Title: Hilliard City Schs. Bd. of Educ. v. Franklin County Bd. of Revision

State: ohio

Issuer: Ohio Supreme Court

Document:

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
Hilliard City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, Slip Opinion No. 2014-
Ohio-853.] 
 
NOTICE 
This slip opinion is subject to formal revision before it is published in 
an advance sheet of the Ohio Official Reports.  Readers are requested 
to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 
65 South Front Street, Columbus, Ohio 43215, of any typographical or 
other formal errors in the opinion, in order that corrections may be 
made before the opinion is published. 
 
SLIP OPINION NO. 2014-OHIO-853 
HILLIARD CITY SCHOOLS BOARD OF EDUCATION, APPELLEE, v.  
FRANKLIN COUNTY BOARD OF REVISION ET AL., APPELLEES;  
U-STORE-IT, L.P., APPELLANT. 
SOUTH-WESTERN CITY SCHOOLS BOARD OF EDUCATION, APPELLEE, v. 
FRANKLIN COUNTY BOARD OF REVISION ET AL., APPELLEES;  
U-STORE-IT, L.P., APPELLANT. 
[Until this opinion appears in the Ohio Official Reports advance sheets,  
it may be cited as Hilliard City Schools Bd. of Edn. v. Franklin Cty. Bd. of 
Revision, Slip Opinion No. 2014-Ohio-853.] 
Taxation—Arm’s-length sale—Sale price is presumed to establish value—
Related-party disclosure negates arm’s-length character of a sale only if it 
demonstrates that the buyer and seller are aligned in a way that makes 
their motivations atypical of the market. 
(Nos. 2012-1015 and 2012-1016—Submitted October 22, 2013—Decided  
March 11, 2014.) 
APPEALS from the Board of Tax Appeals, Nos. 2009-A-1069,  
2009-A-1070, and 2009-A-1071. 
____________________ 
SUPREME COURT OF OHIO 
2 
 
Per Curiam. 
{¶ 1} In these appeals, the owner of several self-storage facilities in 
Franklin County contests the decision of the Board of Tax Appeals (“BTA”), 
which adopted the 2006 sale prices as the value of those properties for the 2006 
tax year.  All the properties at issue were acquired by U-Store-It, L.P., in a bulk 
purchase in 2006.  U-Store-It raises the primary contention that the 2006 sale 
involved related parties and therefore could not qualify as an arm’s-length 
transaction for purposes of valuing the properties.  U-Store-It also contends that 
the sale prices cannot be used because they include consideration paid for 
personal property as well as real property. 
{¶ 2} We hold that because the record contained affirmative evidence 
supporting the use of the stated sale prices as the value of the properties for tax-
year 2006, and because U-Store-It failed to substantiate its claim that the sale 
prices should be allocated between real and personal property, the BTA did not 
act unreasonably or unlawfully in adopting the 2006 sale prices.  We therefore 
affirm the decision of the BTA. 
Facts 
{¶ 3} We confront two appeals from two BTA decisions.  Case No. 2012-
1015 addresses the 2006 tax-year value of one self-storage facility located in the 
Hilliard City Schools District; case No. 2012-1016 addresses the 2006 tax-year 
value of two such facilities located in the South-Western City Schools District.1  
All three self-storage facilities were acquired by U-Store-It in the same 
transaction, and the issue of their value turns on the resolution of the same legal 
and factual questions.  The appeals were consolidated for argument before the 
master commissioner, and we now dispose of them with a single decision. 
                                                 
1 The BTA specifically found that the 2006 value should be carried forward to tax-years 2007 and 
2008 as to all of the properties at issue.  U-Store-It does not separately challenge the carry forward 
January Term, 2014 
3 
 
A.  The properties at issue were all sold to Jernigan Property Group in 2005, 
then sold by Jernigan to U-Store-It in 2006 
{¶ 4} Twice in a little over a year, the properties at issue were transferred.  
The first  sale occurred in April 2005, in which Jernigan Property Group 
purchased several facilities; the second sale occurred in August 2006, in which 
Jernigan Property Group sold nine properties to U-Store-It for more than $44 
million.  Both times, the sale contracts separately set forth the consideration for 
each property, and the 2006 sale prices as allocated by the contract were reported 
as the sale price on the conveyance-fee statements. 
{¶ 5} The Hilliard City Schools Board of Education and the South-
Western City Schools Board of Education (“school boards” or “school board”) 
filed complaints in relation to the properties located in their respective districts.  
Another self-storage facility that was part of the 2006 sale is located in the 
Reynoldsburg City School District, and the BTA’s decision in that case was also 
appealed to this court.  That case has settled, however.  134 Ohio St.3d 1477, 
2013-Ohio-770, 984 N.E.2d 22.  Nevertheless, the record of that case was 
incorporated into the records of the cases before us, and we will consult the 
evidence in that record in reviewing the BTA’s decision. 
{¶ 6} The school boards’ complaints asked that the 2006 sale prices be 
applied to the individual properties for the 2006 tax year.  The board of revision 
determined that the 2006 sale did not qualify as an arm’s-length transaction and 
therefore adopted the 2005 sale prices for tax-year 2006 instead.  The BTA 
reversed and adopted the 2006 sale prices as the 2006 property values. 
{¶ 7} Below is a chart showing the values assigned to the properties at 
issue here for tax-year 2006, in these proceedings: 
 
                                                                                                                                     
apart from contesting the use of the sale prices for the 2006 tax year.  Accordingly, our affirmance 
of the BTA’s disposition for tax-year 2006 extends to 2007 and 2008 as well. 
SUPREME COURT OF OHIO 
4 
 
Supreme 
Court 
Case No. 
Address 
School 
District  
Auditor 
BOR value 
(2005 sale 
price) 
BTA value 
(2006 sale 
price) 
2012-
1015 
5252 Nike Hilliard 
3,500,000
4,298,500 
4,700,0002 
 
 
 
 
 
 
2012-
1016 
5411 W. 
Broad 
South-
Western 
2,760,00 
2,715,000 
4,350,000 
 
 
 
 
 
 
2012-
1016 
3300 
Southwest 
Blvd. 
South-
Western 
3,500,000
4,483,500 
6,200,000 
 
B. What the evidence shows 
1. Evidence pertaining to the arm’s-length character of the 2006 sale 
{¶ 8} At the November 26, 2007 BOR hearings, U-Store-It’s counsel 
introduced both testimony and documents.  The documents included the purchase 
agreements for the 2005 sale to Jernigan Property Group and the 2006 sale by 
Jernigan Property Group to U-Store-It, along with closing statements and a copy 
of a Form 10-Q filed by U-Store-It. 
{¶ 9} The Form 10-Q, a filing with the Securities and Exchange 
Commission (“SEC”) required of U-Store-It Trust as a publicly traded entity 
listed on the New York Stock Exchange, disclosed that the 2006 sale was in a 
certain respect a “related-party” transaction.  The disclosure points out that the 
sale contract was entered into between Jernigan Property Group as seller and U-
Store-It as buyer on April 3, 2006.  Dean Jernigan, who was president of Jernigan 
Property Group and held “a 20% beneficial interest in one self-storage facility 
partially owned by Jernigan Property Group and related companies and 
partnerships,” was appointed president and chief executive officer (“CEO”) of U-
                                                 
2 With respect to the BTA’s 2006 value for the Nike Road property, the contract quoted $4.8 
million as the sale price, but the conveyance-fee statement quoted $4.7 million as the sale price.  
The BTA adopted the latter as the value of the property.  
January Term, 2014 
5 
 
Store-It Trust on April 24, 2006.  The transaction “was subject to review and final 
approval by a majority of the independent members of the Company’s Board of 
Trustees.”  The 10-Q further noted that “Mr. Jernigan has discontinued all 
involvement in the day-to-day management or operation of the Jernigan Property 
Group.” 
{¶ 10} U-Store-It relies on the Form 10-Q as establishing that the 2006 
sale was not at arm’s length, because it was a related-party transaction for SEC 
reporting purposes. 
{¶ 11} Kathleen Weigand, executive vice-president, general counsel, and 
secretary of U-Store-It Trust, testified.  She reiterated the points made in the 10-Q 
and emphasized the importance of a noncompete clause in the 2006 sale 
agreement, to which Jernigan personally was made a party. 
{¶ 12} In her testimony, Weigand fleshed out the disclosure of the related-
party transaction.  Weigand added that Jernigan “had an interest” in the Jernigan 
Property Group, L.L.C.  But notable by its absence is any testimony—or any 
statement in the Form 10-Q itself—that (1) Jernigan had previously owned or 
acquired an interest in U-Store-It Trust or that (2) Jernigan Property Group and U-
Store-It were in any other respect under common ownership. 
2. Evidence relating to the value of the properties 
{¶ 13} Weigand also testified that in conjunction with the 2006 purchase, 
U-Store-It did not commission outside appraisals, but did perform underwriting 
in-house,  “placing a value on the properties based on net operating income,” 
including developing a cap rate and taking into account vacancy loss and cash 
flow from rents.  This in-house underwriting was the basis for the per-property 
allocated purchase price for each parcel set forth in the 2006 sale. 
{¶ 14} Weigand’s testimony describes, in essence, an income approach, 
performed by U-Store-It itself, from which the sale prices for the individual 
properties were developed.  That process also helped persuade the independent 
SUPREME COURT OF OHIO 
6 
 
trustees of U-Store-It Trust that the deal was fair in the context of Dean Jernigan 
profiting from the trust’s purchase while contemporaneously being hired as the 
trust’s new CEO. 
{¶ 15} U-Store-It has also advanced an argument that the sale prices of the 
facilities at issue include personal property as well as realty.  The 2006 sale refers 
to tangible personal property to be conveyed along with the realty.  Attached to 
the 2006 sale contract is a bill of sale for the personal property, with an extensive 
list of personalty appended.  But the bill of sale contains no indication of the cost 
or value of any individual items of personal property, nor does the sale contract 
elsewhere set forth an allocation to personalty.  The same can be said of the other 
separately identified item of personal property:  the intangible covenant not to 
compete. 
C. Determinations by the BOR and the BTA 
{¶ 16} On May 4, 2009, in the Reynoldsburg case, the BOR eliminated the 
2006 sale as an arm’s-length transaction.  Accordingly, the BOR ordered that the 
2005 sale prices be adopted as the value of the properties for tax-years 2005 and 
2006. 
{¶ 17} In the present cases, which involve the properties in the Hilliard 
and South-Western school districts, the record contains no deliberation of the 
BOR, but the determinations issued likewise adopted the 2005 sale prices for tax-
year 2006. 
{¶ 18} The school boards appealed to the BTA, advocating adoption of the 
2006 sale prices.  The BTA issued its decisions in these cases on May 15, 2012.  
The decision in the South-Western City Schools’ case was the lead decision, and 
the decision in the Hilliard City Schools’ case adopted the reasoning of the lead 
decision. 
{¶ 19} The BTA presumed the validity of the 2006 sale price for the value 
of the properties for tax-year 2006.  South-Western City Schools Bd. of Edn. v. 
January Term, 2014 
7 
 
Franklin Cty. Bd. of Revision, BTA Nos. 2009-A-1070 and 2009-A-1071, 2012 
WL 1869990, *3 (May 15, 2012).  The BTA summarized U-Store-It’s objections 
as follows:  “[T]he sale in question does not qualify as an arm’s-length transaction 
because it was a bulk sale with allocated prices among many properties between 
related parties and the sale included items other than real property.”  Id. 
{¶ 20} With respect to the bulk-sale allocation issues, the BTA relied on 
FirstCal Indus. 2 Acquisitions, L.L.C. v. Franklin Cty. Bd. of Revision, 125 Ohio 
St.3d 485, 2010-Ohio-1921, 929 N.E.2d 426, to conclude that U-Store-It bore the 
burden to show that the sale prices reported on the conveyance-fee statements did 
not reflect true value.  South-Western City Schools Bd. of Edn., 2012 WL 
1869990 at *3-4.  According to the BTA, “[t]he property owner has provided no 
evidence or testimony with regard to the subject sale to demonstrate why the sale 
prices, as allocated to each property and set forth on the subject conveyance fee 
statements, are not reflective of the subjects’ true values.”  Id., *4.  With respect 
to the non-realty items in the sale, the BTA found that nothing in the record 
indicated “that the allocated bulk sale price was not indicative of market value” 
and concluded that “the price paid by the property owner for the subject 
properties represents the true value of the properties for tax year 2006.”  Id., *6. 
{¶ 21} With respect to the related-party issue, the BTA found that 
Jernigan’s “relationship to the seller was limited in scope, constituting a minimal 
interest in one of the nine storage facilities purchased.”  Id., *5.  Also significant 
were the facts that “the sales contract in question was entered into on April 3, 
2006, prior to Mr. Jernigan beginning his tenure with the buyer on April 24, 
2006” and that “the sale transaction was reviewed and approved by a majority of 
the independent members of the buyer’s board of trustees.”  Id.  Given these 
circumstances, the BTA found that Jernigan’s role did not “compromise[ ] the 
arm’s-length nature of the sale transaction under consideration.”  Id.  
SUPREME COURT OF OHIO 
8 
 
Additionally, the BTA noted that there was no dispute that the 2006 sale was 
closer to the lien date than the 2005 sale. 
{¶ 22} Accordingly, the BTA reversed the BOR’s decision and adopted 
the 2006 sale prices as the value of the properties for tax-years 2006, 2007, and 
2008. 
Analysis 
A. The BTA’s explicit findings may be reviewed on appeal 
{¶ 23} The school boards argue that U-Store-It has waived all of the 
arguments it advances in this appeal, because U-Store-It’s brief at the BTA 
consisted of a single paragraph that did not advance specific arguments.  Despite 
the brevity of U-Store-It’s submission at the BTA, the BTA considered the issues 
raised before the BOR:  whether the aggregate sale price was properly allocated 
among the real estate parcels; whether the sale, as a “related-party transaction,” 
qualified as an arm’s-length transaction under R.C. 5713.03; and whether the sale 
price would have to be allocated among real-estate and non-realty assets in the 
sale.  On appeal, U-Store-It’s brief challenges the BTA decision on these points. 
{¶ 24} We conclude that the doctrine of waiver is inapplicable.  Because 
the BTA explicitly addressed and resolved the issues raised in U-Store-It’s 
propositions of law, those propositions are properly before this court. 
{¶ 25} The case the school board relies on, The Chapel v. Testa, 129 Ohio 
St.3d 21, 2011-Ohio-545, 950 N.E.2d 142, differs in precisely this respect from 
the present case.  In that case, the BTA made no mention of the timing issue 
raised by the tax commissioner on appeal to this court.  That the BTA failed to 
address the issue was not surprising:  the commissioner had not raised the issue 
below. 
{¶ 26} By stark contrast, this appeal contests actual findings of the BTA.  
We have jurisdiction under R.C. 5717.04 to review the BTA decision in light of 
January Term, 2014 
9 
 
the “errors complained of” in the BTA decision, and we will proceed to exercise 
that jurisdiction under these circumstances. 
B. The record supports rather than rebuts the adoption 
of the stated prices as property values 
{¶ 27} The BTA relied on case law to place the burden on U-Store-It to 
show that the amounts reported on the conveyance-fee statements as consideration 
for the realty did not equate to the value of the property.  Both with respect to the 
arm’s-length-transaction issue and the allocation issues, that was correct. 
{¶ 28} Typically, a board of education makes a prima facie showing of 
value by presenting the conveyance-fee statement showing the sale and the price.  
See Worthington City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 124 
Ohio St.3d 27, 2009-Ohio-5932, 918 N.E.2d 972, ¶ 28-29 (when a school board 
has presented a deed and a conveyance-fee statement, rebuttal of the sale price 
“ ‘lies in challenging whether the elements of recency and arm’s-length character 
between a willing seller and a willing buyer are genuinely present for that 
particular sale’ ”), quoting Cummins Property Servs., L.L.C. v. Franklin Cty. Bd. 
of Revision, 117 Ohio St.3d 516, 2008-Ohio-1473, 885 N.E.2d 222, ¶ 13.  
Moreover, this court has held that when a sale price has been reported on the 
conveyance-fee statement, the party opposing the use of that price typically bears 
the burden of showing that the reported price is not the proper value.  FirstCal, 
125 Ohio St.3d 485, 2010-Ohio-1921, 929 N.E.2d 426, ¶ 25. 
{¶ 29} U-Store-It maintains that it succeeded in rebutting the 2006 sale 
prices by showing that (1) the 2006 sale was a related-party transaction, thereby 
failing to qualify as an arm’s-length transaction, and (2) the sale included personal 
property as well as real property, without allocating a value between the different 
kinds of property.  We now examine these contentions in detail. 
SUPREME COURT OF OHIO 
10 
 
1. The related-party disclosure in Form 10-Q did not rebut 
the propriety of using the sale prices as property values 
{¶ 30} U-Store-It claims that the 2006 sale prices cannot be used to value 
the properties because that year’s sale was not at arm’s-length.3  To determine the 
validity of this contention, it is essential to explain why a relationship of the 
parties may prevent a sale from indicating the market value of the property. 
{¶ 31} Both the appraisal literature and the case law define “market value” 
in part in terms of whether the buyer and the seller act as “typically motivated 
market participants” who are acting “in their own self-interest.”  See, e.g., 
Internatl. Assn. of Assessing Officers, Property Assessment Valuation 17-19 (2d 
Ed.1996) (quoting the Uniform Standards of Professional Appraisal Practice 
definition that calls for a buyer and a seller to be “typically motivated” and to be 
“acting in what they consider their best interests,” id. at 18); American Institute of 
Real Estate Appraisers (now the Appraisal Institute), The Dictionary of Real 
Estate Appraisal 194-195 (1984) (definition of “market value” calling for the 
buyer and seller to be “motivated by self-interest”); Appraisal Institute, The 
Appraisal of Real Estate 22-25 (13th Ed.2008) (quoting various definitions of 
market value to the same effect); N. Royalton City School Dist. Bd. of Edn. v. 
Cuyahoga Cty. Bd. of Revision, 129 Ohio St.3d 172, 2011-Ohio-3092, 950 N.E.2d 
955, ¶ 33 (“one primary characteristic of an arm’s-length sale is that the parties 
act in their own self-interest”); AEI Net Lease Income & Growth Fund v. Erie Cty. 
Bd. of Revision, 119 Ohio St.3d 563, 2008-Ohio-5203, 895 N.E.2d 830, ¶ 25 (a 
“typically motivated” transaction is one in which the buyer and seller are pursuing 
their own financial interests), citing Cummins Property Servs., L.L.C. v. Franklin 
                                                 
3 In U-Store-It’s view, the related-party disclosure is dispositive and establishes that the 2006 sale 
prices cannot establish the property values.  A weak form of this argument might contend merely 
that a burden should be placed on the school board to show that the sale prices ought to be used.  
But because the record furnishes an affirmative basis for adopting the sale prices as the property 
January Term, 2014 
11 
 
Cty. Bd. of Revision, 117 Ohio St.3d 516, 2008-Ohio-1473, 885 N.E.2d 222, ¶ 31, 
and Rhodes v. Hamilton Cty. Bd. of Revision, 117 Ohio St.3d 532, 2008-Ohio-
1595, 885 N.E.2d 236, ¶ 10.  It follows that the inquiry into whether “the parties 
to a sale are related bears on whether they are self-interested for purposes of R.C. 
5713.03.”  N. Royalton, ¶ 33. 
{¶ 32} In N. Royalton, we further explained that the related-party inquiry 
is important “because related parties may be pursuing the identical interest of 
common owners rather than acting as separately interested, typically motivated 
actors in the marketplace.”  Id. 
{¶ 33} The classic related-party situation arises when the interests of the 
seller and the buyer are aligned (atypically for the market) by their being under 
common ownership.  For example, in Shiloh Automotive, Inc. v. Levin, 117 Ohio 
St.3d 4, 2008-Ohio-68, 881 N.E.2d 227, a sale was arranged between MTD 
Products, Inc., as the seller and Shiloh Industries, Inc., as the purchaser.  MTD 
owned a 37 percent interest in Shiloh at the outset; during the negotiation of the 
contract, MTD increased its ownership in Shiloh to majority status:  the seller thus 
owned 51 percent of the buyer.  Id. at ¶ 8-9.  We affirmed the BTA’s conclusion 
that the sale could not be regarded as an arm’s-length transaction that furnished 
the value of the personal-property assets, because of the “collective, mutual 
interests” of the parties. 
{¶ 34} We have acknowledged that another type of relationship between 
the parties may defeat the arm’s-length character of the sale.  If the sale of 
property constitutes one element of a larger contractual relationship, the existence 
of those other contractual provisions may create motivations for the seller and the 
buyer that are atypical of the market as a whole.  See Cummins, 117 Ohio St.3d 
516, 2008-Ohio-1473, 885 N.E.2d 222, ¶ 30, fn. 4; S. Euclid/Lyndhurst Bd. of 
                                                                                                                                     
values, we need not decide and do not reach the question whether U-Store-It’s referring to the 
Form 10-Q placed a burden of going forward on the school board. 
SUPREME COURT OF OHIO 
12 
 
Edn. v. Cuyahoga Cty. Bd. of Revision, 74 Ohio St.3d 314, 317, 658 N.E.2d 750 
(1996) (in a sale-leaseback situation, “a willing buyer would pay less for property 
if the leaseback arrangement limited the amount of rent the buyer could collect”). 
{¶ 35} Because it does not establish an alignment of interest or other 
motivations atypical of the market, U-Store-It’s statement in the Form 10-Q that 
the parties are related fails to rebut the presumptive arm’s-length character of the 
2006 sale. 
{¶ 36} The disclosure in the Form 10-Q does not intimate any common 
ownership of Jernigan Property Group and U-Store-It.  To be sure, the disclosure 
does state that Jernigan personally had an ownership interest in one of the 
properties transferred, but there is no indication that Jernigan owned a share of U-
Store-It as of the time of sale, or that the seller and buyer were otherwise under 
common ownership. 
{¶ 37} Moreover, the Form 10-Q disclosure shows that in spite of Jernigan 
being hired by U-Store-It in conjunction with the sale, he did not exercise control 
over the sale itself.  First, the contract was signed on April 3, before Jernigan 
assumed his position with the buyer on April 24.  Second, the sale was approved 
by the independent trustees of U-Store-It.  Thus, even as the Form 10-Q 
disclosure raises concerns about common ownership, it dispels them. 
{¶ 38} U-Store-It refers to Financial Accounting Standards (“FAS”) No. 
57, Related Party Disclosures, created by the Financial Accounting Foundation, as 
well as to a publication of the American Institute of Certified Public Accountants 
that discusses FAS 57 to support its argument.  U-Store-It argues that the very 
fact that a related-party disclosure is required under accounting principles means 
that the sale cannot be regarded as presumptively arm’s length for tax valuation 
purposes.  But a review of the accounting standard shows that that conclusion is 
not justified.  The accounting standard states that “[t]ransactions involving related 
parties cannot be presumed to be carried out on an arm’s-length basis,” because 
January Term, 2014 
13 
 
“free-market dealings may not exist.”  (Emphasis added.)  But the standard also 
acknowledges that particular circumstances may be shown that substantiate the 
arm’s-length character of the transaction.  Accordingly, FAS No. 57 does not, 
contrary to U-Store-It’s assertions, establish that a related-party transaction is 
necessarily one that is not at arm’s length.  
{¶ 39} The accounting standards call for disclosure in order to put 
investors on notice of circumstances material to evaluating the sale and to permit 
further inquiry into those circumstances.  But it is not the requirement of 
disclosure that disqualifies a sale as arm’s length; rather, it is the content of that 
disclosure.  A related-party disclosure negates the arm’s-length character of the 
sale if and only if it demonstrates that the interests of the seller and the buyer are 
aligned in a way that makes their motivations atypical of the market in general.  
Because in this case the Form 10-Q disclosure did not unequivocally establish an 
alignment of interests between Jernigan Property Group and U-Store-It, and 
because Weigand’s testimony furnished an affirmative basis for relying on the 
allocated sale prices, the BTA could reasonably and lawfully decide to adopt the 
2006 prices as the property values. 
2. U-Store-It failed to demonstrate that the sale prices were misallocated or that 
they included amounts attributable to the purchase of personal property 
{¶ 40} U-Store-It’s second proposition of law states that the BTA decision 
is unreasonable and unlawful because the board made “no inquiry as to [the] basis 
for the allocation of the purchase price.”  We disagree. 
{¶ 41} The BTA adopted sale prices that were fully allocated under the 
sale contract and reported as the consideration for the realty on the conveyance-
fee statements.  Under FirstCal, 125 Ohio St.3d 485, 2010-Ohio-1921, 929 
N.E.2d 426, ¶ 22-25, the burden lay squarely on U-Store-It to prove an allocation 
that would reduce the value of the property.  See also Bedford Bd. of Edn. v. 
SUPREME COURT OF OHIO 
14 
 
Cuyahoga Cty. Bd. of Revision, 132 Ohio St.3d 371, 2012-Ohio-2844, 972 N.E.2d 
559, ¶ 22.  U-Store-It did not discharge that burden. 
{¶ 42} As for reallocation of the total sale price among the parcels, 
Weigand’s testimony strongly contravened the theory that the reported sale prices 
were misallocated.  As for an allocation of part of the total sale price to personal 
property, U-Store-It’s burden was to present “corroborating indicia” in support of 
such an allocation.  Sapina v. Cuyahoga Cty. Bd. of Revision, 136 Ohio St.3d 188, 
2013-Ohio-3028, 992 N.E.2d 1117, ¶ 18.  If the in-house underwriting at U-Store-
It took the value of personal property into account, that fact should have become 
clear through U-Store-It’s evidence.  But the testimony offered by U-Store-It did 
not indicate that the sale prices separately took personal-property value into 
account. 
{¶ 43} U-Store-It relies on the bare fact that a considerable amount of 
tangible personal property, plus the intangible asset of the noncompete clause, 
transferred along with the real estate.  But it was not unreasonable on this record 
for the BTA to conclude that in the context of an aggregate $44 million purchase 
of self-storage facilities, the parties did not contemplate attaching any separate 
value to the personal property. 
{¶ 44} U-Store-It cites Consol. Aluminum Corp. v. Monroe Cty. Bd. of 
Revision, 66 Ohio St.2d 410, 423 N.E.2d 75 (1981), for the proposition that the 
BTA had a duty to inquire into the allocation of the sale prices.  That citation is 
unavailing, because the evidence in the present case, unlike the record in Consol. 
Aluminum, affirmatively shows the propriety of allocating the entire sale price to 
the realty. 
{¶ 45} Moreover, Consol. Aluminum involved a purchase of an entire 
aluminum division, consisting of realty and personalty used in a manufacturing 
business.  By contrast, self-storage is a real-estate business:  it involves leasing 
the use of real property, much as apartment buildings and hotels do.  It follows 
January Term, 2014 
15 
 
that the income approach performed by U-Store-It’s in-house underwriting likely 
arrived at a figure reflecting an overwhelming predominance of real-property 
value.  See St. Bernard Self-Storage, 115 Ohio St.3d 365, 2007-Ohio-5249, 875 
N.E.2d 85, ¶ 24 (“The income generated by that [self-storage] business derives 
from St. Bernard’s granting the right to use space, either outdoors or within the 
buildings,” and therefore “[a]s a matter of pure logic, rent revenue relates to such 
rights and privileges [appertaining to the land and improvements]”), and Dublin 
Senior Community Ltd. Partnership. v. Franklin Cty. Bd. of Revision, 80 Ohio 
St.3d 455, 460, 687 N.E.2d 426 (1997) (in a senior living facility, rent for an 
apartment could properly be taken into account when valuing realty, as opposed 
to charges for food service and housekeeping, which constituted nonrealty 
business revenue); compare LTC Properties, Inc. v. Licking Cty. Bd. of Revision, 
133 Ohio St.3d 111, 2012-Ohio-3930, 976 N.E.2d 852, ¶ 20-22 (noting that under 
the income approach to valuing congregate care facilities, the income earned by 
an comparable facility was too closely tied to operating the business of eldercare 
to be indicative of the value of the real property); accord Hilliard City Schools 
Bd. of Edn. v. Franklin Cty. Bd. of Revision, 128 Ohio St.3d 565, 2011-Ohio-
2258, 949 N.E.2d 1, ¶ 33 (because most of the income earned by a hotel was from 
the rental of space, the court rejected an allocation to goodwill as an asset 
separable from the realty). 
3. The BTA’s determination of value was supported 
by reliable and probative evidence 
{¶ 46} Ultimately, U-Store-It’s arguments fail because the record in this 
case affirmatively establishes a basis for relying on the 2006 sale prices as the 
value of the realty.  Namely, the underwriting performed by U-Store-It “plac[ed] a 
value on the properties based on net operating income”:  the staff developed a 
capitalization rate and took into account vacancy loss and cash flow from rents.  
In this manner, the staff determined what a reasonable investor would pay for the 
SUPREME COURT OF OHIO 
16 
 
properties in order to obtain the income that the properties generate.  That in-
house valuation was the basis for the purchase prices allocated for each parcel set 
forth in the 2006 sale contract. 
{¶ 47} We will accept a contractual allocation of sale price to individual 
properties when “other indicia on the face of the contract, the circumstances 
attending the allocation, or some other independent evidence establishes the 
propriety of the allocation.”  St. Bernard Self-Storage, L.L.C. v. Hamilton Cty. Bd. 
of Revision, 115 Ohio St.3d 365, 2007-Ohio-5249, 875 N.E.2d 85, ¶ 19.  
Weigand’s testimony in the context of the present case furnishes specific 
“circumstances attending the allocation”:  the sale prices in the contract resulted 
from an income-approach valuation of the properties at issue conducted in-house 
by the purchaser.  That testimony thereby furnishes direct support for the BTA’s 
decision to adopt the sale prices as the value of the individual properties. 
{¶ 48} As we have often acknowledged, “ ‘[t]he fair market value of 
property for tax purposes is a question of fact, the determination of which is 
primarily within the province of the taxing authorities, and this court will not 
disturb a decision of the Board of Tax Appeals unless it affirmatively appears 
from the record that such decision is unreasonable or unlawful.’ ”  EOP-BP 
Tower, L.L.C. v. Cuyahoga Cty. Bd. of Revision, 106 Ohio St.3d 1, 2005-Ohio-
3096, 829 N.E.2d 686, ¶ 17, quoting Cuyahoga Cty. Bd. of Revision v. Fodor, 15 
Ohio St.2d 52, 239 N.E.2d 25 (1968), syllabus.  In light of the foregoing 
discussion, it cannot be said that the record lacks support for the BTA’s 
conclusion, much less that there is “a total absence of evidence to support” its 
findings.  See HealthSouth Corp. v. Testa, 132 Ohio St.3d 55, 2012-Ohio-1871, 
969 N.E.2d 232, ¶ 14.  Accordingly, because “ ‘the record contains reliable and 
probative support” for the BTA’s decision, we will affirm it.  Satullo v. Wilkins, 
111 Ohio St.3d 399, 2006-Ohio-5856, 856 N.E.2d 954, ¶ 14, quoting Am. Natl. 
Can Co. v. Tracy, 72 Ohio St.3d 150, 152, 648 N.E.2d 483 (1995). 
January Term, 2014 
17 
 
Conclusion 
{¶ 49} For the foregoing reasons, we conclude that the BTA acted 
reasonably and lawfully in adopting the 2006 sale prices as the value of the 
properties at issue.  We therefore affirm the decisions of the BTA. 
Decisions affirmed. 
O’CONNOR, C.J., and PFEIFER, LANZINGER, KENNEDY, FRENCH, and 
O’NEILL, JJ., concur. 
O’DONNELL, J., dissents and would reverse the decisions of the BTA. 
____________________ 
 
Rich & Gillis Law Group, L.L.C., Kelley A. Gorry, Mark H. Gillis, and 
Jeffrey H. Rich, for appellees Hilliard City Schools Board of Education and 
South-Western City Schools Board of Education. 
 
Sleggs, Danzinger & Gill Co., L.P.A., Steven R. Gill, and Todd W. 
Sleggs, for appellant. 
_________________________