’s requirement that the land in fact be valued. Nonetheless, the Indiana Board explained that to the extent the income capitalization approach contained in Square 74’s appraisal report contained a land valuation that resulted from an estimation of the ground lease’s value, the Indiana Board was able to “remedy” the appraisal report’s land value exclusion. In other words, the Indiana Board simply added that land valuation to the appraisal report’s valuation of the improvements, for a total value of $3.9 million for the 2010 assessment year.
The Indiana Board then explained that because the 2010 assessment represented an increase of more than 5% from its correct value, the Assessor bore the burden of demonstrating under Indiana Code § 6-1.1-15-17.2 that the 2011 through 2018 assessments were correct and if the Assessor failed, Square 74 was provided an opportunity to prove that its proffered valuations were correct. The Indiana Board ultimately held that neither party met its burden of proof and, as a result, Indiana Code § 6-1.1-15-17.2 mandated that the 2011 through 2018 assessments revert to the $3.9 million value as it previously determined.
The Assessor now appeals from that final determination. In his appeal, the Assessor asserts that the Indiana Board abused its discretion when it “revised” Square 74’s appraisal report to include the land value; instead, the Indiana Board should have rejected the appraisal report outright. In addition, the Assessor alleges that the Indiana Board erred when it shifted the burden of proof on the 2011 through 2018 assessments to the Assessor.
Oral argument will be held remotely via videoconference.