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Kohl’s Indiana, L.P. leases a store in the Fashion Mall Commons on the northside of Indianapolis. In 2011, the Fashion Mall Commons was sold to two entities for $15.3 million. In 2013, one of those entities bought the other out (in a portfolio transaction) for $15.3 million.
For the 2011 through 2014 tax years, the Kohl’s store was assessed between $6.1 and $7.9 million. Kohl’s appealed the assessments, first with Marion County Property Tax Assessment Board of Appeals and then with the Indiana Board of Tax Review.
Prior to the Indiana Board’s May 2019 hearing on the matter, the Marion County Assessor filed numerous motions:
With respect to the motion to compel, the Indiana Board first ordered counsel for Kohl’s to ascertain whether the appraisals even existed. When it was shown that the appraisals did not exist, the Indiana Board denied the motion to compel. The Indiana Board also denied three of the Assessor’s requests for subpoenas duces tecum because they were either incomplete or untimely. Finally, the Indiana Board denied the motion to dismiss, finding that because Kohl’s was both statutorily and contractually liable for the taxes on its store, it was proper for it to initiate the appeal in its name.
During the administrative hearing on the merits of the case, Kohl’s presented a USPAP appraisal that estimated the market value-in-use of the Kohl’s store to be approximately $4 million for each of the years at issue. The Assessor did not provide an appraisal, but rather sought to show that the much higher 2011 and 2013 sales prices for the entire strip center indicated a much higher value.
On May 7, 2020, the Indiana Board issued a final determination in the matter. The Indiana Board found that the Assessor failed to provide any probative evidence as to the value of the Kohl’s store because he had “pinned his hopes” on the chance that 1) there were appraisals for the property for both 2011 and 2013; 2) that those appraisals had analyzed market rents; and 3) that it could get copies of those appraisals through discover. But, as it turned out, those appraisals did not exist. Accordingly, the Indiana Board adopted the value established in Kohl’s’ appraisal, finding it to be the only probative evidence before it that demonstrated the value of the Kohl’s store.
The Assessor initiated an appeal with the Indiana Tax Court on June 22, 2020, arguing that the Indiana Board’s final determination constituted an abuse of discretion. The Assessor’s primary arguments on appeal are that the Indiana Board erred when it: