Diamond Ledge Properties Corp. v. Board of Assessors of the Town of Swansea (December 9, 2009)

COMMONWEALTH OF MASSACHUSETTS

		      APPELLATE TAX BOARD


DIAMOND LEDGE 	        v.        BOARD OF ASSESSORS OF  
PROPERTIES CORP. 			        THE TOWN OF SWANSEA			   
Docket No. F298715			        Promulgated:
		  					   December 9, 2009
		   
							
	This is an appeal 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 appellee, Board of Assessors of the Town of Swansea ("assessors"), to abate taxes on certain real estate located in the Town of Swansea, owned by and assessed to the appellant under G.L. c. 59, §§ 11 and 38, for fiscal year 2008 ("fiscal year at issue").
	Commissioner Egan ("Presiding Commissioner") heard this appeal and, in accordance with G.L. c. 58A, § 1 and 831 CMR 1.20, issued a single-member decision 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.  

	David A. Sullivan, Esq. for the appellant.
	Mady Jenkins Rudziak, assessor, for the appellee.  

FINDINGS OF FACT AND REPORT
On the basis of testimony and exhibits submitted at the hearing of this appeal, the Presiding Commissioner made the following findings of fact.
On January 1, 2007, Diamond Ledge Properties Corp. ("Diamond Ledge Properties" or "appellant") was the assessed owner of an 18.499-acre parcel of real estate located at 0 Walker Street in the Town of Swansea ("subject property" or "subject").  For fiscal year 2008, the assessors valued the subject property at $225,100 and assessed a tax thereon, at the rate of $8.26 per $1,000, in the total amount of $1,859.33.  The appellant timely paid the tax in full without incurring any interest.  On May 13, 2008, the appellant timely applied for an abatement in writing to the appellee, which the appellee denied on July 28, 2008.  On September 17, 2008, the appellant seasonably appealed to the Appellate Tax Board ("Board").  On the basis of these facts, the Presiding Commissioner found and ruled that the Board had jurisdiction to hear this appeal.
The appellant claimed that the assessors misclassified the subject property, changing its designation from class 132 "unbuildable" property to class 131 "potentially developable" property.  The appellant purchased the subject property on March 31, 2006 for $330,000.  At the time of purchase by the appellant, the subject property was classified as class 132 unbuildable property.  
J. Michael Medeiros, the President of Diamond Ledge Properties, testified on behalf of the appellant.  Mr. Medeiros challenged the assessors' designation of the subject property as class 131 potentially developable because it was land-locked, lacked frontage, and contained approximately 6 acres of wetlands.  He also submitted one purportedly comparable property, 0 E S Vinnicum Road, in an attempt to prove that the subject property was misclassified.  The purportedly comparable property is a 6.999-acre undeveloped parcel of land located in a neighborhood which adjoins the subject property's neighborhood.  The property record card on file with the assessors for this purportedly comparable property indicates that 0.689 acres of the property were designated as class 132 unbuildable property and the remaining 6.31 acres were designated as class 131 potentially developable property.  For the fiscal year at issue, the assessors valued 0 E S Vinnicum Road at $10,500.
Mady Jenkins Rudziak, Assessor, testified on behalf of the appellee.  Ms. Rudziak submitted a Quitclaim Deed to demonstrate that on February 6, 2006, less than a month prior to the purchase by the appellant of the subject property, Mr. Medeiros purchased a 2.18-acre parcel of land on Walker Street, directly adjacent to the subject property, for a sale price of $400,000.  Ms. Rudziak also submitted a copy of a decision from the Swansea Building Department, dated December 28, 2005, prior to the appellant's purchase of the subject property, denying Mr. Medeiros' petition for a waiver of frontage requirements in order to allow for the construction of a storage and office building on the subject property.  On the same day that this petition was denied, Mr. Medeiros filed an appeal with the Zoning Board of Appeals of Swansea, which Ms. Rudziak also submitted as evidence.  On the appeal form, in the space seeking information as to the property's "frontage," Mr. Medeiros indicated that the subject property included a "deeded right of way"; Ms. Rudziak submitted a map to indicate that the right of way was to the GAR Highway.  On March 15, 2006, about two weeks prior to the appellant's purchase of the subject property and subsequent to Mr. Medeiros' purchase of the adjacent property, Mr. Medeiros withdrew his appeal to the Zoning Board of Appeals.   
Ms. Rudziak contended that, given that the appellant had purchased the subject property for $330,000, that Mr. Medeiros had purchased an adjacent lot less than a month before the purchase of the subject property, and that he had appealed to the Zoning Board of Appeal for permission to develop the subject property, the appellant intended to develop the subject property.  Moreover, because the property included a deeded right of way to the GAR Highway, the subject property was capable of being developed.  Therefore, Ms. Rudziak concluded, the designation of the subject property as class 132 potentially developable property was appropriate.  Moreover, she contended, the appellant's purchase of the subject property for $330,000, with full knowledge of the Building Department's decision and less than a year before the relevant valuation date, supported its assessment of $225,100.
On the basis of all of the evidence, the Presiding Commissioner made the following ultimate findings of fact.  First, the Presiding Commissioner found that the appellant's comparable-assessment property, located in a different neighborhood and only about 1/3 the size of the subject property, was not sufficiently comparable to the subject property to be probative of its proper classification or valuation.  Next, the appellant presented no evidence to suggest that it was unaware of the presence of the wetlands before its purchase of the subject property.  Moreover, the appellant purchased the subject property subsequent to the Building Department's denial of Mr. Medeiros' petition to build a storage and office building on the subject and was therefore fully aware of this decision at the time of its purchase of the subject property.  Finally, the appellant presented no evidence to suggest that its purchase of the subject property for $330,000 was not an arm's-length transaction.  The Presiding Commissioner thus found that the appellant's purchase of the subject property for $330,000 in an arm's-length transaction, less than one year before the relevant valuation date, with the appellant fully informed of the subject's potential shortcomings, amply supported its valuation of $225,100 for the fiscal year at issue.  Therefore, the Presiding Commissioner found that the appellant failed to meet its burden of proving that the subject assessment was too high.  Accordingly, the Presiding Commissioner issued a decision for the appellee in this appeal.

OPINION
"All property, real and personal, situated within   the commonwealth . . . shall be subject to taxation."   G.L. c. 59, § 2.  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 taxpayer has the burden of proving that the subject property has a lower value than that assessed.  Schlaiker v. Assessors of Great Barrington, 365 Mass. 243, 245 (1974) (citing Judson Freight Forwarding Co. v. Commonwealth, 242 Mass. 47, 55 (1922)).  The assessment is presumed to be valid until the taxpayer sustains its burden of proving otherwise.  General Electric Co. v. Assessors of Lynn, 393 Mass. 591, 598 (1984) (citing Schlaiker,       365 Mass. at 245).  The taxpayer may sustain this burden by introducing evidence of fair cash value, or by proving that the assessors erred in their method of valuation.  General Electric Co., 393 Mass. at 600 (citing Donlon v. Assessors of Holliston, 389 Mass. 848, 855 (1983)).  
Generally, real estate valuation experts, 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).  "[S]ales of property usually furnish strong evidence of market value, provided they are arm's-length transactions and thus fairly represent what a buyer has been willing to pay for the property to a willing seller."  Foxboro Associates v. Board of Assessors of Foxborough, 385 Mass. 679, 682 (1982).  In addition, "[r]eliable comparable sales data will ordinarily trump comparable assessment information for purposes of finding a property's fair cash value."  Graham v. Assessors of West Tisbury, Mass. ATB Findings of Fact and Reports 2007-321, 403, aff'd, 73 Mass. App. Ct. 1107 (2008).  Even more persuasive than comparable sales or comparable assessments, actual sales of the subject "‛are very strong evidence of fair market value, for they represent what a buyer has been willing to pay to a seller for [the] particular property [under appeal].'"  New Boston Garden Corp. v. Board of Assessors of Boston, 383 Mass. 456, 469 (1981) (quoting First Nat'l Stores, Inc. v. Assessors of Somerville, 358 Mass. 554, 560 (1971)).    
In the present appeal, the Presiding Commissioner found and ruled that the appellant's comparable-assessment property, located in a different neighborhood and much smaller than the subject property, was not sufficiently comparable to be probative of the subject's proper classification or valuation.  By contrast, the Presiding Commissioner found that the sale of the subject was persuasive evidence of its valuation.  The appellant purchased the subject property on March 31, 2006, less than one year before the relevant assessment date, for $330,000, over $100,000 more than the subject assessment.  Furthermore, the appellant purchased the subject property subsequent to the Building Department's denial of Mr. Medeiros' petition to construct a storage and office building, and the appellant submitted no evidence to suggest that the sale was not arm's length nor that it was unaware of the presence of wetlands on the subject at the time of purchase.  The Presiding Commissioner thus found and ruled that the sale price of the subject fully supported its valuation at $225,100 for the fiscal year at issue.
On the basis of the evidence of record, the Presiding Commissioner found that the appellant did not present credible evidence that the assessors had overvalued the subject property and therefore, the appellant did not meet its burden of proving that the subject property was overvalued. 

Accordingly, the Presiding Commissioner issued a decision for the appellee in this appeal.

    	    		    APPELLATE TAX BOARD

				By:				______	undefinedundefined_____
				    Nancy T. Egan, Commissioner





A true copy,


Attest:	______		_________
	     Clerk of the Board

ATB 2009-1185