2023 WI App 56

COURT OF APPEALS OF WISCONSIN

PUBLISHED OPINION

Case No.: 2022AP507

Complete Title of Case: 

†Petition for Review filed

VERITAS VILLAGE, LLC,

 PLAINTIFF-APPELLANT,†

 V.

CITY OF MADISON,

 DEFENDANT-RESPONDENT.

Opinion Filed: October 26, 2023

Submitted on Briefs: September 22, 2022

Oral Argument: 

JUDGES: Kloppenburg, P.J., Graham, and Nashold, JJ.

Concurred:

Dissented:

Appellant

ATTORNEYS: On behalf of the plaintiff-appellant, the cause was submitted on the 

briefs of Jacob R. Sundelius and Patrick J. Coffey of Menn Law Firm, 

Ltd., Appleton. 

Respondent

ATTORNEYS: On behalf of the defendant-respondent, the cause was submitted on the 

brief of Jamie L. Staffaroni, assistant city attorney, Madison. 
2023 WI App 56

COURT OF APPEALS

DECISION

DATED AND FILED

October 26, 2023

Samuel A. Christensen

Clerk of Court of Appeals

NOTICE

This opinion is subject to further editing. If 

published, the official version will appear in 

the bound volume of the Official Reports. 

A party may file with the Supreme Court a 

petition to review an adverse decision by the 

Court of Appeals. See WIS. STAT. § 808.10 and 

RULE 809.62. 

Appeal No. 2022AP507 Cir. Ct. No. 2019CV1469

STATE OF WISCONSIN IN COURT OF APPEALS

VERITAS VILLAGE, LLC,

 PLAINTIFF-APPELLANT,

 V.

CITY OF MADISON,

 DEFENDANT-RESPONDENT.

APPEAL from a judgment of the circuit court for Dane County: 

MARIO WHITE, Judge. Affirmed. 

Before Kloppenburg, P.J., Graham, and Nashold, JJ. 

¶1 NASHOLD, J. Veritas Village, LLC (“Veritas”) appeals a circuit 

court judgment upholding the City of Madison’s 2018 tax assessment of Veritas’s 

apartment building. Veritas challenges the assessment as excessive under WIS.
No. 2022AP507

2

STAT. § 74.37 (2021-22).1 Specifically, Veritas argues that the City’s assessment 

lost the presumption of correctness under WIS. STAT. § 70.49(2) because it did not 

comply with the Wisconsin Property Assessment Manual (2018) (“the Manual”)2

and that this court should therefore credit the significantly lower appraised value 

determined by Veritas’s appraiser. 

¶2 The circuit court credited the City’s appraiser’s appraised value over

that of Veritas’s appraiser, and the parties agree that the key difference between the 

two appraisals is the vacancy rates used by the appraisers in determining the value. 

Veritas argues that the City was required to use the actual 72% vacancy rate that 

existed on January 1, 2018, rather than a vacancy rate that took into account leases

that were anticipated to occur after that date. We disagree and therefore affirm the 

circuit court order.

BACKGROUND

¶3 Veritas is the owner of a luxury four-story, multi-family property 

consisting of 189 apartment units located in the downtown area of Madison, 

Wisconsin (“the Property” or “the Veritas Property”). The Property consists of 

studio and one-, two-, and three-bedroom units. The common area of the Property 

includes underground parking and amenities such as a fitness center, a yoga studio, 

a clubhouse, a coffee bar, an outdoor sundeck with pool, an outdoor lounge area and 

fire pit, outdoor grilling stations, a party room, and a bike room. 

 

1

 All references to the Wisconsin Statutes are to the 2021-22 version.

2

 All references are to the 2018 version of the Wisconsin Property Assessment Manual, 

which is the version relied on by the parties and the circuit court.
No. 2022AP507

3

¶4 Construction of the Property was completed in 2017 and leasing 

began in August of that year. As of January 1, 2018, the Property was 28% 

occupied, meaning that it was 72% vacant. The parties agree that the Property was 

in the process of “lease-up”3as of January 1, 2018; that it was anticipated that 

additional leases would be signed, thereby reducing the vacancy rate; and that, as of 

January 1, 2018, the Property was not yet “stabilized.”4

¶5 The City assessed the Property at $17,780,000 based on the appraisal 

conducted by City appraiser Scott West. Veritas filed an objection to the City’s 

assessment and hired private appraiser Dominic Landretti to conduct a retrospective 

appraisal, which valued the Property at $6,800,000. As stated, the difference in the 

appraised values was due primarily to the differing vacancy rates used by the two 

appraisers, with Landretti using a 72% vacancy rate that reflected the actual vacancy 

rate of the Property on January 1, 2018, and West using a vacancy rate that 

accounted for anticipated future leases. 

¶6 The City subsequently hired private appraiser William Miller to 

complete a retrospective appraisal of the Property, and Miller valued the Property 

at $32,600,000. It is undisputed that the City’s assessment was based on West’s 

appraisal, not Miller’s, and that Miller’s appraisal served only to confirm the City’s 

view that the assessment is not excessive. 

 

3

 The parties use the term “lease-up,” but neither the parties nor the Manual define it. We 

understand it to have the meaning offered by trial counsel for Veritas in his opening statement, 

which is essentially the period during which leases are being obtained on a newly constructed 

apartment building. 

4

 During his testimony, West explained that a property is considered “unstabilized” when 

the vacancy level does not represent a market vacancy level. 
No. 2022AP507

4

¶7 The Board of Assessors for the City of Madison and the Board of 

Review sustained the City’s assessment of $17,780,000. Veritas paid $400,322.62 

in real estate taxes on the Property calculated from the $17,780,000 assessment and 

commenced this action against the City for excessive assessment under WIS. STAT.

§ 74.37. 

¶8 The circuit court held a five-day bench trial, during which the court 

heard testimony from the three appraisers, West, Miller, and Landretti; and from 

Veritas’s developer and managing member, Terrence Wall. 

¶9 Following the submission of post-trial briefs, the circuit court issued 

a written decision. The court determined that Veritas did not overcome the 

presumption of correctness afforded the City’s assessment under WIS. STAT.

§ 70.49(2). Specifically, the court concluded that West’s appraisal complied with 

the Manual and with Wisconsin statutes and case law and that Veritas did not present 

significant contrary evidence. In comparing West’s analysis to Landretti’s, the court 

concluded that Landretti’s analysis, “which utilized both actual and market data[,] 

creates a situation in which a completely vacant, luxury apartment complex has no 

value for tax assessment purposes.” The court determined that the City’s assessment 

and West’s conclusions were more “reliable, credible, and persuasive than those 

offered by Veritas.” Given these conclusions, the court declined to address Miller’s 

analysis. Accordingly, the court sustained the City’s assessment and entered 

judgment in favor of the City. Veritas appeals. Additional facts are discussed below 

as needed.
No. 2022AP507

5

DISCUSSION

I. Standard of Review and General Principles of Law

Governing Real Property Assessments

¶10 “Real property shall be valued by the assessor in the manner specified 

in the Wisconsin property assessment manual ... 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.” WIS. STAT. § 70.32(1). 

¶11 Pursuant to WIS. STAT. § 70.49(2), a tax assessment challenged under 

WIS. STAT. § 74.37 is given a presumption of correctness.5 Metropolitan Assocs. v. 

City of Milwaukee, 2018 WI 4, ¶50, 379 Wis. 2d 141, 905 N.W.2d 784. However, 

the presumption can be overcome if the challenging party establishes that the 

assessment does not apply the principles set forth in the Manual or presents 

“‘significant contrary evidence.’” Bonstores Realty One, LLC v. City of 

Wauwatosa, 2013 WI App 131, ¶¶5, 9, 351 Wis. 2d 439, 839 N.W.2d 893 (quoted 

source omitted). “Stated differently, when a city assessor correctly applies the 

[Manual] and Wisconsin Statutes, and there is no significant evidence to the 

contrary, courts will reject a party’s challenge to the assessment.” Allright Props., 

Inc. v. City of Milwaukee, 2009 WI App 46, ¶12, 317 Wis. 2d 228, 767 N.W.2d 

567.

¶12 WISCONSIN STAT. § 70.32(1) “sets forth a hierarchical valuation 

methodology for arriving at a property’s fair market value.” Lowe’s Home Ctrs., 

LLC v. City of Delavan, 2023 WI 8, ¶27, 405 Wis. 2d 616, 985 N.W.2d 69 (citing

 

5

 WISCONSIN STAT. § 70.49(2) provides: “The value of all real 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. 2022AP507

6

State ex rel. Markarian v. City of Cudahy, 45 Wis. 2d 683, 685-86, 173 Wis. 2d 

627 (1970)). This provision “lists three sources of information that inform tax 

assessments.” Lowe’s, 405 Wis. 2d 616, ¶28. “The order in which these sources 

are listed is indicative of the quality of information each source provides.” Id., ¶28. 

“This methodology has been described as providing three ‘tiers’ of analysis.” Id.

¶13 A tier 1 analysis is an examination of a recent arm’s-length sale. Id., 

¶29. “An arm’s-length sale of the subject property is the best information of a 

property’s fair market value, and is thus the first source of information to which an 

assessor should look in conducting an assessment.” Id. 

¶14 If a tier 1 analysis cannot be conducted because “the property has not 

been recently sold, then the appraiser moves to a tier 2 analysis.” Id. In a tier 2 

analysis, the appraiser “examin[es] recent arm’s-length sales of reasonably 

comparable properties (the ‘sales comparison’ approach).” Id. 

¶15 When both tier 1 and tier 2 are unavailable, the assessor moves to a 

tier 3 analysis. Id., ¶30. Under the tier 3 analysis, the assessor “may consider all 

the factors collectively that have a bearing on the value of the property,” including 

“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.” Id. The tier 3 

framework includes, among other things, 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.” Adams

Outdoor Advert., Ltd. v. City of Madison, 2006 WI 104, ¶35, 294 Wis. 2d 441, 717 

N.W.2d 803. 
No. 2022AP507

7

¶16 Here, Veritas brought an excessive assessment claim against the City 

pursuant to WIS. STAT. § 74.37(3)(d). “The question on appeal in a WIS. STAT.

§ 74.37 action is not whether the initial assessment was incorrect, but whether it was 

excessive.” Metropolitan Assocs. 379 Wis. 2d 141, ¶40. “An action filed pursuant 

to § 74.37 seeks a trial before the circuit court, and is distinct from a certiorari 

action.” Lowe’s, 405 Wis. 2d 616, ¶23. In contrast to a certiorari action, an 

excessive assessment action under § 74.37 “is not confined to the record before the 

board and new evidence may be presented.” Id., ¶23 n.11. Thus, “we review the 

circuit court’s determination, not that of the assessor or Board of Review.” Id., ¶23. 

¶17 Veritas’s excessive assessment claim is premised on its argument that 

the City’s assessment did not comply with the Manual and therefore lost the 

presumption of correctness. “[W]e independently review whether a valuation 

complied with the statutes and the Wisconsin Property Assessment Manual.” 

Bonstores, 351 Wis. 2d 439, ¶6. However, we defer to the circuit court’s findings 

of fact and “will not upset the court’s factual findings, including findings involving 

the credibility of witnesses, unless they are clearly erroneous.” Id. “In particular, 

it is within the province of the factfinder to determine the weight and credibility of 

expert witnesses’ opinions.” Id.
No. 2022AP507

8

II. The Appraisals

¶18 As stated, West conducted an appraisal of the Property that formed 

the basis of the City’s assessment of $17,780,000.

6 The explanation of his analysis 

that follows is not disputed. 

¶19 West’s appraisal incorporated the three-tier hierarchical valuation 

methodology described above. West did not conduct a tier 1 analysis because there 

was no recent arm’s-length sale of the Property. 

¶20 West attempted to conduct a tier 2 sales comparison using sales of 

three properties that are similar to the Veritas Property, but ultimately determined 

that the other properties were not sufficiently comparable to the Veritas Property for 

purposes of a tier 2 analysis. West selected these three properties because they had 

a similar use and were in a similar location or market to the Veritas Property. Then, 

in analyzing these other sales, West made adjustments to account for differences 

between these properties and the Veritas Property, and assigned a particular weight 

to each of the resulting figures. Due to the number of adjustments that he was 

required to make to account for the differences between these properties and the 

Veritas Property, West determined that the tier 2 sales comparison analysis was not 

appropriate.

 

6

 West initially valued the Property at $25,390,000, but then revised the value during the 

“open book period” to $19,570,000 in May 2018. After Veritas filed an objection to the assessment, 

West completed an objection report for the Property, recommending the revised assessment of 

$17,780,000. This objection report is referred to in this opinion as West’s “appraisal” and, as stated, 

forms the basis of the City’s assessment. The City notes that West made these changes to his 

appraised value based on additional information Veritas submitted to the City. Veritas does not 

dispute this representation.
No. 2022AP507

9

¶21 Accordingly, West converted the data from the three recent sales into 

a tier 3 sales approach that compares the subject property to “like” or “similar” 

properties rather than to “reasonably comparable” properties. This tier 3 sales 

approach will be referred to in this opinion as the “sales approach” to distinguish it 

from the tier 2 sales comparison analysis. Under the tier 3 sales approach, West 

arrived at a value of $17,781,000 and assigned this sales approach value a 20%

weight in his tier 3 “reconciliation” to reach his recommended assessed value.

7

 

¶22 Also under tier 3, West conducted a cost approach analysis and three 

separate income approach analyses. See Wisconsin Property Assessment Manual, 

13-15 (describing cost and income approaches). West did not place any weight on 

his cost approach analysis. In the three income approach analyses, West estimated 

expenses based on an average of actual operating expenses for newer apartment 

complexes built in Madison in 2014-15. Those expenses are not at issue in this 

appeal. West also applied capitalization rates that are likewise not at issue in this 

appeal. 

¶23 In his first income approach analysis, West averaged the 72% actual 

vacancy rate as of January 1, 2018, with the 5% market vacancy rate (38.5%) and 

rounded the result up to 40%. This first income approach resulted in a valuation of 

approximately $17,520,000. West assigned this valuation a 40% weight in his 

reconciliation. West’s second income approach analysis used a 5% vacancy rate 

and resulted in a valuation of approximately $18,040,000. West also assigned this 

 

7

 “Reconciliation” is defined in the Manual’s glossary as “[t]he process by which the 

appraiser evaluates, chooses and selects from among two or more alternative conclusions or 

indications to reach a final value estimate.” Wisconsin Property Assessment Manual, G-44; see 

also id., 9-22 (reconciliation is “the process of evaluating and selecting from the alternative 

approaches to value”). “The final value estimate may be the value estimate derived from one of 

the approaches or may be a careful reconciliation of the applicable approaches.” Id. at 9-23.
No. 2022AP507

10

valuation 40% weight in his reconciliation. In his third income analysis, West again 

used a 5% vacancy rate but changed the capitalization rate and arrived at a valuation 

of approximately $29,300,000; however, he did not give this valuation any weight. 

In reconciling his tier 3 approaches, including the tier 3 sales approach referenced

above, West arrived at an appraised value of $17,780,000 for the Property. 

¶24 In contrast, Landretti’s appraisal valued the Property at $6,800,000, 

using a 72% vacancy rate, which was the vacancy rate on January 1, 2018.8 Like 

West, Landretti determined that a tier 3 income approach was most appropriate. 

Unlike West, Landretti relied exclusively on the income approach for his 

assessment, whereas West determined that 20% weight should be assigned to the 

sales approach. However, the primary reason for the difference in value between 

the West and Landretti analyses is that West used a substantially lower vacancy rate 

than Landretti, accounting for anticipated future leases. 

¶25 The Manual contains a multi-step formula for determining value for 

commercial properties under the income approach. Wisconsin Property Assessment 

Manual, 13-16. It is not disputed that the two main appraisals at issue, West’s and 

Landretti’s, used this formula and that the primary difference between the two 

appraisals involves the step in which an appraiser is to “[d]educt for vacancy and 

collection loss.” Wisconsin Property Assessment Manual, 13-16. As Veritas 

acknowledges, “the only difference between West and Landretti’s income approach 

 

8

 At the trial held in this matter, Landretti changed his appraised value to $8,500,000 after 

being provided information that eight additional leases had been signed for units that were not yet 

occupied as of January 1, 2018. According to Landretti, this changed the vacancy rate from 72%

to 68%. The parties generally rely on the 72% figure in their briefs and this opinion follows their 

lead.
No. 2022AP507

11

analyses was that West used projected vacancy rates [in this step], whereas Landretti 

used [the Property’s] undisputed 72% vacancy rate.” 

III. Veritas’s Arguments

¶26 On appeal, Veritas argues that the City’s assessment is not entitled to 

the presumption of correctness because West did not comply with the Manual in 

several respects. As a result, Veritas argues that Landretti’s appraisal should be 

credited instead of West’s. Before addressing these arguments, we first emphasize 

the following two undisputed points.

¶27 First, the appraisers all agreed that a tier 3 income approach is the 

most appropriate method for assessing the Property.9 See Walgreen Co. v. City of 

Madison, 2008 WI 80, ¶24, 311 Wis. 2d 158, 752 N.W.2d 687 (“The [Manual] 

explains that in leased property scenarios, the income approach is often the most 

reliable approach for property valuation, describing the income approach as 

estimating and then capitalizing the net rent a property subject could generate.”). 

¶28 Second, the parties agree that the overarching issue in this case is how 

to account for vacancy under the income approach for a brand new building that is 

in the process of lease-up. Veritas argues that the vacancy rate should be 72%, 

reflecting the vacancies that existed on January 1, 2018, whereas the City argues 

that the vacancy rate should take into account a projection of leases that are 

reasonably anticipated to be signed after that date. 

 

9

 As previously explained, West also used a sales approach; however, he assigned the sales 

approach value only a 20% weight in his reconciliation under his tier 3 analysis. 
No. 2022AP507

12

¶29 With those points in mind, we now address Veritas’s specific 

arguments.

A. Presumption of Correctness—the City’s Assessment

¶30 Veritas argues that the City’s assessment lost its presumption of 

correctness because, according to Veritas, West failed to follow the principles set 

forth in the Manual in the following four ways: (1) West considered anticipated 

future leases in “direct contravention” to the Manual’s principle of “change”; 

(2) West used a projected vacancy rate as opposed to the Property’s actual vacancy 

rate; (3) West “mixed and matched” the economically independent methodologies 

in conducting his reconciliation; and (4) West was “unable to support or explain any 

of his opinions beyond assurances that he was simply exercising his ‘judgment.’”10 

We address these arguments in turn.

1. The Manual’s Principle of Change

¶31 Veritas argues that, by considering anticipated future leases, West’s 

appraisal failed to comply with the Manual’s principle of change. This principle is 

one of several “valuation principles” identified in the Manual that form “the basis 

of the techniques used by the assessor to arrive at the market value of a given 

property.” Wisconsin Property Assessment Manual, 9-10. The principle of change 

is described in the Manual as follows: 

 

10

 Veritas also asserts at various points in its brief that it is “undisputed that there was no 

market for [the Property] on January 1, 2018.” The City adamantly disputes this point. Because 

Veritas does not develop an argument based on this assertion in any way as a separate basis for 

challenging the assessment as excessive, we do not address it. See State v. Pettit, 171 Wis. 2d 627, 

646, 492 N.W.2d 633 (Ct. App. 1992). 
No. 2022AP507

13

Change

The factors that affect market value are constantly 

changing. Not only are economic, social and government 

forces constantly changing, but the property itself is subject 

to change. Because change is constant, every opinion of 

value is meaningful only in the context of the date to which 

i[t] applies. In Wisconsin, assessment values are always as 

of January 1. Any changes to the property, economy, or any 

other financial factors affecting value that occur after that 

date, are not considered until the following assessment cycle.

Wisconsin Property Assessment Manual, 9-13.

¶32 Veritas argues that, under this principle, leases signed after January 1, 

2018, are “other financial factors affecting value” that cannot be considered in the 

valuation of the Property. In support of this contention, Veritas notes that all three 

appraisers (West, Miller, and Landretti), when asked by Veritas’s counsel whether 

such future leases were “other financial factors affecting value,” generally testified 

that they were. Because the City’s assessment was based on West’s appraisal, and 

it is this assessment that Veritas argues violated the Manual, we examine only 

West’s testimony on this point. West testified as follows: 

Q. Now, you told me that brand-new leases, not ones 

that are occupied or not ones that are signed but not yet 

moved in, brand-new leases through 2018, after January 1, 

2018 would be other financial factors affecting the value. 

A. Because they’re after January 1st? 

Q. Yes. Is that correct? 

A. Correct. 

Q. So those new leases that have not either been 

occupied as of January 1, 2018 or have not at least been 

signed as of January 1, 2018 would be other financial factors 

affecting value and fall under the principle of change. 

A. That’s one definition of it, yeah. 
No. 2022AP507

14

Notably, during this exchange, West did not testify that such future leases constitute 

“financial factors affecting value that occur after [January 1],” as set forth in the 

principle of change quoted above. In fact, during subsequent testimony, West made 

clear that he did not view the future leases as a factor affecting value that “occur[s] 

after that date” so as to be barred from consideration by the principle of change. 

¶33 Specifically, the City’s counsel asked West to explain how the 

principle of change works in conjunction with another valuation principle, 

“anticipation,” which is described in the Manual as follows: 

Anticipation

One definition of value is the present worth of 

anticipated future benefits. These future benefits can be the 

amenities of home ownership, the receipt of an income, a 

place to run a business, or any other benefits that may be 

projected. It is the conversion of anticipated future benefits 

into a present value that is the basis of the valuation of 

property in the income approach.

Wisconsin Property Assessment Manual, 9-12 to 9-13. In response, West testified:

A. Well, principle [of] anticipation, that’s the whole 

foundation of the income approach, present worth of future 

anticipated benefits. So that’s why you calculate a potential 

income for the property regardless of whether it was 

70-percent vacant or not. 

You have to come up with a potential, if it was fully 

leased, and then you can apply a vacancy rate market or in 

this case I applied additional [vacancy] to take into 

consideration it wasn’t stabilized. 

... I didn’t value anything that occurred after 

January 1st, in my opinion. I valued what was there as of 

January 1st, which was a brand-new 189-unit apartment 

complex.

(Emphasis added.) Thus, West expressed the view that, in taking the anticipated 

future leases into account in his appraisal, he “didn’t value anything that occurred 
No. 2022AP507

15

after January 1st,” 2018. Instead, consistent with the change principle as reconciled 

with the anticipation principle, West valued the anticipated future leases as part of 

the current value of the Property.

¶34 Indeed, Veritas’s interpretation of the change principle would nullify 

the anticipation principle. The anticipation principle expressly allows for 

consideration of benefits that are “anticipated,” “future,” and “projected,” 

particularly when using the income approach for valuing property, which is the 

primary approach that West used. As stated above, under the anticipation principle, 

“value” is defined as “the present worth of anticipated future benefits.” As also 

previously noted, the anticipation principle explicitly states that such “future 

benefits” can be “the receipt of an income, a place to run a business, or any other 

benefits that may be projected.” (Emphasis added.) It also expressly states that “[i]t 

is the conversion of anticipated future benefits into a present value that is the basis 

of the valuation of property in the income approach.” 

¶35 Thus, if the principle of anticipation is to be given any effect, Veritas’s 

interpretation of the principle of change cannot stand. Instead, these anticipated 

leases are financial factors affecting the current value of the property and, consistent 

with both principles, are properly considered. The reasonable anticipation of 

additional leases occurring in the lease-up period is a factor that was applicable on 

January 1, 2018, even if the leases themselves are not signed until after that date. 

¶36 Other directives in the Manual likewise support the conclusion that 

reasonably anticipated future leases are properly considered in assessing value 

under the income approach. For example, the Manual states that the process under 

the income approach consists of “converting anticipated future benefits (income) 
No. 2022AP507

16

into an estimate of the present worth of the property.” Wisconsin Property

Assessment Manual, 13-15. The Manual also states: 

The income approach to value is based on the 

principle of anticipation. It is the calculation of present 

value based on anticipated future benefits. Typically these 

benefits are in terms of rents and other income that the 

property may produce either directly or indirectly. These are 

compared to the typical rents and expenses of similar 

property types in developing an opinion of value. The 

income approach relies on estimating the net rent that the 

subject property could generate, then capitalizing the rent by 

an appropriate rate.

Wisconsin Property Assessment Manual, 9-22 (italics added). Thus, it can hardly 

be clearer under the explicit language of the Manual that anticipated leases are 

properly considered in determining the present value of the Property.

¶37 The Manual further states that the income approach represents “the 

way investors think when they buy and sell income property in the market.” 

Wisconsin Property Assessment Manual, 13-15. It is unreasonable to conclude that 

a seller would agree to a price based on the actual vacancy rate on January 1, 2018, 

if the seller reasonably expects the vacancy rate to decrease in the coming months. 

Thus, Veritas’s interpretation of the principle of change fails to take into account 

the goal of an appraisal, which is to determine how much the Property would sell 

for in a private arm’s-length sale. See WIS. STAT. § 70.32(1) (“Real property shall 

be valued by the assessor ... 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.”); Doneff v. City of Two Rivers Bd. of Rev., 184 Wis. 2d 

203, 213-14, 516 N.W.2d 383 (1994) (“[F]ull value” as used in § 70.32(1) means 

“‘the amount [the property] will sell for upon arm’s-length negotiation in the open 
No. 2022AP507

17

market, between an owner willing but not obliged to sell, and a buyer willing but 

not obliged to buy.’” (quoted source omitted)). 

¶38 Faced with the Manual’s language supporting West’s analysis, Veritas 

suggests in its reply that the way to harmonize the principle of change with the 

principle of anticipation is to disallow consideration of future leases that do not yet 

exist but to allow consideration of signed leases for not-yet-occupied units. Veritas 

states: “[T]he doctrine of anticipation allows appraisers to consider the ‘future 

benefit’ of signed leases. The doctrine of change prevents appraisers from 

attempting to consider the ‘future benefit’ of future leases that do not yet exist.” 

This is so, according to Veritas, because “appraisers cannot reasonably project or 

anticipate the value of unsigned leases.” Veritas cites no authority for the 

proposition that an assessor cannot reasonably estimate the value of unsigned leases, 

and its argument that only signed leases may be considered is unpersuasive, given 

the language of the Manual quoted above.

¶39 Accordingly, we reject Veritas’s argument that, by considering 

anticipated future leases in valuing the Property, the City’s assessment violated the 

Manual’s principle of change. 

2. Projected Vacancy Rate vs. Actual Vacancy Rate

¶40 Veritas argues that West improperly relied on a projected vacancy rate 

as opposed to the Property’s much higher actual vacancy rate of 72%. Veritas 

contends that this was contrary to the Manual and to case law concluding that actual 

data is superior to projected data. Veritas neither refers to nor cites any part of the 

Manual in support of this argument, and, therefore, we do not consider its argument 

on this topic as it relates to the Manual. See State v. Pettit, 171 Wis. 2d 627, 646, 

492 N.W.2d 633 (Ct. App. 1992) (we need not address undeveloped arguments). 
No. 2022AP507

18

We now explain why we reject Veritas’s argument that, by not using a vacancy rate 

of 72%, the City’s assessment was contrary to case law addressing the use of actual, 

rather than projected, data.

¶41 Veritas relies primarily on Metropolitan Holding Co. v. Board of 

Review, 173 Wis. 2d 626, 495 N.W.2d 314 (1993).11 In that case, Metropolitan built 

a housing complex. Id. at 628. In return for federal financing through the federal 

Department of Housing and Urban Development (HUD), the actual rent that 

Metropolitan received was restricted in several ways. Id. For example, HUD 

controlled the maximum amount of rent that Metropolitan could charge and it 

limited the amount that Metropolitan could retain after expenses, with any excess 

profits reverting to HUD. Id. at 629. At issue was “the proper annual income figure 

to be used when assessing a subsidized housing project under the capitalization of 

income approach.” Id. at 628. The City of Milwaukee argued that annual income 

should be based on estimated market rents and expenses, whereas Metropolitan 

argued that annual income should be based on its actual income and expenses. Id.

¶42 Our supreme court concluded that the use of estimated market rents 

violated WIS. STAT. § 70.32 because a valuation based on estimated market rents 

exceeded the fair market value of Metropolitan’s property. Id. at 631. The court 

reasoned that the property was “hindered by the HUD restrictions and it is 

undisputed that the HUD restrictions precluded Metropolitan from charging market 

 

11

 In a part of its brief other than the “Argument” section, Veritas cites other cases in 

support of its assertion that West was required to use the “actual data” of a 72% vacancy rate rather 

than estimated data. Specifically, Veritas cites Rosen v. Milwaukee, 72 Wis. 2d 653, 242 N.W.2d 

681 (1976); State ex rel. Garton Toy Co. v. Mosel, 32 Wis. 2d 253, 145 N.W.2d 129 (1966); State 

ex rel. Park Plaza Shopping Center, Inc. v. Board of Review, 61 Wis. 2d 469, 213 N.W.2d 27 

(1973); Fontana v. Village of Fontana-on-Geneva Lake, 107 Wis. 2d 226, 319 N.W.2d 900 (Ct. 

App. 1982). To the extent Veritas means to incorporate these cases into its argument, they do not 

assist Veritas because they do not involve vacancies in a newly constructed apartment complex in 

the process of lease-up. 
No. 2022AP507

19

rents.” Id. The court stated that the city assessor “essentially pretended that [the 

plaintiff] was not hindered by the HUD restrictions and valued the property at the 

amount the property would bring in an arm’s-length transaction if Metropolitan 

were able to charge market rents.” Id.

¶43 Metropolitan is inapplicable here because no such encumbrances 

affect the Property. Veritas asserts that the Property was “encumbered” by the 72%

vacancy rate. However, this vacancy rate of a newly built, luxury property during 

the lease-up period is not remotely similar to encumbrances like the HUD

restrictions in Metropolitan.

12

 The HUD restrictions constituted a federally 

imposed encumbrance on Metropolitan’s ability to charge market rents, whereas 

here, the vacancy rate of the Property is reasonably anticipated to decrease 

throughout the lease-up period. 

¶44 Further, West’s analysis is consistent with the Metropolitan court’s 

directive that the assessment reflect market value. As set forth above, the Manual 

directs how to determine the market value under the income approach, namely, by 

“converting anticipated future benefits (income) into an estimate of the present 

worth of the property.” As stated differently above, the market value “is the 

calculation of present value based on anticipated future benefits,” which are 

“[t]ypically ... rents and other income that the property may produce.” This is 

consistent with West’s testimony that he did not run an income approach with the 

72% vacancy rate because, in his professional judgment, it “would [not] reflect the 

 

12

 Veritas also asserts that West “ignore[d]” actual data, namely, the 72% vacancy rate. 

The record does not support this assertion. As set forth above, in his first income approach analysis, 

West averaged the 72% actual vacancy rate with the 5% market vacancy rate and rounded the result 

to a 40% vacancy rate. This first income approach resulted in a valuation of approximately 

$17,500,000 and West assigned this valuation 40% weight in his reconciliation under the tier 3 

analysis. 
No. 2022AP507

20

market value of the property as of January 1, 2018.” West’s analysis is not only 

consistent with Metropolitan, but with other case law that rejects a requirement that 

actual data be used when such data does not reflect market value. See, e.g.,

Walgreen, 311 Wis. 2d 158, ¶¶36-53 (where taxpayer negotiated above-market 

rents, market rents rather than actual rents are appropriate in assessing valuation 

under income approach). 

¶45 West’s analysis is also consistent with the Manual’s directive on how 

to incorporate vacancy rates under the income approach:

Rental properties are rarely fully occupied during 

their rental life; therefore, a deduction should be made from 

the potential gross income to compensate for lost income due 

to vacancies. This vacancy allowance can be determined by 

an analysis of the vacancy factors of other comparable 

properties and the recent vacancy history of the subject

property. Care should be taken to make sure the noted 

vacancies are from stabilized projects....

Wisconsin Property Assessment Manual, 13-18 (emphasis added). 

¶46 For all of these reasons, we reject Veritas’s argument that West was 

required to rely solely on the actual vacancy rate as of January 1, 2018, in his 

appraisal of the Property. 

3. “Mixing and Matching” 

¶47 Veritas next argues that West failed to follow the Manual by “mixing 

and matching economically independent methodologies in ‘reconciliation.’” 

Veritas relies on the following passage in the Manual:

Reconciliation is the process by which the appraiser 

evaluates and selects from the alternative approaches to 

value. Keep in mind that the three approaches to value are 

designed to be economically “independent.” That is, the 

foundation for each reflects independent method and data. 
No. 2022AP507

21

For the sales comparison approach, it’s sales data. For the 

cost approach, it’s cost of construction material, cost of 

labor, soft costs, and depreciation data. For the income 

approach, it’s rental and financial data. 

Assessors may consider all three approaches when 

estimating the value of a property. However, all three 

approaches may not be used as the basis for an assessment 

because of case law[.] [Citing Markarian, 45 Wis. 2d at 

686.] 

Wisconsin Property Assessment Manual, 13-41. According to Veritas, West’s 

reconciliation, in which he applied a weighted average of his tier 3 approaches, was 

in “direct contravention” of this language from the Manual stating that an appraiser 

“evaluates and selects from the alternative approaches” but that “all three 

approaches may not be used as the basis for an assessment because of case law.”13 

We reject Veritas’s arguments for the following reasons. 

¶48 First, it is clear from this excerpt of the Manual that the economic 

independence of the approaches refers to the independence of their data: i.e., “[f]or 

the sales comparison approach, it’s sales data. For the cost approach, it’s cost of 

construction material, cost of labor, soft costs, and depreciation data. For the 

income approach, it’s rental and financial data.” Veritas points to nothing in the 

record showing that West’s appraisal mixed these data in his analyses under the

income and sales approaches that formed the basis of his appraisal. 

 

13

 Veritas asserts that “West’s appraisal is a mix of five different ‘economically

independent’ approaches to value.” We assume that Veritas is referring to the five analyses that 

West conducted under tier 3: analyses under a sales approach, a cost approach, and three income 

approaches. However, the record does not support Veritas’s assertion that there were five 

approaches that formed “the basis for [the] assessment” as contemplated by the passage from the 

Manual quoted above. Instead, the record is clear that only three of the analyses were given any 

weight—two analyses under the income approach that yielded respective values of $17,520,000 

and $18,040,000, to which West assigned a weight of 40% each; and one analysis under the sales 

approach that yielded a value of $17,781,000, to which West assigned a weight of 20%. The other 

two (under a cost approach and a third income approach) were given no weight and thus did not 

form any part of the “basis for [the] assessment,” as contemplated by the language of the Manual. 
No. 2022AP507

22

¶49 As to the last sentence of the excerpt from the Manual quoted above 

that “all three approaches may not be used as the basis for an assessment because of 

case law,” we note that the case law cited for that proposition is Markarian, which, 

as set forth above, establishes the three-tier hierarchy for valuing property. As 

previously explained, under the Markarian hierarchy, an assessor must use tier 1 

(an arm’s-length sale of the subject property) if there has been such a sale; may only 

use tier 2 (sales of reasonable comparable properties) if there is no recent 

arm’s-length sale of the subject property, and may only use a tier 3 analysis 

(including the cost and income approaches) if there is no arm’s-length sale of the 

subject property or sufficient data from sales of comparable properties. See

Markarian, 45 Wis. 2d at 686; see also Adams, 294 Wis. 2d 441, ¶34. At no point 

does Markarian prohibit the use of multiple approaches within a single tier, tier 3, 

as occurred here. Thus, we construe the last sentence to refer to the use of 

Markarian’s three tiers and not to the use of multiple approaches within tier 3, such 

as the income, cost, and sales approaches used here.

¶50 Indeed, as we now explain, a prohibition on the use of multiple 

approaches within tier 3 would violate the express provisions of the Manual and 

would contradict case law. 

¶51 As to the Manual, in addition to the excerpt above stating that

“[a]ssessors may consider all three approaches [sales, cost, and income] when 

estimating the value of a property,” the Manual further provides: 

The appraiser should consider all three approaches 

when estimating the value of a property.... 

....

... Usually more than one—and often all three—of 

the approaches apply to a given property. The only limiting 
No. 2022AP507

23

factor: whether available and appropriate data exists to 

develop any and all approaches.

... Generally, the greatest weight should be placed 

on the approach for which the greatest amount of reliable and 

appropriate data is available that will yield the highest 

degree of confidence. 

The final value estimate may be the value estimate 

derived from one of the approaches or may be a careful 

reconciliation of the applicable approaches. 

Wisconsin Property Assessment Manual, 9-23 (emphasis added). This language 

allows an appraisal to rely on more than one approach in conducting a tier 3 analysis 

and to ascribe weight to the various approaches.

¶52 Not only is it permissible under the Manual to rely on more than one 

approach in a tier 3 analysis but, as our supreme court held in Adams, it is sometimes 

required. See Adams, 294 Wis. 2d 441, ¶¶48-56. In Adams, the court concluded 

that the City’s assessor erred in relying on only the income approach for his tier 3 

analysis rather than relying on both the income and cost approaches. See id., ¶56. 

The court based this conclusion, in part, on language from the Manual quoted 

directly above. Id., ¶¶52-53. The court also relied on the Manual’s requirement 

that, when there is sufficient data to estimate market value under both the income

and cost approaches, assessors should determine a final estimate of value through 

the process of reconciliation. Id. at ¶54. The court described reconciliation as 

follows: “Reconciliation requires an assessor to evaluate the data available under 

the alternative approaches and decide whether to derive the value from one of the

approaches or a combination of approaches.” Id. (emphasis added). The court also 

relied on precedent concluding that “an assessment cannot be based solely on the 

income approach.” Id. at ¶¶48, 50-51. 
No. 2022AP507

24

¶53 Thus, both the Manual and case law expressly permit what West did 

here: deriving an estimate of the Property’s value by ascribing 40% weight to each 

of the two income approaches, and 20% weight to the sales approach during the 

reconciliation process. Accordingly, Veritas has not shown that West’s appraisal 

failed to comply with the Manual by an impermissible “mixing and matching.” 

4. Exercise of Judgment 

¶54 Veritas asserts that West failed to apply the Manual’s principles “by 

being pervasively unable to support or explain any of his opinions beyond 

assurances that he was simply exercising his ‘judgment.’” As a preliminary matter, 

we observe that the examples provided are far from “pervasive[].” More 

importantly, however, Veritas has failed to demonstrate that West impermissibly 

relied on his judgment in making adjustments to the data used in his approaches to 

value.

¶55 Veritas first relies on an approach that West considered but did not 

end up relying on in his final valuation. For example, Veritas refers to statements 

West made in describing a cost approach he examined but ultimately did not place 

any weight on. Because the cost approach was not used in West’s appraisal and 

Veritas makes no argument that it should have been, we do not consider any asserted 

errors in West’s examination of the cost approach. 

¶56 Veritas also refers to a 30% vacancy rate that West applied in a second 

appraisal prior to the Board of Review hearing but which played no role in West’s 

final appraisal. As Veritas itself acknowledges in its reply brief, West’s final 

appraisal “is the only valuation subject to appeal.” Thus, as the City points out, any 

criticisms of the appraisals conducted prior to the Board of Review hearing are not 

germane to this appeal. 
No. 2022AP507

25

¶57 As to the appraisal that is the subject of this appeal, Veritas argues 

that West’s assignment of 20% weight to the sales approach and 40% to each of the 

two income approaches was based solely on his “judgment.” However, the record 

cite Veritas provides does not support that assertion. Veritas further suggests that 

West’s assignment of 20% weight to the sales approach must be based solely on 

“judgment,” given West’s testimony that he “lacked reasonable confidence” in that 

approach. This statement is taken out of context. West was asked by counsel for 

Veritas, “Why 20 percent to the sales approach?” and West responded, “Again, I 

went back to what I stated earlier, after applying, making adjustments that I did, I 

did not have reasonable confidence in that. So I gave more weight to the income 

approach.” In context, it is clear that in making that statement, West is comparing 

his lower level of confidence in the sales approach to his higher level of confidence 

in the income approach. 

¶58 Veritas also notes that when West was asked about why he applied a 

15% vacancy deduction to the Property in comparing it to the three other properties

under the sales approach, West ultimately responded that it was based on his 

“judgment.” But the Manual expressly allows appraisers to make adjustments for 

economic factors reflecting the differences between the subject and comparable (or 

similar) properties in a sales approach. See Wisconsin Property Assessment Manual,

13-12 to 13-13. And, as West further explained during his testimony, the Manual

does not provide specific numerical adjustments that are required to be made during 

this process and an appraiser must rely on other information and on the appraiser’s 

own training, experience, and professional judgment.

¶59 For example, regarding the sales approach, West testified that neither 

the Manual, statutes, nor case law instruct appraisers on how to specifically make a 
No. 2022AP507

26

quantitative adjustment to a sales comparison. When asked how he would compare 

a brand-new, unstabilized apartment complex to a similarly situated stabilized 

apartment complex, West testified that he would conduct “research in the market 

and make appropriate adjustments to account for the fact that the subject was not 

stabilized.” His adjustment percentages are based on studying the market and 

relevant professional publications, interviewing buyers and sellers, analyzing the 

data, and coming up with “reasonable” adjustments. He further testified that his 

adjustments and judgment are based on his “knowledge and experience of analyzing 

the Madison real estate market for 14-plus years.” West also testified as to his 

training on how to make adjustments, such as courses he has taken from the 

International Association of Assessing Officers.

¶60 As to any assumptions West makes when applying the various 

approaches, West testified that such assumptions are based on his “knowledge of 

the market,” including from “field[ing] sales” and routinely reviewing professional 

publications addressing commercial property, reviewing building permit 

information, and talking to brokers and financial institutions. He testified that it is 

“a year-round cycle of reviewing market data because we do mass appraisals, so we 

have to review the most current data we have so that we can apply it to our annual 

assessments.” 

¶61 Veritas points to nothing in the Manual that says that an appraiser may 

not base adjustments or other determinations on professional judgment when neither 

the Manual nor statutory or case law provide specific instructions on how to make 

a particular adjustment or determination. As West explained, professional judgment 

is not the same as a guess and it is in fact his job to have “an opinion based on facts.” 
No. 2022AP507

27

¶62 We agree that exercising professional judgment is an inherent part of 

an appraiser’s job. Veritas’s arguments that West improperly did so are unsupported 

and unpersuasive. This is particularly so in light of the testimony summarized above 

and the circuit court’s findings regarding the credibility and weight of the evidence. 

After a five-day trial, the court explicitly found that the City’s assessment and 

West’s conclusions on which the assessment was based were more “reliable, 

credible, and persuasive than those offered by Veritas.” We defer to the court’s 

findings of fact and “will not upset the court’s factual findings, including findings 

involving the credibility of witnesses, unless they are clearly erroneous.” See

Bonstores, 351 Wis. 2d 439, ¶6. Although this court may determine whether an 

appraiser complied with the Manual and other legal requirements, “it is within the 

province of the factfinder to determine the weight and credibility of expert 

witnesses’ opinions.” Id. And, as set forth above, Veritas has not demonstrated 

legal error.14

B. Veritas’s Remaining Arguments 

¶63 Veritas argues that, in the absence of the presumption of correctness, 

this court should credit Landretti’s appraisal over West’s because, according to 

 

14

 In its brief-in-chief, Veritas also briefly asserts in a footnote that West’s rounding one 

of his calculations of the vacancy rate in the income approach from 38.5% to 40% was “arbitrary.” 

In support, Veritas relies on this court’s decision in ABKA Limited Partnership v. Board of 

Review, 224 Wis. 2d 551, 591 N.W.2d 879 (Ct. App. 1999), aff’d, 231 Wis. 2d 328, 603 N.W.2d 

217 (1999). We initially note that this case was subsequently taken up by our supreme court, which 

affirmed our decision. Assuming we may nevertheless rely on our decision in ABKA, it does not 

assist Veritas. In ABKA, we concluded that the municipality erred in rounding the actual assessed 

value up by 2%. Id. at 569-70. We did not conclude that an assessor is prohibited from rounding 

a number that is used to arrive at the ultimate assessment, such as the vacancy rate in this case. 

Moreover, Veritas fails to show why such rounding would assist Veritas in its excessive assessment 

claim, given that this rounding inures to Veritas’s benefit by applying a greater vacancy rate, 

thereby resulting in a lower assessment. 
No. 2022AP507

28

Veritas, Landretti followed the Manual by using the actual vacancy rate of the 

Property. 

¶64 The primary problem with Veritas’s argument is that it assumes we 

agree with Veritas that the presumption of correctness does not apply. However, 

we have decided to the contrary.15 Veritas makes no argument that we may credit 

Landretti’s appraisal over West’s where the presumption remains in effect. Thus, 

given our conclusion that the presumption applies, we may reject as undeveloped 

any argument Veritas may mean to make that we should credit Landretti’s appraisal 

over West’s. See Pettit, 171 Wis. 2d at 646.

¶65 Even assuming, however, that Veritas has offered a developed 

argument that we should “credit Dominic Landretti’s appraisal, and hold that [the 

Property’s] 2018 taxable value was $8,500,000,”16 its argument fails because it 

depends on legal challenges that we have rejected in our preceding discussion. 

These challenges are based on a single premise—that West erred in not using the 

72% (or 68%) vacancy rate that Landretti used—a premise that we have also 

 

15

 Notably, Veritas did not argue in the circuit court and does not argue in this court that it 

presented “significant contrary evidence” so as to rebut the presumption of correctness. See

Bonstores Realty One, LLC v. City of Wauwatosa, 2013 WI App 131, ¶¶5, 9, 351 Wis. 2d 439, 

839 N.W.2d 893 (presumption of correctness may be overcome if assessment does not comply with 

Manual or if “significant contrary evidence” is presented). In fact, Veritas specifically disavows

such an argument, stating that the significant contrary evidence standard is “inapplicable” in this 

case and that “[h]ere, Veritas never argued under the ‘significant contrary evidence standard’ and 

instead established that West failed to follow [the Manual’s] principles in numerous manners.” 

16

 This $8,500,000 amount reflects Landretti’s revised valuation at trial that uses a 68% 

vacancy rate, taking into account an additional eight signed leases for units that were still vacant as 

of January 1, 2018. As previously explained, Landretti’s original valuation was $6,800,000, 

compared to the City’s assessment of $17,780,000.
No. 2022AP507

29

rejected. Because Veritas presents no other basis for us to conclude that the City’s 

assessment was excessive, we affirm the circuit court.17 

CONCLUSION

¶66 For the reasons stated, Veritas has failed to show that the City’s 2018 

assessment of the Property was excessive within the meaning of WIS. STAT. § 74.37. 

Accordingly, we affirm the judgment of the circuit court.

By the Court.—Judgment affirmed.

 

17

 For the same reasons, we also reject Veritas’s argument that “the City and [circuit] court 

erred by rejecting [the Manual’s] mandated results based upon preconceived notions of the 

[Property’s] value.”