Opinion ID: 2377818
Heading Depth: 3
Heading Rank: 6

Heading: Board Of Equalization Appeal

Text: Pacific Park appealed the Assessor's 2007 valuation of $2,930,700 to the Borough's Board of Equalization (Board). Upon reinspection and reevaluation, the Assessor calculated a total value of $3,067,800. The Board heard Pacific Park's appeal on June 11, 2007. Pacific Park argued that: (1) the Assessor had used a fundamentally wrong principle of valuation in that the Assessor did not consider [the] 30-year rent restriction; and (2) even under the cost approach, rental restrictions needed to be considered in the form of economic obsolescence. [39] Pacific Park also argued that its federal tax credits should not be considered in the assessment valuation because they are intangible. The Assessor argued that: (1) Pacific Park would have to show fraud or the clear adoption of a fundamentally wrong valuation methodology for the Board to alter the valuation; (2) using the cost approach was within the Assessor's discretion as a taxing authority; and (3) the cost approach maintains a level playing field between Pacific Park and competing businesses not in the LIHTC program. The Assessor also argued that rental restrictions should not be allowed to affect the Apartments' value because participation in the LIHTC program should be seen either as a voluntary contractual agreement to restrict rents in exchange for tax credits or as an abnormally favorable below-market rental agreement between the owner and renters. The Board found that although using the cost approach was within the Assessor's discretion, application of that approach to the Apartments without consideration of rental restrictions or economic obsolescence resulted in a valuation that was overvalued [and] grossly disproportionate as compared to similar properties. The Board decided that the Apartments' improvement value should be reduced by a 40% economic obsolescence factor.