Opinion ID: 1349227
Heading Depth: 1
Heading Rank: 2

Heading: proceedings before terc

Text: Steven Allen, a certified real estate appraiser, testified for Firethorn. Allen testified that he appraised the golf course property using 31 comparable sales, with emphasis placed on 9 sales, but only 4 that were primarily relied on. Allen testified that he inspected the property from the periphery before he did his appraisal. Because the property was limited to use only as an open space or golf course, Allen determined those were the highest and best uses of the property. Allen also testified that the property was outside of the city limits and did not have city utilities, such as sewer and water. The first sale Allen relied on consisted of 160 acres purchased by the City for $2,500 per acre in September 1997 for purposes of expanding a nature center at a city park and to add nine holes to a golf course located at the park. The land was zoned agricultural (AG) instead of AGR and was located outside the city limits, and there were no utilities on the property. The second sale consisted of 40 acres purchased by the City in September 1995 for $2,475 per acre. The land was zoned AG and was outside the city limits. The third sale consisted of 156.55 acres purchased by the City for $2,900 per acre in June 1994, for development as a park. The land was zoned AG, did not have utilities available, and was located outside of the city limits. The fourth sale consisted of 159.56 acres purchased for $4,237 per acre by a private party in October 1997 for development as a golf course. The property was zoned AG, was outside the city limits, and did not have utilities available. Allen admitted that three of the four sales were to the City. Allen testified that he confirmed that the sales were arm's-length transactions by speaking with the City and that they were based on an appraisal of like-kind properties, with the purchase price negotiated from that price. Allen did not know if the properties were initially offered for sale on the open market or if real estate agents were involved. He also testified that properties zoned AGR would typically be more valuable than property zoned AG if the AGR property could be utilized for low-density residential purposes. Allen testified that he adjusted the four sales for time and considered what might be superior or inferior about the properties before reaching a conclusion. In particular, Allen found the adjusted price of the fourth sale to be $4,558 per acre. Based on the sales, Allen opined that the fair and reasonable market value of the underlying land of the golf course property was $3,500 per acre. Robert Stanley, the county appraiser who performed the assessment on the property, testified that when he made his assessment, he was unaware of the conservation and preservation easements on the property but that he was aware that the property was included in a community unit plan. The record shows that the Board was aware of the conservation and preservation easements. In assessing the property, Stanley looked at sales of 14 properties but placed emphasis on 5 sales ranging in price from $10,000 to $24,758 per acre. None of the 14 properties were part of a community unit plan. The properties that Stanley emphasized most were generally either inside the city limits or had city services. The properties, however, were generally close in proximity to Firethorn's golf course property, including several that were across the street. The properties were generally zoned AG. Stanley testified that he did not consider the sales Allen relied on comparable for several reasons. In regard to the sales to the City, Stanley testified that even in the absence of an overt threat of condemnation, the ability of the City to take the property is always present, thus making it a distressed sale. Stanley stated the policy of the county assessor's office was to always disqualify sales to or from governmental entities under Neb.Rev.Stat. § 77-1371 (Reissue 1996). Concerning the remaining sale, Stanley testified that the sellers of the property had an offer to sell the property for $5,000 per acre to a group planning to develop residential acreages. The sellers, however, chose to accept $4,200 per acre from the party who intended to use the land as a golf course because the sellers lived adjacent to the property and wanted a golf course next to them instead of additional homes. In its findings and order, TERC found that the community unit plan and the conservation easements did not affect the fair market value of the golf course property and that the highest and best use of the property was as a golf course. TERC further found that three of the four most comparable sales used by Allen were ones in which the City was the buyer. Based on this, TERC found that the record did not establish that any of the sales to the City reflected the current market value. In finding that the sales to the City were not comparable, TERC relied largely on Stanley's testimony that the threat of condemnation is always present, along with the policy of the county assessor's office to always disqualify such sales. In addition, TERC cited to § 77-1371 for the proposition that sales prices of real property which result from sales to or purchases from political subdivisions are generally not considered as representative of `market value.' In regard to the fourth sale presented by Allen, TERC concluded that nothing in the record established that any adjustments were made to the sale for time, location, and physical characteristics. TERC further concluded that one sale does not establish market value. Utilizing information regarding Firethorn's purchase and sale of other property in 1998, TERC further reasoned that the remaining portions of Firethorn's property, including the golf course, were worth $16,814 per acre without taking into account substantial changes and differences in zoning among various portions of the property. In its brief, Firethorn presents figures indicating that the reasoning applied by TERC should actually show a value of $1,052.63 per acre. The Board states that it does not disagree that this finding by TERC was erroneous, but contends that any error was harmless. Finally, TERC concluded that the comparable sales presented by the Board also caused concerns, but that the burden of persuasion was on Firethorn. TERC concluded that the action of the Board was not unreasonable or arbitrary and affirmed. Firethorn appeals.