Opinion ID: 2124844
Heading Depth: 1
Heading Rank: 11

Heading: The Evidence Before the Commission

Text: The assessor submitted written testimony to the commission, but all of her evidence was excluded regarding the real and personal property assessments. As a result, the only evidence submitted at the hearing regarding valuation was from Aztar's two expert witnesses. Aztar's appraisal expert testified that the highest and best use of the property was as a casino, but he compared Aztar's property to country club property when applying the income approach as supported by the replacement cost approach and the comparable sales approach. In fact, there is evidence in the record that it would not be economically feasible to convert Aztar's property to an alternate use, including use as a hotel, mixed use, institutional use, or retail use. So any alternate use proposed by the expert was based entirely on speculation. None of the rental comparables used by Aztar's expert in applying the income approach were casino properties. That is precisely why the income approach is inappropriate in this case  casino property is not rental property, so no rental comparables are available with which to apply the income approach. Aztar's application of the comparable sales approach is similarly flawed in that the evidence established that there were no sales of similar properties in the market to which the property at issue could be compared. If there is an absence of comparables in the market on which to base a determination, the appropriate solution is to reject the use of this approach, not to find the next best economic use for which comparables in the market can be found. See Union Realty and Securities Co., 827 S.W.2d at 770-771. In adopting Aztar's income approach supported by replacement costs and the second-best use standard, the commission ignored evidence showing that, in light of the recent construction of the improvements [6] and the specialized use of the property, the reproduction cost approach would most accurately indicate the true value in money of Aztar's property. The commission's decision relied on expert testimony that ignored or improperly applied the appropriate valuation standard and approach. The legal premise that the commission applied is incorrect as a matter of law, and its decision is not supported by substantial evidence.