Opinion ID: 2377818
Heading Depth: 4
Heading Rank: 2

Heading: Grossly disproportionate finding

Text: The Board's oral and written findings do not state the comparison from which it determined the Assessor's valuation to be unequal. Pacific Park argued to the Board that the Assessor's valuation was unequal to valuations of other LIHTC properties in Alaska. But as the Assessor pointed out to the Board, the other LIHTC properties in Alaska are valued under AS 29.45.110(d)  which mandates they be assessed under the income approach based on actual income without adjustment for federal tax credits  because they either qualified as LIHTC properties before January 1, 2001, or are located in municipalities without an ordinance allowing for a different valuation method. [59] The Assessor made particular mention of another post-2000 LIHTC property in the Borough valued under the cost approach without adjustments for rental restrictions or federal tax credits. But Pacific Park pointed out that the property was not appropriate for comparison because its owners participated in the Section 515 Program, [60] which Pacific Park explained provides for a flexible on-going federal subsidy to help the owners cope with high property taxes. The Assessor asserted the valuation was not unequal given the appropriate comparison to the nearly 90 apartment complexes in the Borough appraised under the cost approach. The Board's finding that the Assessor's valuation was grossly disproportionate because of the failure to factor in recorded restrictions suggests that the Board compared the Apartments to the non-LIHTC apartment complexes, which are unencumbered by rental restrictions. This would be consistent with the Board's finding that the Assessor's valuation was excessive for the same reason. But given the cost-approach valuation of all the properties, the Board could not have found the valuation grossly disproportionate compared to other Borough apartment complexes unless it considered those properties' actual rental or fair market rental rates as well. There is no evidence in the record regarding those rental rates, except for Pacific Park's appraiser's testimony suggesting that the depressed housing market in Seward would make up to [a] 50% reduction in value reasonable due to economic obsolescence. The obvious implication from this testimony is that restricted rents at the Apartments might not be significantly less than current apartment rental rates in Seward, contradicting the argument that the Apartments were over-valued in comparison to other apartment complexes. [61] Despite reviewing the parties' briefing and the record for clarification, [62] we cannot discern with any reasonable certainty what the Board used as comparison properties for its finding that the Assessor's valuation was grossly disproportionate as compared to similar properties. We therefore remand to the Board for clarification and explanation of its decision on this issue and for further factual findings as it deems necessary.