Court Opinion

ID: 8245583
Source: CourtListenerOpinion
Date Created: 2022-10-16 09:31:51.137655+00
Date Added: 2024-06-11T16:41:49.133239
License: Public Domain

ANDERSON, PAUL H., Justice
(concurring).
I concur in Part I of the majority’s decision and in the decision to remand the matter to the tax court. And I agree with the majority’s concern that the tax court adopted verbatim the valuation proposed by the County, particularly given some of the errors in the County’s valuation. Nevertheless, I write separately to make two points.
First, the majority criticizes the tax court for not “explicitly addressing] whether changing one of EPM appraiser Lennhoffs revenue assumptions” — whether tenant improvements allowances should be deducted to arrive at market rents— “would impact other revenue and expense assumptions, such as tenant revenues.” Beyond the tax court’s finding as to the square footage of the mall (which neither party challenges on appeal), the only one of Lennhoffs revenue assumptions that the court rejected was the adjustment for tenant improvements. The adjustment for tenant improvements affects the court’s calculation of market rents. But it is not clear, at least to me, how the adjustment for tenant improvements affects “other revenue and expense assumptions.” If the majority believes that “other revenue and expense assumptions” will be affected by the court’s ultimate decision on the appropriate treatment of tenant allowances, it should explain what aspects of the court’s decision as to value will be altered before expecting the court to incorporate them into its analysis on remand.
Second, the majority criticizes the tax court for not “explain[ing] its reasoning for rejecting the appraisal testimony [of the parties] and the grounds for adopting a higher rent revenue figure,” and contends that the court did not “explain the factual support in the record for its determination” of revenues. In its post-trial brief, the County argued that EPM expert Lennhoff had erred by reducing market rents for amortization of rent concessions. The County therefore argued that total market rents should be $9,588,820. That figure is based on $24.85 per square foot (Lennhoffs figure for average rent before amortization of tenant allowances) times 385,868 square feet (Lennhoffs figure for the mail’s gross leasable area). But the tax court made a separate finding as to the mall’s gross leasable area that differed from Lennhoffs opinion: the court found *201that the mall comprised 394,912 square feet of rentable area, whereas Lennhoff used the figure of 385,868 square feet. If it were not for the difference in square footage, the figure used by the tax court for market rents would equal EPM expert Lennhoffs figure for rents before amortization of tenant allowances.