ATTORNEY FOR PETITIONER:
TIMOTHY J. VRANA
SHARPNACK, BIGLEY, DAVID & RUMPLE
ATTORNEYS FOR THE RESPONDENT:
ATTORNEY GENERAL OF INDIANA
LINDA I. VILLEGAS
DEPUTY ATTORNEY GENERAL
INDIANA TAX COURT
DEER CREEK DEVELOPERS, LTD., )
v. ) Cause No. 49T10-0209-TA-115
HARRISON TOWNSHIP ASSESSOR, )
ON APPEAL FROM A FINAL DETERMINATION
OF THE INDIANA BOARD OF TAX REVIEW
NOT FOR PUBLICATION
June 3, 2003
Deer Creek Developers, Ltd. (Deer Creek) appeals the final determination of the Indiana
Board of Tax Review (Indiana Board) valuing its real property for the 1994
assessment. The sole issue for the Court to decide is whether the
Indiana Board erred in assessing Deer Creeks storage facility under the General Commercial
Mercantile (GCM) Supermarket model. For the reasons stated below, the Court REVERSES
the Indiana Boards final determination.
FACTS AND PROCEDURAL HISTORY
Deer Creek owns a shopping center (the Center), located in Harrison County, Indiana.
In an appeal filed with this Court, Deer Creek argued that for
the 1994 assessment, its 10,440 square-foot storage area adjoining the supermarket of the
Center had erroneously been assessed as finished open under the GCM Supermarket model.
Subsequently, this Court held that based on the undisputed facts, the storage
area should have been assessed as unfinished. See Deer Creek Developers, Ltd.
v. Dept of Local Govt Fin., 769 N.E.2d 259, 268 (Ind. Tax Ct.
2002). The Court remanded the case to the Indiana Board and ordered
that Deer Creeks storage area be assessed as unfinished. See id.
On remand, the Harrison Township Assessor (Assessor) assessed the storage area as unfinished
and subtracted $2.64 from the storage areas per-square-foot base rate under the GCM
Supermarket model. Nevertheless, because the GCM Supermarket model does not provide for
the unfinished finish type, Deer Creek again appealed the assessment to the Indiana
Board, arguing that the Assessor should have changed the model to that of
the GCM Utility/Storage, which does provide for the unfinished finish type.
On August 14, 2002, the Indiana Board issued a final determination denying Deer
Creek relief. On September 26, 2002, Deer Creek initiated an original tax
appeal. On May 29, 2003, the Court heard oral arguments. Additional
facts will be supplied as needed.
ANALYSIS AND OPINION
Standard of Review
This Court gives great deference to final determinations of the Indiana Board when
it acts within the scope of its authority. Wittenberg Lutheran Vill. Endowment
Corp. v. Lake County Prop. Tax Assessment Bd. of Appeals, 782 N.E.2d 483,
486 (Ind. Tax Ct. 2003). Consequently, the Court will reverse a final
determination of the Indiana Board only if it is arbitrary, capricious, an abuse
of discretion, or otherwise not in accordance with law; contrary to constitutional right,
power, privilege, or immunity; in excess of statutory jurisdiction, authority, or limitations, or
short of statutory jurisdiction, authority, or limitations; without observance of procedure required by
law; or unsupported by substantial or reliable evidence. Id. at 48687 (citing
Ind. Code § 33-3-5-14.8(e)(1)(5) (Supp. 2001) (quotation marks omitted)). The burden of
showing that the Indiana Boards action was invalid is on the party asserting
the invalidity. Ind. Code § 33-3-5-14.8(b) (Supp. 2002).
The sole issue is whether the Indiana Board acted arbitrarily and capriciously when
it affirmed the Assessors reassessment of Deer Creeks storage area. Deer Creek
contends that because the GCM Supermarket model does not have an unfinished finish
type, and because the Court ordered the storage area to be assessed as
unfinished, the model used to assess the storage area must be changed to
the GCM Utility/Storage model, which includes an unfinished finish type. The Assessor,
on the other hand, argues that this Courts order only required the storage
area to be assessed as unfinished; it did not require a different model
be used to assess the storage area.
Improvements in Indiana are assessed using generally descriptive models. See Ind. Admin.
Code tit. 50, r. 2.1-4-7 (1992). The finish type is a component
of a models base cost and denotes the extent to which interior finish
is included in that cost. Ind. Admin. Code tit. 50, r.
2.1-4-3(a) (1992). The GCM Supermarket model, which was used to assess Deer
Creeks storage area, allows for finished open finish types, but does not allow
for unfinished finish types. Ind. Admin. Code tit. 50, r. 2.1-4-5 (Sched.
C) (1992). The finished open finish type for the GCM Supermarket model
is broken down into the following interior finish values: $14.70 per linear
foot for walls; $0.90 per square foot for floors; and $1.45 per square
foot for ceilings. Id. The GCM Utility/Storage model, on the other
hand, allows for the unfinished finish type only and assigns a zero dollar
value to the interior finish of improvements assessed with this model. Id.
On remand, the Assessor changed the finish type of the storage area to
unfinished but still used the GCM Supermarket model. The Assessor also subtracted
$2.64 from the storage areas per-square-foot base price but provided no explanation as
to why or how he arrived at the $2.64 reduction. With no
explanation to support his calculation, it is impossible for this Court to determine
whether there is a reasonable basis for itparticularly in light of the fact
that there is no unfinished finish type for the GCM Supermarket model.
As a result, the Indiana Board acted arbitrarily and capriciously when it affirmed
the Assessors action. Accordingly, the Court REVERSES the Indiana Boards final determination
on this matter.See footnote
For the aforementioned reasons, the Court REVERSES the Indiana Boards final determination.
The Court REMANDS this issue to the Indiana Board and ORDERS it to
instruct the Assessor to assess Deer Creeks storage area as unfinished using the
GCM Storage/Utility model.
After oral arguments, Counsel for the Harrison Township Assessor (Assessor) submitted a
supplemental pleading attempting to explain how the Assessor arrived at his calculation.
Because this explanation was not reflected in the administrative record before the Court
at the time of oral arguments, the Court will not consider it.
Hoogenboom-Nofziger v. State Bd. of Tax Commrs, 715 N.E.2d 1018, 1022 (Ind. Tax
Ct. 1999) (stating that the Court is bound by the evidence . .
. raised at the administrative level).
Additionally, the Court AFFIRMS its prior order that the cost for air
conditioning be subtracted from the base cost for Deer Creeks storage area.
See Deer Creek Developers, Ltd. v. Dept of Local Govt Fin., 769 N.E.2d
259, 268 (Ind. Tax Ct. 2002).