William H. MacCrellish, Jr., Trustee, Bandwagon Trust v. Board of Assessors of the Town of Wilmington (May 11, 2017)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


WILLIAM H. MACCRELLISH, Jr.,	   v.	  BOARD OF ASSESSORS OF   
TRUSTEE, BANDWAGON TRUST		  		  THE TOWN OF WILMINGTON
					
	         
Docket Nos.  F319063 (FY 2013)		  Promulgated:
		   F322590 (FY 2014)		  May 11, 2017
             

	These are appeals filed under the formal procedure, pursuant to G.L. c. 58A, § 7 and G.L. c. 59, §§ 64 and 65, from the refusal of the Board of Assessors of the Town of Wilmington ("appellee" or "assessors") to abate taxes on certain real estate in Wilmington, owned by and assessed to William H. MacCrellish, Jr., Trustee of the Bandwagon Trust ("appellant"), under G.L. c. 59, §§ 11 and 38, for fiscal years 2013 and 2014 ("fiscal years at issue").  
	Commissioner Chmielinski heard these appeals. Chairman Hammond and Commissioners Scharaffa, Rose, and Good joined him in the decisions for the appellee.  
	These findings of fact and report are made pursuant to a request by the appellant under G.L. c. 58A, § 13 and 831 CMR 1.32.  

	Matthew A. Luz, Esq. for the appellant.
	
J. Richard Hucksman, Esq. for the appellee. 


Findings of Fact and Report

Based on all of the evidence, including testimony, expert reports, and jurisdictional documents, as well as other submissions, the Appellate Tax Board ("Board") made the following findings of fact.  
I. Introduction
On January 1, 2012 and January 1, 2013, the relevant assessment dates for the fiscal years at issue, the appellant was the assessed owner of a 4.05-acre parcel of real estate located at 54 Industrial Way in Wilmington ("subject property").  The subject property is an irregular but somewhat rectangular-shaped parcel of land with approximately 795.83 feet of frontage along the south side of Industrial Way.  It is relatively level, but above the grade of Industrial Way.  There is a 30-foot-wide drainage easement located on the left side of the site.  
The subject property is improved with a single-story, owner-occupied, industrial warehouse building containing 68,120 square feet of gross building area ("subject building").  The subject building is a steel and masonry structure constructed on a concrete slab foundation.  It has a flat roof with a rubber membrane covering and a brick and concrete block exterior.  The subject building is designed for industrial warehouse use with ancillary office space.  The office area includes a reception area, administrative cubicles, seven private offices, two conference rooms, and an employee break area.  There are two bathrooms in the office area and three bathrooms in the warehouse area.  Interior finishes include wood paneling in the office area and concrete block in the industrial area.  The flooring is carpet and vinyl tile in the office area and concrete in the industrial area.  The ceilings are suspended acoustic tiles in the office area and exposed metal in the industrial area.  The warehouse area has 16-foot high ceilings and, in addition, there are five overhead doors with tailboard access and one overhead door with drive-in access located along the left side of the building.  There is on-site parking for approximately 31 vehicles.  
II. Fiscal Year 2013
At the hearing of these appeals, the assessors filed a Motion to Dismiss ("Motion") the appellant's fiscal year 2013 appeal (Docket No. F319063) on the grounds that the taxpayer did not timely pay the tax due without incurring interest and, therefore, the Board lacked jurisdiction to hear the appeal.  In support of the Motion, the assessors submitted affidavits from Pamela L. MacKenzie, Treasurer/Collector of Taxes ("Collector") for the Town of Wilmington; David B. McDonald, Postmaster at the U.S. Post Office in Wilmington; and Janice A. Brandano, Senior Vice President of Lockbox Services for Century Bank.  In opposition to the appellee's Motion, the appellant submitted the affidavit of Timothy Ho, President of Bandwagon, Inc.   	  
For fiscal year 2013, the assessors valued the subject property at $2,803,500 and assessed a tax thereon, at the rate of $32.08 per thousand, in the total amount of $89,936.28.  On December 28, 2012, the Collector sent out the town's actual real estate tax bill, which, in accordance with G.L. c. 59, § 57C, was due and payable in two equal installments on February 1, 2013 and May 1, 2013.  On January 28, 2013, within thirty days of the mailing of the actual tax bills, the appellant timely filed an Application for Abatement with the assessors, which was subsequently denied on April 10, 2013.  On April 28, 2013, in accordance with G.L. c. 59, §§ 64 and 65, the appellant seasonably filed an appeal with the Board.  
The first payment of the appellant's actual real estate tax bill, in the amount of $26,696.92, was due on February 1, 2013.  The Wilmington's tax payments are routed to a post office box at the Wilmington post office.  The post office box is checked every business day and, relative to this appeal, the post office box was checked every day from Monday, January 28, 2013 through Tuesday, February 5, 2013, excluding the weekend dates of February 2 and 3.  On each of the business days between January 28 and February 5, the real estate tax payments received at the post office were picked up by a courier from Century Bank and transported to the Century Bank "lockbox" facility in Medford, where they were processed.  On each and every day from January 29, 2013 through February 6, 2013, excluding the weekend, a courier from Century Bank delivered the tax bill payments received the previous day in the post office box together with a report of the bill payments that had been processed the previous day at the Century Bank "lockbox" facility.  Payment of the appellant's third quarter real estate tax bill, in the amount of $26,696.92, was received at the post office box and recorded at the Century Bank "lockbox" facility, on Tuesday, February 5, 2013, four days after the previous Friday's due date.
According to Mr. Ho's affidavit, the appellant's bookkeeper, Patricia Graham, recorded and mailed the subject property's third quarter tax bills on January 28, 2013 and argued that that the assessors failed to timely record the payment.  The appellant presented neither testimony nor an affidavit of Patricia Graham. 
	Based on the preceding facts, and for the reasons stated in the following Opinion, the Board found and ruled that it did not have jurisdiction to hear and decide the appellant's fiscal year 2013 appeal.  Accordingly, the Board allowed the assessors' Motion and issued a decision for the appellee in Docket No. F319063.
III. Fiscal Year 2014
For fiscal year 2014, the appellee valued the subject property at $2,803,500 and assessed a tax thereon, at the rate of $33.04 per thousand, in the total amount of $92,627.64.  On December 30, 2013, the Collector sent out the town's actual real estate tax bill.  In accordance with G. L. c. 59, § 57C, the appellant paid the tax due without incurring interest.  In accordance with G.L. c. 59, § 59 the appellant timely filed an Application for Abatement with the assessors on January 28, 2014, which was denied on April 10, 2014.  On April 28, 2014, in accordance with G.L. c. 59, §§ 64 and 65, the appellant seasonably filed an appeal with the Board.  On the basis of these facts, the Board found and ruled that it had jurisdiction to hear and decide the appellant's fiscal year 2014 appeal.
In support of its claim that the subject property was overvalued for fiscal year 2014, the appellant presented the testimony and appraisal report of Eric Wolff, whom the Board qualified as an expert in the area of real estate valuation.  To develop a value for the subject property for fiscal year 2014, Mr. Wolff first examined the subject property's highest-and-best use and concluded that it was its current use as an industrial-use building.  Mr. Wolff then considered the three usual methods for estimating the value of the subject property for fiscal year 2014. He rejected both the cost and sales-comparison approaches and instead relied on the income-capitalization approach to estimate the fair cash value of the subject property for fiscal year 2014 because it was an income-producing property.
To determine what he considered to be the most appropriate rent to use in his income-capitalization methodology for fiscal year 2014, Mr. Wolff conducted a survey of eleven purportedly comparable industrial-use spaces located in Wilmington and the neighboring town of Woburn.  Of these eleven spaces, seven rented on a triple-net basis with rents ranging from $3.42 to $6.00 per square foot, with an average per-square-foot rate of $5.34, and four rented under gross-plus-utilities ("modified-gross") leases ranging from $5.50 to $7.50 per square foot. Relying on his experience and knowledge of operating expenses for similar-type properties, Mr. Wolff made downward adjustments of $3.00 per square foot to convert the modified-gross leases to a triple-net basis.  Based on this information together with the subject property's location, size, and condition, Mr. Wolff selected an economic rent of $3.75 per square foot on a triple-net basis.  Applying this rate to the subject property's net rentable area of 68,120 square feet, Mr. Wolff obtained a potential gross income of $255,450.
For vacancy and collection loss, Mr. Wolff testified that he consulted with local brokers who reported that vacancy rates for industrial space in Woburn ranged between 5% and 10%. He further testified that market surveys conducted by CoStar indicated that the vacancy rate for industrial space in the Wilmington area was between 5.8% and 6.2%.  For purposes of the subject property, Mr. Wolff selected a vacancy rate of 10% for fiscal year 2014, which resulted in an effective gross income of $229,905.
Next, Mr. Wolff determined the subject property's net-operating income by deducting from the effective gross income the subject property's estimated operating expenses.  Mr. Wolff noted that within the subject property's competitive market area, the tenant is responsible for all operating expenses, excluding those associated with management and structural maintenance of the building. Consequently, Mr. Wolff reported that he limited his expenses to a management fee equal to 5% of the effective gross income, a replacement reserve allowance equal to $0.15 per square foot, and also a leasing commission expense equal to 1% of the potential gross income, which he testified were typical in the market. Mr. Wolff deducted these expenses from his effective gross income to derive a net-operating income of $205,637. 
Finally, Mr. Wolff developed a capitalization rate using a band-of-investment technique.  He assumed a mortgage-to-equity ratio of 75% to 25%, with a 4.5% interest rate and a 14% equity capitalization rate, resulting in a capitalization rate of 8.5%.  Applying the 8.5% capitalization rate to the $205,637 net operating income resulted in an estimated rounded value for the subject property of $2,420,000 for fiscal year 2014.
Mr. Wolff's fiscal year 2014 income-capitalization analysis is reproduced in the following table.
Mr. Wolff's Income-Capitalization Analysis

INCOME
Industrial Space - 68,120 square feet @ $3.75 psf 		
Potential Gross Income ("PGI")	  $   255,450	
Vacancy & Collection Allowance (10%)	 ($    25,545)	
Effective Gross Income ("EGI")	  $   229,905	
		
EXPENSES		
  Management Fee          $ 11,495   @ 5% of EGI
  Replacement Reserves    $ 10,218   @ $0.15 psf
  Commissions             $  2,555   @ 1% of PGI
Total Expenses	


 ($    24,268)	
		
Net Operating Income ("NOI")	  $   205,637	
		
Divide by Capitalization Rate - 8.5%	 	
		
Indicated Value for Fiscal Year 2014	  $ 2,419,259	
Rounded Value for Fiscal Year 2014	  $ 2,420,000	

In support of their assessment for fiscal year 2014, the assessors relied on the testimony and appraisal report of James R. Johnston, whom the Board qualified as a real estate valuation expert.  The assessors also offered into evidence the requisite jurisdictional documents.
Like Mr. Wolff, Mr. Johnston developed his opinion of value using the income-capitalization approach.  First, Mr. Johnston determined what he considered to be an appropriate market rent based on a review and analysis of competitive rentals in the subject market.  Specifically, Mr. Johnston relied on nine purportedly comparable warehouse leases, six of which were located at the abutting property at 80 Industrial Way.  All of Mr. Johnston's chosen leases were on a triple-net basis with rents ranging from $5.50 to $7.48 per square foot.  Based on a review and analysis of historic leasing in the subject market area, Mr. Johnston selected a market rent of $5.50 per square foot on a triple-net basis.  Applying this rate to the subject property's net rentable area of 68,120 square feet, Mr. Wolff obtained a potential gross income of $374,660.  
Next, Mr. Johnston applied a vacancy rate of 10%, the same rate used by the appellant's expert, which resulted in an effective gross income of $337,194.  
Mr. Johnston testified that in a triple-net rental scenario the tenant is responsible for all operating expenses, excluding those associated with management and structural maintenance of the building.  He therefore made allowances for management expense equal to 4% of the effective gross income and structural maintenance equal to $0.20 per square foot, noting that expenses for tenant improvements, commissions, and reserves are subsumed in the capitalization rate.  He deducted these expenses from his effective gross income to derive a net-operating income of $310,082.  
For his capitalization rate, Mr. Johnston consulted the Price Waterhouse/Coopers Korpacz Report for non-institutional-grade warehouses, which reported capitalization rates ranging from 7.0% to 12% as of January 1, 2013.  He also reviewed the Integra Realty Resources, which reported an average capitalization rate of 7.5% for office/warehouse property in the Boston area.  Given the age and size of the subject property, Mr. Johnston chose a capitalization rate of 9%.  
Finally, applying the 9.0% capitalization rate to the $310,082 net operating income, Mr. Johnston derived an indicated value of $3,445,357, rounded to $3,450,000, for fiscal year 2014.
Mr. Johnston's income-capitalization analysis is reproduced in the following table.

Mr. Johnston's Income-Capitalization Analysis

INCOME			
Rental Income4 - 68,120 square feet @ $5.50			
Potential Gross Income		 $  374,660	
Vacancy and Collection Allowance (10%)		($   37,466)	
Effective Gross Income		 $  337,194	
			
EXPENSES			
 Operating 			
   Mgmt                 @ 4% EGI
   Struc Main           @ $0.20 psf	$13,488
$13,624 		
Total Expenses		($   27,112)	
			
Net Operating Income		 $  310,082	
			
Divide by Capitalization Rate - 9.0%	 		
			
Indicated Value for Fiscal Year 2014		 $3,445,357	
Rounded Value for Fiscal Year 2014		 $3,450,000	

Based on all of the evidence, as well as reasonable inferences drawn therefrom, the Board found that the appellant did not meet its burden of proving that the subject property was overvalued for fiscal year 2014.  The Board agreed with the parties and concluded that the subject property's highest-and-best use was its continued use as an industrial use building and also that an income-capitalization methodology was the best approach to use to value the subject property for fiscal year 2014.
The Board further found that Mr. Wolff's suggested rent of $3.75 per square foot on a triple-net basis was unsubstantiated and lacked credibility.  First, and most notably, Mr. Wolff failed to include in his analysis the rentals located at the abutting property at 80 Industrial Way, which ranged from $5.50 to $7.00 on a triple-net basis.  Second, Mr. Wolff failed to support the adjustment factor of $3.00 per square foot applied to his modified-gross rentals.  And third, his suggested rent of $3.75 per square foot on a triple-net basis was significantly less than the average rental rate of $5.34 per square foot for his cited triple-net leases.  Instead, based on the subject property's location, condition, and size, along with the data submitted by both real estate valuation experts, the Board found that a rental rate of $4.75 per square foot on a triple-net basis was more appropriate.  For vacancy and collection loss the Board adopted a rate of 10%, which was used by both real estate valuation experts. 
For expenses, the Board recognized that under the triple-net leasing scenario that it adopted, the tenant pays or reimburses the landlord for most operating expenses associated with the building. Accordingly, the Board agreed with Mr. Wolff's approach regarding expenses and adopted his recommendations for a management fee equivalent to 5% of EGI and a leasing commission expense calculated at 1% of EGI. The Board further found that Mr. Wolff's replacement for reserves, which he calculated on a per-square-foot basis and was approximately 4% of the subject property's PGI, was more properly calculated at 1% of the subject property's PGI.  Finally, for its capitalization rate, the Board adopted Mr. Wolff's underlying assumptions and analysis and ultimately his capitalization rate of 8.5% for fiscal year 2014.
The Board's analysis is contained in the following table.

Board's Income-Capitalization Methodology 
INCOME
Industrial Space - 68,120 square feet @ $4.75 psf 		
Potential Gross Income 	  $   323,570	
Vacancy & Collection Allowance (10%)	 ($    32,357)	
Effective Gross Income 	  $   291,213	
		
EXPENSES		
  Management Fee          $ 14,561   @ 5% of EGI
  Replacement Reserves    $  3,236   @ 1% of PGI
  Commissions             $  2,912   @ 1% of EGI
Total Expenses	


 ($    20,709)	
		
Net Operating Income 	  $   270,504	
		
Divide by Capitalization Rate - 8.5%	 	
		
Indicated Value for Fiscal Year 2014	  $ 3,182,400	
Rounded Value for Fiscal Year 2014	  $ 3,200,000	
  

IV. Conclusion 
On the basis of the evidence presented, the Board found that the appellant incurred interest on the actual tax bills for fiscal year 2013 and granted the appellee's Motion to Dismiss Docket No. F319063 for lack of jurisdiction and decided that appeal for the appellee.  The Board further found that the appellant failed to prove that the subject property was overvalued for fiscal year 2014 and therefore issued a decision for the appellee in Docket No. F322590.

OPINION
Fiscal Year 2013 
In this appeal, the assessors filed a Motion to Dismiss for lack of jurisdiction due to the accrual of interest attributable to the appellant's late payment of the third quarter real estate tax bill.
"The Board is a creature of statute and, therefore has no jurisdiction to entertain any proceeding for relief other than in a manner prescribed by statute." Pepperell Power Assoc. v. Assessors of Pepperell, Mass. ATB Findings of Fact and Reports 1996-503, 507.  "Adherence to the statutory prerequisites is essential 'to prosecution of appeal from refusals to abate taxes.'"  Id. (quoting New Bedford Gas & Edison Light Co. v. Assessors of Dartmouth, 368 Mass. 745, 747 (1975)). Given that the appellant failed to satisfy the statutory prerequisites to filing an appeal, the Board is deprived of jurisdiction to hear and decide his appeal. See Columbia Pontiac Co. v. Assessors of Boston, 395 Mass. 1010, 1011 (1985); Fillipone v. Assessors of Newton, Mass. ATB Findings of Fact and Reports 1995-216.
In accordance with the version of G.L. 59, § 64 applicable for the fiscal years at issue, a taxpayer aggrieved by the assessors' refusal to abate a tax on real property may file an appeal with the Board, provided that:
[I]f the tax due for the full fiscal year on a parcel of real estate is more than $3,000, said tax shall not be abated unless the full amount of said tax due has been paid without the incurring of any interest charges on any part of said tax pursuant to section fifty-seven of chapter fifty-nine of the General Laws.  

G.L. c. 59, § 64 (emphasis added).  Alternatively, a taxpayer may appeal to the Board if he has made a timely payment of tax that is at least equal to the average tax for the three preceding years. G.L. c. 59, § 64; Assessors of New Braintree v. Pioneer Valley Academy, Inc., 355 Mass. 610, 617 (1969).  However, the evidence does not support a conclusion that the appellant met the three-year average provision and the appellant does not argue that it did.
	Rather, the appellant argued that the subject property's fiscal year 2013 third-quarter tax bill was timely paid because, according to the affidavit of Mr. Ho, the company's accounts payable system and the company's bookkeeper reported that the tax bill was mailed on January 28, 2013.  Ms. Graham did not testify in these proceedings and Mr. Ho's affidavit does not credibly support a finding that the tax bill was timely paid.  
In contrast, the assessors offered credible evidence to prove that the appellant's payment was not received by the town until February 5, 2013, four days after the due date.  On the basis of the credible evidence offered by the assessors, the Board found that the third-quarter tax bill was not paid on its due date of February 1, 2013.
Accordingly, the Board found and ruled that it lacked jurisdiction to hear this appeal and granted the assessors' Motion to Dismiss.
Fiscal Year 2014
The assessors are required to assess real estate at its fair cash value.  G.L. c. 59, § 38.  Fair cash value is defined as the price on which a willing seller and a willing buyer in a free and open market will agree if both of them are fully informed and under no compulsion.  Boston Gas Co. v. Assessors of Boston, 334 Mass. 549, 566 (1956).
The appellant has the burden of proving that the property has a lower value than that assessed.  "'The burden of proof is upon the petitioner to make out its right as [a] matter of law to [an] abatement of the tax.'"  Schlaiker v. Assessors of Great Barrington, 365 Mass. 243, 245 (1974) (quoting Judson Freight Forwarding Co. v. Commonwealth, 242 Mass. 47, 55 (1922)).  "[T]he board is entitled to 'presume that the valuation made by the assessors [is] valid unless the taxpayers . . . prov[e] the contrary.'" General Electric Co. v. Assessors of Lynn, 393 Mass. 591, 598 (1984) (quoting Schlaiker, 365 Mass. at 245).  
In determining fair cash value, all uses to which the property was or could reasonably be adapted on the relevant assessment dates should be considered.  Irving Saunders Trust v. Assessors of Boston, 26 Mass. App. Ct. 838, 843 (1989).  The goal is to ascertain the maximum value of the property for any legitimate and reasonable use.  Id.  If the property is particularly well-suited for a certain use that is not prohibited, then that use may be reflected in an estimate of its fair market value.  Colonial Acres, Inc. v. North Reading, 3 Mass. App. Ct. 384, 386 (1975).  "In determining the property's highest and best use, consideration should be given to the purpose for which the property is adapted."  Peterson v. Assessors of Boston, Mass. ATB Findings of Fact and Reports 2002-573, 617 (citing Appraisal Institute, The Appraisal of Real Estate 315-316 (12th ed., 2001)), aff'd, 62 Mass. App. Ct. 428 (2004).  For the fiscal year 2014 appeal, the Board agreed with the parties' real estate valuation experts that the highest-and-best use of the subject property during the fiscal year was its existing use as an industrial warehouse property containing some related or ancillary office space.            
Generally, real estate valuation experts, the Massachusetts courts, and this Board rely upon three approaches to determine the fair cash value of property: income capitalization, sales comparison, and cost reproduction.  Correia v. New Bedford Redevelopment Authority, 375 Mass. 360, 362 (1978).  The use of the income-capitalization approach is appropriate when reliable market-sales data are not available.  Assessors of Weymouth v. Tammy Brook Co., 368 Mass. 810, 811 (1975); Assessors of Lynnfield v. New England Oyster House, 362 Mass. 696, 701-02 (1972); Assessors of Quincy v. Boston Consolidated Gas Co., 309 Mass. 60, 67 (1941).  It is also recognized as an appropriate technique to use for valuing income-producing property.  Taunton Redevelopment Associates v. Assessors of Taunton, 393 Mass. 293, 295 (1984).  For the fiscal year 2014 appeal, the Board agreed with both parties' real estate valuation experts that the income-capitalization approach was the most appropriate method to value the subject property for fiscal year 2014. 
"The direct capitalization of income method analyzes the property's capacity to generate income over a one-year period and converts the capacity into an indication of fair cash value by capitalizing the income at a rate determined to be appropriate for the investment risk involved."  Olympia & York State Street Co. v. Assessors of Boston, 428 Mass. 236, 239 (1998).  "It is the net income that a property should be earning, not necessarily what it actually earns, that is the figure that should be capitalized."  Peterson v. Assessors of Boston, 62 Mass. App. Ct. 428, 436 (2008) (emphasis in original).  Accordingly, the income stream used in the income-capitalization method must reflect the property's earning capacity or economic rental value.  Pepsi-Cola Bottling Co. v. Assessors of Boston, 397 Mass. 447, 451 (1986).  Imputing rental income to the subject property based on fair market rentals from comparable properties is evidence of value if, once adjusted, they are indicative of the subject property's earning capacity.  See Correia v. New Bedford Redevelopment Auth., 5 Mass. App. Ct. 289, 293-94 (1977), rev'd on other grounds, 375 Mass. 360 (1978); Library Services, Inc. v. Malden Redevelopment Auth., 9 Mass. App. Ct. 877, 878 (1980)(rescript). 
For the fiscal year 2014 appeal, the Board found that Mr. Wolff's suggested rental rate of $3.75 per square foot was too low and, based on the evidence of record, made its own independent determination that a rate of $4.75 per square foot was, under the circumstances, the appropriate rental rate for the subject property.  Next, the Board found that the parties' suggested vacancy allowance of 10% was reasonable and well supported.  
After accounting for vacancy and rent losses, the net-operating income is obtained by deducting the landlord's appropriate expenses.  General Electric Co., 393 Mass. at 610.  The expenses should also reflect the market.  Id.; see Olympia & York State Street Co., 428 Mass. at 239, 245.  In the present appeal, the Board found that Mr. Wolff's management fee and commissions expenses, calculated at 5% and 1% of effective gross income, respectively, were reasonable.  The Board further found, however, that Mr. Wolff's replacement for reserves calculated on a per-square-foot basis was excessive and more properly calculated at 1% of the subject property's potential gross income.  See Star Margit ETR, Mass. ATB Findings of Fact and Reports at 2016-473-74.  
The capitalization rate should reflect the return on investment necessary to attract investment capital.  Taunton Redevelopment Associates, 393 Mass. at 295.  Based on the evidence presented, the Board found that Mr. Wolff's capitalization rate of 8.5% was appropriate.  
The Board is not required to believe the testimony of any particular witness or to adopt any particular method of valuation that an expert witness suggests.  Rather, the Board can accept those portions of the evidence that the Board determines have more convincing weight, and form its own independent judgment of fair market value.  Foxboro Associates v. Board of Assessors of Foxborough, 385 Mass. 679, 683 (1982); New Boston Garden Corp. v. Board of Assessors of Boston, 383 Mass. 456, 473 (1981); New England Oyster House, 261 Mass. at 701-02; General Electric Co., 393 Mass. at 605; North American Philips Lighting Corp. v. Assessors of Lynn, 392 Mass. 296, 300 (1984).  In evaluating the evidence before it in this appeal, the Board selected among the various elements of value and appropriately formed its own independent judgment of fair cash value.  General Electric Co., 393 Mass. at 605; North American Philips Lighting Corp., 392 Mass. at 300.  "The credibility of witnesses, the weight of the evidence, and inferences to be drawn from the evidence are matters for the Board."  Cummington School of the Arts, Inc. v. Assessors of Cummington, 373 Mass. 597, 605 (1977).  

On the basis of its analysis, the Board found and ruled that the subject property was not overvalued for fiscal year 2014 and therefore issued a decision for the appellee in Docket No. F322590.


   THE APPELLATE TAX BOARD




	By:	_____	   __________________	       
   Thomas W. Hammond, Jr., Chairman 



A true copy,


Attest:				_____undefinedundefinedundefinedundefined______
	    Clerk of the Board

 While Mr. Wolff included in his appraisal report a sales-comparison analysis for fiscal year 2014, he did not testify about this method, except to say that he did not rely on the sales-comparison approach or the value derived from it. The Board, therefore, gave no weight to Mr. Wolff's sales-comparison approach or to the estimate of value obtained from it. 

 Although Mr. Wolff recommended a leasing commission expense of 1% of PGI, the Board adopted a leasing commission expense of 1% of EGI, which is the Board's preferred methodology when not calculating this expense on a per-square-foot basis.  See, e.g., Star Margit ETR v. Assessors of Woburn, Mass. ATB Findings of Fact and Reports 2016-461, 473 (adopting the appellant's income-capitalization methodology, which includes a leasing commission expense of 1% of EGI); Porter Square Equity Partners 2, LLC, et al. v. Assessors of Cambridge, Mass. ATB Findings of Fact and Reports 2016-207, 239-245 (using brokerage commissions calculated at 2% of EGI).  The Board noted that leasing commissions are dependent on occupancy and are therefore variable as opposed to fixed expenses.  
 See Star Margit ETR, Mass. ATB Findings of Fact and Reports at 2016-473-74.
 As the statute then existed at the relevant time of this appeal.

ATB 2017-128