2018 WI 4

SUPREME COURT OF WISCONSIN

CASE NO.: 2016AP21

COMPLETE TITLE: Metropolitan Associates,

 Plaintiff-Appellant-Petitioner,

 v.

City of Milwaukee,

 Defendant-Respondent.

REVIEW OF A DECISION OF THE COURT OF APPEALS

Reported at 373 Wis. 2d 310, 895 N.W.2d 104

(2017 – Unpublished)

OPINION FILED: January 10, 2018

SUBMITTED ON BRIEFS: 

ORAL ARGUMENT: September 15, 2017

SOURCE OF APPEAL:

COURT: Circuit

COUNTY: Milwaukee

JUDGE: Jeffrey A. Conen and Dennis P. Moroney

JUSTICES:

CONCURRED:

DISSENTED: R.G. BRADLEY, J. and KELLY, J. (coauthor)dissent (opinion filed).

NOT PARTICIPATING: 

ATTORNEYS:

For the plaintiff-appellant-petitioner, there were briefs 

filed by Alan Marcuvitz, Nicholas J. Boerke, and Von Briesen & 

Roper, S.C., Milwaukee. There was an oral argument by Nicholas 

J. Boerke and Alan Marcuvitz.

For the defendant-respondent, there was a brief filed by 

Grant F. Langley, city attorney, and Allison N. Flanagan, 

assistant city attorney. There was an oral argument by Allison 

N. Flanagan.
2

An amicus curiae brief was filed on behalf of League of 

Wisconsin Municipalities by Claire Silverman and League of 

Wisconsin Municipalities, Madison. 
2018 WI 4

NOTICE

This opinion is subject to further 

editing and modification. The final 

version will appear in the bound 

volume of the official reports.

No. 2016AP21

(L.C. No. 2009CV9871)

STATE OF WISCONSIN : IN SUPREME COURT

Metropolitan Associates,

 Plaintiff-Appellant-Petitioner,

 v.

City of Milwaukee,

 Defendant-Respondent.

FILED

JAN 10, 2018

Diane M. Fremgen

Clerk of Supreme Court

REVIEW of a decision of the Court of Appeals. Affirmed.

¶1 ANN WALSH BRADLEY, J. The petitioner, Metropolitan 

Associates (Metropolitan), seeks review of an unpublished court 

of appeals decision affirming the circuit court's determination, 

which in turn affirmed the City of Milwaukee's (the City) tax 

assessment of property owned by Metropolitan.1 Metropolitan 

contends that the court of appeals erred in concluding that the 

 

1 Metro. Assocs. v. City of Milwaukee, No. 2016AP21, 

unpublished slip op., (Wis. Ct. App. Dec. 8, 2016) (affirming 

order of circuit court for Milwaukee County, Jeffrey A. Conen

and Dennis P. Moroney, JJ.).
No. 2016AP21

2

City complied with Wis. Stat. § 70.32(1) (2013-14)2 in its 

assessment of Metropolitan's property.

¶2 Specifically, Metropolitan argues that the City 

contravened Wis. Stat. § 70.32(1) because it failed to utilize 

the "best information" available when it relied on mass 

appraisal, and not single-property appraisal, in determining the 

value of Metropolitan's property. Metropolitan additionally 

asks this court to reject the findings of the circuit court 

regarding the reliability of the competing assessment evidence 

and the weight and credibility the circuit court attributed to 

that evidence. Ultimately, it argues that the application of 

the presumption of correctness to the City's assessment based on 

a mass appraisal constitutes an error of law.

¶3 We conclude that the City's assessment of 

Metropolitan's property complied with Wis. Stat. § 70.32(1). 

The City permissibly utilized mass appraisal for its initial 

assessment and appropriately defended its initial assessment 

with single property appraisals demonstrating that the 

assessment was not excessive.

¶4 Next, we decline Metropolitan's request to upset the 

circuit court's findings of fact. As the court of appeals aptly 

stated, "[i]n asking us to reject the court's judgment as to the 

weight and credibility of the competing assessment evidence, 

Metropolitan effectively asks us to substitute our judgment for 

 

2 All subsequent references to the Wisconsin Statutes are to 

the 2013-14 version unless otherwise indicated.
No. 2016AP21

3

the circuit court's regarding the credibility of witnesses and 

the relative weights to assign to various pieces of the evidence 

at trial, neither of which we can do."3

¶5 We conclude that the circuit court's findings of fact 

regarding the reliability of the respective appraisals are not 

clearly erroneous. Because the circuit court's findings are 

sufficient to support its determination regardless of whether 

the presumption of correctness was employed, we need not address 

whether the presumption of correctness attached to the 

assessment based on the initial mass appraisal.

¶6 Accordingly, we affirm the decision of the court of 

appeals.

I

¶7 The facts presented arise from the City's assessments 

of seven properties owned by Metropolitan for the tax years 

2008-2013. Metropolitan objected that the assessments were 

excessive, initially appealing to the City's Board of Assessors

and Board of Review. The Board of Assessors and Board of Review 

both upheld the assessments. Metropolitan then brought an 

excessive assessment action in the circuit court.

¶8 Both parties agreed to present evidence on only one of

the seven Metropolitan properties, the Southgate Apartments, and 

to focus exclusively on the tax years 2008-2011. They further 

agreed that the resolution of the Southgate Apartments 

 

3 Metro. Assocs. v. City of Milwaukee, No. 2016AP21, 

unpublished slip op., ¶35 (Wis. Ct. App. Dec. 8, 2016).
No. 2016AP21

4

assessment would control the resolution of Metropolitan's 

challenges to the other six properties' assessments.

¶9 The Southgate Apartments were initially assessed by 

the City using a "mass appraisal" technique. At trial, the City 

assessor, Peter Weissenfluh, testified that "[m]ass appraisal is 

a technique used by probably the majority of assessment 

jurisdictions in the nation. It is a process whereby an 

assessor values entire groups of property using systematic 

techniques and allowing for statistical testing."

¶10 Mass appraisal stands in contrast to single property 

appraisal. Weissenfluh testified that single property appraisal 

"is looking at the individual properties and determining the 

full fair market value of that individual property with more 

detail and more . . . individual analysis . . . ."

¶11 Single property appraisals are conducted by what 

Weissenfluh described as a "three-tier valuation technique." 

The three "tiers" of analysis provide a hierarchy of what 

constitutes the best evidence of fair market value. Pursuant to 

a "tier 1" analysis, the best evidence of value is a recent sale 

of the subject property.

¶12 Weissenfluh explained that there were no recent sales 

of the Southgate Apartments. Because no tier 1 evidence was 

available, he then moved to a "tier 2" analysis, also known as a 

"sales comparison" approach.

¶13 A tier 2 analysis examines any sales of reasonably 

comparable property. Under this approach, as Weissenfluh 

testified, an assessor "surveys the market to determine 
No. 2016AP21

5

comparable sales. In that process many sources are used." The 

assessor then selects comparable properties relying on such 

factors as location and use, adjusting the sale price based on 

particular physical characteristics of the properties.

¶14 Weissenfluh testified that he completed a tier 2 

analysis to assess the Southgate Apartments. Through this 

analysis, he ultimately arrived at a value higher than that 

produced with the initial mass appraisal.

¶15 If there is no information from which to conduct 

either a tier 1 or tier 2 analysis, the assessor moves to a 

"tier 3" analysis. A tier 3 analysis takes into account other 

characteristics of the property, such as the amount of income it 

generates and the cost to maintain it.

¶16 Weissenfluh conducted a tier 3 income analysis "to 

confirm that the sales comparison approach made sense." He 

further testified that his income analysis validated the results 

of the sales comparison analysis, confirming that the initial 

mass appraisal was not excessive.

¶17 Metropolitan responded by presenting the testimony of 

its appraiser, Lawrence Nicholson. He also conducted both tier 

2 and tier 3 analyses of the Southgate Apartments. Nicholson 

concluded, contrary to Weissenfluh's determination, that the 

Southgate Apartments had a value lower than that reflected in 

the City's initial mass appraisal.

¶18 After a two-day bench trial, the circuit court 

rendered a written decision affirming the City's initial 

assessments. The circuit court determined first that the City 
No. 2016AP21

6

complied with Wis. Stat. § 70.32(1) and the Wisconsin Property 

Assessment Manual (the Manual) by conducting a mass appraisal of 

the Southgate Apartments.

¶19 Second, the circuit court found that the City's tier 2 

and 3 valuations were "more reliable" than Metropolitan's. 

Specifically, the circuit court determined that "[t]he City's 

sales comparison approach is more reliable than Metropolitan's 

approach" because Metropolitan made "adjustments based solely on 

the properties' net operating income[]." In so doing,

Metropolitan "conflate[d] the sales comparison and income 

approaches."

¶20 Further, the circuit court found that "[t]he City's 

income approach was more reliable than Metropolitan's approach." 

The City's income approach correctly adjusted for Metropolitan's 

expense ratio, which was "markedly higher than the expense 

ratios for similar properties in the market." As the circuit 

court highlighted, "[t]he market trend is to maintain a lower 

expense ratio, and the City's income approach accounted for 

this."

¶21 On appeal, Metropolitan argued that the circuit court 

erred in concluding that Metropolitan failed to rebut the 

presumption of correctness to which City assessments are 

entitled. Specifically, it asserted that (1) the City's initial 

assessments were invalid as a matter of law because the City 

assessor used the mass appraisal method and not the three-tier 

technique; (2) the City assessor's tier 2 and 3 assessments were 

conducted in a manner contrary to Wisconsin assessment law in 
No. 2016AP21

7

that the City assessor ignored the individual economic 

characteristics of the Southgate Apartments property; and (3) 

the circuit court erred in its determination that the City 

assessor's methods were more reliable than those of 

Metropolitan's assessor.

¶22 The court of appeals rejected Metropolitan's 

arguments. It concluded that the Wisconsin Property Assessment 

Manual explicitly encourages assessors to use mass appraisal. 

Metro. Assocs. v. City of Milwaukee, No. 2016AP21, unpublished 

slip op., ¶20 (Wis. Ct. App. Dec. 8, 2016). Next, it determined 

that the City assessor's sales comparison and income analyses 

were conducted in accordance with Wisconsin law. Id., ¶33. 

Finally, it opined that the circuit court's determination 

regarding the reliability of each assessor's methods was a 

credibility determination that the court of appeals would not 

upset on appeal. Id., ¶35.

II

¶23 In this case we are asked to review a tax assessment 

made in an action for refund of excess property taxes paid 

pursuant to Wis. Stat. § 74.37(3)(d).4 An action under § 74.37 

 

4 Wis. Stat. § 74.37(3)(d) provides:

If the taxation district or county disallows the 

claim, the claimant may commence an action in circuit 

court to recover the amount of the claim not allowed. 

The action shall be commenced within 90 days after the 

claimant receives notice by registered or certified 

mail that the claim is disallowed.
No. 2016AP21

8

is a new trial, not a certiorari action. Trailwood Ventures, 

LLC v. Vill. of Kronenwetter, 2009 WI App 18, ¶6, 315 

Wis. 2d 791, 762 N.W.2d 841. Accordingly, we review the circuit 

court's determination, not that of the assessor or Board of 

Review. Id.

¶24 In review, we interpret and apply Wis. Stat. § 70.32 

to determine whether the appraisal at issue followed the 

statutory directives. Regency W. Apartments LLC v. City of 

Racine, 2016 WI 99, ¶22, 372 Wis. 2d 282, 888 N.W.2d 611. 

Statutory interpretation and application present questions of 

law that this court reviews independently of the determinations 

rendered by the circuit court and court of appeals. Id.

¶25 We do, however, defer to a circuit court's findings of 

fact. Royster-Clark, Inc. v. Olsen's Mill, Inc., 2006 WI 46, 

¶11, 290 Wis. 2d 264, 271, 714 N.W.2d 530, 534 (citation 

omitted). Factual findings made by the circuit court will not 

be disturbed unless they are clearly erroneous. Emp'rs Ins. of 

Wausau v. Jackson, 190 Wis. 2d 597, 613, 527 N.W.2d 681 (1995). 

It is within the province of the factfinder to determine the 

weight and credibility of expert witnesses' opinions. Bonstores 

Realty One, LLC v. City of Wauwatosa, 2013 WI App 131, ¶6, 351 

Wis. 2d 439, 839 N.W.2d 893 (citation omitted).

III

¶26 Metropolitan argues first that the City's assessments 

do not comply with Wis. Stat. § 70.32(1), which provides in 

relevant part:
No. 2016AP21

9

Real property shall be valued by the assessor in the 

manner specified in the Wisconsin property assessment 

manual provided under s. 73.03(2a) from actual view or 

from the best information that the assessor can 

practicably obtain . . .

Specifically, Metropolitan contends that the City did not use 

the "best information" available when it relied on mass 

appraisal rather than single property appraisal. The argument 

centers on the meaning of "best information that the assessor 

can practicably obtain."

¶27 In its initial briefing,5 Metropolitan asserts that the 

"best information" on which to base an assessment is not that 

which informs a mass appraisal, but instead is information 

underlying a single property appraisal pursuant to the three 

tiers of analysis under State ex rel. Markarian v. City of 

Cudahy, 45 Wis. 2d 683, 173 N.W.2d 627 (1970).

¶28 Wisconsin Stat. § 70.32(1) explicitly directs that 

property be assessed "in the manner specified in the Wisconsin 

property assessment manual." The Manual provides that 

"[c]ommercial property can be valued by either single property 

or mass appraisal techniques." 1 Wisconsin Property Assessment 

Manual (2009) at 9-5.6

 

5 Although in its initial brief Metropolitan appeared to 

cast aspersions on mass appraisal as a whole, it conceded in its 

reply brief and at oral argument that it is not asking the court 

to "completely discard mass appraisal techniques." Metropolitan 

thus recognized that the information underlying a mass appraisal 

may constitute the best information available at the initial 

assessment stage. See Pet'r Reply Brief at 2.

6 All references to the Wisconsin Property Assessment Manual 

are to the 2009 version unless otherwise noted.
No. 2016AP21

10

¶29 "Mass appraisal is the systematic appraisal of groups 

of properties, as of a given date, using standardized procedures 

and statistical testing." 1 Wisconsin Property Assessment 

Manual at 7-32. The Manual provides for assessors utilizing 

mass appraisal in initial assessments: "Mass appraisal is the 

underlying principle that Wisconsin assessors should be using to 

value properties in their respective jurisdictions." Id.

¶30 Mass appraisal stands in contrast to single property 

appraisal, which is the valuation of a single particular 

property as of a given date. Id. A single property appraisal 

focuses on the unique characteristics of the subject property 

within the strictures of the methodology set forth in Markarian, 

45 Wis. 2d 683.

¶31 In Markarian, we addressed a landowner's challenge to 

the City of Cudahy's assessment of his property. 45 Wis. 2d at 

684. We interpreted Wis. Stat. § 70.32(1)7 to set forth a 

hierarchical valuation methodology for single-property 

appraisal. Id. at 686. The text of the statute lists three 

sources of information in a specific order, with the court in 

 

7 Wis. Stat. § 70.32(1), as relevant here, provides:

In determining the value, the assessor shall consider 

recent arm's-length sales of the property to be 

assessed if according to professionally acceptable 

appraisal practices those sales conform to recent 

arm's-length sales of reasonably comparable property; 

recent arm's-length sales of reasonably comparable 

property; and all factors that, according to 

professionally acceptable appraisal practices, affect 

the value of the property to be assessed.
No. 2016AP21

11

Markarian clarifying this order as indicative of the quality of 

the information each source provides. Id. This methodology has 

been further described in the courts as providing for three 

"tiers" of analysis. See, e.g., Allright Props., Inc. v. City 

of Milwaukee, 2009 WI App 46, ¶¶20-30, 317 Wis. 2d 228, 767 

N.W.2d 567.

¶32 The best information of a property's fair market value 

is an arm's-length sale of the subject property. Markarian, 45 

Wis. 2d at 686; Regency W., 372 Wis. 2d 282, ¶27. Examination 

of a recent arm's-length sale is known as a "tier 1" analysis. 

Allright Props., 317 Wis. 2d 228, ¶21.

¶33 If there is no recent sale of the subject property, 

the appraiser moves to tier 2, examining recent, arm's-length 

sales of reasonably comparable properties (the "sales comparison 

approach"). Markarian, 45 Wis. 2d at 686; Allright Props., 317 

Wis. 2d 228, ¶22.

¶34 When both tier 1 and tier 2 are unavailable, an 

assessor then moves to tier 3. See Allright Props., 317 

Wis. 2d 228, ¶29. Under tier 3, an assessor "may consider 'all 

the factors collectively which have a bearing on value of the 

property in order to determine its fair market value.'" Adams 

Outdoor Advert., Ltd., v. City of Madison, 2006 WI 104, ¶35, 294 

Wis. 2d 441, 717 N.W.2d 803 (quoting Markarian, 45 Wis. 2d at 

686). These factors include "cost, depreciation, replacement 

value, income, industrial conditions, location and occupancy, 

sales of like property, book value, amount of insurance carried, 

value asserted in a prospectus and appraisals produced by the 
No. 2016AP21

12

owner." State ex rel. Mitchell Aero, Inc. v. Bd. of Review of 

City of Milwaukee, 74 Wis. 2d 268, 278, 246 N.W.2d 521 (1976) 

(citations omitted). Both the income approach, which seeks to 

capture the amount of income the property will generate over its 

useful life, and the cost approach, which seeks to measure the 

cost to replace the property, fit under the umbrella of tier 3 

analysis. Adams Outdoor Advert., 294 Wis. 2d 441, ¶35.

¶35 Metropolitan's argument that the "best information" 

must necessarily be the information underlying a single property 

appraisal and not a mass appraisal is unpersuasive for two 

reasons. First, property must be assessed "in the manner 

specified in the Wisconsin property assessment manual." Wis. 

Stat. § 70.32(1). It allows assessors to conduct mass 

appraisal. 1 Wisconsin Property Assessment Manual at 7-32. 

Second, Metropolitan's argument does not give full effect to the 

word "practicably" in § 70.32(1).

¶36 The Manual outlines the division of labor between mass 

appraisal and single property appraisal, demonstrating when the 

use of each method is appropriate:

The assessor needs skills in both mass appraisal and 

single property appraisal. Mass appraisal skills for 

producing initial values, whether during a reappraisal 

year or not, and single property appraisal skills to 

defend specific property values or to value specialpurpose properties that do not lend themselves to mass 

appraisal techniques.

1 Wisconsin Property Assessment Manual at 7-32.

¶37 Metropolitan acknowledged in its reply brief and at 

oral argument that mass appraisal is appropriate in certain 
No. 2016AP21

13

circumstances. Namely, Metropolitan recognized that at the 

initial assessment stage, mass appraisal may comprise the best 

information for all properties being assessed en masse.

¶38 The Manual makes clear that mass appraisal is accepted 

at the initial assessment stage. It likewise sets forth when a 

single property appraisal is warranted. A single-property 

appraisal is necessary (1) after the initial mass appraisal has 

been challenged by the taxpayer or (2) if the property being 

valued is a "special-purpose" property that does not lend itself 

well to mass appraisal.8 See 1 Wisconsin Property Assessment 

Manual at 7-32. The express language of the Manual indicates 

that mass appraisal is a proper method of valuation in all other 

circumstances.

¶39 Requiring a single property appraisal after a taxpayer 

challenges an assessment does not mean that the value of the 

property must be set in accordance with the single property 

appraisal. Indeed, this could not be the case when the 

subsequent single property appraisal is higher than the initial 

mass appraisal. In Trailwood Ventures, the court of appeals 

determined that Wis. Stat. §§ 74.37 and 74.399 do not permit the 

 

8 There has been no argument advanced here that the 

Southgate Apartments are a "special-purpose" property. 

Accordingly, we will not address the second exception to the 

general rule in favor of mass appraisal.

9 Wisconsin Stat. § 74.37 sets forth rules and procedures 

for excessive assessment actions. Wis. Stat. § 74.39 permits a 

court to order reassessment of a property if it is deemed 

necessary. Trailwood Ventures, LLC v. Vill. of Kronenwetter, 

2009 WI App 18, ¶8, 315 Wis. 2d 791, 762 N.W.2d 841.
No. 2016AP21

14

court to impose a greater tax burden than the one the taxpayer 

challenges. 315 Wis. 2d 791, ¶10.

¶40 The question on appeal in a Wis. Stat. § 74.37 action 

is not whether the initial assessment was incorrect, but whether 

it was excessive. Accordingly, Weissenfluh testified at trial 

as follows:

Q: And you're not asking that the assessment be 

changed to the sales comparison approach value, 

correct?

A: No. The assessment cannot be changed at this 

level. All I'm showing is that my work supports the 

original assessment and I conclude, therefore, that 

the assessment as made was not excessive.

The value reflected in the initial mass appraisal can thus 

constitute the value of the property for tax assessment purposes 

as long as it is not excessive.

¶41 Further, disallowing mass appraisal as the basis for 

the City's valuation in this case would not give full effect to 

the word "practicably" in Wis. Stat. § 70.32(1). Wisconsin 

Stat. § 70.32(1) dictates that an assessment must be based on 

"the best information that the assessor can practicably obtain" 

(emphasis added).

¶42 "[S]tatutes should be so construed that no word or 

clause shall be rendered surplusage." Milwaukee Cty. v. Dep't 

of Indus., Labor & Human Relations Comm'n, 80 Wis. 2d 445, 452-

53, 259 N.W.2d 118 (1977) (quoting Cook v. Indus. Comm'n, 31 

Wis. 2d 232, 240, 142 N.W.2d 827 (1966)). A blanket disavowal 

of mass appraisal would render the word "practicably" 
No. 2016AP21

15

superfluous. It would not be practicable to require a single 

property appraisal of every parcel in the state.

¶43 Completing annual assessments in a major metropolitan 

area would simply not be feasible without the use of mass 

appraisal. As Weissenfluh testified at trial, "[i]n Milwaukee 

we have 150,000 properties. Without mass appraisal it's a job 

that simply could not be done [] especially on an annual 

basis."10

¶44 Mass appraisal is equitable and efficient. 1 

Wisconsin Property Assessment Manual at 7-32. Additionally, 

mass appraisal is widely used throughout the country. See, 

 

10 The dissent recognizes that assessing every single 

property in the City of Milwaukee every year is "at the very 

least, a daunting prospect," but would nevertheless mandate that 

the task be completed. Dissent, ¶97. However, it appears to 

rest on the flawed assumptions that the information needed to 

conduct a single property appraisal is both reliable and

("practicably") available in all instances. This is problematic 

for two reasons.

First, the dissent assumes that the City should trust the 

data submitted by Metropolitan, which the circuit court 

specifically determined was not reliable. Second, it assumes

that the information necessary to conduct a tier 2 valuation was 

available to the City because it brought such a valuation to 

trial and because Metropolitan provided it with information to 

conduct such an analysis. Id. To say that the City can 

practicably obtain the information because Metropolitan gave it 

to them is to accept without scrutiny the data provided by a 

self-interested party. Importantly, we observe that the City 

brought a tier 2 valuation to trial solely to defend its mass 

appraisal. It was forced to compile the information necessary 

to conduct a tier 2 analysis only because Metropolitan 

challenged the initial mass appraisal. As Weissenfluh 

testified, it would not be practicable for the City to do this 

for every property, every year.
No. 2016AP21

16

e.g., C.P. & Son, Inc. v. Bd. of Cty. Comm'rs of Cty. of 

Boulder, 953 P.2d 1303, 1304-05 (Colo. App. 1998); Walsh v. 

State Prop. Tax Appeal Bd., 677 N.E.2d 489, 493 (Ill. App. Ct.

1997); In re Johnson Cty. Appraiser/Privitera Realty Holdings, 

283 P.3d 823, 828 (Kan. Ct. App. 2012); Revenue Cabinet, Com. of 

Ky. v. Gillig, 957 S.W.2d 206, 209 (Ky. 1997); Darnall Ranch, 

Inc. v. Banner Cty. Bd. of Equalization, 753 N.W.2d 819, 827 

(Neb. 2008); Appeal of Wagstaff, 255 S.E.2d 754, 756 (N.C. Ct. 

App. 1979); Gray v. Wyoming State Bd. of Equalization, 896 

P.2d 1347, 1349 (Wyo. 1995). While our conclusion is not 

dependent on the practices in other jurisdictions, an 

examination of such practices demonstrates that our approach in 

endorsing mass appraisal does not make Wisconsin an outlier.

¶45 At the initial assessment stage, the best information 

the City can "practicably" obtain is often that underlying a 

mass appraisal. Because its use is provided for by the Manual 

and it allows the City to efficiently assess a large number of 

properties, mass appraisal comports with Wis. Stat. § 70.32(1). 

We thus reaffirm that mass appraisal is appropriately utilized 

as a manner of valuing property under § 70.32(1).

¶46 Although subject to modification, the Manual sets 

forth the procedures to be used. Wisconsin Stat. § 70.32(1) 

directs the use of the Manual. The value reflected in the 

initial mass appraisal can constitute the value of the property 

for tax assessment purposes as long as it is not excessive.
No. 2016AP21

17

¶47 Our recent decision in Regency W., 372 Wis. 2d 282, 

does not alter this conclusion. In Regency W., we determined 

that the City of Racine:

chose not to employ [] information [regarding 

projected expenses and income] and chose instead to 

calculate the [net operating income] for its incomebased valuation through mass appraisal techniques that 

were not particularized to Regency West's property.

We conclude that in that regard, Racine did not comply 

with the directive of § 70.32(1) because it did not 

use the "best information" that was available to its 

assessor.

Id., ¶40. Regency W. can be fairly read to hold that mass 

appraisal valuations are legally valid so long as the underlying 

characteristics are appropriately particular to the property in 

question. In Regency W., the assessor refused to use expense 

data for the federally regulated subject property, relying 

instead on expenses for market rate properties that did not 

share the underlying characteristics. Id., ¶¶40, 46.

¶48 We therefore conclude that the City's assessment of 

the Southgate Apartments complied with Wis. Stat. § 70.32(1). 

The City permissibly utilized mass appraisal to value the 

property and appropriately defended its initial assessment with 

single property appraisals demonstrating that the mass appraisal 

was not excessive.

IV

¶49 Metropolitan contends next that the circuit court 

erred in concluding that Metropolitan failed to rebut the 

presumption of correctness to which City assessments are 

entitled. It asserts that we should reject the circuit court's 
No. 2016AP21

18

findings regarding the reliability of the competing assessment 

evidence and the weight and credibility the circuit court 

attributed to that evidence. Metropolitan also argues that the 

presumption of correctness should not have attached to the 

City's assessment in the first instance.

¶50 Wisconsin Stat. § 70.49(2) provides that a tax 

assessment being challenged pursuant to Wis. Stat. § 74.37 is 

entitled to a presumption that it was "justly and equitably" 

made, giving rise to a presumption of correctness.11 Bonstores 

Realty One, 351 Wis. 2d 439, ¶¶5, 7; Adams Outdoor Advert., 294 

Wis. 2d 441, ¶25. The presumption can be overcome if the 

challenging party presents significant contrary evidence. See

Adams Outdoor Advert., 294 Wis. 2d 441, ¶25.

¶51 Metropolitan advances that it presented significant 

contrary evidence sufficient to rebut the presumption of 

correctness. At trial, both the City and Metropolitan presented 

the testimony of their respective appraisers. The City, in 

defending its initial mass appraisal, presented the testimony of 

City assessor Peter Weissenfluh. Metropolitan presented the 

testimony of its own appraiser, Lawrence Nicholson.

 

11 Wisconsin Stat. § 70.49(2) provides:

The value of all real and personal property entered 

into the assessment roll to which such affidavit is 

attached by the assessor shall, in all actions and 

proceedings involving such values, be presumptive 

evidence that all such properties have been justly and 

equitably assessed in proper relationship to each 

other.
No. 2016AP21

19

¶52 We turn first to the parties' respective tier 2 sales 

comparison analyses. In defending the initial mass appraisal, 

Weissenfluh conducted a tier 2 sales comparison analysis of the 

Southgate Apartments. Nicholson likewise provided a tier 2 

sales comparison analysis.

¶53 A sales comparison analysis involves "a comparison of 

properties similar to the subject property and adjustment for 

differences." Walgreen Co. v. City of Madison, 2008 WI 80, ¶22, 

311 Wis. 2d 158, 752 N.W.2d 687 (internal citations omitted). 

"The Manual explains that this approach incorporates 'the 

principles of substitution,' that buyers will not pay more for 

property than it would cost them to acquire substitute property 

of equal desirability and utility." Id.

¶54 Under the sales comparison approach, the Manual 

directs that a property's operating expenses, lease terms, 

management quality or tenant mix "should be considered." 1 

Wisconsin Property Assessment Manual at 7-21. The circuit court 

observed that the City did not, and should have, adjusted for 

economic characteristics in its sales comparison analysis. 

However, the City mitigated this deficiency because the 

valuations reached through the City's income approach supported 

the valuations reached under the sales comparison approach.

¶55 Metropolitan, however, made adjustments to its own 

appraisal based only on the properties' net operating income 

without consideration of any other factors. In so doing, the 

circuit court determined that Metropolitan "conflate[d] the 

sales comparison and income approaches."
No. 2016AP21

20

¶56 It is error to use the income approach "when the 

market value is established by a fair sale of the property in 

question or like property." Markarian, 45 Wis. 2d at 686. The 

income approach should only be used when there is no data of 

comparable property on which to base a sales comparison 

analysis. Id.

¶57 Accordingly, the circuit court opined that, by relying 

only on income, "Metropolitan [had] not presented reliable 

contrary evidence to support its sales comparison valuations." 

As a result, the circuit court found that "[t]he City's sales 

comparison approach is more reliable than Metropolitan's 

approach."

¶58 Next, we turn to the parties' tier 3 analyses. The 

record reflects that Weissenfluh conducted a tier 3 income 

analysis,12 as did Nicholson. Pursuant to a tier 3 income 

analysis, a property's value is determined by reference to its 

income generating potential. Walgreen Co., 311 Wis. 2d 158, 

¶24. In applying the income approach, "the assessor must be 

aware of what is happening in the market. All of the 

information needed for the income approach is either obtained or 

 

12 Weissenfluh performed an appraisal using the tier 3 

income approach, even though under the Markarian framework it 

was not required. See Walgreen Co. v. City of Madison, 2008 WI 

80, ¶73, 311 Wis. 2d 158, 752 N.W.2d 687 (explaining that the 

income approach is only favored over the sales comparison 

approach if there is no available data of comparable 

properties). He used this approach to validate the results of 

his earlier sales comparison approach.
No. 2016AP21

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verified by what the assessor finds in the marketplace." Id.

(citing Wisconsin Property Assessment Manual (2007) at 9-11).

¶59 As it did with the sales comparison approach, the 

circuit court found that "[t]he City's income approach was more

reliable than Metropolitan's approach." Metropolitan's income 

approach relied too heavily on Metropolitan's own expense ratio, 

which is markedly higher than the expense ratios for similar 

properties. Further, the specific expenses that were 

responsible for the heightened expense ratio were largely 

administrative and payroll expenses. The circuit court 

determined that these expenses are "not tied to the property 

itself."13

¶60 Conversely, the City accounted for the market trend 

with regard to expense ratio, imputing a lower expense ratio to 

Metropolitan that was more in line with the market. See 1 

Wisconsin Property Assessment Manual at 9-12. As the circuit 

court stated, "[t]he market trend is to maintain a lower expense 

ratio, and the City's income approach accounted for this." 

Because the City took the market into consideration and 

Metropolitan did not, the circuit court found that "[t]he City's 

income approach was more reliable than Metropolitan's approach."

 

13 Although we affirm on the basis that the circuit court's 

fact finding was not clearly erroneous, we also observe that its 

position finds support in the law: "[A]n assessor must have the 

ability to discount, even disregard, factors that do not really 

bear on the value of a property." Adams Outdoor Advert., Ltd. 

v. City of Madison, 2006 WI 104, ¶53, 294 Wis. 2d 441, 717 

N.W.2d 803.
No. 2016AP21

22

¶61 When the circuit court assessed the weight to be given 

to the testimony of each witness, it determined that 

Weissenfluh's appraisals were more reliable than Nicholson's.14 

The weight to be given testimony is for the trier of fact. 

Syvock v. State, 61 Wis. 2d 411, 414, 213 N.W.2d 11 (1973). 

"When the trial court acts as the finder of fact, it is the 

ultimate arbiter of the credibility of the witnesses and of the 

weight to be given to each witness's testimony." Lessor v. 

Wangelin, 221 Wis. 2d 659, 665, 586 N.W.2d 1 (Ct. App. 1998).

¶62 We will upset a finding of fact only if it is clearly 

erroneous. Id. at 665-66. A finding of fact is clearly 

erroneous if it is against the great weight and clear 

preponderance of the evidence. State v. Arias, 2008 WI 84, ¶12, 

311 Wis. 2d 358, 752 N.W.2d 748 (quoting State v. Sykes, 2005 WI 

48, ¶21 n.7, 279 Wis. 2d 742, 695 N.W.2d 277 (quoting State v. 

Tomlinson, 2002 WI 91, ¶36, 254 Wis. 2d 502, 648 N.W.2d 367)).

¶63 The circuit court's observation that the City's 

approach was worthy of greater weight than Metropolitan's was 

not clearly erroneous. It detailed the findings of each 

assessor and noted what it determined to be deficiencies in 

 

14 The dissent asserts that the circuit court's only two 

findings of fact of import are (1) that the City's tier 2 

analysis was missing an adjustment for economic characteristics, 

and (2) that Metropolitan's tier 2 analysis erroneously adjusted 

for net operating income. Dissent, ¶90. This formulation 

disregards and fails to give effect to the circuit court's most 

important finding: that the City's appraisals were "more 

reliable" and therefore worthy of greater weight than 

Metropolitan's.
No. 2016AP21

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Nicholson's approach. The circuit court's findings were not 

"against the great weight and clear preponderance of the 

evidence." Rather, the findings supported the circuit court's 

conclusion to uphold the City's assessment.

¶64 Metropolitan additionally argues that the presumption 

of correctness should not have attached to the City's assessment 

in the first instance. In support of this argument, it also 

advances that, by presenting evidence of its tier 2 and 3 

analyses, the City demonstrated that its own assessment was 

incorrect.15 Because we have concluded above that the circuit 

 

15 Specifically, Metropolitan contends that the City cannot 

rely on a presumption of correctness because the only evidence 

it presented (Weissenfluh's tier 2 and 3 analyses) indicated 

that the initial appraisal was too low. Therefore, the tier 2 

and 3 analyses undermine the correctness of the initial mass 

appraisal and should not be considered.

This argument is premised on footnote 19 from Regency W., 

2016 WI 99, ¶57 n.19, 372 Wis. 2d 282, 888 N.W.2d 611. However, 

footnote 19 does not compel this conclusion. Footnote 19 

states:

We do not consider the appraisals of Peter Weissenfluh 

and Dan Furdek because their appraisals exceeded the 

valuations of Racine for both 2012 and 2013. See

Trailwood Ventures, LLC v. Vill. of Kronenwetter, 2009 

WI App 18, ¶¶12-13, 315 Wis. 2d 791, 762 N.W.2d 841 

(concluding that a taxation district that has accepted 

the payment it requested has agreed that its taxation 

value is the maximum value that it may seek; Wis. 

Stat. § 74.37 permits a refund to the taxpayer or may 

uphold the status quo, but there is no authority for 

deficiency judgments).

Regency W. Apartments LLC v. City of Racine, 2016 WI 99, ¶57 

n.19, 372 Wis. 2d 282, 888 N.W.2d 611.

(continued)
No. 2016AP21

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court's findings of fact regarding the reliability of the 

respective appraisals are not clearly erroneous and sufficiently 

support the circuit court's determination, regardless of whether 

the presumption was employed, we need not address whether the 

presumption of correctness attached to the City's assessment 

which was based on a mass appraisal.

¶65 In conclusion, we determine that the City's assessment 

of the Southgate Apartments complied with Wis. Stat. § 70.32(1). 

The City permissibly utilized mass appraisal for its initial 

assessment and appropriately defended its initial assessment 

with single property appraisals demonstrating that the 

 

Although we do not address the question of whether the 

presumption of correctness applies to the City's assessment 

based on the initial mass appraisal, we nevertheless consider it 

prudent to address this argument to provide guidance to the bar 

on the application of footnote 19.

The court in Regency W. did not address the portions of the 

Manual related to the use of mass appraisal as a means for 

setting an initial assessment and single property appraisal to 

defend initial assessments. Indeed, Regency West's property, as 

explained above, did not lend itself well to mass appraisal. 

See supra, ¶47.

Metropolitan's reading of footnote 19 conflicts with the 

directive from Wis. Stat. § 70.32(1) that property be assessed 

in accordance with the Manual. The Manual dictates that a mass 

appraisal, if challenged, be defended with a single property 

appraisal. To accept Metropolitan's interpretation of footnote 

19 would mean that an assessor would be unable to defend an 

assessment if the value he or she derived in a single property 

appraisal exceeded the initial mass appraisal assessment. This 

would lead to an absurd result. Ultimately, the question when a 

taxpayer challenges an initial assessment is not whether the 

initial assessment was incorrect, but whether it was excessive. 

See Wis. Stat. § 74.37(1).
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assessment was not excessive. Further, we decline 

Metropolitan's request to upset the circuit court's findings of 

fact because we conclude that they are not clearly erroneous.

¶66 Accordingly, we affirm the decision of the court of 

appeals.

By the Court.—The decision of the court of appeals is 

affirmed.
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¶67 REBECCA GRASSL BRADLEY, J. and DANIEL KELLY, 

J. (dissenting). The law requires that real property tax 

assessments match as closely as possible the amount a buyer 

would pay for the subject property in an arm's-length 

transaction. Our statutes provide spare, but critical, 

instructions on how municipalities must make that match. Most 

significantly, they unmistakably require that an assessment 

reflect the property's fair market value:

Real property shall be valued by the assessor in the 

manner specified in the Wisconsin property assessment 

manual provided under s. 73.03(2a) from actual view or 

from the best information that the assessor can 

practicably obtain, at the full value which could 

ordinarily be obtained therefor at private sale.[1]

Wis. Stat. § 70.32(1) (emphasis added).2 This statute also 

details the three types of analyses an appraiser may use in 

arriving at that value:

In determining the value, the assessor shall consider 

[1] recent arm's-length sales of the property to be 

assessed if according to professionally acceptable 

appraisal practices those sales conform to recent 

arm's-length sales of reasonably comparable property; 

[2] recent arm's-length sales of reasonably comparable 

property; and [3] all factors that, according to 

 

1 "Fair market value or full value of property is 

consistently defined as: '[T]he amount it will sell for upon 

arms-length negotiation in the open market, between an owner 

willing but not obliged to sell, and a buyer willing but not 

obliged to buy.'" Darcel, Inc. v. City of Manitowoc Bd. of 

Review, 137 Wis. 2d 623, 628, 405 N.W.2d 344 (1987) (quoting 

State ex rel. Mitchell Aero, Inc. v. Bd. of Review, 74 

Wis. 2d 268, 277, 246 N.W.2d 521 (1976)).

2 All subsequent references to the Wisconsin Statutes are to 

the 2013-14 version unless otherwise indicated.
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professionally acceptable appraisal practices, affect 

the value of the property to be assessed.[3]

Id. A property's assessment normally enjoys a presumption of 

correctness under Wis. Stat. § 70.49. The presumption, however, 

attaches only if the appraiser used the proper valuation 

techniques. See State ex rel. Markarian v. City of Cudahy, 45 

Wis. 2d 683, 686, 173 N.W.2d 627 (1970) (stating that the 

presumption of correctness "presuppose[s] the method of 

evaluation is in accordance with the statutes"); see also

Regency W. Apartments LLC v. City of Racine, 2016 WI 99, ¶52,

372 Wis. 2d 282, 888 N.W.2d 611 ("Taxing authorities are 

required to comply with the law when valuing properties, and 

failing to do so negates the presumption of correctness that 

Wis. Stat. § 70.49 otherwise accords.").

¶68 The assessment in this case was not based on any of 

the three types of analyses listed in the statute. Instead, the 

 

3 The third type of appraisal encompasses a number of 

factors:

Within tier three, an assessor may consider "all 

the factors collectively which have a bearing on value 

of the property in order to determine its fair market 

value." These factors include "cost, depreciation, 

replacement value, income, industrial conditions, 

location and occupancy, sales of like property, book 

value, amount of insurance carried, value asserted in 

a prospectus and appraisals produced by the owner."

The income approach, which seeks to capture the amount 

of income the property will generate over its useful 

life, and the cost approach, which seeks to measure 

the cost to replace the property, both fit into this 

analytic framework.

Adams Outdoor Advert., Ltd. v. City of Madison, 2006 WI 104, 

¶35, 294 Wis. 2d 441, 717 N.W.2d 803 (citations omitted).
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City's assessor used a technique known as "mass appraisal" to 

determine the taxes Metropolitan must pay. Thus, we must 

determine whether our statutes allow appraisers to use the mass 

appraisal technique, and whether the result produced by that 

technique reflects the fair market value of Metropolitan's 

property. As discussed below, this technique is not authorized 

by statute, and it is structurally incapable of identifying the 

fair market value of a specific property. Therefore, because 

the assessed value under consideration was the product of the 

mass appraisal technique, it is not entitled to the presumption 

of correctness.

¶69 The majority opinion, however, not only erroneously 

authorizes the mass appraisal technique, but also avoids 

entirely the question of whether the presumption of correctness 

attaches——an important task because the circuit court's decision 

depended upon the presumption: "Metropolitan has not overcome 

the presumption of the assessments' correctness and therefore 

cannot prevail." We write separately to explain why the mass 

appraisal technique is not authorized by Wis. Stat. § 70.32(1), 

and why its use constitutes an error of law. We also analyze 

whether the City's or Metropolitan's single-property sales 

comparison assessments can be used as the basis to calculate 

Metropolitan's tax liability. Based on the circuit court's 

findings that both the City's and Metropolitan's sales 

comparison appraisals are based on flawed information, we 

conclude that neither single-property assessment complied with 

the statute; therefore, this case should be reversed and 
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remanded for the circuit court to remand to the Board of Review 

to remand to the assessor with directions to perform a 

statutorily-compliant sales comparison analysis to determine the 

fair market value of Southgate using the best information 

available.

I. MASS APPRAISALS

¶70 The majority says our law authorizes the mass 

appraisal technique for two reasons. First, the Wisconsin 

Property Assessment Manual (the "Manual") discusses the method, 

and encourages its use. Second, it says mass appraisal is the 

only practical means of assessing all the properties in 

Milwaukee every year. Neither of these reasons finds support in 

the laws of our State. In fact, they say the opposite.

A. The Manual's Authority

¶71 The majority should have paid more attention to 

whether the mass appraisal technique is authorized by law. It 

touched this question so lightly, however, that it missed the 

legislatively-prescribed relationship between the statutes, the 

Department of Revenue, and this court in developing and curating 

the Manual's contents. As a consequence, this court found 

authority for the mass appraisal technique where there was none. 

¶72 The majority opinion assumes, sotto voce, that the 

legislature entrusted the Manual's content entirely to the 

Department of Revenue, and that whatever the Department puts in 

the Manual comprises a proper method of appraisal. The majority 

observed, and truly so, that "property must be assessed 'in the 

manner specified in the Wisconsin property assessment manual.'" 
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Majority op., ¶35 (quoting Wis. Stat. § 70.32). But the 

observation is pregnant with this question: What techniques may 

the Manual prescribe? If the majority had engaged that subject, 

it would have found two substantive constraints on its content 

that make the mass appraisal technique ineligible for inclusion.

¶73 The first constraint relates to the very purpose for 

developing the Manual. The Manual is supposed to help an 

assessor develop a statutorily-compliant appraisal. And the 

sole purpose of that appraisal is to fulfill the directive that 

"[r]eal property shall be valued . . . at the full value which 

could ordinarily be obtained therefor at private sale." Wis. 

Stat. § 70.32(1). Thus, when the statute directs the assessor 

to appraise the property "in the manner specified in the 

Wisconsin property assessment manual," it presupposes that the 

Manual fixes its sights on the specific property's fair market 

value. So we view the Manual's authority in light of its 

ability to achieve that objective.

¶74 The legislature delegated responsibility to the 

Department to develop the Manual, but the Manual exists only to 

fulfill the statute's goal. If the Manual contains a technique 

that does not produce the "full value which could ordinarily be 

obtained therefor at private sale," then the technique lies 

outside the legislative mandate. Without a legislative 

pedigree, such a technique would necessarily lack authority. 

This court has said so before. In Metropolitan Holding Co. v. 

Board of Review, 173 Wis. 2d 626, 495 N.W.2d 314 (1993), this 

court rejected one of the Manual's prescriptions for precisely 
No. 2016AP21.rgb&dk

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this reason. The court concluded the Manual's direction would 

not fulfill the statute's requirement that the appraisal 

determine a property's fair market value: "In summary, we hold 

that the assessment of [the property] violated sec. 70.32(1), 

Stats. even though the assessment was pursuant to the 

instructions set forth in the Wisconsin Property Assessment 

Manual." Metropolitan Holding Co., 173 Wis. 2d at 633. That is 

to say, the Manual's prescriptions are authoritative only to the 

extent they assist in discovering a property's fair market 

value.

¶75 The second constraint on the Manual is that it must 

conform to our decisions, not vice-versa. That is not judicial 

hubris, it is an explicit legislative requirement. The statute 

authorizing the Manual's creation says it "shall be amended by 

the department from time to time to reflect advances in the 

science of assessment, court decisions concerning assessment 

practices, costs, and statistical and other information 

considered valuable to local assessors by the department." Wis. 

Stat. § 73.03(2a) (emphasis added). Thus, if some part of the 

Manual conflicts with our decisions, we are duty bound to ignore 

it. See Allright Prop., Inc. v. City of Milwaukee, 2009 WI App 

46, ¶10, 317 Wis. 2d 228, 767 N.W.2d 567. As we said in 

Metropolitan Holding Company, the "Manual conform[s] to, rather 

than establish[es], Wisconsin Law." Metropolitan Holding Co., 

173 Wis. 2d at 633.

¶76 It is within this context that we should consider 

whether the assessor may rely on the mass appraisal technique to 
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determine a property's fair market value. As relevant to this 

case, an appraisal can lose its authoritative bona fides, 

notwithstanding the Manual's blessing, in two ways. First, by 

using an appraisal method that finds no warrant in the law. Or 

second, by using a statutorily-compliant appraisal method that 

nonetheless incorporates elements that prevent it from producing 

the property's fair market value.

B. The Mass Appraisal Technique Cannot

Discover Fair Market Value

¶77 The mass appraisal technique did not identify the fair 

market value of Metropolitan's property. And it did not because 

it could not. We know this because the City said so. Well, 

more than just said so——the City asseverated that the mass 

appraisal technique does not even attempt to achieve the 

statute's prime directive, to wit, discovering the fair market 

value of the subject property:

At the outset, mass appraisal and single-property 

appraisal are two different valuation techniques. 

According to the WPAM,[] "Mass appraisal is the 

systematic appraisal of groups of properties, as of a 

given date, using standardized procedures and 

statistical testing. In sharp contrast, single 

property or "fee" appraisal is the valuation of one 

particular property as of a given date."

(Emphasis added.)

¶78 "Sharp contrast," indeed. The statute requires the 

assessor to identify the value of a specific property, whereas 

the existential purpose of the mass appraisal technique is to 

avoid that task. This technique values groups of properties 

and, as the City admits, appraisers necessarily derive the value 

of a group from trends and statistics, not individualized 
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considerations: "Mass appraisal, unlike single property 

appraisal, requires the development of a valuation model capable 

of replicating the forces of supply and demand over a large 

area." Buyers and sellers, of course, do not settle on a price 

based on what the forces of supply and demand say about 

properties not under contract. They consult the fair market 

value of the specific property that is the subject of the 

transaction. The mass appraisal technique is simply not 

designed to discover that information. So if the assessed value 

of Metropolitan's property were to match its fair market value, 

it would be nothing more than a happy coincidence. The prospect 

of a happy coincidence does not receive the presumption of 

correctness.

¶79 This is the reason this court rejected the appraisal 

in Metropolitan Holding Company. There, the City's assessor 

used a capitalization of income approach to determine a 

property's value. Metropolitan Holding Co., 173 Wis. 2d at 629. 

But instead of using the property's actual income as the basis 

of his calculations, he used a hypothetical income derived from 

a market survey. Id. The resulting opinion of value, 

therefore, could not describe the subject property's fair market 

value; it could describe only the value of a chimeric property 

comprising both real and fictional elements. Id. at 631-32. 

This court said that was a violation of Wis. Stat. § 70.32(1) 

because the opinion failed to reflect the fair market value of 

the subject property. Id. at 632.
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¶80 The mass appraisal technique represents the extension 

and formalization of the very error that caused us to reject the 

appraisal in Metropolitan Holding Company. Whereas there the 

appraiser valued a chimera (which was bad enough), the mass 

appraisal technique here values an entirely fictional property 

(which is worse). Thus, this methodology is statutorily 

deficient because it is structurally incapable of determining 

the fair market value of the specific property under 

consideration.

C. Mass Appraisal Is Not an Authorized Technique

¶81 The mass appraisal technique is also deficient because 

it is a valuation method that does not fit within the Markarian

trilogy. For good or for ill, we have developed a rigid threetier hierarchy of appraisal methodologies, and we require 

assessors to comply with it punctiliously. See Adams Outdoor 

Adver. Ltd. v. City of Madison, 2006 WI 104, ¶34, 294 Wis. 2d

441, 717 N.W.2d 803. The first tier, and the one we consider 

the best evidence of fair market value, is a recent arm's-length 

sale of the subject property.4 The second tier inquires into 

recent arm's-length sales of properties comparable to the 

subject property (while making adjustments for differences 

 

4 "We conclude that an arms-length sale price is the best 

indicator to determine fair market value for property tax 

purposes." Darcel, Inc., 137 Wis. 2d at 624.
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capable of affecting a property's value).5 The third tier 

includes techniques such as capitalization of income and 

replacement cost.6 Id., ¶¶34-35.

¶82 The hierarchy is rigid because we believe that an 

appraisal method's ability to accurately reflect a property's 

fair market value decreases as one descends through the tiers.7 

Consequently, if there is a sale of the subject property that 

can be used in the tier-one valuation method, we have said it is 

an error of law to use a different method: "We conclude that 

the fair market value was established by this sale [of the 

subject property] and that other evidence tending to show what 

market value might be, which might be resorted to in the absence 

of such a sale, may not be used here to overthrow the evidence 

of the market itself." State ex rel. Evansville Mercantile 

Ass'n v. City of Evansville, 1 Wis. 2d 40, 45, 82 N.W.2d 899 

(1957); Darcel, Inc. v. City of Manitowoc Bd. of Review, 137 

 

5 "The 'best information' of such value is a sale of the 

property or if there has been no such sale then sales of 

reasonably comparable property." State ex rel. Geipel v. City 

of Milwaukee, 68 Wis. 2d 726, 733, 229 N.W.2d 585 (1975) 

(citation omitted).

6 "The income approach, which seeks to capture the amount of 

income the property will generate over its useful life, and the 

cost approach, which seeks to measure the cost to replace the 

property, both fit into this analytic framework." Adams Outdoor 

Advert., Ltd., 294 Wis. 2d 441, ¶35 (citations omitted) 

(referring to tier-three appraisals).

7 Whether that belief is warranted is a matter of some 

debate. Wisconsin Stat. § 70.32(1) does not describe these 

three categories as a hierarchy, but instead as a conjunctive 

list of considerations for which an appraiser must account in 

developing an opinion of value.
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Wis. 2d 623, 624, 405 N.W.2d 344 (1987) ("We conclude 

that . . . an approach that considers factors extrinsic to the 

arms-length sale [of the subject property] is not statutorily 

correct and therefore in error as a matter of law.").

¶83 Likewise, if there are comparable sales sufficient to 

conduct a tier-two analysis, it is an error of law to instead 

use a tier-three methodology:

The "best information" of such value is a sale of the 

property or if there has been no such sale then sales 

of reasonably comparable property. In the absence of 

such sales, the assessor may consider all the factors 

collectively which have a bearing on value of the 

property in order to determine its fair market value. 

However, it is error to use this method when the 

market value is established by a fair sale of the 

property in question or like property.

State ex rel. Geipel v. City of Milwaukee, 68 Wis. 2d 726, 733, 

229 N.W.2d 585, 588–89 (1975) (citation and internal marks 

omitted); see also Adams Outdoor Advert., Ltd., 294 Wis. 2d 441, 

¶37 ("If there were reasonably comparable sales, but the City 

used the income approach, the assessments would be invalid."); 

State ex rel. Hennessey v. City of Milwaukee, 241 Wis. 548, 553, 

6 N.W.2d 718 (1942) ("When [fair market] value is established by 

the sale of the instant and like property there is no occasion 

to resort to reproduction value less depreciation as was here 

done to determine that value."); State ex rel. Enter. Realty Co. 

v. Swiderski, 269 Wis. 642, 645, 70 N.W.2d 34 (1955) (stating 

that "facts [supporting tier-three analysis] only indicate what 

the fair market value is and there is no occasion to resort to 

them, and it is wrong to do so, when the market value is 
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established by a fair sale of the property in question or like 

property.").

¶84 And finally, we have consistently rejected valuation 

methodologies that do not find a home in this three-tiered 

hierarchy. See, e.g., State ex rel. Nw. Mut. Life Ins. Co. v. 

Weiher, 177 Wis. 445, 448, 188 N.W. 598 (1922) (rejecting 

valuation based on a property's "intrinsic value," rather than 

its sale value); State ex rel. Markarian, 45 Wis. 2d 683 

(rejecting valuation based on predicted post-development value, 

rather than on comparable sales); State ex rel. Lincoln 

Fireproof Warehouse Co. v. Bd. of Review, 60 Wis. 2d 84, 98, 208 

N.W.2d 380 (1973) (rejecting valuation based on the property's 

"intrinsic value.").

¶85 So now we must compare the mass appraisal technique to 

our stable of authorized methodologies. At trial, the City 

admitted this method does not belong in that stable. It is 

neither fish nor fowl, as the saying goes, but a pastiche of 

various methodologies:

Q So let me ask you this question. Did the mass 

appraisal technique that was followed in 2008 

contain a cost approach?

[City Assessor:] For this particular property?

Q Yes.

[City Assessor:] No.

Q Did it contain a comparable sales analysis?

[City Assessor:] Not in the strict form and the 

methodology that I have done in this report or 

that Mr. Tsoris had done for the board of review.

Q Did it follow the income approach?
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[City Assessor:] There were elements of the 

income approach again with reference to the 

market and sales. So I would say it's a 

combination of information from the market 

developed into a process that is systematic and 

allowable for statistical testing.

¶86 Unless we abandon the Markarian trilogy, we must 

necessarily conclude that the mass appraisal technique is not 

lawful. It does not reflect a recent arm's-length sale of the 

subject property, so it cannot be considered a tier-one method. 

And although it apparently resembles the comparable sales method 

(tier two), it does not follow its "strict form and 

methodology." That must certainly be true, inasmuch as it 

incorporates elements of a tier-three method (income 

capitalization). And finally, it incorporates factors entirely 

exogenous to the Markarian trilogy by relying on the value of 

groups of properties determined through the use of "standardized 

procedures and statistical testing."

¶87 The mass appraisal technique may be efficient, but 

efficiency is not the standard by which we measure its 

compliance with statutory requirements and our opinions. This 

valuation method is not designed to discover the fair market 

value of Metropolitan's property, and it operates entirely 

outside the universe of previously approved appraisal 

techniques. Today, the majority unwisely places this court's 

imprimatur on the City's appraisal methodology by making the 

Markarian trilogy a tetralogy. The new addition will not rest 

comfortably with the others, because the mass appraisal 

technique is not trying to accomplish the same objective as the 

others.
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II. SALES COMPARISON EVALUATIONS

¶88 Having concluded that mass appraisal is not authorized 

by statute and not entitled to the presumption of correctness, 

we are left with determining whether either of the singleproperty sales comparison assessments in the record satisfied 

Wis. Stat. § 70.32(1).

¶89 "Failure to make an assessment on the statutory basis 

is an error of law." Adams Outdoor Adver., Ltd., 294 

Wis. 2d 441, ¶26. "Whether the City followed the statute in 

making its assessment is a question of statutory interpretation 

that we review de novo." Id. A circuit court's findings of 

facts will not be overturned unless clearly erroneous. 

Bonstores Realty One, LLC v. City of Wauwatosa, 2013 WI App 131, 

¶6, 351 Wis. 2d 439, 839 N.W.2d 893.

¶90 There are two findings of fact of importance here: 

(1) the circuit court found that the City's sales comparison was 

erroneously missing an adjustment for economic characteristics; 

and (2) the circuit court found Metropolitan's sales comparison 
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erroneously adjusted for net operating income (NOI).8 These 

findings, which are not clearly erroneous, make both the City's 

and Metropolitan's sales comparison evaluations materially 

deficient because neither complies with the requirements of a 

proper sales comparison analysis.

¶91 Because no recent sale of Southgate exists, the proper 

assessment must be based on the sale price of comparable 

properties, with adjustments to reach a value the subject 

property would likely fetch if it were sold. There is no 

dispute that comparable properties exist; thus, the "tier two" 

approach provides the best method to determine fair value.

¶92 The Manual defines comparable sales under the "Sales 

Comparison Approach" as: "properties that are similar to the 

subject property in age, condition, use, type of construction, 

location, design, physical features and economic 

 

8 The majority hangs its hat on a circuit court "finding" 

that the City's appraisals were "more reliable" and claims the 

circuit court gave more "weight" to the City assessor's 

testimony. Majority op., ¶¶4-5, ¶61 & n.14. The circuit 

court's reference to "more reliable" was not, however, a finding 

of fact. Rather, it was a conclusion of law based on two 

findings: (1) Metropolitan's assessor used NOI to make economic 

adjustments to its sales comparison appraisal, and (2) even 

though the City's sales comparison assessment failed to adjust 

for economic characteristics, the City's tier-three assessment 

supports its tier-two assessment. The circuit court's decision 

never uses the term "weight" or discusses the "credibility" of 

the assessor's testimony. Instead, the circuit court concludes 

the City's sales comparison assessment complies with the statute 

and Metropolitan's does not. The circuit court's legal 

conclusion was wrong and mischaracterizing it as a credibility 

determination does not redeem the error. Neither the City's nor 

Metropolitan's sales comparison assessments comply with the 

statute.
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characteristics." 1 Property Assessment Manual, ch. 7, at 7-20 

(2009). The Manual then provides a list of six "Elements of 

Comparison":

1. Real property rights conveyed

2. Financing terms

3. Time (market conditions)

4. Location

5. Physical characteristics (e.g. size, construction 

quality, age, condition, features)

6. Economic characteristics (e.g. operating expenses, 

lease terms, management, and tenant mix).

Manual at 7-21 (emphasis added). The City did not make any 

adjustments for economic characteristics, claiming none were 

necessary. Metropolitan's appraiser made adjustments for 

economic characteristics, but based the adjustment on NOI 

instead of "operating expenses, lease terms, management, and 

tenant mix." Both resulted in evaluations contrary to the 

statutory requirements.

¶93 With respect to the City's failure to adjust for 

economic characteristics, the circuit court explicitly found 

that "the City did not make specific adjustments for economic 

characteristics" and "[i]t should have." Nevertheless, the 

circuit court proceeded to choose the City's assessment as more 

reliable because its tier-three income evaluation vouched for 

the numbers in its sales comparison. But this court interpreted 

the statutory language to mean we cannot use the income approach 

unless no comparable sales exist, and everyone agrees that 

comparable sales do exist. Adams Outdoor Adver., Ltd., 294 
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Wis. 2d 441, ¶34 ("Only if there has been no arms-length sale 

and there are no reasonably comparable sales may an assessor use 

any of the third-tier assessment methodologies."). Using the 

income approach to prop up the City's flawed sales comparison 

approach improperly conflates the two approaches. The circuit 

court's finding that the City "failed to but should have" 

adjusted its sales comparison evaluation for economic 

characteristics renders the City's sales comparison approach 

violative of the statute. Therefore, the City's sales 

comparison approach cannot be used.

¶94 Next, we consider whether Metropolitan's sales 

comparison evaluation can be used. The circuit court found that 

Metropolitan's sales comparison analysis does not comply with 

the statute because although Metropolitan adjusted for economic 

characteristics, it chose to adjust for NOI instead of the 

factors the Manual identifies as part of the economic 

characteristics adjustment: "operating expenses, lease terms, 

management, and tenant mix." Manual at 7-21. Quoting from The 

Appraisal of Real Estate 300 (13th Ed.), Metropolitan's 

appraiser explained why he adjusted for NOI instead of making an 

adjustment solely on the factors listed in the Manual: "Buyers 

of income-producing properties usually concentrate on a 

property's economic characteristics and put more emphasis on 

conclusions of the Income Capitalization Approach." He further 

explained that large apartment complexes are purchased "for 

their income streams" and therefore considering "the 

comparables' respective economics relative to the subject's" was 
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important. Even if we agreed that NOI constitutes the best 

adjustment factor in ascertaining true fair market value, 

Wisconsin law does not list NOI as an element of comparison in 

conducting the sales comparison approach. Thus, Metropolitan's 

appraisal cannot be used in determining the correct assessment.9

 

9 It should not be a surprise that independent appraisers, 

who rely on the Manual to determine fair value, produce reports 

contrary to the statute because the Manual contains instructions 

that conflict with the assessment statute. For example, the 

Manual does not require the same strict three-tier progressive 

Markarian hierarchy courts follow. Instead, the Manual 

instructs that all methods for which information exists should 

be conducted and then the final value of the property determined 

by a "reconciliation" of all the methods. Manual, 7-18, 7-19 

("The appraisal process consists of . . . developing preliminary 

values based on the three approaches to value, then reconciling 

the results to determine the most probable market value."; "The 

appraiser should consider all three approaches when estimating 

the value of a property."; "Reconciliation is the process by 

which the appraiser evaluates and selects from the alternative 

approaches to value."). The Manual also specifically instructs 

that the income approach is most commonly used in determining 

the value of commercial property, including apartment complexes 

having more than four units, because this is the information a 

buyer (or investor) most often uses to determine purchase price. 

Manual, 7-20; 9-6 ("Appraisers typically use the income approach 

for income-producing properties" because "buyers and sellers of 

income-producing property may place the most reliance on the 

income approach because it explicitly considers the net income 

of the property."; "Buyers and sellers of commercial properties 

usually base their transaction decisions on the property's net 

operating income."). These principles may explain why the 

income approach appears first in Metropolitan's appraiser's 

report. Although this may accurately reflect how appraisers 

normally arrive at an opinion of value, it does conflict with 

the court's current understanding that the statute maintains a 

rigid separation between the valuation methods, and requires a 

hierarchical prioritization amongst them. So, as it currently 

stands, the Manual's principles on this subject are at odds with 

the court's requirement that assessors use the "tier two" 

approach when comparable properties exist. When the Manual 

conflicts with our interpretation of the statute, our 

interpretation controls.
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¶95 With no statutorily-compliant assessment from either 

party, this case should be remanded to the circuit court to 

remand to the Board of Review to remand to the assessor with 

directions to conduct a proper assessment under the sales 

comparison approach with an adjustment for economic 

characteristics using the best information available to 

determine the fair market value of Southgate.

III. PRACTICALITY

¶96 A brief word on practicality. The majority says that 

"[t]he arguments center on the meaning of 'best information that 

the assessor can practicably obtain.'" Majority op., ¶26 

(quoting Wis. Stat. § 70.32(1)). That is certainly where one of 

the parties wanted to center the argument, and full marks to the 

City for successfully getting this court to focus our attention 

there. But this case has nothing to do with what information 

"the assessor can practicably obtain." It is about what the 

assessor does with the information indisputably available to 

him.

¶97 All of the information necessary to perform a tier-two 

valuation of Metropolitan's property was "practicably" available 

to the City. We know this because the City brought just such a 

valuation to trial (and Metropolitan willingly provided the 

underlying data year after year). What the majority opinion 

really means to say is not that the information for a tier-two 

analysis is not practicably available to the assessor, but that 

the time to do an authorized analysis is not practicably 

available to him. That may certainly be true: He must assess 
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every single property in the City of Milwaukee every single 

year. That is, at the very least, a daunting prospect. But if 

he does not have enough time to do that, he needs either more 

staff or an amendment to the requirement that he make yearly 

assessments.10 Neither of those needs, however, is capable of 

changing the meaning of the statute.11

 

10 This is true, of course, only if the City wishes us to 

presume its assessment is correct. The City has two available 

options. It may either (a) receive the presumption of 

correctness by performing a statutorily-compliant appraisal, or 

(b) forego the presumption of correctness and perform a mass 

appraisal. What it may not do is ask for the presumption of 

correctness after performing an appraisal that does not comply 

with the law.

11 In footnote 10, the majority objects to following the law 

set forth in the statute because: (1) it would have to trust 

data Metropolitan——a self-interested party——submitted; and (2) 

the best information is available only because Metropolitan 

challenged the mass appraisal, which forced the City to do the 

calculation the statute requires. The first objection is so 

sweeping that it calls into question a City's ability to ever 

conduct a tier-two appraisal of a commercial property (because 

it incorporates data in the hands only of the property owner), 

or a tier-three capitalization of income appraisal (because 

almost all of the information is solely in the owner's 

possession). The possibility certainly exists that a taxpayer 

may commit fraud by falsifying its income and costs, but that 

possibility does not alleviate the City's responsibility to 

follow the statute.

(continued)
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¶98 So, after today, our instruction to assessors will be 

as follows. You must determine the fair market value from a 

recent arm's-length sale of the subject property, if such a 

transaction is available. If you do not, you err as a matter of 

law. If such a sale is not available, you must base the 

property's value on the sale of comparable properties. If you 

do not, you err as a matter of law. If there are not enough 

comparable sales to perform the analysis, then you must apply a 

tier-three analysis, such as capitalization of income, or 

replacement cost. If you do not, you err as a matter of law. 

All of this we will require of you without fail. Unless, of 

course, you don't have enough time. In that case, you can set 

aside the Markarian hierarchy, ignore our opinions, forget the 

statutory mandate to determine the fair market value of the 

subject property, and do whatever the Manual tells you to do. 

It seems odd that our entire jurisprudence on this subject 

 

Moreover, the City chose to "trust" Metropolitan's actual 

rents but not its actual costs. Instead, the City used data 

from other apartment owners who voluntarily provide this 

information in response to annual surveys the City conducts. 

The same possibility of falsified data arises from the use of 

this data. In fact, as indicated on several of the City's 

exhibits, the City has to fabricate some of this data in order 

to calculate the average "market" expense ratio: "City of 

Milwaukee imputed 5% management fee to comparables #2, #3 and 

#4" presumably because those properties did not report any costs 

tied to management, and "City of Milwaukee appraiser imputed 

reserves for replacements at 3% of EGI."

The majority's second objection is also not persuasive. 

The City has not been forced to do anything by Metropolitan. 

The statute and our opinions describe what comprises a compliant 

appraisal, so if there has been any forcing, it was coming from 

the legislature and the court, not Metropolitan.
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depends on whether the assessor has enough time, but there you 

have it.

¶99 Having said all this, petitioners should be wary of 

what they ask for. A successful challenge to the lawful basis 

of an assessment does not mean that the case gets remanded for a 

renewed contest over its excessiveness. It goes back for a new 

assessment. State ex rel. Boostrom v. Bd. of Review, 42 

Wis. 2d 149, 156, 166 N.W.2d 184 (1969). And that means the 

petitioner will not enjoy the assurance that the assessment 

cannot increase.

IV. CONCLUSION

¶100 Mass appraisal is not a statutorily-authorized 

appraisal method because it is a creation of the Manual, not the 

legislature, and it cannot produce "the full value which could 

ordinarily be obtained therefor at private sale." Wis. Stat. 

§ 70.32(1). It is not entitled to the benefit of the 

presumption of correctness. Setting the mass appraisal aside, 

we are left with the parties' single-property, sales comparison 

appraisals. Neither complied with § 70.32(1). This case should 

be reversed and remanded for the circuit court to remand to the 

Board of Review to remand to the assessor with directions to 

conduct a statutorily-compliant assessment based on the sales 

comparison approach and properly adjusted for economic 

characteristics using the best information available.

¶101 For these reasons, we respectfully dissent.
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