| Matter of Regency Realty Assoc., LLC v Board of Assessment Reviewof the Town of Malta |
| 2010 NY Slip Op 06197 [75 AD3d 950] |
| July 22, 2010 |
| Appellate Division, Third Department |
| In the Matter of Regency Realty Associates, LLC, Respondent, vBoard of Assessment Review of the Town of Malta et al.,Appellants. |
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Malone Jr., J. Appeal from a judgment of the Supreme Court (Ferradino, J.), entered May 13,2009 in Saratoga County, which partially granted petitioner's application, in a proceedingpursuant to RPTL article 7, to reduce the tax assessment on certain real property owned bypetitioner.
Petitioner commenced this proceeding to challenge, as excessive, respondents' 2006 taxassessment on petitioner's 412-unit mobile home park located in the Town of Malta, SaratogaCounty. At trial, the parties conditionally stipulated to the admission of their respective appraisalreports, subject to cross-examination of their respective experts and the right to move to strike allor part of the opposing party's appraisal. Both appraisals employed similar methodology,establishing separate values for the mobile homes and the mobile home park, which were thencombined to establish a total value for the property. Both appraisals utilized a market approachto value the homes and petitioner's appraisal also incorporated a cost approach to value thehomes. Both appraisals used a market approach and income capitalization to value the park andpetitioner's appraisal also discounted cash flow to value the park. Petitioner's appraisal valuedthe property at $13,000,000, while respondent's appraisal valued the property at $18,440,000.Supreme Court rejected respondents' appraisal and credited petitioner's appraisal and, based onan 85% equalization rate, thereafter entered judgment reducing the assessed value of the property[*2]from $15,080,482 to $11,050,000, prompting this appeal byrespondents. We affirm.
Although a municipal tax assessment is presumptively valid (see Matter of NiagaraMohawk Power Corp. v Assessor of Town of Geddes, 92 NY2d 192, 196 [1998]; Matter of Ace Hardware Corp. vLittle, 63 AD3d 1345, 1346 [2009]), petitioner satisfied its initial burden of submittingsubstantial evidence "demonstrat[ing] a valid and credible dispute regarding valuation"(Matter of FMC Corp. [Peroxygen Chems. Div.] v Unmack, 92 NY2d 179, 188 [1998])by submitting "a detailed, competent appraisal based on standard, accepted appraisal techniques. . . prepared by a qualified appraiser" (Matter of Niagara Mohawk Power Corp.v Assessor of Town of Geddes, 92 NY2d at 196). Once petitioner's initial burden was met,Supreme Court was required "to weigh the entire record, including evidence of claimeddeficiencies in the assessment, to determine whether petitioner ha[d] established by apreponderance of the evidence that [the subject] property ha[d] been overvalued" (Matter of Eckerd Corp. v Semon, 44AD3d 1232, 1233 [2007] [internal quotation marks and citations omitted]). Upon appeal, wewill disturb Supreme Court's findings only upon a mistake of law or error in the admission orexclusion of evidence, or where such findings are not supported by the weight of the evidence,giving due deference to Supreme Court's credibility determinations (see Matter of General Elec. Co. v Assessorof Town of Rotterdam, 54 AD3d 469, 472 [2008], lv denied 11 NY3d 711[2008]).
Initially, we are not persuaded that petitioner's appraisal was rendered deficient by its failureto include a statement of the operating expenses for comparable properties identified inpetitioner's income approach to support the estimation of market expenses. Petitioner's experttestified that the Uniform Standards of Professional Appraisal Practice (see 19 NYCRRpart 1106) require an appraiser to analyze comparable operating expense data for the incomevaluation approach. Although petitioner's appraisal was required to "contain a clear and concisestatement of every fact that [petitioner sought] to prove" regarding the comparable properties (22NYCRR 202.59 [g] [2]), we note that the purpose of the rule is to allow opposing counsel to "'adequately prepare for cross-examination' " (Matter of Golub Corp./Price Chopper OperatingCo. v Assessor of Town of Queensbury, 282 AD2d 962, 963 [2001], quoting Matter ofNiagara Mohawk Power Corp. v Town of Bethlehem Assessor, 225 AD2d 841, 843 [1996]).Petitioner's appraisal set forth actual line expenses of the subject property as well as estimatedmarket line expenses for comparison. Any deficiency in the appraisal was rectified at trial (see Matter of Gibson v Gleason, 20AD3d 623, 625 [2005], lv denied 5 NY3d 713 [2005]) when petitioner's experttestified regarding his personal knowledge of market expenses based on his experience as theoperator of several mobile home parks and as a broker specializing in the sale of mobile homeparks for 20 years. In addition, testimony was admitted from another recent proceeding beforeSupreme Court, pursuant to a stipulation by the parties, in which the same expert testifiedregarding his valuation methodology and personal knowledge of the relevant market expenses.Similarly, we find that petitioner's expert adequately explained the basis for his capitalizationrate at trial. On this record, we perceive no prejudice to respondents' ability to adequatelycross-examine petitioner's expert (see Matter of Bialystock & Bloom v Gleason, 290AD2d 607, 608-609 [2002]; Matter of Golub Corp./Price Chopper Operating Co. v Assessorof Town of Queensbury, 282 AD2d at 963).
Nor are we persuaded that, deferring, as we must, to Supreme Court's resolution ofcredibility issues generated by the conflicting expert opinions (see Matter of Northern Pines MHP, LLC vBoard of Assessment Review of the Town of Milton, 72 AD3d 1314, 1315-1316[2010]), the weight of the evidence favors respondents' valuation of the subject property. The[*3]parties relied, in part, on different comparable sales of mobilehome parks. Petitioner's expert generally favored more recent sales of mobile home parks moresimilar in size to the subject property with minor adjustments. Respondents' expert favoredsmaller properties that were closer in proximity to the subject property and for which he assignedsubstantially more significant adjustments including, in one instance, a 20% adjustment forlocation alone. Petitioner's report provided a more detailed and thorough evaluation of themobile homes within the subject property and petitioner's expert possessed significantexperience in the sale of mobile homes and mobile home parks. Although the parties' estimationof gross income for the subject property was substantially similar, the income analysis providedby petitioner's expert incorporated actual operating expenses from the subject property thatrespondents' expert dismissed as unreliable because they covered a span of only 20 months,while at the same time relying, in part, and somewhat inconsistently, on expenses from acomparable property that covered only a 12-month period. The expense ratio used byrespondents' expert in this proceeding was substantially lower than the one used by petitioner'sexpert and was substantially lower than the expense ratio he estimated for the same property in aprior proceeding. The opinion of respondents' expert as to the appropriate reserves andcapitalization rate were undermined by his reliance on statistics generated for dissimilarincome-producing properties. A preponderance of the evidence supports petitioner's claim thatthe property was overvalued and, upon review of the entire record, we find no basis fordisturbing Supreme Court's findings.
We have considered the parties' remaining contentions and find them to be without merit.
Cardona, P.J., Mercure, Lahtinen and Egan Jr., JJ., concur. Ordered that the judgment isaffirmed, without costs.