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Mercer Mall v. Gearhart

Supreme Court of West Virginia

March 11, 2019

Mercer Mall, Bluefield, West Virginia, Plaintiff Below, Petitioner
v.
Sharon Gearhart, Assessor, Mercer County, and The County Commission of Mercer County, West Virginia, Defendants Below, Respondents

          Mercer County 17-C-146

          MEMORANDUM DECISION

         Petitioner Mercer Mall, by counsel Herschel H. Rose, III, appeals the February 21, 2018, order of the Circuit Court of Mercer County that determined the Mercer County Assessor's $19, 011, 800 assessment of the Mercer Mall was fair and equitable. Respondents Sharon Gearhart and the County Commission of Mercer County, by counsel, Mercer County Prosecuting Attorney George V. Sitler, filed a response, to which petitioner filed a reply brief.

         This Court has considered the parties' briefs and the record on appeal. The facts and legal arguments are adequately presented, and the decisional process would not be significantly aided by oral argument. Upon consideration of the standard of review, the briefs, and the record presented, the Court finds no substantial question of law and no prejudicial error. For these reasons, a memorandum decision affirming the order of the circuit court is appropriate under Rule 21 of the Rules of Appellate Procedure.

         This matter arises from the real property assessment of the Mercer Mall, a regional enclosed shopping mall, in Bluefield, West Virginia. For the 2017 tax year, Respondent, Mercer County Assessor Sharon Gearhart ("the Assessor"), assessed the property for $19, 011, 800. On February 6, 2017, Petitioner Mercer Mall, appeared before the County Commission of Mercer County ("the Commission"), sitting as the Board of Equalization and Review, to contest the assessment by the Assessor. In support of its position, petitioner subsequently presented the appraisal of Mike Hazelwood, a licensed general appraiser, who performed an appraisal ("Hazelwood appraisal") of the Mercer Mall in 2017, and appraised the value of the mall at $10, 000, 000.

         The hearing continued on February 27, 2017. At that hearing, the Commission acknowledged receipt of the Hazelwood appraisal, but determined that it was based on the income approach, rather than the cost approach and was therefore inapplicable. The Commission voted that the correct assessment was $19 million, as determined by the Assessor. Petitioner appealed the Commission's decision to the Mercer County Circuit Court, where the circuit court determined that the record below was inadequate to support the Commission's ruling, and remanded the matter to the Commission for development of the record.

         A final hearing was held on November 29, 2017. At that hearing, the Commission again determined that the Assessor's valuation was correct. Jeff Price, a Deputy Assessor, testified that the $19 million appraisal came from the sale of the property recorded in 2005, or 2007. At the time of the sale the appraised value was reduced from $32 million to $19 million, approximately $22 per square foot. Mr. Price testified that he compared the Mercer Mall to malls in Beckley, Bridgeport, and Huntington, and that the square foot valuation of Mercer Mall was the lowest of the four. Mr. Price testified that the assessor also took note of a comparable strip mall, located in Bluefield, West Virginia, that sold for $28.83 per square foot in 2017.

         On February 16, 2018, the Commission reported its findings to the Circuit Court of Mercer County. The report noted that the majority of assessors in West Virginia utilize the "cost-minus depreciation" method to arrive at an appraised value, and utilizing that method, the Assessor assessed the Mercer Mall at $19, 011, 800, for the year 2017. The Commission noted further that petitioner submitted an appraisal that used the income approach to appraise value, but asserted that the income approach is typically only used for low income housing properties, and not to assess other commercial properties.

         The Commission determined that the Assessor provided sufficient data to support this assessment including: (1) information regarding the recent sale of a mall in Bluefield, that sold for a purchase price of $28.83 per square foot; (2) that the average daily traffic count on U.S. 460 on Cumberland Road near Mercer Mall is slightly more than 16, 000; (3) that the valuation of $23.75 has not increased for several years, "in order to help the mall through a prolonged economic downturn[;]" (4) that regionally, the Crossroads Mall in Beckley is assessed at $40.58 per square foot, the Huntington Mall is assessed at $39.41 per square foot, the Meadowbrook Mall is assessed at $42.03 per square foot; and (5) the Crossroads Mall in Raleigh recently sold for $33 per square foot. Further, the Commission took notice that Assessor Gearhart testified that her office has adopted a long-term strategy of maintaining the petitioner's assessment at a modest level

         Based upon this report, by order entered February 21, 2018, the circuit court found that the Commission did not abuse its discretion, and properly appraised the value of the Mercer Mall at $23.75 per square foot. The circuit court determined that the commission compared the value of the Mercer Mall with the 2017 sale of a similar mall in Bluefield, West Virginia, and reviewed the value of similarly situated shopping malls to reach its conclusion. Petitioner now appeals the February 21, 2018 order.

         Petitioner asserts that the circuit court erred by upholding the County Commission's finding that it would only consider an appraisal using the cost approach to valuation, and rejecting the Hazelwood appraisal presented by petitioner. Regarding the assessment of real property, we have held that,

"[a]s a general rule, there is a presumption that valuations for taxation purposes fixed by an assessor are correct. . . . The burden is on the taxpayer challenging the assessment to demonstrate by clear and convincing evidence that the tax assessment is erroneous." Syllabus point 2, in part, Western Pocahontas Properties, Ltd. v. County Commission of Wetzel County, 189 W.Va. 322');">189 W.Va. 322, 431 S.E.2d 661 (1993).

Syl. Pt. 5, Stone Brooke Ltd. P'ship v. Sisinni, 224 W.Va. 691, 688 S.E.2d 300 (2009). Further,

[i]n a case involving the assessment of property for taxation purposes, which does not involve the violation of a statute governing the assessment of property, or a violation of a constitutional provision, or in which a question of the constitutionality of a statute is not involved, this Court will not set aside or disturb an assessment made by an assessor or the county court, acting as a board of equalization and review, where the assessment is supported by substantial evidence." Syllabus point 2, In re Tax Assessments Against the Southern Land Co., 143 W.Va. 152, 100 S.E.2d 555 ...

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