State of New York

Supreme Court, Appellate Division

Third Judicial Department

Decided and Entered: December 18, 2014 518303 

_________________________________

In the Matter of KOHL'S

ILLINOIS INC. #691,

Appellant,

v

MEMORANDUM AND ORDER

BOARD OF ASSESSORS OF THE TOWN 

OF CLIFTON PARK et al.,

Respondents.

(And Another Related Proceeding.)

_________________________________

Calendar Date: October 16, 2014

Before: Lahtinen, J.P., Garry, Egan Jr. and Lynch, JJ.

__________

Schroder & Strom, LLP, Mineola (Robert N. Goldstein of

counsel), for appellant.

The Vincelette Law Firm, Albany (Daniel G. Vincelette of

counsel), for Board of Assessors of the Town of Clifton Park and

another, respondents.

Cooper Erving & Savage LLP, Albany (David C. Rowley of

counsel), for Shenendehowa Central School District, respondent.

__________

Lynch, J.

Appeal from a judgment of the Supreme Court (Crowell, J.),

entered April 11, 2013 in Saratoga County, which dismissed

petitioner's applications, in two proceedings pursuant to RPTL

article 7, to reduce the 2010 and 2011 tax assessments on certain

real property leased by petitioner.
-2- 518303 

Petitioner leases a 10.81-acre parcel of real property in

the Town of Clifton Park, Saratoga County under a 20-year ground

lease. The property includes a 95,715-square-foot retail store

constructed in 2003 pursuant to petitioner's specifications. 

Petitioner commenced these proceedings to challenge the 2010 and

2011 tax assessments, which were based on an assessed value of

$5,200,900 that, from an equalization rate of 58%, yields a fair

market value of $8,967,069. Following a bench trial in which the

parties presented the testimony and reports of their respective

appraisers, Supreme Court dismissed the petitions. Petitioner

appeals.

Petitioner maintains that Supreme Court's decision is

procedurally flawed in that the court ultimately granted

respondents' motion to dismiss the petitions made at the close of

petitioner's proofs, even though petitioner satisfied its

threshold burden of establishing a prima facie dispute regarding

valuation through the presentation of a competent appraisal. As

a consequence, petitioner maintains that Supreme Court, in

finding that the property was not overvalued, applied the wrong

burden of proof in granting the motion to dismiss. Although we

recognize that there is an anomoly in the court's decision, we do

not agree with petitioner's ultimate conclusions.

As explained by the Court of Appeals in Matter of FMC Corp.

(Peroxygen Chems. Div.) v Unmack (92 NY2d 179 [1998]), "a

property valuation by the tax assessor is presumptively valid and

thus obviates any necessity, on the part of the assessors, of

going forward with proof of the correctness of [the] valuation. 

However, when a petitioner challenging the assessment comes

forward with substantial evidence to the contrary, the

presumption disappears" (id. at 187 [internal quotation marks and

citations omitted]). There is no dispute here that petitioner

satisfied this minimal threshold burden of proof through the

report and testimony of its appraiser, Christopher Harland, and

Supreme Court acknowledged as much in its decision. In this

regard, it is important to recognize that "[t]he ultimate

strength, credibility or persuasiveness of petitioner's arguments

are not germane during this threshold inquiry. Similarly, the

weight to be given to either party's evidence is not a relevant

consideration at this juncture" (id. at 188). Once the threshold
-3- 518303 

has been met, however, "a court must weigh the entire record,

including evidence of claimed deficiencies in the assessment, to

determine whether petitioner has established by a preponderance

of the evidence that its property has been overvalued" (id.).

Although Supreme Court erred in one part of the decision in

its description of the appropriate procedure and failed to

discuss respondents' proof or set a value for the property, the

court did expressly confirm that it weighed the entire record. 

In this context, petitioner was still required to establish that

the property had been overvalued and the credibility and

persuasiveness of petitioner's appraiser was squarely at issue. 

The record shows that Harland utilized both a sales

comparison approach and a capitalization of income approach in

concluding that the market value of the property was $4.8 million

and $4.6 million in 2010 and 2011, respectively. In his sales

comparison analysis, Harland primarily utilized five vacant,

older big-box stores located outside of the Capital District as

comparables. In contrast to Harland, respondent's appraiser,

John O'Neill, opined that vacant properties could not be

considered as comparables to the subject property. For income

capitalization purposes, Harland chose eight second-generation

lease properties as comparables. Harland's basic premise was

that build-to-suit leases, such as petitioner's, were not

accurate indicators of market value because the original user

would pay more to build its prototype building than the market

would be willing to pay. O'Neill adamantly disagreed, explaining

that such leases are negotiated at arm's length between a tenant

and developer motivated to maximize profits. Utilizing build-tosuit lease properties located in the Capital District, and

emphasizing that the subject property was in a "premier

commercial location," O'Neill completed a comparable sales and an 

income capitalization analysis, valuing the property at $11.1

million and $10.8 million for the tax years 2010 and 2011,

respectively. The difference in the valuation approach of each

expert presented a credibility determination for Supreme Court to

resolve (see Matter of Rite Aid of N.Y. No. 4928 v Assessor of

Town of Colonie, 58 AD3d 963, 964 [2009], lv denied 12 NY3d 709

[2009]).
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We find that the record supports Supreme Court's rejection

of Harland's appraisal and its conclusion that petitioner failed

to sustain its burden of proof of establishing overvaluation of

the subject property. Lest there be any uncertainly here, and

"in the interest of judicial economy, we exercise our broad

authority to independently consider the evidence" (Matter of

Friar Tuck Inn of Catskill v Town of Catskills, 2 AD3d 1089

[2013]). Considering the above, we find that the court properly

dismissed the petitions (see Matter of NYCO Mins. v Town of

Lewis, 296 AD2d 748, 750-751 [2002], lv dismissed and denied 99

NY2d 576 [2003]; see also Matter of Thomas v Davis, 96 AD3d 1412,

1415 [2012], lv denied 21 NY3d 860 [2013]; Matter of Villa Roma

Country Club v Fulton, 301 AD2d 911, 912-913 [2003]).

Lahtinen, J.P., Garry and Egan Jr., JJ., concur.

ORDERED that the judgment is affirmed, without costs.

ENTER:

Robert D. Mayberger

Clerk of the Court