PETITIONERS, APPEARING PRO SE: ATTORNEYS FOR RESPONDENT:
FRED EARL LAWSON KAREN M. FREEMAN-WILSON
JOHNETTE L. LAWSON ATTORNEY GENERAL OF INDIANA
Indianapolis, IN Indianapolis, IN
TED J. HOLADAY
DEPUTY ATTORNEY GENERAL
INDIANA TAX COURT
FRED EARL & JOHNETTE L. LAWSON, )
v. ) Cause No. 49T10-9907-TA-169
STATE OF INDIANA, INDIANA STATE
BOARD OF TAX COMMISSIONERS, )
ON APPEAL FROM A FINAL DETERMINATION OF THE
STATE BOARD OF TAX COMMISSIONERS
NOT FOR PUBLICATION
December 7, 2000
Petitioners Fred Earl and Johnette L. Lawson (the Lawsons) appeal the final determination
of the State Board of Tax Commissioners (State Board). In this original
tax appeal, the Lawsons raise various issues challenging the assessment of their property
as of March 1, 1995. The Court restates these issues as:
I. Whether the State Board improperly valued the Lawsons land;
II. Whether the State Board erroneously refused to grant the Lawsons a
negative influence factor;
III. Whether the State Board incorrectly applied a C-1 grade to the
Lawsons residence; and
IV. Whether the State Board erroneously applied a neighborhood rating of Good, instead of
Average, to the Lawsons Planned Unit Development. FACTS AND PROCEDURAL HISTORY
The Lawsons own a residence and real property within Eagle Valley Farms Project
1 (Eagle Valley), which is located in Wayne Township, Marion County, Indiana.
Eagle Valley is a Planned Unit Development (PUD).
See footnote The Wayne Township Assessor
initially valued their land at $3500 and their improvements at $22,170, for a
total assessed value of $25,670. (Stipulation 24, Property Record Card.) The
Lawsons appealed this assessment to the Marion County Board of Review, which sustained
the local assessors valuations. (State Bd. Tr. at 7.) Thereafter, on
August 27, 1996, the Lawsons filed a Form 131 petition for review of
assessment with the State Board. The State Board conducted a hearing on
August 11, 1998. On May 27, 1999, the State Board issued its
final determination, affirming the lands value but decreasing the improvements value to $18,000.
(Final Determination at 1.) The total assessed value for the Lawsons
property was reduced to $21,500. (Stipulation 24.) The Lawsons filed an
original tax appeal with this Court on July 12, 1999. The
Court conducted a trial on July 31, 2000.See footnote Additional facts will be
supplied as needed.
ANALYSIS AND OPINION
Standard of Review
This Court gives the final determinations of the State Board great deference when
the State Board acts within the scope of its authority. Wetzel Enters.,
Inc. v. State Bd. of Tax Commrs, 694 N.E.2d 1259, 1261 (Ind. Tax
Ct. 1998). Accordingly, this Court reverses final determinations of the State Board
only when those decisions are unsupported by substantial evidence, are arbitrary or capricious,
constitute an abuse of discretion, or exceed statutory authority. Id. The
taxpayer bears the burden of demonstrating the invalidity of the State Boards final
determination. Clark v. State Bd. of Tax Commrs, 694 N.E.2d 1230, 1233
(Ind. Tax Ct. 1998). To do so, the taxpayer must submit probative
evidence sufficient to establish a prima facie case demonstrating its position. See
Western Select Properties v. State Bd. of Tax Commrs, 639 N.E.2d 1068, 1075
(Ind. Tax Ct. 1994); King Indus. Corp. v. State Bd. of Tax Commrs,
699 N.E.2d 338, 343 (Ind. Tax Ct. 1999). When a taxpayer offers
probative evidence, the State Board must deal with the evidence in some meaningful
manner. Clark, 694 N.E.2d at 1235. Once the taxpayer has submitted
probative evidence establishing a prima facie case, the burden of production shifts to
the State Board; the State Board must then rebut the taxpayers evidence and
support its final determination with substantial evidence.
Id. at 1239.
I. Land Value
The first issue raised by the Lawsons concerns the base rate for their
land. Their basic argument is that the Marion County Land Order (Land
Order) is invalid as applied to Eagle Valley. The Lawsons claim that
PUDs in general and Eagle Valley in particular are discriminated against in relation
to condominiums and other commercial properties in Marion County. These properties, the Lawsons
contend, have land values much lower than those in Eagle Valley.
The State Board affirmed the County Board of Reviews base rate values of
$6.30 per square foot for primary land and $1.26 per square foot for
excess (undeveloped) land. (Final Determination at 11, ¶ 28, 29.) The
State Boards final determination responded to the Lawsons challenge by claiming that the
Wayne Township Assessor applied the values found in the Land Order for Very
(Final Determination at 11, ¶ 28.) The State Board
explained that the township assessor was obligated to use these values pursuant to
Ind. Admin. Code tit. 50, r. 2.2-4-3 (1996).
(Final Determination at 11, ¶
28.) In addition, the State Board concluded that the Lawsons comparison of
their PUDs primary land to that of commercial properties was not valid, because
the definitions of primary land for PUDs and for commercial properties are different.
(Final Determination at 11, ¶ 29.) Specifically, the State Board stated
that [w]hile primary land for a PUD is defined as only titled/deeded land
under the unit, commercial primary land can also include regularly used parking areas,
roadways, regularly used yard storage, and necessary support land. (Final Determination at
11, ¶ 29.)
Land orders are administrative rules. Precedent v. State Bd. of Tax Commrs,
659 N.E.2d 701, 704 (Ind. Tax Ct. 1995). The party claiming that
the land order is invalid bears the burden of showing that the order
is not in accordance with the law. Poracky v. State Bd. of
Tax Commrs, 635 N.E.2d 235, 237 (Ind. Tax Ct. 1994). The Lawsons
complain that the Land Order, as applied to land within Eagle Valley, violates
Ind. Code Ann. § 6-1.1-2-2 (West 2000), which provides that [a]ll tangible property
which is subject to assessment shall be assessed on a just valuation basis
and in a uniform and equal manner. (Stipulation 15 at 1.)
Also, the Lawsons maintain that the Land Order violates Ind. Code Ann. §
6-1.1-31-6(a)(1) (West 2000), which calls on the State Board to provide for the
classification of land on the basis of nine factors, including a propertys location
and use. (Stipulation 15 at 1.)
In order to make a prima facie case that the Land Order was
invalid as applied to Eagle Valley, the Lawsons in the present case were
required to submit probative evidence showing that comparable properties were assessed differently under
the order. They have not done so. The Lawsons offer evidence
that some condominiums and commercial properties within Marion County have lower base rates
for primary land. First, the Lawsons point out that, at a rate
of $6.30 per square foot for primary land, property in Eagle Valley is
valued at approximately $274,000 per acre.
In contrast, at trial Fred Lawson
indicated that values for three different areas in Marion County with condominiums ranged
from $25,000 per acre to $27,500 per acre.
(Trial Tr. at
10-11.) Further, the Lawsons pointed to two commercial properties with lower per
square foot values for their primary land than the $6.30 assigned to Eagle
Valley: Stitzer Buick in Pike Township ($3.00 per square foot) and Honda
West in Wayne Township ($5.00 per square foot).
(Stipulations 1, 2 and
15); (Trial Tr. at 17.)
The Lawsons have not demonstrated that the referenced properties, i.e., condominiums and commercial
properties, are comparable to the residential properties located within Eagle Valley. While
no statute or regulation defines a PUD precisely, the Land Order does recognize
that PUD owners have fee simple title to the property underneath their units
in addition to any excess property authorized by their title.
(Land Order at 2.) See also supra n.1. With condominiums, the undivided
interests in the common areas and facilities are vested in the condominium unit
owners. Ind. Code Ann. § 32-1-6-2(a) (West 1979). Common areas for
condominiums include, among several other items, the land on which the building is
Id., § 32-1-6-2(h)(1). Primary commercial land, in contrast, refers to
the primary building or plant site, with examples being land located under buildings,
regularly used parking areas and roadways. Ind. Admin. Code tit. 50, r.
2.2-4-1(18) (1996). See also Ind. Admin. Code tit. 50, r. 2.2-4-17(b) (1996)
(The amount of acreage necessary to support the existing facility and its purposes
is classified as primary.). The basic characteristics of these three types of
properties are different. At first blush, it seems odd that primary land
for a PUD is valued at approximately $274,000 per acre in this case.
The Court notes, though, that the primary land in questionthe 1644 square
feet of property upon which the Lawsons home sitsis far from an acre
in size. (Stipulation 24.) Moreover, the excess land rate applies only
to 142 square feet. (Stipulation 24.) Higher rates for PUDS may
simply have been applied to account for the small percentage of land that
is actually considered primary and excess property in PUDs.
The State Board,
through its review and approval of the Land Order, was permitted to value
these types of properties differently, as long as there existed a reasonable basis
for doing so. See Herb v. State Bd. of Tax Commrs, 656 N.E.2d
890, 894 (Ind. Tax Ct. 1995) (noting that a classification for taxation purposes
is not invalid when it rests on a reasonable basis of actual difference
between those included and those excluded); see also Ind. Code Ann. § 6-1.1-4-13.6
(West 1989) (amended 1993, 1997) (permitting State Board to modify a county land
commissions values for commercial, industrial and residential properties). The Lawsons have not
provided evidence showing that the Land Order unreasonably classifies and establishes base rates
for PUDs. Without further evidence that the properties in question were sufficiently
similar to justify a comparison, the Lawsons could not use them to prove
that the Land Order discriminated against PUDs generally or Eagle Valley specifically.
The State Boards valuation of base rates for land within Eagle Valley
II. Negative Influence Factor
The Lawsons contend that the State Board erroneously refused to apply a negative
influence factor to their property.
According to the Lawsons, the proximity of
their home to high power electric transmission lines and to State Highway 136,
in addition to the presence of easements on their property, warrants application of
a twenty to twenty-five percent negative influence factor. (Original Tax Appeal Pet.
at 3); (Trial Tr. at 34-35.) Specifically, the Lawsons maintain that many
statistics reflect the publics concern regarding the effects of power lines transmissions on
human beings, especially children, and that a future buyer might consider this factor
to negatively influence the purchase of their property. (Original Tax Appeal Pet.
at 3.) The Lawsons indicate that lower level power lines are located
within ten feet of their property line, with higher power lines next to
the lower power ones. (Original Tax Appeal Pet. at 3); (Trial Tr.
at 33.) In addition, the Lawsons explain that that the power company
owns an easement directly off [their] patio. (Original Tax Appeal Pet. at
3.) Further, Mr. Lawson states that there are both easements on the
back of [their] property and along the side of [their] house. The
easements are for utility easements and also for right-of-way. (Trial Tr. at
34.) Consequently, Mr. Lawson maintains that these easements create an obstacle for
anybody trying to do any kind of remodeling to the home. (Trial
Tr. at 34.) The Lawsons also point out that Highway 136 is sixty-seven
feet from their property. (Original Tax Appeal Pet. at 3); (Trial Tr.
at 33-34.) They assert that traffic on Highway 136 has continued to
increase, creating traffic problems, and sirens from fire trucks and ambulances of a
nearby fire station generate unpleasant noise at all times of day or nightboth
factors that would definitely negatively affect the location of their property. (Original
Tax Appeal Pet at 3); (Trial Tr. at 35.)
In its final determination, the State Board declined to apply a negative influence
factor to the subject property. (Final Determination at 12, ¶ 31.)
To support its decision, the State Board explained as follows:
While Highway 136 runs behind this property and creates some traffic noise, many
would consider the direct access to this road as desirable. The power
lines and poles discussed by [the Lawsons] are not on or directly above
the subject property. They are located in a commons area approximately 20-30
feet behind the subject property. While some may view this as somewhat
undesirable, [the Lawsons] failed to show, through evidence, that this has a negative
impact on [their] property value. [The Lawsons] purchased this property in 1991,
but failed to show the location of Highway 136 or the power lines
negatively impacted the property value at the time [they] purchased the property.
Id. Also, the State Board estimated that Highway 136 is within 100
to 150 feet of the subject property. (Final Determination at 4, ¶
12.) At trial, the State Board summed up its position by stating
that the Lawsons contentions are merely speculation and that they had failed to
present evidence of any substantial reason that is a recognized reason for putting
a negative influence factor on this land. (Trial Tr. at 53, 54
& 56.) III. Grade
An influence factor refers to a condition peculiar to the lot that dictates
an adjustment to the extended value to account for variations from the norm.
Ind. Admin. Code tit. 50, r. 2.2-4-10(a)(9) (1996). See also id.,
r. 2.2-4-12 (An influence factor represents the composite effect that influences the value
of certain lots within the boundaries of an entire geographic area.); id., r.
2.2-4-16 (discussing influence factors for residential acreage). The regulations list six specific
conditions and one general condition that may be the basis for an adjustment.
Ind. Admin. Code tit. 50, r. 2.2-4-10(a)(9) (1996). The adjustment is
expressed in terms of a percentage increase or decrease in the subject lands
assessed value. Ind. Admin. Code tit. 50, r. 2.2-4-10(a)(9) (1996). The
decision whether to apply an influence factor calls for subjective judgment. Wirth
v. State Bd. of Tax Commrs, 613 N.E.2d 874, 878 (Ind. Tax Ct.
1993). In applying an influence factor, an assessing official must first identify
the deviations from the norm and then quantify the variations as a percentage.
White Swan Realty v. State Bd. of Tax Commrs, 712 N.E.2d 555,
562 (Ind. Tax Ct. 1999), review denied.
In the present case, the issue before the Court is whether the State
Board abused its discretion by refusing to grant the Lawsons property a negative
See footnote The Lawsons were obligated to establish, through probative evidence, a
prima facie case that the proximities of power lines and/or Highway 136 near
their home or the presence of easements on their property justified application of
a negative influence factor to the subject property.
See Talesnick v. State
Bd. of Tax Commissioners, 693 N.E.2d 657, 659 (Ind. Tax Ct. 1998).
Two cases are instructive as to whether the Lawsons met this burden of
In Talesnick v. State Board of Tax Commissioners, the taxpayers owned land and
improvements on the banks of Eagle Creek Reservoir in the Eagle Ridge subdivision
in Indianapolis. The taxpayers argued that their property was entitled to a
negative influence factor because of a lack of infrastructure and because of the
presence of a water flowage easement. The Court noted that influence factors
are appropriate for making adjustments to the value of land encumbered by an
easement. Id. at 660 (citing Poracky, 635 N.E.2d at 238). The
taxpayers in Talesnick had submitted evidence showing that the water flowage easement encumbered
and encroached upon their property to a greater extent than it did other
land surrounding the reservoir. The evidence consisted of a taxpayers testimony, which
he supported with maps of the subdivision showing the line of the water
flowage easement, the topography of the subdivision, and photographs of his home and
others around the reservoir. Id. at 661. Moreover, the taxpayers had
demonstrated that their subdivision lacked the same infrastructure, i.e., city sewers, city water
and city-maintained streets with access to the property, as other nearby subdivisions, even
though the taxpayers property was valued identically to similarly situated properties in these
other subdivisions. The Court concluded that the taxpayers had made a prima
facie case that their property was valued incorrectly and that the State Board
had failed to rebut the taxpayers case. Id. at 660 & 661.
In Wirth v. State Board of Tax Commissioners, the taxpayer owned a commercially
zoned platted lot located near a large water tower. The taxpayer used
the building on the property as the office for his construction business and
for his wifes retail diet business. To prosecute his appeal before the
State Board, Wirth engaged a contingently paid expert witness who was a property
tax consultant. Before this Court, the taxpayer claimed that the State Board
abused its discretion by denying the taxpayer an influence factor to account for
the propertys proximity to the water tower. However, the taxpayers only evidence
was the experts opinion that the water tower detracted from the propertys value.
The Court denied the taxpayers claim, reasoning that the witness presented no
other evidence that shows the water tower was a detriment, and [that] the
experts opinion is simply insufficient to overcome the wide latitude given the State
Board and the presumption the State Board acted properly. Wirth, 613 N.E.2d
The Lawsons have not established a prima facie case that their propertys proximity
to either power lines or Highway 136 warrants application of a negative influence
factor. They have submitted no probative evidence to support this position.
In their petition to this Court, the Lawsons claim that many statistics reveal
the publics concern regarding power lines transmissions and their effects on human beings,
especially children. (Original Tax Appeal Pet. at 3.) However, the Lawsons
have cited no specific studies or other authority supporting this claim. Their
claim is speculative. A conclusory statement is not probative evidence.
Wirth, 613 N.E.2d at 878; CDI, Inc. v. State Bd. of Tax Commrs,
725 N.E.2d 1015, 1019 (Ind. Tax Ct. 2000).
In addition, the Lawsons submitted copies of photographs of the subject property.
See footnote (Stipulation
7.) According to Mr. Lawson, one picture shows that both large and
small power lines are directly behind his residence; he further testified that there
is one foot of space between the back of his home and the
power lines. (Trial Tr. at 33.) In their petition, the Lawsons
stated that the power companys low level lines [are] within 10 feet of
[their] property line and the high powered ones next to them. (Original
Tax Appeal Pet. at 3.) Unfortunately, the photocopied picture submitted is
dark and unclear. One cannot reasonably ascertain the distances of the power
lines to the Lawsons home using this copy. Mr. Lawson admits this,
observing at trial that the copy does not give [the Court] much of
a chance to view [the property] . . . . [The copy]
does not give [a] good enough picture to show that its directly behind.
(Trial Tr. at 33-34.) Even assuming arguendo that the picture shows
that the power lines are approximately one foot from the Lawsons home, the
Court concludes that the Lawsons have shown neither that the power lines constitute
a condition peculiar to their lot nor that the presence of the power
lines is in anyway a variation from the norm.
Ind. Admin. Code
tit. 50, r. 2.2-4-10(a)(9) (1996). Unlike Talesnick, 693 N.E.2d at 660-61, where
a taxpayers testimony combined with photographs and other documentary evidence established a prima
facie case that the property was incorrectly valued, the Lawsons here have submitted
no evidence showing the effects of power lines on the value of their
In like manner, the Lawsons have not shown how the easements on their
property negatively impact the value of their property. In
Talesnick, 693 N.E.2d
at 661, the Court found that the taxpayers had presented evidence showing that
the easement encroached upon their land to a greater extent than it did
upon the other land surrounding the reservoir. In the present case, the
Lawsons do not show the extent of the easements on their property or
how these easements compare with those affecting other properties in Eagle Valley.
The easements may very well be an obstacle to remodeling or otherwise improving
the Lawsons home and property. (Trial Tr. at 34.) However, the
Lawsons cannot merely posit this without explanation or supporting evidence. Conclusory statements
of this nature are not probative evidence. See CDI, 725 N.E.2d at
The Lawsons also offered no evidence demonstrating how the proximity of Highway
136 negatively impacts the value of their property. They argue that there
is increased traffic accompanied by noise pollution, including the noise from a nearby
fire station. (Original Tax Appeal Pet. at 3.) The increased traffic,
the Lawsons opine, also means that homeowners must be very cautious that children
do not end up on the highway. (Trial Tr. at 35.)
Again, the Lawsons have provided the Court with no evidence of probative value.
Without further explanation, the Court will not assume that the presence of
a highway, regardless of increased traffic flow and its accompanying noise, qualifies as
a condition peculiar to the lot that affects the propertys value in a
manner requiring a negative adjustment to account for variations from the norm.
Similar to Wirth, 613 N.E.2d at 878, where the experts opinion standing alone
was insufficient to support application of a negative influence factor, in the present
case the testimony of Mr. Lawson (a non-expert) is insufficient to overcome the
wide latitude given the State Board and the presumption the State Board acted
The Court holds that the State Board did not abuse its discretion in
declining to apply a negative influence factor to the Lawsons land. Therefore,
the State Boards final determination on this issue is AFFIRMED.
The Lawsons request that the grade of their home be lowered to a
D at best. (Original Tax Appeal Pet. at 3.) According to
the Lawsons, Many of the [homes] interior features were built with low cost
materials. (Original Tax Appeal Pet. at 3.) At trial, Mr. Lawson
submitted a copy of the State Boards grade specification table, see Ind. Admin.
Code tit. 50, r. 2.2-7-6 (1996). (Stipulation 16.) He compared his
home with the specifications in the table. (Trial Tr. at 35-41.)
Mr. Lawson drew the following similarities between his residence and the D grade
description: (1) no drain tile; (2) 2 x 8 wood joists; (3)
metal gutters; (4) 3/8 to 1/2 drywall finish; (5) low cost cabinets; (6)
low cost plumbing fixtures; and (7) tract type structural design that is simple
and conventional and that has normal roof overhangs.
See footnote (Trial Tr. at 36-40.)
In its final determination, the State Board lowered the assigned grade of the
Lawsons home from a C+2 to a C-1. (Final Determination at 13-14,
¶ 35.) The State Board reasoned as follows:
After inspection of the dwelling and in consideration of 50 IAC 2.2-7-6(d) and
(g), it is determined [that] many of the property features are consistent with
that of a C grade, or of average quality. There are a
few features, such as the cathedral ceilings, and oak staircase . . .
[that] are above what would normally be found in a C grade dwelling.
However, there are more features that stand out as being below the
features of a C grade. Examples of these features are the 2
x 4 rafters; small, inexpensive windows; floor joists that are 24 on center;
slightly below average woodwork; and apparent lack of drain tile . . .
. In addition, the quality of workmanship appears to be below average.
For the above reasons the grade is best described as C-1.
(Final Determination at 13-14, ¶ 35.) At trial the State Board essentially
argued that grade assignment involves the weighing of numerous factors, many of which
are subjective in nature, and that in the present case the State Board
did consider all of the relevant features of the Lawsons home in arriving
at a grade of C-1. (Trial Tr. at 57-58.) The State
Board asserted that the Lawsons had failed to prove specific facts demonstrating that
a C-1 grade is clearly wrong. (Trial Tr. at 58.)IV. Neighborhood Rating
Grade means the classification of an improvement based on certain construction specifications and
quality of materials and workmanship.
Ind. Admin. Code tit. 50, r. 2.2-1-30
(1996). C grade dwellings are described in part as being moderately attractive
and constructed with average quality materials and workmanship. They have minimal to
moderate architectural treatment. The design has universal appeal and optimal utility.
Id., r. 2.2-7-6(d)(3). D grade dwellings are described in part as being
constructed with economy materials and fair workmanship. They are void of any
architectural detail. Id., r. 2.2-7-6(d)(4).
Each grade has a corresponding multiplier that applies to the base value of
a residence. Id., r. 2.2-7-8.1(g).
A C grade dwelling has
a corresponding multiplier of one hundred percent. Id., r. 2.2-7-6(e)(3). A
D grade dwelling has a corresponding multiplier of eighty percent. Id., r.
2.2-7-6(e)(4). An intermediate grade of C-1 indicates that the grade is slightly
below the C grade classification. Id., r. 2.2-7-6(g)(2). A C-1 grade
has a multiplier of ninety-five percent. Id., r. 2.2-7-11 (Schedule F).
The selection of which grade should be applied to an improvement calls for
a subjective judgment and is committed to the discretion of the assessor.
Garcia v. State Bd. of Tax Commrs, 694 N.E.2d 794, 796 (Ind. Tax
Ct. 1998). Accord King Indus., 699 N.E.2d at 341 n.7. See
also Ind. Admin. Code tit. 50, r. 2.2-7-6(c) (1996) (The selection of the
proper grade relies on the judgment of the assessor.) This Court affords
subjective determinations made by the State Board a great deal of deference, and
this Court will not substitute its judgment for that of the State Board.
Clark, 694 N.E.2d at 1236. To assign the correct grade, the
regulations provide that the assessor must weigh the components of each represented major
grade classification and determine an overall composite grade. This is accomplished by
first determining the major grade classification that best represents the structure [and second]
. . . weigh[ing] the various components against the determined classification. Ind.
Admin. Code tit. 50, r. 2.2-7-6(f) (1996). According to the regulations, the
quality of materials and design are the most significant factors to consider in
establishing a dwellings grade. Id., r. 2.2-7-6(c). The grade specification table
offers some guidance for assessors in selecting the basic grade classification. Garcia,
694 N.E.2d at 797. But cf. Kemp v. State Bd. of Tax
Commrs, 726 N.E.2d 395, 401 (Ind. Tax Ct. 2000) (concluding that marking a
copy of the grade specification table, without further explanation, is conclusory and thus
not probative as to grade). It provides the assessor with an indicator
for establishing the differences between the subject dwelling and the model.
Admin. Code tit. 50, r. 2.2-7-6(b) (1996). Assessors must carefully review the
grade specification table for the changes in material used to construct the different
grade dwellings. Id., r. 2.2-7-6(b).
To prove that the State Board abused its discretion in assigning a C-1
grade, the Lawsons, who argue that a D grade should be applied, were
obligated to submit probative evidence sufficient to establish a prima facie case that
a D grade was the proper grade. See Whitley Prods., Inc.
v. State Bd. of Tax Commrs, 704 N.E.2d 1113, 1119 (Ind. Tax Ct.
1998); Clark, 694 N.E.2d at 1236 (finding that taxpayer had presented prima facie
case that State Board erred as to grade). The Lawsons have shown
that a D grade would be appropriate. They list several items from
the D grade column of the grade selection table that match the design
and construction of their home.
However, this does not mean that the State Board has abused its discretion.
The State Boards final determination noted that the hearing officer who inspected
the Lawsons home observed fourteen different characteristics of the home that were relevant
to the buildings grade determination.See footnote (Final Determination at 5, ¶ 15.)
Some of these characteristics are found in the C grade description, including average
quality doors, plumbing fixtures, and kitchen cabinets, and the 1/2 plywood on 2
x 8 joists for the floor and normal roof overhangs.See footnote
Admin. Code tit. 50, r. 2.2-7-6(d)(3) (1996). Two of these characteristics,
the 2 x 8 wood joists and the normal roof overhangs (cited by
Mr. Lawson as well), are also found in the D grade description, per
Ind. Admin. Code tit. 50, r. 2.2-7-6(b) (1996).
The Court finds that the State Board has rebutted the Lawsons prima facie
case with substantial evidence. The Lawsons home had some C grade features.
Thus, the homes major grade classification appropriately could be deemed as best
represented by C,
see Ind. Admin. Code tit. 50, r. 2.2-7-6(f) (1996).
Having determined that many of the homes features are consistent with that of
a C grade, the State Board then weighed the buildings features against the
C grade classification. (Final Determination at 13-14, ¶ 35.) Compare with
(Stipulation 15 at 5) (listing as either C or D grade quality the
homes roof, interior finish and electric and listing its heating as C
grade.) Upon doing so, the State Board determined that the home had
both features typical of higher and lower quality homes. (Final Determination at
13-14, ¶ 35.) It found that the buildings overall quality was slightly
below a C grade. (Final Determination at 13-14, ¶ 35.) Having
examined the evidence, the Court cannot state that the State Board abused its
discretion in assigning a grade of C-1. Therefore, the State Boards final
determination on this issue is AFFIRMED.
The Lawsons argue that Eagle Valley should have been rated as Good, not
Average. In their petition, the Lawsons maintain that
[t]he lack of street lighting, lack of sidewalks, [and] poor maintenance of the
roads has a very negative impact [on] our community in light of recent
developments around [Eagle Valley]. The fact that Highway 136 is close to
schools, shopping and major roads may be desirable to some[;] however the heavy
flow of traffic and newer competitive construction have had a negative impact on
the community and a change from good to average would be more consistent
with this neighborhood.
(Original Tax Appeal Pet. at 3.) At trial Mr. Lawson repeated these
contentions, adding that the wooded areas and trees in the neighborhood have become
a problem for septic systems. (Trial Tr. at 42-43.) Many of
the septic systems, he indicated, need to be removed. (Trial Tr. at
43.) According to Mr. Lawson, the only sidewalks in the neighborhood are
on one-half of the main thoroughfare; none are located on side streets.
(Trial Tr. at 44-45.) He admitted that the both a country club
and racing facility were located somewhat near Eagle Valley. (Trial Tr. at
45-46.) Moreover, he reported that the landscape in Eagle Valley is maintained.
(Stipulation 23, Tape of Administrative Hearing.) Accord (Stipulation 15 at 2.)
The State Boards final determination upheld the application of a Good rating to
Eagle Valley. (Final Determination at 15, ¶ 40.) The State Board
concluded that [w]hile the lack of many street lights and sidewalks detract slightly
from this neighborhood, it has many characteristics of a desirable neighborhood. It
is close to shopping and major roads, and an acceptable distance to schools.
It is in close proximity to a country club and a major
motor speedway. (Final Determination at 15, ¶ 40.) Moreover, the State
Board stated that new construction in the area was evidence that the neighborhood
was above average.
See footnote (Final Determination at 15, ¶ 40.)
A dwellings neighborhood desirability rating is important for purposes of calculating its physical
Ind. Admin. Code tit. 50, r. 2.2-7-9(c) (1996). The neighborhood
desirability rating is a judgment of overall desirability, which includes the consideration of
all neighborhood characteristics that are benefits or liabilities to the dwelling. Id.,
r. 2.2-7-7.1(g)(20). The rating is a composite judgment of the overall desirability
based on the condition of agreeable living and the extent of residential benefits
arising from the location of the dwelling. Id., r. 2.2-7-7.1(f)(7). The
regulations list seven categories, including G[ood] and Av[erage]. Id., r. 2.2-7-7.1(f)(7)(C) &
(D); see also infra n.28. These categories have limited definitions in the
regulations. Good indicate[s an] attractive and desirable area; Average indicate[s] an average
area. Id. However, the Marion County Land Order further fleshes out
the meaning of these two terms with respect to Apartment Land and PUDs
in the following manner:
GOOD: Attractive and desirable with good landscaping, level to rolling partially wooded
terrain and could possibly include a man-made lake. Has many of the
same features as the very good classification. Features include: 2 parking
spaces per unit, some carport areas, asphalt or concrete roads, sidewalks to units,
lighted streets, clubhouse and office. Recreational areas may include a swimming pool
and tennis courts.
AVERAGE: A typical area with level terrain, adequate drainage, and landscaping.
May have a man-made lake, near commercial and residential areas with acceptable distances
to roads, schools and shopping areas and is neither particularly attractive nor unattractive
having characteristics of both good and fair areas. Features include: one
and one-half parking spaces per unit, may have carports available, sidewalks, hard surface
roads, small clubhouse and office.
(Land Order at 1-2.)
Before considering whether the Lawsons home was assigned a proper neighborhood rating pursuant
to the above descriptions, the Court first observes that the State Board applied
the incorrect description in the first place. This fact is reflected in
both the State Boards final determination and by its arguments at trial.
The final determination states that the neighborhood classification was left unchanged as Good
[a]fter inspection of the property and in consideration of 50 IAC 2.2-4-13.
(Final Determination at 15, ¶ 40.) The final determination quotes the relevant
language from Ind. Admin. Code tit. 50, r. 2.2-4-13(c) (1996), which lists seven
See footnote including those for Good and Average. (Final Determination at 15, ¶
39.) However, under the regulation, these categories are to be applied to
agricultural homesites and rural residential parcels.
Id. The regulation specifically requires
local land valuation commissions to establish value ranges for each of the seven
categories. Id. Under this regulation, Good indicates that the location is
pleasant, is an improving area with good access to shopping, schools, and major
roads, and may be in close proximity to recreational facilities. Id., r.
2.2-4-13(c)(3). Average, in comparison, indicates that the location is typical, is generally
in a static area with little or no evidence of new development, has
acceptable distances to shopping, school and major roads, and is neither particularly attractive
nor unattractive. Id., r. 2.2-4-13(c)(4). The Land Order adopts this language
verbatim, stating that the category definitions apply to Rural Residential and Agricultural Homesites
[Rural Sites]. At trial, the State Boards counsel admitted that the final
determination quoted the wrong description. (Trial Tr. at 60 & 61.)
Although the wrong description was used as the standard, the State Board insists
that its analysis is consistent with the Good standard applicable to a PUD.
(Trial Tr. at 61.) In other words, the State Board argues
that paragraph forty of its final determination makes it clear that [the State
Board is] analyzing [the Lawsons property] under the correct criteria for . .
. good PUD neighborhood land. (Trial Tr. at 61.) If this
is the case, the State Boards rating is proper.
Unfortunately, a comparison of the State Boards findings and conclusions with the proper
standard indicates that the State Board may have improperly considered and applied some
factors while neglecting to consider and apply others. First, the State Board
pointed out that there was new construction in the area, i.e., it was
not a static neighborhood.
See footnote The proper standard for a PUD does not
include such a consideration, while the presence of new development plays a prominent
role in the description for Rural Sites. Second, the State Board noted
that the neighborhood lacks many street lights and sidewalks. (Final Determination at
15, ¶ 40.) An Average PUD typically features sidewalks. An Average
PUD may have characteristics of both Good and Fair areas, and Fair areas
feature sidewalks and scant lighting throughout the area. (Land Order at 2.)
In sharp contrast, a Good PUD features sidewalks to units and lighted
streets. (Land Order at 1.) The Good and Average descriptions for
Rural Sites mention neither sidewalks nor street lighting. (Land Order at 1.)
Third, The only overlapping category that plays into the State Boards final
determination is the neighborhoods access to shopping, schools and major roads. In
the Rural Sites category, Good involves good access to these places, including the
possibility that it may be in close proximity to recreational facilities. (Land
Order at 1.) Similarly, Good PUDs have many features of the Very
Good Classification, which includes easy access to major roads, schools and shopping areas.
(Land Order at 1.) Average Rural Sites properties merely have acceptable
distances to shopping, schools and major roads. (Land Order at 1.)
In like manner, Average PUDs have acceptable distances to roads, schools, and shopping
areas. (Land Order at 2.) The State Boards final determination states
that the Lawsons neighborhood is in close proximity to shopping and major roads
and is an acceptable distance to schools. Thus, the area apparently shares
features of both Good and Average PUDs, with respect to access to shopping,
major roads and schools. The Court notes, though, that the State Board
also considered the areas proximity to a country club and a racing facility;
these are important with respect to the Good category for Rural Sites, but
recreational facilities are not part of the PUD category descriptions. The State
Board thus appears to have improperly weighed this factor.
The Court disagrees with the State Boards contention that it analyzed the Lawsons
neighborhood using the factors associated with the Good and Average PUD categories.
It is obvious that that the State Board applied the incorrect descriptions.
However, it is not so obvious as to whether, in considering and applying
the incorrect descriptions, the State Board also applied the incorrect neighborhood rating.
The Lawsons, while providing some probative evidence concerning certain pertinent features in the
neighborhood, have not established a prima facie case as to the appropriate neighborhood
rating. In this case, where the State Board mistakenly applied the incorrect
standard, the Court finds that the State Board should consider this issue under
the correct standard for the first time on remand. Under these circumstances,
the Court finds that the State Board abused its discretion when it applied
the Good neighborhood rating pursuant to the incorrect rating descriptions. Therefore, the
Court REVERSES the State Boards final determination on this issue and REMANDS this
issue to the State Board for further consideration in a manner consistent with
For the aforementioned reasons, the Court AFFIRMS the State Boards final determination with
respect to Issues I, II and III. The Court REVERSES the State
Boards final determination with respect to Issue IV and ORDERS this case REMANDED
to the State Board for a determination of the correct neighborhood desirability rating
using the correct category descriptions for PUDs.
PUD is not defined by statute or regulation.
Blacks Law Dictionary
1171 (7th ed. 1999) defines it as a land area zoned for a
single-community subdivision with flexible restrictions on residential, commercial, and public uses. Additionally,
the Marion County Land Order includes the following description with respect to PUDs:
Fee Simple Title titled by either lot number, unit number, deed
descriptions etc. Includes the area under the individual unit plus any excess
included or excluded by the title. (Land Order at 2.)
The Court did not order the parties to submit briefs in this
matter. (Trial Tr. at 51.)
Footnote: The Lawsons offer a second argument; they contend that the ratio of
their homes true tax value to its sales or market value is much
higher in comparison with other properties in Marion County. In their Form
131 Petition for Review, the Lawsons assert that a ratio study shows other
residential property in [Marion] County at 45-60% of [market] value. (State Bd.
Tr. at 4.) At trial, Mr. Lawson stated that he purchased his
home for $80,000. (Trial Tr. at 64.) The home was purchased
in 1991. (Stipulation 6.) Prior to the State Boards adjustments in
this case, his propertys true tax value was determined to be $77,000.
(Trial Tr. at 64); (Stipulation 24.) Mr. Lawson indicated that his property
was assessed at ninety-eight percent of its market value. (Trial Tr. at
64.) The ratio actually approximates ninety-six percent. At the administrative hearing,
Mr. Lawson testified that ratio studies have shown that the ratio of true
tax value to fair market value is much higher with PUD owners than
any other type of property. (Final Determination at 4, ¶ 8.)
He submitted as proof studies showing the disparities in sales to market value
ratios between his property and other properties in Marion County. (Stipulation 9);
(Final Determination at 6, ¶ 19.) The Lawsons challenge is really a
constitutional challenge to the Land Order; they basically assert that the Land Order,
as applied to their property, violates Article X, § 1 of the Indiana
Constitution. The Court permits such as applied challenges.
Dana Corp. v.
State Bd. of Tax Commrs, 694 N.E.2d 1244, 1247 (Ind. Tax Ct. 1998).
To be successful, a taxpayer must present specific evidence that an assessment
is unconstitutional as applied to him. Id. The Court recently discussed
whether use of a sales ratio study as evidence met this standard.
In Kemp v. State Board of Tax Commissioners, 726 N.E.2d 395, 403 (Ind.
Tax Ct. 2000), the Court observed that the taxpayers were obligated to show
how use of this market data helps demonstrate that the State Boards regulations,
as applied, violated their right to an equal and uniform assessment under the
Indiana Constitution. Accord Bernacchi v. State Bd. of Tax Commrs, 727 N.E.2d 1133,
1138 (Ind. Tax Ct. 2000) (noting that counsel must provide evidentiary basis for
his argument). As with the taxpayers in Kemp, the Lawsons in the
present case do not sufficiently explain how the [sales ratio study] demonstrates uniformity
of assessments calculated using the true tax value system. 726 N.E.2d at
The Land Order provides ten different categories of PUDs, ranging from the
top category of Excellent/Very Good to Poor. However, no values are assigned
to these extreme categories. The categories with assigned values provide low and
high values for Title/Deeded Land Under the Unit, as well as low and
high values for Excess Land. Eagle Valley has been deemed Very Good/Good.
This category has a low value of $5.50 and a high value
of $6.30 for titled/deeded land under the unit and a low value of
$1.10 and high value of $1.26 for excess land. Thus, Eagle Valley
has been assessed at the high values for both categories.
Footnote: This provision has been repealed. The regulation in part provided that
[i]n making land assessments, the township assessor shall use the values as finally
determined by the state board.
Ind. Admin. Code tit. 50, r. 2.2-4-3(d)
This is based on Mr. Lawsons calculation of the base rate times
a total of 43,500 square feet per acre. (Stipulation 15 at 1);
(Trial Tr. at 11.) An acre actually equals 43,560 square feet.
The New Encylcopaedia Britannica 68 (15th ed. 1992). However, this discrepancy
does not affect the outcome of the Courts decision. For the sake
of convenience, the Court will use the per acre value applied by Mr.
Stipulation 17 is an addendum with exhibits prepared by the Lawsons for
the State Board hearing officer. It shows average land per square foot
costs for these same three areas as ranging from $1.89 to $2.37. Applying
the Lawsons formula to one of these figures, the Court observes that multiplying
$2.37 by 43,500 square feet results in a value of $103,095. The
Lawsons point out that the figures for condominiums do not reflect that regular
condominiums include the cost of common land in the land figures[,] whereas, PUD[s]
have a separate cost passed on to each homeowner to cover these land
costs. (Stipulation 17 at 1.) Accordingly, the Lawsons posit that removing
the common land values from these base values would effectively lower them by
at least fifty cents. (Stipulation 17 at 1.) Applying the $2.37
example again, less fifty cents (for a value of $1.87), the value for
one total acre would equal $81,345. Either set of figures, i.e., the
per acre values recited at trial or the per square foot values in
Stipulation 17, is less than the $274,000 per acre value attributed to Eagle
Valley by the Lawsons. The Court cannot ascertain from the evidence how
Mr. Lawson came up with the two significantly different sets of values for
the referenced condominiums.
Footnote: The Lawsons also assert that the primary base rates for their property
exceed even those for a shopping mall in Marion County. (Stipulation 15
at 1.) However, they have provided no property cards or other evidence
supporting this assertion.
Property underneath the individual units in a PUD was also referred to
as a footprint. (Trial Tr. at 62.)
Compare with Blacks
Law Dictionary 656 (7th ed. 1999) (defining footprint, for real estate purposes, as
the shape of a buildings base).
Mr. Lawson described the excess land as that land owned by the
taxpayer (not the homeowners association) that was platted but not improved upon.
(Trial Tr. at 28.)
Footnote: PUDs also have common ground. According to Mr. Lawson, homeowners in
a PUD receive two property tax bills; one is a bill directly to
the homeowner and that homeowner is responsible for the homesite as platted and
the other is a bill for the PUDs common ground. (Trial Tr.
at 31.) Mr. Lawson further explained that each homeowner in a PUD
is responsible for a portion of the common grounds assessment based upon the
square footage of [the homeowners] house. (Trial Tr. at 31.) Common
ground in Eagle Valley (and other PUDs in Marion County) was valued at
$18,000 per acre or its rough equivalent of forty-one cents an acre.
(Stipulation 4.) At trial, Mr. Lawson claimed that this rate violated the
Land Ordera fact proving that the township assessor neither had to nor actually
did follow the Land Order. (Trial Tr. at 12.) This is
important because the final determination explains that the State Boards regulations require township
assessors to use values in the land order. (Final Determination at 11,
¶ 28) (citing
Ind. Admin. Code tit. 50, r. 2.2-4-3 (1996).) However,
the Lawsons are appealing only the assessment for their primary and excess land,
not the assessment for their proportionate liability of the common ground. (Tr.
of Proceedings at 3 & 5-6, Form 131 Petition & Property Record Card);
(Final Determination at 4, ¶ 8.) The State Board was not obligated
to and did not address the propriety of the assessment of common land
within Eagle Valley. Whitley Prods., Inc. v. State Bd. of Tax Commrs,
704 N.E.2d 1113, 1119 (Ind. Tax Ct. 1998) (noting that State Board may
limit its inquiry to only those errors raised by the taxpayer), review denied.
Therefore, the Court does not and, indeed, likely does not have the
authority to consider the merits of this argument. See id. (noting that
Courts scope of review precludes it from considering evidence and issues not presented
to the State Board).
At the administrative hearing, the Wayne Township Assessor was represented by Mr.
John Kendall. (Final Determination at 3, ¶ 3.) Mr. Kendall estimated
that the land in Eagle Valley averaged approximately $170,000 per acre. (Stipulation
23, Tape of Administrative Hearing); (Trial Tr. at 16.) The Court assumes
that this figure represents totals for all primary, excess and common lands included
within an average acre in Eagle Valley. Again, the Lawsons offer no
probative evidence showing or explaining why this average, if accurate, is inappropriate for
a PUD, in comparison with lower-valued areas with condominiums and commercial properties.
Footnote: What constitutes a comparable property depends on the characteristics of the subject
Cf. Zakutansky v. State Bd. of Tax Commrs, 691 N.E.2d 1365,
1370 (Ind. Tax Ct. 1998) (concluding that evidence of comparable properties submitted by
taxpayer established that assessed value of his property was not equal and uniform
with similarly situated properties); Vonnegut v. State Bd. of Tax Commrs, 672 N.E.2d
87, 90 (Ind. Tax Ct. 1996) (holding that State Board failed to assess
taxpayers land consistently with similar properties located in his neighborhood).
At trial, Mr. Lawson made his argument on this issue in terms
of an adjustment for economic obsolescence. (Trial Tr. at 32-33) (citing
Admin. Code tit. 50, r. 2.2-1-40 (1996).) However, his argument is properly
viewed as one requesting application of a negative influence factor. See Ind.
Admin. Code tit. 50, r. 2.2-7-9(d) (1996) (stating that obsolescence depreciation is seldom
applied to residential dwellings).
The six specific factors are: (1) adverse topography; (2) absence of
water or sewage disposal system; (3) excess frontage; (4) irregular shape or inadequate
size; (5) misimprovement (non-conforming land use); and (6) restrictions such as encumbrances, restrictive
covenants or the presence of obstructions.
Ind. Admin. Code tit. 50, r.
2.2-4-10(a)(9)(A)-(F) (1996). These six factors result in a decrease in the subject
lands value. Id. The sole general condition is labeled the other
category and indicates an influence other than those listed. Id. Although
not citing any specific factor, the Lawsons rely upon sub-sections (a)(9)(F) & (G),
i.e., the encumbrances and other factors, as the basis for their arguments.
Quantification of the influence factor is not an issue. However, the
Court notes that in
Phelps Dodge v. State Board of Tax Commissioners, 705
N.E.2d 1099, 1106 (Ind. Tax Ct. 1999), review denied, it held that in
any hearing regarding influence factors, market data may be used to quantify influence
The Lawsons may be asking this Court to take judicial notice of
the fact that power lines are potentially dangerous to those who live near
them. However, the Lawsons have not demonstrated this alleged fact to be
either generally known within Indiana or capable of accurate and ready determination by
resort to sources whose accuracy cannot reasonably be questioned.
Ind. Evidence R.
Fred Lawson testified that the originals had been given to the State
Board at the administrative hearing. (Trial Tr. at 33.)
Footnote: Stipulation 7 does show the presence of a tall power lines tower
near the Lawsons property. The State Board admitted that the tower, not
the lines, may be less desirable to some people. (Trial Tr. at
54.) This observation, while perhaps true, is based on speculation and is
not probative evidence justifying application of a negative influence factor.
725 N.E.2d at 1020-21.
The Lawsons also submitted photocopied pictures of their home as evidence of
the homes quality. (Stipulation 11-13.) However, these photocopies are of extremely
poor quality. In fact, Mr. Lawson described the photocopies as being of
(Trial Tr. at 36.) They do not assist
the Court in reaching a decision on this issue.
The base rates listed for dwellings,
see Ind. Admin. Code tit. 50,
r. 2.2-7-11 (1996), reflect C grade standards of quality and design. Ind.
Admin. Code tit. 50, r. 2.2-7-6(e) (1996).
A model is a conceptual tool used to replicate reproduction cost of
a given structure using typical construction materials.
Ind. Admin. Code tit. 50,
r. 2.2-7-6(a) (1996).
However, the statements by Mr. Lawson that the cabinets and plumbing fixtures
in the home are low cost are concustory and thus do not constitute
probative evidence. (Trial Tr. at 39 & 40.)
See CDI, 725
N.E.2d at 1019. Likewise, a statement that the carpeting in the home
was average is conclusory and not probative evidence. (Stipulation 15 at 5.)
See CDI, 725 N.E.2d at 1019.
These fourteen items were: (1) minimal roof lines, 2 x 4
rafters; (2) small aluminum windows; (3) Masolite siding and garage door; (4) average
quality bathroom fixtures; (5) Floor 1/2 [inch] plywood on 2 [inch] x
8 [inch] joists, 24[inch] on center. Floor squeaks; (6) average quality six-panel
doors; (7) cathedral ceiling with a skylight in the living room and a
cathedral ceiling in the den; (8) linoleum kitchen floor and average kitchen cabinets;
(9) average to slightly below average woodwork; (10) oak staircase; (11) mirrored closet
doors in the bedrooms; (12) textured ceilings throughout home; (13) normal roof overhangs;
and (14) no drain tile. (Final Determination at 5, ¶ 15.)
Footnote: Mr. Lawson described the Masolite as composition board, which is an item
listed as part of the C grade description (and not the D grade
description) with regard to the design and construction of exterior walls. (Trial
Tr. at 38);
Ind. Admin. Code tit. 50, r. 2.2-7-6(b) (1996).
At trial, Mr. Lawson stated that the home had a gambrel roof.
(Trial Tr. at 39.) This is a characteristic included in the C
description and excluded from the D description.
Ind. Admin. Code tit. 50,
r. 2.2-7-6(b) (1996). In Stipulation 15 at 4, he labeled it
a gable roof (a D characteristic). The Court is unable to ascertain
which is correct from the evidence. In addition, the homes heating system
matches the C grade description, as Mr. Lawson indicated that the home has
central forced air and heat and is automatically fired and thermostatically controlled.
(Stipulation 15 at 4); (Trial Tr. at 40); Ind. Admin. Code tit. 50,
r. 2.2-7-6(b) (1996). As with Mr. Lawsons conclusory statements with respect to
cabinets, plumbing and carpet, see supra n.23, the Court finds that the State
Boards statements as to the average quality doors, plumbing fixtures and kitchen cabinets
are conclusory and not probative as to grade. See CDI, 725 N.E.2d
The hearing officer, upon viewing the property, noted: (1) some new
construction in the area; (2) shopping and restaurants within one mile; (3) access
to Highway 136, Crawfordsville Road and Interstate 74; (4) one block from Indianapolis
Country Club; (5) two to three miles from schools; (6) three to four
miles from the Indianapolis Speedway; and (7) few street lights or sidewalks in
the immediate area. (Final Determination at 6, ¶ 23.)
Footnote: As with
Ind. Admin. Code tit. 50, r. 2.2-7-7.1 (1996), this regulation
provides the following categories: (1) Excellent; (2) Very Good; (3) Good; (4)
Average; (5) Fair; (6) Poor; and (7) Very Poor.
A static neighborhood means that the neighborhood is in a condition of
equilibrium evidenced by little change.
Ind. Admin. Code tit. 50, r. 2.2-6-1(e)(4)(B)