[Cite as West Carrollton City Schools Bd. of Edn. v. Montgomery Cty. Bd. of Revision, 2018-Ohio-2324.]

 

IN THE COURT OF APPEALS OF OHIO 

SECOND APPELLATE DISTRICT 

 MONTGOMERY COUNTY 

WEST CARROLLTON CITY 

SCHOOLS BOARD OF EDUCATION, 

Appellee 

v. 

MONTGOMERY COUNTY BOARD 

OF REVISION, Appellee; GOLDEN 

ARCH LLIMITED PARTNERSHIP, 

Appellant 

: 

: 

: 

: 

: 

: 

: 

: 

: 

:

Appellate Case No. 27686 

BTA Case No. 2015-2319 

(Administrative Appeal from Board of 

Tax Appeals) 

. . . . . . . . . . . 

O P I N I O N 

Rendered on the 15th day of June, 2018. 

. . . . . . . . . . . 

KAROL C. FOX, Atty. Reg. No. 0041916 and MARK H. GILLIS, Atty. Reg. No. 0066908, 

6400 Riverside Drive, Suite D, Dublin, Ohio 43017 

 Attorney for Plaintiff-Appellee 

 

CHARLES L. BLUESTONE, Atty. Reg. No. 0060897 and PATRICK J. HEERY, Atty. Reg. 

No. 0092060, 141 E. Town Street, Suite 100, Columbus, Ohio 43215 

 Attorneys for Defendant-Appellant, Golden Arch Limited Partnership 

. . . . . . . . . . . . . 

 
-2- 

HALL, J. 

{¶ 1} Golden Arch Limited Partnership, d/b/a Delaware Golden Arch Limited 

Partnership, appeals from the decision of the Board of Tax Appeals (BTA) that found the 

taxable value of Golden Arch’s property to be $1,340,000 for tax year 2014. We find no 

error in the BTA’s decision, so it is affirmed. 

I. Background 

{¶ 2} The property at issue is a 1.457-acre parcel located at 2757 W. Alex Bell 

Road in Moraine, Ohio. The property is improved with a 4,411-square foot building, 

constructed in 1996, that houses a McDonald’s restaurant. For tax year 2014 the 

Montgomery County Auditor valued the property at $942,280. Golden Arch filed a 

complaint with the Board of Revision (BOR) seeking to reduce the value to $661,650. The 

West Carrollton City Schools Board of Education (BOE) filed a countercomplaint, asking 

the BOR to retain the auditor’s original valuation. 

{¶ 3} The BOR held a hearing. Stephen J. Weis, a certified appraiser retained by 

Golden Arch, testified at the hearing and submitted a written appraisal report. He 

appraised the property at $645,000 as of January 1, 2014. Golden Arch amended its 

complaint to conform with Weis’s appraisal. The BOE cross-examined Weis but did not 

present any evidence of its own. The BOR reduced the property’s value to $645,000. The 

BOE appealed to the BTA. 

{¶ 4} At the BTA hearing, the BOE presented the testimony and written appraisal 

report of Thomas D. Sprout, a certified appraiser. Sprout valued the property at 

$1,340,000. 1 Apparently, the recording device used at the BOR hearing stopped 

 

1 As the BTA noted in its decision, it “held a consolidated merit hearing on this matter, as 
-3- 

recording during Weis’s cross-examination. Golden Arch asked the BTA to supplement 

the record by having Weis recreate the cross-examination portion of his testimony. The 

BTA agreed and held another hearing at which Weis was cross-examined on his 

appraisal. 

{¶ 5} The BTA issued a written decision finding Sprout’s analysis superior to 

Weis’s, and the BTA adopted the $1,340,000 valuation proposed by the BOE. 

{¶ 6} Golden Arch appealed. 

II. Analysis 

{¶ 7} Golden Arch presents seven assignments of error. Each assignment of error 

challenges the BTA’s assessment of the competing appraisal reports, the specific 

calculations contained in them, or the relative qualifications of the appraisers. 

First Assignment of Error 

The Board of Tax Appeals acted unreasonably and unlawfully, and abused 

its discretion, when it failed to find that Appellant’s appraisal evidence 

constituted competent and probative evidence of the market value of the 

subject property. 

Second Assignment of Error 

The Board of Tax Appeals acted unreasonably and unlawfully, and abused 

its discretion, when it failed to find that Appellant met its burden of proof, 

when the record contained reliable and probative evidence to support 

 

well as another matter involving a McDonald’s restaurant (BTA No. 2015-2357), which 

involved the same counsel, same appraisers and substantially the same appraisal 

reports. (The cases were not formally consolidated because they involved unaffiliated 

property owners.)” The other case is the subject of a separate appeal (Appellate Case 

No. 27679). 
-4- 

Appellant’s market value of the subject property. 

Third Assignment of Error 

The Board of Tax Appeals acted unreasonably and unlawfully, and abused 

its discretion, by finding the appraisal analysis submitted by Appellee West 

Carrollton City Schools Board of Education to be more competent and 

probative evidence of the subject property’s market value than the appraisal 

analysis proffered by Appellant.2

Fourth Assignment of Error 

The Board of Tax Appeals acted unreasonably and unlawfully, and abused 

its discretion, by finding the highest and best use analysis advanced by 

Appellee West Carrollton City Schools Board of Education more appropriate 

than the analysis proffered by Appellant. 

Fifth Assignment of Error 

The Board of Tax Appeals acted unreasonably and unlawfully, and abused 

its discretion, in considering the present use of the subject property in 

determining its market value. 

Sixth Assignment of Error 

The Board of Tax Appeals acted unreasonably and unlawfully, and abused 

its discretion, in finding the capitalization rate advanced by Appellee West 

 

2 The third assignment of error is found only in Golden Arch’s notice of appeal. The only 

mention of the third assignment of error in Golden Arch’s merit brief is a parenthetical 

statement at the end of the argument supporting the first two assignments of error saying 

that we need not rule on the third assignment of error if we agree with the first two 

assignments of error. Although we may disregard it because Golden Arch failed to argue 

it separately, see App.R.12(A)(2), our review covers the issue that the assignment of error 

appears to raise. 
-5- 

Carrollton City Schools Board of Education, rather than the rate adopted by 

Appellant, more appropriate to use in calculating the subject property’s 

market value under the income capitalization approach to value. 

Seventh Assignment of Error 

The Board of Tax Appeals acted unreasonably and unlawfully, and abused 

its discretion, in continuing to recognize Appellee West Carrollton City 

School Board of Education’s appraiser as an expert witness in view of the 

testimony and evidence proffered at the BTA hearing. 

{¶ 8} Golden Arch’s primary argument on appeal is that the BTA should have 

adopted Weis’s valuation. We begin by reviewing the standards that apply to BTA 

decisions. 

A. Standards of review 

{¶ 9} When a case is appealed to the BTA from a board of revision, the appellant 

has the burden of proving its right to a decrease or increase in value from the value found 

by the board of revision. Shinkle v. Ashtabula Cty. Bd. of Revision, 135 Ohio St.3d 227, 

2013-Ohio-397, 985 N.E.2d 1243, ¶ 24. This means that the “appellant must come 

forward and demonstrate that the value it advocates is a correct value. Once competent 

and probative evidence of value is presented by the appellant, the appellee who opposes 

that valuation has the opportunity to challenge it through cross-examination or by 

evidence of another value.” (Citation omitted.) 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, ¶ 6. 

{¶ 10} The BTA, itself, as a taxing authority, has an independent duty to weigh 

evidence and make findings, and the BTA reviews the administrative decisions of boards 
-6- 

of revision de novo as to both fact and law. MacDonald v. Shaker Hts. Bd. of Income Tax 

Rev., 144 Ohio St.3d 105, 2015-Ohio-3290, 41 N.E.3d 376, ¶ 21; Coventry Towers, Inc. 

v. City of Strongsville, 18 Ohio St.3d 120, 122, 480 N.E.2d 412 (1985). Under R.C. 

5717.01, the BTA has “three options when hearing an appeal: the board may confine itself 

to the record and the evidence certified to it by the board of revision, hear additional 

evidence from the parties, or may make such other investigation of the property as is 

deemed proper.” Coventry Towers at 122. 

{¶ 11} Under what is called the Bedford rule, “ ‘when the board of revision has 

reduced the value of the property based on the owner’s evidence, that value has been 

held to eclipse the auditor’s original valuation,’ and the board of education as the appellant 

before the BTA may not rely on the latter as a default valuation.” Dublin City Schools Bd. 

of Edn. v. Franklin Cty. Bd. of Revision, 147 Ohio St.3d 38, 2016-Ohio-3025, 59 N.E.3d 

1270, ¶ 6, referencing Bedford Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 115 Ohio 

St.3d 449, 2007-Ohio-5237, 875 N.E.2d 913. (Other citation omitted.) Thus, when the 

board of revision adopts a new value based on an owner’s evidence, the burden of going 

forward shifts to the board of education on appeal to the BTA. Id. The board of education 

then has the burden to establish a new value, whether that be the valuation of the auditor 

or another value. Id. at ¶ 7. 

{¶ 12} With respect to our review of BTA decisions, we note that Golden Arch’s 

notice of appeal was filed before the effective date of recent amendments to R.C. 

5717.04, which became effective on September 29, 2017. See Am. Sub. H.B. 49, 2017 

Ohio Laws File 14. Before the amendments, parties had the option of appealing decisions 

of the BTA to the Supreme Court of Ohio, as well as to the court of appeals for the county 
-7- 

in which the taxed property was situated. But the statute was amended to eliminate initial 

appeals to the Supreme Court of Ohio, and the court of appeals in which a notice of 

appeal has been filed now has exclusive jurisdiction.3 See Am. Sub. H.B. 49, 2017 Ohio 

Laws File 14, Part 15. 

{¶ 13} R.C. 5717.04, as amended, states: 

If upon hearing and consideration of such record and evidence the 

applicable court decides that the decision of the board appealed from is 

reasonable and lawful it shall affirm the same, but if the court decides that 

such decision of the board is unreasonable or unlawful, the court shall 

reverse and vacate the decision or modify it and enter final judgment in 

accordance with such modification.4

{¶ 14} The general standards for reviewing BTA decisions are well settled. If the 

BTA’s decision is both “reasonable and lawful,” the reviewing court must affirm. NWD 300 

Spring, L.L.C. v. Franklin Cty. Bd. of Revision, 151 Ohio St.3d 193, 2017-Ohio-7579, 87 

N.E.3d 199, ¶ 13, citing R.C. 5717.04. Nonetheless, a reviewing court does not hesitate 

 

3 An exception was made for appeals in which a party files a petition requesting a transfer 

of jurisdiction to the Supreme Court of Ohio. The petition must be filed within 30 days 

after the notice of appeal has been filed with the appropriate court of appeals, and the 

petition must be filed with the Supreme Court of Ohio. If the appeal “involves a substantial 

constitutional question or a question of great general or public interest,” the Supreme 

Court of Ohio may approve the petition and order the appeal to be taken directly to the 

Supreme Court. However, if jurisdiction is not transferred, the appeal proceeds in the 

court of appeals. See R.C. 5717.04, as amended in 2017. The remainder of the 

amendments to R.C. 5717.04 are non-substantive, except for a line that was added which 

stated that “[a]s used in this section, ‘taxpayer’ includes any person required to return any 

property for taxation.” 

4 The amendment to this paragraph is non-substantive, as the only change under the 

2017 revision was the insertion of the word “applicable.” Am. Sub. H.B. 49, 2017 Ohio 

Laws File 14, Part 15. Thus, the standard of review is unchanged. 
-8- 

to reverse BTA decisions that are based on incorrect legal conclusions. See, e.g., Satullo 

v. Wilkins, 111 Ohio St.3d 399, 2006-Ohio-5856, 856 N.E.2d 954, ¶ 14, citing GahannaJefferson Local School Dist. Bd. of Edn. v. Zaino, 93 Ohio St.3d 231, 232, 754 N.E.2d 

789 (2001). Consequently, questions of law are reviewed de novo. Dublin City Schools 

Bd. of Edn. v. Franklin Cty. Bd. of Revision, 139 Ohio St.3d 193, 2013-Ohio-4543, 11 

N.E.3d 206, ¶ 13; Terraza 8, L.L.C. v. Franklin Cty. Bd. of Revision, 150 Ohio St.3d 527, 

2017-Ohio-4415, 83 N.E.3d 916, ¶ 7. 

{¶ 15} Review of BTA decisions “is guided by the premise that ‘ “[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.” ’ ” NWD 300 Spring at ¶ 13, quoting 

EOP-BP Tower, 106 Ohio St.3d 1, 2005-Ohio-3096, 829 N.E.2d 686, at ¶ 17. (Other 

citation omitted.) The BTA’s factual decisions are upheld “if the record contains reliable 

and probative evidence supporting the BTA’s determination.” Dublin City Schools Bd. of 

Edn., 139 Ohio St.3d 193, 2013-Ohio-4543, 11 N.E.3d 206, at ¶ 13, citing Satullo at ¶ 14. 

Deference is also given to BTA findings about the weight of the evidence, as long as the 

findings are supported by the record. Terraza 8 at ¶ 7, citing Olmsted Falls Bd. of Edn. v. 

Cuyahoga Cty. Bd. of Revision, 122 Ohio St.3d 134, 2009-Ohio-2461, 909 N.E.2d 597, ¶ 

27. 

{¶ 16} Article XII, Section 2 of the Ohio Constitution requires property to be “taxed 

by uniform rule according to value.” “This provision generally requires a real-property 

valuation to ascertain ‘the exchange value’ of the property.” (Citation omitted; emphasis 

sic.) Johnston Coca-Cola Bottling Co. v. Hamilton Cty. Bd. of Revision, 149 Ohio St.3d 

155, 2017-Ohio-870, 73 N.E.3d 503, ¶ 13. As a general rule, “the value or true value in 
-9- 

money of any property is the amount for which that property would sell on the open market 

by a willing seller to a willing buyer. In essence, the value of property is the amount of 

money for which it may be exchanged, i.e., the sales price.” State ex rel. Park Inv. Co. v. 

Bd. of Tax Appeals, 175 Ohio St. 410, 412, 195 N.E.2d 908 (1964). Actual sales are the 

best way to determine value, when they are available. (Citations omitted.) Terraza 8, 150 

Ohio St.3d 527, 2017-Ohio-4415, 83 N.E.3d 916, at ¶ 9. 

{¶ 17} But where no recent sales of the property have occurred, the BTA has wide 

latitude in the matters that it can consider and broad discretion in the weight that it 

attaches to expert testimony. (Citations omitted.) Wynwood Apts., Inc. v. Bd. of Revision 

of Cuyahoga Cty., 59 Ohio St.2d 34, 35, 391 N.E.2d 346 (1979). When the BTA reviews 

appraisals, it “ ‘is vested with wide discretion in determining the weight to be given to the 

evidence and the credibility of the witnesses that come before it.’ ” NWD 300 Spring, 151 

Ohio St.3d 193, 2017-Ohio-7579, 87 N.E.3d 199, at ¶ 13, quoting EOP-BP Tower, 106 

Ohio St.3d 1, 2005-Ohio-3096, 829 N.E.2d 686, at ¶ 9. (Other citation omitted). Reviewing 

courts also apply an abuse of discretion standard to BTA decisions on witness credibility 

and the weight their testimony is given. Id. at ¶ 14. An abuse of discretion refers to “an 

unreasonable, arbitrary, or unconscionable attitude.” Renacci v. Testa, 148 Ohio St.3d 

470, 2016-Ohio-3394, 71 N.E.3d 962, ¶ 32, citing J.M. Smucker, L.L.C. v. Levin, 113 Ohio 

St.3d 337, 2007-Ohio-2073, 865 N.E.2d 866, ¶ 16. BTA factual determinations are not 

disturbed “ ‘ “if the record contains reliable and probative support.” ’ ” Meijer Stores Ltd. 

Partnership v. Franklin Cty. Bd. of Revision, 122 Ohio St.3d 447, 2009-Ohio-3479, 912 

N.E.2d 560, ¶ 17, quoting Satullo, 111 Ohio St.3d 399, 2006-Ohio-5856, 856 N.E.2d 954, 

at ¶ 14, quoting Am. Natl. Can Co. v. Tracy, 72 Ohio St.3d 150, 152, 648 N.E.2d 483 
-10-

(1995). 

{¶ 18} Here, the BTA weighed the probative value of two appraisals and found one 

to be more probative than the other. “This decision rests within the core of the BTA’s 

competence as fact-finder and deserves the highest degree of deference from this court.” 

Meijer at ¶ 18. Most of the assignments of error allege deficiencies in Sprout’s appraisal 

and testimony. “But determining the probative value of an appraiser’s testimony lies within 

the competence of the BTA,” id. at ¶ 20, and we will defer to the BTA’s determinations as 

to these matters. 

B. The competing appraisals and the BTA’s findings 

{¶ 19} Each expert—Stephen Weis for Golden Arch and Thomas Sprout for the 

BOE—performed a comprehensive valuation of the subject property, a McDonald’s 

restaurant. They both valued the property at its “highest and best use,” a concept that is 

a “crucial element in determining the value of property in the overall market.” Rite Aid of 

Ohio, Inc. v. Washington Cty. Bd. of Revision, 146 Ohio St.3d 173, 2016-Ohio-371, 54 

N.E.3d 1177, ¶ 34. “Highest and best use” “ ‘is that use which will generate the highest 

net return to the property over a reasonable period of time.’ ” Id., quoting IAAO, Property 

Assessment Valuation 31 (2d Ed.1996) (International Association of Assessing Officers). 

{¶ 20} Both experts also analyzed the property’s value using the same two 

approaches—the sales-comparison approach and the income-capitalization approach. 

These different and independent approaches are “two accepted methods of analysis.” 

Johnston Coca-Cola Bottling Co., 149 Ohio St.3d 155, 2017-Ohio-870, 73 N.E.3d 503, ¶ 

15. The sales-comparison approach values the subject property by comparing it with 

similar, or comparable, properties that have recently sold and that reflect the subject 
-11-

property’s market value. The sale price of each comparable property is adjusted for 

factors like market conditions at the time of sale, building size, location, and quality and 

condition. Based on the adjusted sales prices, a market price for the subject property is 

determined. In the income-capitalization approach, the value of the subject property is the 

present worth of anticipated future income derived from the property. This is calculated 

by estimating the property’s net annual operating income and then applying a rate of 

capitalization that reflects the relative certainty of continuing to earn that income and the 

risks of ownership. The net operating income is based on the lease rates of comparable 

properties. And the appropriate capitalization rate is determined by looking at the 

capitalization rates of similar properties. Because the purpose of the valuation here is to 

determine the value for tax purposes, both experts also conducted a tax additur analysis. 

This analysis removes real estate taxes from the net-operating-income calculation and 

adds a tax additur to the capitalization rate “to reflect the percentage amount of the 

subject’s value that is paid in tax each year.” (Sprout Appraisal Report, p. 46; see also

Weis Appraisal Report, p. 45-46).5 After the experts analyzed the property’s value under 

each approach, they reconciled the two values into a final opinion of value. 

i. Weis’s appraisal 

{¶ 21} Weis concluded that the best-and-highest use of the subject property here, 

 

5 A “tax additur” is a component of the capitalization rate that accounts for the negative 

effect that property taxes have on the value of the property. When the amount of real 

estate taxes is unknown, such as when the taxes are in dispute, the appraiser develops 

an adjustment—a “tax additur”—that reflects the “effective tax rate” for the subject 

property; this percentage then is added to and becomes a component of the capitalization 

rate. Columbus City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, 144 Ohio St.3d 

324, 2015-Ohio-3633, 43 N.E.3d 387, ¶ 26-28, citing Worthington City Schools Bd. of 

Edn. v. Franklin Cty. Bd. of Revision, 140 Ohio St.3d 248, 2014-Ohio- 3620, 17 N.E.3d 

537, ¶ 8, fn. 2. 
-12-

as improved, was as a “Restaurant.” 

{¶ 22} In his sales-comparison analysis, Weis selected six properties in 

Montgomery County that had sold between 2012 and 2015. Five of the properties were 

restaurants and one was a retail building. Three of the restaurants were fast-food 

restaurants and two were sit-down. Three of the restaurants were vacant at the time of 

sale, and the retail building was also vacant at the time of its sale. After making 

adjustments to the sales prices, Weis derived adjusted values of the comparable 

properties that ranged from $67.28 to $150.64 per square foot. He then concluded that 

the market value of the subject property was $145 per square foot. Multiplying this squarefootage value by the size of the subject property (4,411 sq. ft.) showed a rounded market 

value of $640,000. 

{¶ 23} For his income-capitalization analysis, Weis selected nine restaurant 

properties in Montgomery County that were leased between 2012 and 2015. Based on 

the adjusted lease rates of these properties, Weis determined that the subject property’s 

net annual operating income was $52,891. Weis then determined that the appropriate 

rate of capitalization was 8.25%. He based this figure on the subject property’s size, 

location, and condition and on the capitalization rates for 32 retail properties in several 

Ohio counties as well as national capitalization rates. Next, Weis determined that a tax 

additur of 0.15% would be appropriate. He applied the adjusted capitalization rate to the 

net annual operating income to get a rounded value of $650,000. 

{¶ 24} In his reconciliation of values, Weis gave the most weight to the salescomparison value, “due to abundance of free standing retail building sales.” (Weis 

Appraisal Report, p. 48). Weis concluded that the value of the subject property as of 
-13-

January 1, 2014, was $645,000. 

ii. Sprout’s appraisal 

{¶ 25} Sprout concluded that the highest-and-best use of the property, as 

improved, was as a “national fast food restaurant,” a little narrower than Weis’s highestand-best use conclusion. (Sprout Appraisal Report, p. 19.) 

{¶ 26} For his sales-comparison analysis, Sprout selected eight properties that 

had sold in Ohio between 2012 and 2015—three in the Dayton area, one in Cincinnati, 

one in Springfield, two in the Columbus area, and one in Mansfield. Six of the properties 

were restaurants, occupied at the time of sale. One of the properties was a vacant former 

restaurant in a poor location, which Sprout included to illustrate the sale of what the 

subject property was not. After making adjustments to the sale prices of the properties, 

Sprout determined that the market value of the subject property ranged from $300 to $325 

per square foot. He then multiplied these values by the subject property’s square footage 

(4,411 sq. ft.) to arrive at a rounded value of between $1,325,000 and $1,435,000. 

{¶ 27} For his income-capitalization analysis, Sprout used eight comparison 

properties in Ohio—four in the Dayton area, one in Lebanon, one in Springfield, one in 

Columbus, and one in Mansfield. Based on the adjusted lease prices of the comparable 

properties, Sprout determined that the net annual operating income of the subject 

property was $117,891— more than double Weis’s income determination. Sprout then 

concluded that the appropriate capitalization rate was 7.25%. He based this rate on a 

band-of-investment analysis, the capitalization rates of the comparison properties, and 

national rates. Sprout then found that a tax additur of 2.98% should be added to the 

capitalization rate, giving an adjusted capitalization rate of 10.23%. He applied the 
-14-

adjusted rate to the net operating income to get a rounded value of $1,340,000. 

{¶ 28} In his value reconciliation, in contrast to Weis, Sprout gave the most weight 

to the income-capitalization value. According to Sprout’s report, this value gives a better 

indication of value because “there is an active rental market for properties such as the 

subject.” (Sprout Appraisal Report, p. 47). Sprout concluded that the value of the subject 

property on January 1, 2014, was $1,340,000, which is also more than double Weis’s 

valuation. 

iii. The BTA’s decision 

{¶ 29} The BTA found Sprout’s valuation analysis “to be the most competent and 

probative evidence of value.” It found that his highest-and-best-use conclusion as a 

national fast-food restaurant is “most appropriate.” And it found that Sprout’s “selection of 

comparable properties, under both the sales comparison and income approaches to 

value, best represented the market in which the subject property would operate.” “Sprout,” 

said the BTA, “mostly relied upon comparables that were operating fast-food restaurants 

and that continued to operate as fast-food restaurants after their transfer.” “Weis, on the 

other hand, relied upon comparables that were dissimilar from the subject property, i.e., 

‘sit-down’ restaurants, at least one property that had been converted to a different use, 

and vacant properties.” The BTA said that this was a “crucial” difference that led Weis to 

undervalue the property. As for the capitalization rate, the BTA found that Sprout’s rate 

was “reflective of the subject property’s most likely use,” because it was based on other 

fast-food restaurants. The BTA criticized Weis’s capitalization rate because “it was 

derived from properties that were dissimilar from the subject properly, i.e., general retail, 

instead of restaurant or fast-food restaurant properties.” 
-15-

{¶ 30} After reviewing the evidence, the BTA concluded that the BOE had satisfied 

its evidentiary burden on appeal. The BTA determined that the subject property’s value 

as of January 1, 2014, was $1,340,000. 

C. Golden Arch’s challenges to the BTA’s decision 

{¶ 31} Golden Arch takes issue with the BTA’s decision, challenging it in five 

primary ways. Fundamentally, Golden Arch argues that the BTA should not have given 

the most weight to Sprout’s appraisal. Golden Arch also argues that the BTA’s highestand-best-use finding is too narrow and that it improperly considered the property’s present 

use. Golden Arch further argues that Weis’s capitalization rate is better supported than 

the rate used by the BTA. Finally, Golden Arch argues that the BTA should not have 

recognized Sprout as an expert. 

{¶ 32} Again, our standard of review: “We must affirm the BTA’s decision if it is 

reasonable and lawful. R.C. 5717.04. In making this determination, we must consider 

legal issues de novo and defer to findings concerning the weight of evidence so long as 

they are supported by the record.” (Citations omitted.) Pavilonis v. Cuyahoga Cty. Bd. of 

Revision, Slip Opinion No. 2018-Ohio-1480, ¶ 8. 

{¶ 33} The BTA here considered two competing opinions of value. Although 

facially they are widely divergent, the analysis leading to each value is well explained in 

each appraiser’s written appraisal report. Many of Golden Arch’s arguments urge us to 

re-weigh the appraisal evidence presented to the BTA and reach a different conclusion. 

But that is not our role. 

i. The weight given Sprout’s valuation 

{¶ 34} Golden Arch challenges the BTA’s determination that Sprout’s analysis is 
-16-

entitled to more weight than Weis’s analysis. Specifically, Golden Arch disputes the BTA’s 

findings that Sprout used a more appropriate methodology to value the property, that 

Sprout’s selection of comparable properties “best represents the market in which the 

subject property would operate,” and that Sprout’s qualitative adjustments are more 

probative than Weis’s qualitative and quantitative adjustments. Golden Arch also argues 

that the BTA should not have accepted the sales-breakpoint analysis in Sprout’s appraisal 

report. And Golden Arch claims that Sprout’s appraisal methodology and analysis 

produce inconsistent results. 

Selection of comparable properties 

{¶ 35} The appraisal reports and the appraisers’ testimony describe the manner in 

which comparable properties were selected. Determining which appraiser selected the 

best comparable properties was the crux of the BTA’s decision. On the one hand, Weis 

generally placed a high priority on using properties within Montgomery County, but this 

limited the number of properties that were similar to the subject property in other ways, 

such as the specific nature of the restaurant business (fast-food vs. sit-down restaurants), 

and resulted in the inclusion of one property that was torn down after its sale and used 

for a completely different purpose. On the other hand, Sprout chose properties from a 

wider geographical area, which led to more variations in locations, neighborhood, 

population, and the like, but allowed him to more narrowly focus his comparisons on 

operating fast-food restaurants. 

{¶ 36} Further, although Golden Arch’s argument in its brief places great emphasis 

on “location, location, location,” the BTA concluded that comparison of the properties 

based on other factors was entitled to greater weight than geographical location. On the 
-17-

whole, the BTA determined that Sprout’s comparable properties were more similar to the 

subject property in characteristics and markets than Weis’s comparables, even if they 

were located in a broader geographical area. 

{¶ 37} The BTA gave its reasons for concluding that Sprout’s appraisal was 

entitled to greater weight. The BTA agreed with Sprout’s conclusion that the highest-andbest use of the property was as a fast-food restaurant, rather than as a more broadly 

defined restaurant or as a property that could be put to use for another retail purpose. 

The BTA found this difference to be “crucial” and concluded that Weis’s approach had 

undervalued the property. Because Sprout had defined the highest-and-best use more 

narrowly, the BTA, as the finder of fact, was permitted to reasonably conclude that his 

comparables were more carefully tailored to this particular use. 

{¶ 38} The BTA’s statement that Sprout’s selection of comparable properties “best 

represented the market in which the subject property would operate” is reasonable if the 

“market” is defined in this broader sense, rather than as limited to Montgomery County. 

And we reject Golden Arch’s assertion that this statement by the BTA “makes no sense 

whatsoever” and is “literally impossible.”6

Adjustments 

{¶ 39} Golden Arch also asserts that Sprout’s analysis is inferior to Weis’s because 

 

6 We also reject Golden Arch’s assertions that the Sprout report “strangely chose” an 

appraisal method, that the BTA's decision is “not merely unreasonable, but shocking,” 

that the Sprout testimony “laughably referr[ed]” to certain building features, that the BTA 

engaged in “[s]loppy reasoning,” that Sprout made “outlandish claims,” that the BTA’s 

reasoning was “lazy and factually inaccurate,” that the BTA failed “to employ common 

sense and good judgment in evaluating [Sprout’s] appraisal report,” or that Sprout 

“magically conclude[d]” a higher value than the BOR. 
-18-

Sprout’s qualitative adjustments to the sales prices of his comparable properties were 

less reliable than Weis’s qualitative and quantitative sales-price adjustments, 7 and 

because Sprout did not provide market support for his conclusions. 

{¶ 40} The BTA has held that “qualitative, rather than quantitative adjustments, are 

recognized standard appraisal practice.” Insite Wooster, LLC, v. Wayne Cty. Board of 

Revision, BTA No. 2014-4149, 2015 WL 11005090, *4 (Sept. 11, 2015), citing Bd. of Edn. 

of the Columbus City Schools v. Franklin Cty. Bd. of Revision, BTA No. 2014-2022, 2015 

WL 1048721 (Feb. 27, 2015). Here, the BTA specifically referenced the Columbus City 

Schools decision for this proposition and rejected Golden Arch’s criticism of the fact that 

Sprout used qualitative adjustments as opposed to the quantitative adjustments Weis 

applied in his report. 

{¶ 41} Golden Arch does not explain exactly what it thinks is wrong with Sprout’s 

qualitative adjustments, other than that they were subjective. We disagree that they were 

subjective. Having reviewed the record in its entirety, we do not find Sprout’s adjustments 

purely subjective. Both experts testified about their process of making adjustments and 

they applied similar factors, like location, size, and so forth, to adjust the sales prices of 

the properties. We fail to see how Sprout’s adjustments were more unsubstantiated than 

Weis’s. 

Sprout’s sales-breakpoint analysis 

{¶ 42} Golden Arch contends that the BTA ignored the problems that Golden Arch 

raised concerning Sprout’s sales-breakpoint analysis. Golden Arch claims that Sprout’s 

income-capitalization approach is “built around some conjectured ‘sales breakpoint 

 

7 The BTA described Weis’s adjustments only as “quantitative.” 
-19-

analysis,’ ” which Golden Arch calls “a flawed methodology unsupported by verifiable 

market research or appraisal industry guidelines that he used to substantiate his income 

capitalization approach.” 

{¶ 43} A “sales breakpoint” typically refers to “[t]he amount of gross sales at which 

percentage rent becomes payable.” Baldwin’s Ohio Practice Ohio Real Estate Law, 

Percentage rent, Section 46:12 (December 2017 Update).8 One Ohio appellate court has 

said this about a sales-breakpoint provision in a lease: “A percentage rent was an 

additional amount payable by a retail tenant at the Centre when its annual sales exceeded 

a level defined in its lease and referred to as a ‘breakpoint.’ The additional rent due was 

computed as a percentage of the amount by which the tenant’s sales exceeded the 

breakpoint.” Kenwood Plaza Ltd. Partnership v. State Teachers’ Retirement Sys. Bd., 1st 

Dist. Hamilton No. C-000730, 2001 WL 1077939, *9 (Sept. 14, 2001). These explanations 

agree with the definition that Sprout gave at the BTA hearing that “[a] breakpoint is * * * a 

percentage of sales.” (July 12, 2016, BTA No. 2015-2319, Tr. 31). Using Wendy’s 

restaurants as an example, Sprout said that “[t]hose leases also a lot of times have a 

percentage rent based on a breakpoint. So if they achieve a sale level that’s above that 

breakpoint, then the lessee is paying percentage rents to the property owner * * *.” Id. at 

17. A sales-breakpoint provision is put in a lease agreement, said Sprout, “because that 

 

8 “Percentage rent” has been explained this way: “Percentage rent is a reflection of the 

fact that the commercial location in question is so valuable a location that the traffic 

generated warrants a premium to be computed in accordance with the commercial 

revenues obtained from business at the site. Percentage rent also gives the landlord 

certain protections from the effects of inflation, while protecting the tenant from downturns 

in sales.” Baldwin’s Ohio Practice Ohio Real Estate Law, Percentage rent, Section 46:12 

(December 2017 Update). “Percentage rent is frequently based on gross sales in excess 

of the amount of gross sales which would yield the base rent when multiplied by the 

applicable percentage.” Id. 
-20-

way if the tenant’s doing well with their sales, the landlord is benefitting as well.” Id. at 32. 

How sales breakpoints are determined and the significance of their analysis is complex. 

Indeed, after going through a lengthy explanation for the BTA hearing examiner, Sprout 

admitted that “it took me a long time to figure that out myself.” Id. at 33. 

{¶ 44} Golden Arch did not spend much time challenging Sprout’s salesbreakpoint testimony. It asked him whether “a sales breakpoint rent clause [is] much more 

common in tenant situations where it’s a mall or a strip center than a fast food restaurant.” 

(July 16, 2016, BTA No. 2015-2357, Tr. 24). Sprout disagreed and testified that in his 

experience national fast-food companies use sales-breakpoint provisions in typical 

restaurant leases, giving Wendy’s as an example. 

{¶ 45} Golden Arch gives no reason why Sprout’s sales-breakpoint analysis is 

such a problem. It may well be that a sales breakpoint increase in rent disadvantages a 

more successful business because the net operating income is increased, and hence the 

income-capitalization value of a specific property will be higher. But the BTA heard 

Sprout’s testimony about his sales-breakpoint analysis and heard Golden Arch’s attempts 

to undermine it. We leave it to the BTA’s discretion to accord the analysis the weight that 

it deserves. 

Sprout’s inconsistent results 

{¶ 46} Golden Arch claims that Sprout’s appraisal methodology produced 

inconsistent results. It cites another case involving a McDonald’s restaurant valuation in 

which both Weis and Sprout participated as appraisers, Bd. of Edn. of the Brookville Local 

Schools v. Montgomery Cty. Bd. of Revision, BTA No. 2016-325, 2017 WL 3034549 (July 

6, 2017). In that case, the appraisers valued a McDonald’s restaurant that was “at the 
-21-

end of its economic life” and was slated to be demolished and replaced, and the BTA 

noted that the restaurant’s age “greatly impact[ed]” its value. The BTA relied on Weis’s 

selection of comparable properties, rather than on Sprout’s, in determining the value of 

the property. 

{¶ 47} Golden Arch says that the result in the Brookville case should lead us to 

reject Sprout’s appraisal in this case. There are flaws in this reasoning, including that 

each case is factually different, that we do not have the record and evidence from the 

Brookville case, and that the BTA’s rejection of the valuation provided by an appraiser in 

one case does not automatically impugn that appraiser’s qualifications or his opinion in 

another case. Appraisers make judgments based on the facts of each case, and those 

facts differ. Accordingly, we find no merit to Golden Arch’s claim that Sprout’s 

methodology is inconsistent. 

ii. The highest-and-best-use finding 

{¶ 48} Golden Arch’s next major argument is that the BTA’s conclusion as to the 

property’s highest-and-best use is too narrow. Golden Arch says that the BTA effectively 

valued the property as “special purpose” property. 

Special-purpose property? 

{¶ 49} Golden Arch focuses much of its argument on the fact that the two 

appraisers expressed different opinions about whether the W. Alex Bell Road McDonald’s 

restaurant was a special-purpose property. But even though Sprout believed that it could 

have been treated as such, he did not value the property as special-purpose property. So 

Sprout’s observation that the property could have been classified as a special-purpose 

property was inconsequential to the BTA’s decision. Indeed, the BTA noted in its decision 
-22-

that “although the property owner faults Sprout’s conclusion that the subject property fit 

the definition of ‘special-purpose property,’ we find no error there given that he testified 

that he did not appraise the property as if it were a ‘special-purpose property.’ ” 

Rite Aid 

{¶ 50} Golden Arch contends that the BTA ignored Rite Aid of Ohio, Inc., v. 

Washington Cty. Bd. of Revision, 146 Ohio St.3d 173, 2016-Ohio-371, 54 N.E.3d 1177. 

In Rite Aid, the BTA adopted the property owner’s lower valuation, finding that the 

county’s comparables, “while potentially appropriate,” were drawn from an unnecessarily 

narrow pool of properties. The Ohio Supreme Court agreed. The Court concluded that 

the county’s appraiser had essentially and unjustifiably treated the subject property as a 

special-use property and that therefore the BTA “was justified in rejecting” the county’s 

appraisal and adopting the property owner’s. The Court also criticized the county’s 

argument that properties encumbered by a lease at the time of sale could be compared 

with unencumbered properties, without adjustment for this difference, “[p]recisely 

because the lease affects the sale price and value.” Id. at ¶ 20. 

{¶ 51} But Sprout’s appraisal does not treat the subject property here as specialpurpose property, and the appraisal incorporates very specific information about existing 

leases on comparable properties in determining whether adjustments in value are 

appropriate. So we see no conflict between Rite Aid and the BTA’s decision here. 

The BTA’s precedent 

{¶ 52} Golden Arch also claims that the BTA ignored its own precedent. In NWD 

300 Spring, L.L.C v. Franklin Cty. Bd. of Revision, 151 Ohio St.3d 193, 2017-Ohio-7579, 

87 N.E.3d 199, the Ohio Supreme Court affirmed the BTA’s valuation of a luxury, high-
-23-

rise residential condominium building. Sprout and another appraiser had provided 

competing appraisals giving different values. In Sprout’s analysis, he selected as 

comparable properties a variety of vacant land parcels designated for mixed-use in the 

nearby market rather than vacant land parcels designated for residential use (which is 

what the other appraiser did). The BTA found that Sprout’s comparables were more 

appropriate and reflective of the subject property’s market. The BTA commended Sprout 

for “ ‘consider[ing] a wider variety of commercial development’ ” and faulted the other 

appraiser for “ ‘utiliz[ing] only sales of properties ultimately developed into apartments.’ ” 

NWD 300 Spring at ¶ 9, quoting BTA Nos. 2015-106 et al., 2015 WL 11018757, *4 (Dec. 

23, 2015). Golden Arch says that the BTA’s decision in the present case directly 

contradicts its decision in NWD 300 Spring. 

{¶ 53} As we have already pointed out, every valuation case is factually different. 

We do not have the record and evidence from the NWD 300 Spring case. The BTA’s 

acceptance of an analysis provided by an appraiser in one case does not mean that the 

BTA must accept the same analysis in another case. The facts on which an appraiser 

makes judgments differ in every case. Therefore we find no merit in Golden Arch’s claim 

that the BTA ignored its own precedent. 

iii. Consideration of present use 

{¶ 54} Golden Arch’s next major argument is that the BTA erred by applying the 

holding in Johnston Coca-Cola Bottling, 149 Ohio St.3d 155, 2017-Ohio-870, 73 N.E.3d 

503. Golden Arch says that that case involved the valuation of an enormous bottling plant, 

which is unlike the subject property here. 

{¶ 55} In Johnston, the Ohio Supreme Court reaffirmed that the “present use” 
-24-

method of evaluation cannot be the basis of valuing real property for tax purposes, 

because it “ ‘excludes, among other factors, location and speculative value which 

comprise market value * * *.’ ” Id. at ¶ 13, quoting State ex rel. Park Inv. Co. v. Bd. of Tax 

Appeals, 32 Ohio St.2d 28, 33, 289 N.E.2d 579 (1972); Rite Aid at ¶ 27. Which is not to 

say that present use must be ignored. Rather, as the Court stressed in Johnston, 

“[a]lthough present use generally cannot be the only measure of value, in a proper case 

it may be considered in determining true value for tax purposes.” Johnston at ¶ 14. The 

key point is that the present-use value may not be considered “to the exclusion of other 

factors relevant to exchange value.” Id. at ¶ 15. The Johnston court found that the BTA 

referred to the property’s present use as a bottling company but that “it did so in the 

context of deciding which comparables identified by the appraisers were ‘more analogous’ 

under the sales-comparison approach.” Id. at ¶ 16. This consideration of present use was 

not improper. 

{¶ 56} Here, the BTA observed that Sprout did not value the subject property 

based solely on its present use as a McDonald’s restaurant: “[W]e find that Sprout 

properly considered the subject property’s current use as a McDonald’s restaurant and 

developed the sales comparison and income approaches to value to determine the 

subject property’s exchange value.” Johnston supports this finding, said the BTA. On this 

record we cannot disagree. 

iv. The capitalization rate 

{¶ 57} Golden Arch argues that the BTA should have chosen Weis’s capitalization 

rate of 8.25% over Sprout’s 7.25% rate. 

{¶ 58} The BTA faulted Weis’s capitalization rate because he derived it from 
-25-

properties that were unlike the subject property: 

* * * Weis’s capitalization rate raises concerns given that it was derived from 

properties that were dissimilar from the subject properly, i.e., general retail, 

instead of restaurant or fast-food restaurant properties. As such, we cannot 

confirm that his capitalization rate appropriately captures the market in 

which the subject property would operate. However, Sprout’s capitalization 

rate was based upon fast-food restaurants and, therefore, reflective of the 

subject property’s most likely use. 

{¶ 59} Both appraisers consulted local and national capitalization rates to derive 

their respective rates. Sprout looked at seven fast-food restaurants in Ohio, three of which 

were in the Dayton area. The capitalization rates of these properties ranged from 5.45% 

to 6.77%. Sprout also consulted the PwC Real Estate Survey, “a national publication 

indicating typical capitalization rates within the net lease market traded in the U.S.,” which 

he included with his report. (Sprout Appraisal Report, p. 45). This survey shows a range 

of 6.0% and 8.5%. Finally, Sprout conducted a band-of-investment analysis, which 

showed a range of 6.77% to 7.27%. As for Weis, he looked at 32 properties across Ohio, 

only ten of which were restaurants and of those ten only nine were fast-food. And like 

Sprout, Weis consulted a source for national capitalization rates. This source used 

various techniques to determine the capitalization rate in the retail, restaurants (all types), 

and restaurants (fast food) sectors. 

{¶ 60} Which capitalization rate is more accurate? Who knows. But the evidence 

supporting Sprout’s rate of 7.25% is reliable and probative. And the BTA’s decision to 

adopt this rate as the appropriate capitalization rate for the subject property was 
-26-

reasonable. See Dublin City Schools Bd. of Edn., 139 Ohio St.3d 193, 2013-Ohio-4543, 

11 N.E.3d 206, at ¶ 13; Terraza 8, 150 Ohio St.3d 527, 2017-Ohio-4415, 83 N.E.3d 916, 

at ¶ 7. 

v. Sprout’s qualifications as an expert 

{¶ 61} Finally, Golden Arch argues that the BTA should not have “continu[ed] to 

recognize” Sprout as an expert. Golden Arch suggests that it discredited or impeached 

Sprout such that the BTA should have doubted whether Sprout “ha[d] experience in 

appraising fast-food restaurants” or was “familiar with the neighborhood in which the 

Subject Property is located.” 

{¶ 62} In its decision, the BTA rejected Golden Arch’s argument that Sprout was 

not an expert: 

We note that, at this board’s hearing, the property owner stipulated to 

Sprout’s qualifications as set forth in his appraisal report; however, in its 

post-hearing briefs, the property owner attempts to impugn 

Sprout’s qualifications and claims that he misled this board about his 

qualifications. We find no merit to this argument and recognize Sprout (and 

Weis) as an expert qualified to render an opinion on the subject property’s 

value. 

The BTA provided a detailed discussion of how it weighed the experts’ opinions and 

methodology, including specific criticisms of Weis’s analysis. Golden Arch obviously 

disagrees with Sprout’s conclusions, but nothing in the record suggests that Sprout was 

unqualified, that his choice of comparable properties or his calculations were 

unreasonable, or that his valuation should have been disregarded because he lacked 
-27-

appropriate qualifications. 

III. Conclusion 

{¶ 63} The BTA said in its decision that “inherent in the appraisal process is the 

fact that an appraiser must make a wide variety of subjective judgments” in selecting data 

on which to rely, making adjustments to the data to make it “usable,” and interpreting and 

evaluating all the information to form an opinion. Similarly, the BTA must use its judgment 

in determining which evidence presents the most credible valuation. Here, the BTA relied 

on credible evidence from an appraiser who presented support for his positions. Based 

on the record before us, we conclude that the BTA’s determination was reasonable and 

lawful. 

{¶ 64} All of the assignments of error are overruled. The BTA’s decision is affirmed. 

. . . . . . . . . . . . . 

WELBAUM, P.J. and FROELICH, J., concur. 

Copies mailed to: 

Karol C. Fox 

Mark H. Gillis 

Charles L. Bluestone 

Patrick J. Heery 

Laura Mariani 

Joseph W. Testa, Ohio Tax Commissioner