Case Title: Developers Diversified Ltd. v. Cuyahoga Cty. Bd. of Revision

Citation: 1998-Ohio-683

Docket Number: 19972329

State: ohio

Court: Ohio Supreme Court

Date: 1998-12-02T00:00:00Z

Document:
DEVELOPERS DIVERSIFIED LTD. ET AL., APPELLEES, v. CUYAHOGA COUNTY BOARD 
OF REVISION ET AL., APPELLEES; NORTH OLMSTED BOARD OF EDUCATION, 
APPELLANT. 
[Cite as Developers Diversified Ltd. v. Cuyahoga Cty. Bd. of Revision (1998), ___ 
Ohio St.3d ___.] 
Taxation – Real property valuation – Only one complaint as to valuation may be 
filed during an interim period – Exceptions – Improvements to real 
property – Rezoning is not an improvement to real property. 
(No. 97-2329 — Submitted October 13, 1998 — Decided December 2, 1998.) 
APPEAL from the Board of Tax Appeals, Nos. 92-J-241, 92-J-242, 92-J-243, 92-J-
244, 92-J-245, 92-J-246, 92-J-247, and 92-J-313. 
 
In 1987, Developers Diversified Ltd. et al. (collectively, “Developers 
Diversified”) owned five of seven parcels of approximately forty-three acres of 
vacant land at the I-480 interchange with Columbia Road in North Olmsted.  The 
land was zoned “single-family residential.”  Developers Diversified sued North 
Olmsted seeking to rezone the entire property so that Developers Diversified could 
develop an executive office park and hotel complex on it. 
 
The North Olmsted Board of Education (“BOE”), appellant, and appellee 
North Olmsted, in 1989, filed a complaint with the appellee Cuyahoga County 
Board of Revision (“BOR”), challenging appellee Cuyahoga County Auditor’s 
value for parcels it owned for tax year 1988.  The year 1988 was the first year of a 
three-year interim period in Cuyahoga County spanning the years 1988, 1989, and 
1990.  The BOR decided the tax year 1988 complaint on March 14, 1990, finding 
an increase in assessed value. 
 
On November 28, 1988, Developers Diversified settled its rezoning suit 
against North Olmsted.  The parties agreed that North Olmsted would rezone the 
 
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property and that Developers Diversified could develop offices, multifamily 
housing, and hotels on it.  This rezoning made the property more valuable. 
 
For the tax year 1990, the BOE and North Olmsted filed complaints 
challenging the values placed on the entire property, including the two additional 
parcels Developers Diversified had purchased since 1987.  Developers Diversified 
moved to dismiss the 1990 complaints, but the BOR denied the motion because 
the complaints on these parcels for tax years 1988 and 1990, filed for the same 
interim period, were not the same.  The BOR then determined that rezoning and 
conditions of the property resulted in a substantial change in its fair market value.  
The BOR, consequently, as to each parcel, increased the value of the land.  
Developers Diversified appealed the BOR’s decisions to the Board of Tax Appeals 
(“BTA”). 
 
Developers Diversified again filed a motion to dismiss the complaints with 
the BTA, arguing that the complaints were second complaints for the same interim 
period in violation of R.C. 5715.19.  The BTA, however, conducted a full 
evidentiary hearing on the valuation question; nonetheless, the BTA dismissed the 
complaints as to the parcels listed in the tax year 1988 complaint.  The BTA ruled 
that an improvement to real property, one of the exceptions permitting a 
complainant to file more than one complaint for an interim period, must be “a 
physical change to or located on the real property.”  A rezoning, according to the 
BTA, was not such a change. 
 
The BTA did increase the value of the two parcels that were not part of the 
tax year 1988 complaint.  The values of these parcels are not at issue. 
 
This cause is now before the court upon an appeal as of right. 
__________________ 
 
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Fred Siegel Co., L.P.A., and Annrita S. Johnson, for appellees Developers 
Diversified Ltd. et al. 
 
Stephanie Tubbs Jones, Cuyahoga County Prosecuting Attorney, and 
Timothy J. Kollin, Assistant Prosecuting Attorney, for appellees Cuyahoga County 
Board of Revision and Cuyahoga County Auditor. 
 
Kolick & Kondzer, Thomas A. Kondzer and Rita M. Jarrett, for appellant. 
__________________ 
 
ALICE ROBIE RESNICK, J.  R.C. 5715.19(A)(2) provides: 
 
“As used in division (A)(2) of this section, ‘interim period’ means, for each 
county, the tax year to which section 5715.24 of the Revised Code applies and 
each subsequent tax year until the tax year in which that section applies again. 
 
“No person, board, or officer shall file a complaint against the valuation or 
assessment of any parcel that appears on the tax list if it filed a complaint against 
the valuation or assessment of that parcel for any prior tax year in the same interim 
period, unless the person, board, or officer alleges that the valuation or assessment 
should be changed due to one or more of the following circumstances that 
occurred after the tax lien date for the tax year for which the prior complaint was 
filed and that the circumstances were not taken into consideration with respect to 
the prior complaint: 
 
“ * * * 
 
“(c) Substantial improvement was added to the property[.]” 
 
The BOE first argues that it may file a second complaint for the same 
interim period because Developers Diversified added parcels to the property 
considered in the first complaint, thus forming a new economic unit.  The BOE 
cites for support Park Ridge Co. v. Franklin Cty. Bd. of Revision (1987), 29 Ohio 
 
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St.3d 12, 29 OBR 231, 504 N.E.2d 1116, in which this court held, at paragraph 
two of the syllabus: 
 
“The true value for real property may well depend on its potential use as an 
economic unit.  That unit may include multiple parcels, or it may be part of a 
larger parcel, on the auditor’s records.  The boundaries of that unit may change 
with time and circumstances.  Thus, a separate tract for valuation purposes need 
not correspond with a numbered parcel.  For tax valuation purposes, property with 
a single owner, for which the highest and best use is a single unit, constitutes a 
tract, lot, or parcel.” 
 
Park Ridge does not support the BOE’s claim.  In Park Ridge, the county 
auditor had assigned a separate permanent parcel number to each of thirty-four 
duplex units on separate city lots in Grove City and to thirty-five duplex units in 
Columbus.  The trial court valued each rental complex as a separate unit, but the 
auditor and school boards argued that each parcel should be valued separately, 
resulting in a higher total value for all the units. 
 
This court ruled, however, that the auditor’s numbering of parcels facilitates 
conveyancing them.  This court, nevertheless, rejected the argument that a parcel’s 
relatively arbitrary boundary should limit valuation practices for real property 
taxes.  Instead, this court allowed taxing authorities to value economic units 
composed of multiple parcels.  This court held that taxing authorities could value 
multiple parcels as an economic unit if the property is being used for its highest 
and best use as such economic unit. 
 
Park Ridge addresses valuing property at its highest and best use.  Park 
Ridge, however, does not address the number of parcels to be listed on a valuation 
complaint or whether adding parcels to an economic unit permits a complainant to 
file a second complaint concerning other parcels of the economic unit in the same 
 
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interim period.  As this court observed in Park Ridge, numbering parcels 
facilitates accounting for them — such as in conveyancing, listing on the tax 
duplicate, and listing on valuation complaints. 
 
R.C. 5715.19, nevertheless, bars the second filing despite the addition of 
new parcels to the compilation of property.  This statute prohibits any “person, 
board, or officer” from filing “a complaint against the valuation or assessment of 
any parcel that appears on the tax list if it filed a complaint against the valuation 
or assessment of that parcel [appearing on the tax list] for any prior tax year in the 
same interim period” (emphasis and bracketed material supplied), unless the 
complainant alleges and establishes one of the exceptions. 
 
Next, the BOE argues that the expansion of permitted uses after the 
rezoning, which increases the value of the property, is a substantial improvement 
to the property.  The BOE reasons that this rezoning satisfies R.C. 5715.19 so that 
it may file a second complaint within the interim period.  Developers Diversified 
replies that the BTA correctly determined that “improvement” means a physical 
addition to the property. 
 
According to Stanjim Co. v. Mahoning Cty. Bd. of Revision (1974), 38 Ohio 
St.2d 233, 235, 67 O.O.2d 296, 298, 313 N.E.2d 14, 16, “full compliance with 
R.C. 5715.19  * * * is necessary before a county board of revision is empowered 
to act on the merits of a claim.”  Thus, a complainant, to file a second complaint 
for the same interim period, must allege and establish one of the four 
circumstances set forth in R.C. 5715.19(A)(2).  Gammarino v. Hamilton Cty. Bd. 
of Revision (1994), 71 Ohio St.3d 388, 643 N.E.2d 1143; Mellon Bank v. Franklin 
Cty. Bd. of Revision (1996), 74 Ohio St.3d 651, 660 N.E.2d 1188; Columbia 
Toledo Corp. v. Lucas Cty. Bd. of Revision (1996), 76 Ohio St.3d 361, 667 N.E.2d 
1180. 
 
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As the BTA determined, a rezoning of property, even one rendering the 
property more valuable, is not an “improvement” to the property.  Under R.C. 
1.42: 
 
“Words and phrases shall be read in context and construed according to the 
rules of grammar and common usage.  Words and phrases that have acquired a 
technical or particular meaning, whether by legislative definition or otherwise, 
shall be construed accordingly.” 
 
Other statutes relating to taxes cast “improvement” with buildings, fixtures, 
and structures located on land.  R.C. 5713.01(B), 5713.03, 5713.041, and 5701.02.  
R.C. 5701.02(D) defines “improvement” as: 
 
“[W]ith respect to a building or structure, a permanent addition, 
enlargement, or alteration that, had it been constructed at the same time as the 
building or structure, would have been considered a part of the building or 
structure.” 
 
Accordingly, tax statutes include the term “improvement” together with 
permanent additions to realty.  Moreover, The Dictionary of Real Estate Appraisal, 
American Institute of Real Estate Appraisers (1984) 158, defines “improvements” 
as: 
 
“Buildings or other relatively permanent structures or developments located 
on, or attached to, land.” 
 
Consequently, in context with other statutes and under statutory and 
dictionary definitions, an “improvement” is a relatively permanent structure 
attached to, or located on, land.  “Zoning” is the government’s “regulation of the 
character and intensity of real estate uses through police power.”  Id. at 332.  
Rezoning does not place a relatively permanent structure on land; thus, rezoning is 
not an improvement to real property. 
 
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Accordingly, we affirm the BTA’s decision because it is reasonable and 
lawful. 
Decision affirmed. 
 
MOYER, C.J., DOUGLAS, F.E. SWEENEY, PFEIFER, COOK and LUNDBERG 
STRATTON, JJ., concur.