Opinion ID: 4505127
Heading Depth: 3
Heading Rank: 4

Heading: Real-estate appraisals

Text: {¶ 11} The school board introduced the financing appraisal prepared in connection with the mortgage loan and offered the testimony of the appraiser, 4 January Term, 2020 Matthew Bilger, to authenticate it. Bilger’s appraisal opines an “as-is market value” of $36,500,000 as of October 23, 2014, and a “prospective value upon stabilization” as of May 1, 2015, of $36,600,000. Palmer objected to the admission of the appraisal and testimony, arguing that Bilger’s value opinion was not expressed “as of” the tax-lien date, January 1, 2015, and that the value opinion lacked relevance for tax-valuation purposes because the appraisal had been prepared for financing purposes. Palmer also contends that Bilger made a particular error in relation to the impact of property taxes on the property’s value. {¶ 12} Palmer presented the appraisal report and testimony of Robert J. Weiler, a real-estate expert and member of the Appraisal Institute. Weiler used three valuation approaches—cost, income-capitalization, and sales-comparison— which all generated a similar value. Giving the most weight to the incomecapitalization method and taking into account the personal property that would transfer in a sale, Weiler estimated a real-estate market value of $25,000,000 as of the January 1, 2015 tax-lien date. In appraising the property, Weiler noted the $0 transfer of the property from Palmer Square to Palmer House Borrower, but did not take into account the sale price of the entity, Palmer House Borrower. {¶ 13} Finally, in an attempt to rebut Weiler’s appraisal, the school board offered testimony in the nature of an “appraisal review” by Thomas Sprout, a member of the Appraisal Institute. Sprout identified several aspects of Weiler’s appraisal that he viewed as defects. B. The BTA decision, the appeal to the court of appeals, and the transfer to this court {¶ 14} After overruling Palmer’s objections to the admission of the sale and conveyance documents, the BTA relied on the documents to determine the realestate value based on the following findings: 5 SUPREME COURT OF OHIO  The “transaction [by which Palmer House Borrower’s ownership interest was transferred] was effectively the sale of real estate structured using the ‘Drop Down LLC Option’ provided in the purchase agreement”;  “The purchase agreement    reflects the intent to engage in a real estate transaction”;  The personal property in the present transaction “is consistent with the tangible personal property that would ordinarily be included in the sale of similar real property”;  Therefore, “the BOE has met its initial burden to show that there was a qualifying sale of the subject real property.” BTA No. 2016-2365, 2018 Ohio Tax LEXIS 1574, -9 (July 25, 2018). Having determined that an arm’s-length sale had occurred in this case, the BTA rejected Weiler’s appraisal, finding that Palmer had not rebutted the presumption that the sale price established the value of the property. Id. at . {¶ 15} Accordingly, the BTA took the total sale price of $35,250,000 as the starting point and then deducted the value of the personal property that transferred in the sale. Relying on Weiler’s appraisal to determine the personal-property value, the BTA computed a $792,000 deduction for personal property and arrived at a final real-estate value of $34,458,000. {¶ 16} Palmer appealed, then petitioned for transfer of its appeal from the court of appeals to this court. On November 28, 2018, we granted the transfer.