IN THE COURT OF APPEALS OF IOWA

No. 20-0623

Filed April 14, 2021

LOWE'S HOME CENTERS, LLC,

Plaintiff-Appellant,

vs.

IOWA PROPERTY ASSESSMENT APPEAL BOARD,

Defendant-Appellee,

and

BLACK HAWK COUNTY BOARD OF REVIEW,

Intervenor-Appellee.

________________________________________________________________

Appeal from the Iowa District Court for Black Hawk County, Linda M. 

Fangman, Judge.

Lowe’s Home Centers, LLC appeals the district court’s ruling on judicial 

review affirming the Property Assessment Appeal Board’s valuation of its Waterloo 

property. AFFIRMED.

Matthew M. Craft and Erich D. Priebe of Dutton, Daniels, Hines, Kalkhoff, 

Cook & Swanson, P.L.C., Waterloo, for appellant.

Jessica Braunschweig-Norris and Bradley O. Hopkins, Des Moines, for 

appellee Property Assessment Appeal Board.

Michael O. Treinen, Waterloo, for appellee intervenor, Black Hawk County 

Board of Review.

Considered by Mullins, P.J., and May and Schumacher, JJ.
2

SCHUMACHER, Judge.

Lowe’s Home Centers, LLC appeals the district court’s ruling on judicial 

review affirming the Property Assessment Appeal Board’s (PAAB) valuation of its 

Waterloo property at $8,898,790. Lowe’s argues the PAAB violated Iowa law by 

adopting an appraisal of the property at its “current use,” rather than its market 

value; erred in interpreting Iowa law, which mandates the property be valued at 

what it “would bring if sold in fee simple free and clear of any lease”;

1 and the 

improper interpretation and application of law violated Lowe’s due process rights 

under the United States Constitution.

 

1 This is a quote from I.C.M. Realty v. Woodward, 433 N.W.2d 760, 762 (Iowa Ct. 

App. 1988) (“We believe the trial court was correct in holding that the proper 

measure of value is what the property would bring if sold in fee simple free and 

clear of any leases.”). We believe Lowe’s reads too much into the isolated 

statement. 

In I.C.M Realty, we rejected a taxpayer’s argument that the property should 

be assessed at a lower value because the property was subject to an existing 

below-market lease. 433 N.W.2d at 762. We noted an existing lease is some 

evidence of the property’s value, but the appraiser must ultimately determine the 

property’s value independent of the existing lease. Id. (citing Oberstein v. Adair 

Cty. Bd. of Review, 318 N.W.2d 817, 821 (Iowa Ct. App. 1982)). Because the 

appraiser must consider the entirety of the rights to the property, an existing belowmarket lease does not lower the value of the property. Id.

The PAAB addressed Lowe’s claim in this manner:

Relying on language from I.C.M. Realty, Lowes argues that 

Manternach’s appraisal departs from fee simple valuation because 

he valued the property under the income approach as if it had 

stabilized occupancy. We think Lowes focuses too narrowly on 

isolated phrases in I.C.M Realty. Iowa case law indicates that an 

existing lease can serve as some evidence of the property’s value. 

Oberstein, 318 N.W.2d at 821; Riso v. Pottawattamie Cty. Bd. of 

Review, 362 N.W.2d 513 (Iowa 1985) (authorizing use of percentage 

rent in determining economic rent in income approach). Within the 

income approach specifically, the ultimate question is what the 

subject property’s productive and earning capacity would be if 

exposed to the market.
3

Lowe’s owns a commercial property located at 400 E. Tower Park Road, 

Waterloo, which includes a large commercial retail store built in 2002. It has 

137,643 square feet of gross building area, and a 19,476 square-foot fenced 

outdoor sales and garden area. The roofed sales and garden areas have lights, 

sprinklers, and interwoven roofing to the main building. The 15.78-acre site is also 

improved with 284,000 square feet of paving. The improvements include three 

dock-level truck doors with a load leveler and several other grade-level overhead 

doors allowing for interior access. The Black Hawk County Board of Review 

assessed the property for $8,898,790 in 2017.

Lowe’s protested the 2017 assessment to the Board of Review and claimed 

the property was assessed for more than the value authorized by law under Iowa 

Code section 441.37(1)(a)(1)(b) (2017). The Board of Review denied the protest. 

Lowe’s appealed the Board of Review’s decision to PAAB. Two appraisals 

were submitted. Lawrence Allen completed an appraisal for Lowe’s, and Russ 

Manternach completed an appraisal for the Board of Review. The following table 

summarizes the appraisers’ approaches to value and their respective conclusions 

as of January 1, 2017.

Appraiser

Sales 

Approach

Income 

Approach Cost Approach

Final 

Opinion of 

Value

Allen $5,490,000 $5,460,000 Not Developed $5,480,000

Manternach $9,080,000 $9,240,000 $9,080,000 $9,100,000

The PAAB affirmed the appraisal. In addition, the district court upheld the 

PAAB’s decision on Lowe’s petition for judicial review. Lowe’s appeals.

We review the PAAB’s decision for correction of errors at law. Iowa Code 

§ 441.39. Because the district court affirmed the agency on judicial review, “we 
4

apply the standards of chapter 17A to determine if we reach the same conclusion 

as the district court.” Wendling Quarries, Inc. v. Prop. Assessment App. Bd., 865 

N.W.2d 635, 638 (Iowa Ct. App. 2015); Winnebago Indus., Inc. v. Haverly, 727 

N.W.2d 567, 571 (Iowa 2006) (“When a district court exercises its authority on 

judicial review, it acts in an appellate capacity to correct any errors of law by the 

agency.”). If our conclusions are the same, we affirm. Winnebago, 727 N.W.2d at 

571. “If the agency’s action was based on an erroneous interpretation of a 

provision of law whose interpretation has not been clearly vested in the agency, 

we shall reverse, modify or grant other appropriate relief from the agency action.” 

Naumann v. Iowa Prop. Assessment App. Bd., 791 N.W.2d 258, 260 (Iowa 2010) 

(citing Iowa Code § 17A.19(10)(c)).

This court recently addressed and rejected the first two issues Lowe’s raises 

in a strikingly similar case. See Lowe’s Home Centers, LLC v. Iowa Prop. 

Assessment App. Bd., No. 20-0764, 2021 WL 610105, at *1 (Iowa Ct. App. 

Feb. 17, 2021). There, Lowe’s challenged the 2017 value of its Coralville property. 

That case involved the same two expert appraisers: Laurence Allen for Lowe’s and 

Russ Manternach for the board. Id. The evidence and arguments made in that 

case are substantially the same as in this case. As was true in that case, the PAAB 

found issues with both appraisers but ultimately found Manternach’s appraisal 

more reliable. See id. at *3–4.

On judicial review, as is the case here, the district court upheld PAAB’s 

valuations. On appeal to this court, we outlined the applicable statutes, reviewed 

the supreme court’s analyses of pertinent case law, including Wellmark, Inc. v. 

County Board of Review, 875 N.W.2d 667 (Iowa 2015), Soifer v. Floyd County 
5

Board of Review, 759 N.W.2d 775 (Iowa 2009), and Maytag Co. v. Partridge, 210 

N.W.2d 584 (Iowa 1973), and rejected Lowe’s claims that the PAAB was 

misinterpreting Iowa law and had misapplied that law in considering the current 

use of the property. See Lowe’s, 2021 WL 610105, at *4–5. For all the reasons 

stated in Lowe’s, 2021 WL 610105, at *2–5, we reject Lowe’s same arguments 

here. Because Lowe’s due process claim is premised on its allegations that the 

PAAB misinterpreted and misapplied Iowa law, we also reject the constitutional 

claim. 

AFFIRMED.