Title: Scott Construction, Inc. v. City of Newport Board of Civil Authority

State: vermont

Issuer: Vermont Supreme Court

Document:

Scott Construction, Inc. v. City of Newport Board of Civil Authority 
(94-185); 165 Vt 232; 683 A.2d 382

[Opinion Filed 19-Apr-1996]

[Motion for Reargument Denied 13-Jun-1996]


       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                                 No. 94-185


Scott Construction, Inc.                          Supreme Court

                                                  On Appeal from
    v.                                            Orleans Superior Court

City of Newport                                   January Term, 1996
Board of Civil Authority


Alan W. Cheever, J.

       Duncan Frey Kilmartin of Rexford & Kilmartin, Newport, for
  plaintiffs-appellants

       Robert R. Bent of Zuccaro, Willis & Bent, P.C., St. Johnsbury, for
  defendant-appellee


PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.


       ALLEN, C.J.   In two cases tried together, taxpayers appeal decisions
  of the Orleans Superior Court setting the assessed valuation of two
  properties in the City of Newport.  We affirm both judgments.

       One property, known as Indian Point Farm, is a former dairy farm owned
  by Daniel Scott and his father, Richard Scott, consisting of about 148
  acres and two residences.  The property is wholly within the Newport City
  limits and has extensive road frontage, as well as substantial shoreline on
  Lake Memphremagog.  The second parcel is owned by Scott Construction, Inc.
  and consists of a lot of about one acre.

       The Indian Point property was assessed by the City during a general
  1990 revaluation at $891,000, based on an assessment by MMC, Inc., an
  appraisal firm.  Taxpayers appealed to the Board of Civil Authority (BCA),
  which set the valuation at $890,200.  They then appealed to the superior
  court, which concluded that the fair market value was $768,000, based on an
  appraisal by Douglas McArthur, an independent real estate appraiser who
  used a development


 

  model under which the parcel would be subdivided and sold as nine separate
  lots.  McArthur considered the property unique because of its size and
  lakeshore location and testified that a lake shore development would be its
  highest and best use.  In his plan, seven of the lots to be created would
  be sold undeveloped, while the last two would be sold with an existing
  dwelling on each. The seven lots were estimated to sell for an aggregate of
  $1,050,000, and the eighth and ninth for a total of $450,000.  The total
  development cost to be subtracted from sale proceeds was projected to be
  $732,000, yielding a net estimated value of $768,000.

       The one-acre lot was assessed during the City's general revaluation at
  $22,600 and was reduced to $20,000 by the BCA.  On appeal, the court ruled
  that the $20,000 valuation was correct.

                        I. Indian Point Property

       Taxpayers first argue that the highest and best use of the property is
  as a farm.  Vermont law compels assessment of real property based on its
  fair market value.  The statute defines fair market value as:

          the price which the property will bring in the market when offered
          for sale and purchased by another, taking into consideration all the
          elements of the availability of the property, its use both potential
          and prospective, any functional deficiencies, and all other elements
          such as age and condition which combine to give property a
          market value.

  32 V.S.A. § 3481(1).  As indicated by the words "potential and
  prospective," fair market value reflects the highest and best use.  See,
  e.g., Board of Assessment Appeals v. Colorado Arlberg Club,