Cambridge Brands, Inc. v. Board of Assessors of the City of Cambridge (May 31, 2001)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD





CAMBRIDGE BRANDS, INC.		v.	BOARD OF ASSESSORS OF
     THE CITY OF CAMBRIDGE

Docket Nos. F251248-251 (FY 99)
		  F255704-707 (FY 00)	Promulgated:
							May 31, 2001


	These are appeals under the formal procedure pursuant to G.L. c. 59, §§ 64 and 65 from the refusal of the appellee to abate taxes on certain real estate in the City of Cambridge owned by and assessed to the appellant under G.L. c. 59, § 38, for fiscal years 1999 and 2000.  
	Commissioner Egan heard these appeals.  Chairman Burns and Commissioners Scharaffa, Gorton, and Rose, all joined her 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.

	Robert J. Gaines, Esq. for the appellant.
	Anthony M. Ambriano, Esq. for the appellee.


FINDINGS OF FACT AND REPORT
	On January 1, 1998 and January 1, 1999, the appellant, Cambridge Brands, Inc., was the assessed owner of four non-contiguous parcels of real estate in the City of Cambridge. At all relevant times, the main parcel, located at      804-830 Main Street, was improved with a candy factory while the other three parcels, located at 13-15 Cherry Street, 80 School Street, and 28-40 Columbia Street, provided parking for the main parcel. 
The main parcel consists of approximately        34,700 square feet of land area with an estimated 185 feet of frontage along Main Street and 184 feet of frontage along State Street.  Its topography is generally level, and there is no landscaping.  The factory building covers approximately seventy-five percent of the site.  The remaining space provides on-site parking for approximately seventeen vehicles.  Municipal water and sewer are connected to this parcel as are telephone, electrical, and gas services.  
The building on the main parcel is a five-story reinforced concrete manufacturing facility that was constructed in 1912 and expanded in 1915 and 1918.  Consequently, it is actually composed of three inter-connected buildings.  The structure was originally designed and continues to be used for candy manufacturing.  According to the property record card, the building, not including its basement, contains approximately       121,450 square feet of gross rentable space that presently includes finished office, semi-finished production, and open warehouse areas.    
The basic construction includes concrete footings and foundations, concrete frame, concrete and concrete block walls, and a specialized GE Silicone roof.  The windows are metal-framed, single-pane glass in the office areas and glass blocks and plastic/fiber glass units in the production and warehouse areas.  The majority of the space is used for manufacturing.  Interior finishes vary, but the manufacturing area has concrete floors, painted concrete and concrete walls, and painted concrete ceilings.  Other areas have higher quality finishes such as quarry tile floors and glazed block walls.  The building's ceilings are 

approximately 11.5 feet high, although beams, piping, and ducts lower that height to 9.5 feet in some areas.  Much of the building is air conditioned, and the heat is primarily residual from the manufacturing process. 
The building's first floor contains a reception area, a conference room, some office space, as well as packaging and shipping and receiving areas.  The upper levels contain the factory's production, packaging, and storage areas, along with a sizable cafeteria with a full kitchen and locker rooms.  The approximately 24,000 square-foot basement area is utilized principally for storage, maintenance, and supplies.  There is also a newer one-story section, which houses large storage tanks containing raw materials used in the manufacturing process.  The two loading docks are only accessible from land that is leased by the appellant from the Massachusetts Institute of Technology ("MIT").    
The two adjacent parcels at 13-15 Cherry Street and  80 School Street are shaped irregularly and together contain approximately 24,776 square feet of land area with frontages varying from an estimated forty-five feet to   126 feet along Main Street, Cherry Street, Bishop Allen Drive, and School Street.  A somewhat dilapidated, one-story, 3,160 square-foot, windowless, concrete block out-building is located here.  At all relevant times, these parcels provided at least sixty-one parking spaces for the candy factory.  
The 28-40 Columbia Street parcel contains about  13,932 square feet of land area with frontages of an estimated 115 feet along Columbia Street, seventy-three feet along Bishop Allen Drive, and fifty-five feet along School Street.  This parcel provides approximately fifty-one surface parking spaces for the candy factory.  
The main parcel is located in a Business B Zoning District.  The parcels used for parking are located in a Business A Zoning District.  These districts allow most retail and service-oriented businesses as well as general and professional office occupancy and light manufacturing, warehouse, and research and development uses.  These districts also allow institutional, educational, and residential development.  Accordingly, the subject property appears to conform to the basic zoning requirements, and, therefore, is considered a conforming use.  The immediate area in which the subject property is located is heavily influenced by the presence of MIT from which the appellant leases additional property for its manufacturing concern.
During the relevant fiscal years, occupancy in the area was high with essentially no vacant space.  There is limited potential for new development.  The subject is located in a very desirable commercial area in Massachusetts with MIT and Forest City on two sides and Kendall Square on a third side.  The Kendall Square and Central Square subway stops are approximately one-half mile away.                        
	The Board of Assessors of Cambridge ("Assessors") valued the four parcels in fiscal years 1999 and 2000 as depicted in the following table.
Property Address	FY 1999
Docket No. & Assessment	FY 2000
Docket No. & Assessment	
804-830 Main Street	 F251248     $4,589,200	 F255704     $5,048,100	
80 School Street	 F251249     $  477,500	 F255706     $  525,300	
28-40 Columbia Street	 F251250     $  352,300	 F255705     $  387,500	
13-15 Cherry Street	 F251251     $  175,400	 F255707     $  192,900	
	             __________	             __________	
Total	             $5,594,400	             $6,153,800	

They assessed taxes at the rates and amounts displayed in the following table. 


Property Address	FY 1999
Docket      Tax          Tax
  No.       Rate      Assessed	FY 2000
Docket      Tax          Tax
  No.       Rate2      Assessed	
804-830 Main St.	F251248    $27.25    $125,055.70	F255704    $25.16    $127,010.20	
80 School St.	F251249    $27.25    $ 13,011.88	F255706    $25.16    $  6,608.27	
28-40 Columbia St.	F251250    $27.25    $  9,600.18	F255705    $25.16    $  9,749.50	
13-15 Cherry St.	F251251    $27.25    $  4,779.65	F255707    $25.16    $  4,853.36	

	All of the taxes for all of the properties and fiscal years at issue were paid timely in accordance with      G.L. c. 59, § 64.  For fiscal year 1999, the appellant timely filed its applications for abatement for all of the appeals with the Assessor on Monday, December 7, 1998.  After the Assessors denied the applications on       January 5, 1999, the appellant seasonably filed its petitions with the Appellate Tax Board ("Board") on    March 4, 1999.  On this basis, the Board found that it had jurisdiction to hear and decide these fiscal year 1999 appeals.
For fiscal year 2000, the appellant timely filed its applications for abatement for all of the appeals with the Assessors on November 5, 1999, before the last day for payment on the first installment of the corresponding actual tax bills.  After the Assessors denied the applications on December 21, 1999, the appellant seasonably filed its petitions with this Board on March 16, 2000.  On this basis the Board determined that it had jurisdiction to hear and decide these fiscal year 2000 appeals.  
	The appellant presented its case in chief through the testimony of the Controller of Cambridge Brands, Inc., a registered structural engineer whom the Board qualified as an expert in structural engineering ("appellant's engineering expert"), and the testimony and appraisal report of a commercial real estate appraiser whom the Board qualified as an expert in real estate valuation ("appellant's valuation expert").   The appellant also submitted numerous exhibits and a post-hearing brief.  Relying on this evidence and submission, the appellant argued that the combined value of the subject properties was $4,550,000 in fiscal year 1999 and $4,950,000 in fiscal year 2000.  
In defense of the assessed values on the subject properties, the Assessors presented the testimony and report of their commercial real estate appraiser whom the Board also qualified as an expert in real estate valuation ("Assessors' valuation expert").  The Assessors also submitted several exhibits.  Relying on this evidence and a post-hearing brief, the Assessors argued that the combined values of the subject properties greatly exceeded their assessments.  The Assessors' expert real estate appraiser estimated the combined fair cash values of the properties at $9,550,000 for fiscal year 1999 and $10,850,000 for fiscal year 2000.  
The appellant's valuation expert testified that the subject property's factory building was originally built in three sections in the early 1900s to manufacture candy.  Accordingly, the structure possessed several limitations that would adversely affect any conversion of the building from its present use to another.  She identified these constraints as low ceiling heights, limited spacing between support columns, geographically restricted access to the basement and loading docks, and inadequate on-site parking.  Because of these inadequacies, she determined that the highest and best use for the subject properties during the fiscal years at issue was their continued combined use as a manufacturing facility.  However, she acknowledged, nonetheless, that the property could be adapted for residential use and that the most productive future use of the property probably was for multi-family residential occupancy.     
The appellant's valuation expert used two approaches to value the subject properties during the fiscal years at issue, a sales-comparison approach and an income-capitalization method.  She rejected the cost approach because of the age of the building and the difficulty in calculating its physical depreciation and functional obsolescence.  
In her sales-comparison approach for the two fiscal year at issue, the appellant's valuation expert examined six relatively recent, but pre-assessment date, sales of urban industrial buildings in Cambridge and Boston that had been purchased for conversion to residential and office use.  In her methodology, she first adjusted upward "the price paid per square foot of building" to reflect favorable market conditions occurring since the sales of her purportedly comparable properties vis-a-vis the relevant assessment dates.  The time-adjusted per-square-foot values of these comparable properties ranged from $23.95 to $50.97 in fiscal year 1999 and $26.62 to $55.92 in fiscal year 2000.  She then adjusted for differences, between these comparable properties and the combined subject properties, in their locational characteristics, building-to-land ratio, gross building area, and ceiling height.  Relying on this data, she determined that the value of the subject building was $37.00 per-square foot in fiscal year 1999 and $41.00 per-square foot in fiscal year 2000.  On this basis, the appellant's valuation expert estimated the combined value of the subject properties as of January 1, 1998, at $4,493,650, which she rounded to $4,500,000 and as of January 1, 1999, at $4,979,450, which she rounded to $5,000,000.  
In her income-capitalization approach, the appellant's valuation expert first estimated the market rent for the subject properties after reviewing, generally, the Cambridge market for industrial space, and, more particularly, the lease agreements for what she considered to be three comparable rental properties located in Watertown and Somerville.  She determined that these rents were in the $5.00 to $7.50 per-square-foot range for fiscal year 1999 and the $5.00 to $8.00 per-square-foot range for fiscal year 2000.  Based on this data and her adjustments for locational and physical differences between the comparable rental properties and the subject properties, the appellant's valuation expert assigned a market rent of $6.00 per-square foot for the subject properties in fiscal year 1999 and $6.30 per-square foot in fiscal year 2000.  She calculated the gross potential income for her income-capitalization approach by multiplying her estimate of the subject building's rental space of 121,450 square feet by $6.00 to reach her $728,700 figure for fiscal year 1999 and by $6.30 to reach her $765,135 figure for fiscal year 2000.  She did not include the basement area in her estimate of the building's rental space, thereby attributing a zero rent to that level.  
Using information disseminated by local commercial real estate firms regarding industrial properties in Eastern Massachusetts and considering the subject property's status as an owner-occupied, single-tenanted building, the appellant's valuation expert applied a vacancy rate of 7.5% for both fiscal years at issue to reach effective gross incomes of $674,048 for fiscal year 1999 and $707,750 for fiscal year 2000.  Her estimates of property expenses were based on actual costs submitted by the owner and known costs for what she considered to be similar urban properties.  Her expenses included costs for insurance, lease payments for parking lots, management fees, and reserves for replacement.  They totaled $122,779 in fiscal year 1999 and $124,310 in fiscal year 2000.  Accordingly, her net-operating incomes for fiscal years 1999 and 2000 were $551,268 and $583,440, respectively.  
The appellant's valuation expert then divided the net-operating incomes by her twelve-percent capitalization rate to estimate the value of the subject properties at $4,593,901 for fiscal year 1999 and $4,862,002 for fiscal year 2000.  She then rounded these estimates to $4,600,000 and $4,900,000, respectively.  She derived her capitalization rate using a band-of-investment technique and data that she purportedly derived from recent market transactions involving allegedly comparable properties along with information obtained from local brokers, developers, and investors.  The following table summarizes the appellant's valuation expert's income-capitalization methodology for the fiscal years at issue.
	Fiscal Year 1999	Fiscal Year 2000	
			
Potential Gross Income	 $  728,135	 $  765,135	
Vacancy & Credit Loss (7.5%)	($   54,652)	($   57,385)	
Effective Gross Income	 $  674,048	 $  707,750	
			
Expenses	($  122,779)	($  124,310)	
			
Net-Operating Income	 $  551,268	 $  583,440	
			
Capitalization Rate	0.1200	0.1200	
			
Estimate of Value	 $4,593,901	 $4,862,002	
			
Rounded Value	 $4,600,000	 $4,900,000	
  
	In reconciling the different estimates of value that the two valuation methods achieved for the two fiscal years at issue, the appellant's valuation expert weighed the values from the sales-comparison approach equally with the values from the income-capitalization approach to finally conclude that the values of the subject properties in fiscal years 1999 and 2000 were $4,550,000 and $4,950,000, respectively.  
	Also testifying on behalf of the appellant was the appellant's engineering expert who offered his opinion on the feasibility of and costs associated with converting the subject property from its present manufacturing use to a first class office/laboratory use.  He determined that a conversion from the existing manufacturing use to first class office/laboratory space was cost prohibitive during the relevant years at issue because of the expensive structural alterations that would be necessary, including changes in ceiling heights, column spacing, and concrete framing, as well as seismic considerations.  Assuming that a renovation of the subject building would bring into play code requirements for seismic considerations, the appellant's engineering expert estimated the cost for addressing the seismic issues alone in the millions of dollars.  He did not render an opinion regarding the financial feasibility of converting the subject properties to something other than first class office or laboratory use.    
	In support of the subject assessments, the Assessors' valuation expert testified that during the relevant time period, there was essentially no demand for manufacturing space in Cambridge.  The demand was for office and/or laboratory space as well as residential units.  Because of the expanding economy in Massachusetts generally and in Cambridge, more particularly, the cost of space in Cambridge was too expensive for manufacturers.  For these reasons, as well as the property's superior location for development, the availability of adequate space for parking, the existing zoning, and the current and foreseeable rents for office and laboratory space, the Assessors' valuation expert concluded that the highest and best use of the subject property during the fiscal years at issue was as a converted office and laboratory facility.    
	In estimating the value of the subject properties for the fiscal years at issue, the Assessors' valuation expert considered the cost, income-capitalization, and sales-comparison approaches, but actually relied on only the sales-comparison approach.  In his opinion, the subject's age and associated obsolescence compromised the integrity of a cost approach.  Similarly, insufficient comparable rental data invalidated potential gross income estimates for an income-capitalization approach.  Accordingly, after determining that there were enough sales of reasonably comparable properties to support an estimate of value based 

on a sales-comparison analysis, he relied exclusively on this method.  
	In his sales-comparison methodology, the Assessors' valuation expert reviewed seven sales of industrial and commercial properties in Cambridge that were purchased for conversion into modern office and laboratory facilities and which, at least in his opinion, were sufficiently similar to the subject property.  Several of his sales coincided with the appellant's valuation expert's comparable sales.  His sales and related information is contained in the following table.

Sale #	Location	Sale Date	Land Area (SF)	Building Area (SF)	Sale $/1,000	Price $/SF	
1	620 Memorial Dr.	02/94	 44,233	 56,900	3,600	 63.27	
2	40 Erie St.	03/95	206,403	100,454	8,500	 84.62	
3	600 Memorial Dr.	07/95	 47,015	 73,488	5,250	 71.44	
4	119 Windsor St.	04/96	 40,770	 74,500	2,690	 36.11	
5	270 Albany St.	06/97	 32,350	 62,929	3,250	 51.65	
6	325 Vassar St.	04/98	 40,750	 51,480	4,850	 94.21	
7	613-641 Mass. Ave.	07/99	 42,571	 93,084	11,800	126.77	
				125,521	11,800	 94.00	

	The Assessors' valuation expert upwardly adjusted sale-number 1, 4, and 5 by ten percent, one hundred percent, and thirty percent respectively, to account for various differences in the comparable properties' sale date, age, condition, utility, location, parking, land area, and certain other considerations when compared to the subject property.  He downwardly adjusted sale-number 7 by thirty percent to reflect that property's later date of sale and differing use.  In this manner, the Assessors' valuation expert calculated his adjusted price-per-square foot as summarized in the following table.
Sale #	Unadjusted $/SF	% Adjustment	Adjusted $/SF	
1	63.27	 +10	69.49	
2	84.62	   0	84.62	
3	71.44	   0	71.44	
4	36.11	+100	72.22	
5	51.65	 +30	67.15	
6	94.21	   0	94.21	
7	126.77	 -30	88.74	

	After eliminating sale number 4 from his analysis because, on further consideration, it was not sufficiently comparable to the subject property and required too many adjustments, the Assessors' valuation expert relied on the adjusted per-square-foot values of his remaining six comparable sales and double-digit appreciation in estimating the per-square-foot value of the subject at $75.00 as of January 1, 1998 and $85.00 as of January 1, 1999.  On this basis, he calculated the rounded value of the subject property for fiscal year 1999 at $9,550,000 and for fiscal year 2000 at $10,850,000.    
	After analyzing all of the evidence, the Board found that the appellant failed to prove that the subject properties were overvalued in fiscal years 1999 and 2000.  In particular, the Board found that the appellant's valuation expert's reliance on her underlying data and information in estimating the value of the subject properties during the fiscal years at issue using income-capitalization and sales-comparison approaches was misplaced and thereby rendered the estimates of value that she derived from these two methodologies unreliable and, therefore, without merit.  
With respect to her income-capitalization approach, the Board agreed with many of the criticisms raised by the Assessors.  The Board found that the purportedly comparable properties that the appellant's valuation expert used to derive her rent figures were, in fact, not comparable.  Of the three properties, two were located in Somerville, and one was situated in Watertown.  The appellant's valuation expert did little to demonstrate any comparability between the locations of the three purportedly comparable properties and the subject properties' location in Cambridge.  In addition, the buildings associated with these purportedly comparable properties were only one or two stories in height.  The subject building was five-stories high.  Two of these allegedly comparable properties were distribution warehouses, not manufacturing facilities, and two of the buildings were only 28,000 square feet or less in area compared to the subject factory building's 121,000 square feet.  
The Board also found that some of the appellant's valuation expert's expenses, such as the cost of an actual lease from MIT for thirty-six parking spaces and access to the factory building's loading dock area, were not appropriate expenses to include in her income-capitalization approach under the circumstances.  The Board found that this expense would more likely be borne by the single tenant of the subject properties.  The Board noted that the deletion of this expense would bring the appellant's valuation expert's estimates of the subject properties' values significantly closer to the assessed values for both of the fiscal years at issue.
Moreover, the Board found that the appellant's valuation expert's determination of her capitalization rate for the years at issue was suspect.   She purportedly derived her rate using market data and the band-of-investment technique.  The Board found, however, that her net-income figures were not based on actual market data, but instead reflected her estimates of certain purportedly comparable properties' net-operating incomes.  Both of the properties that she used for determining her capitalization rates were not even located in Cambridge, and their locations were not otherwise shown to be similar to the subject properties' location in Cambridge.  As a result, the capitalization rate that she determined by dividing her self-styled "actual" net incomes from two ostensibly comparable properties by their sale prices was not based on the market as she represented.  Furthermore, according to the APPRAISAL INSTITUTE, THE APPRAISAL OF REAL ESTATE (11th ed. 1996), the band-of-investment technique "is only applicable when sufficient market data are available to extract equity capitalization rates and pre-tax cash flows are the primary investment criteria used by buyers and sellers."  Id. at 519.  The Board found, however, that the appellant's valuation expert did not rely on actual market data.  The Board further found that her additional reliance on data gleaned from quarterly survey reports, like Korpacz & Associates, and opinions from local investors, brokers, and developers, produced a capitalization rate, using the band-of-investment technique, that was more appropriate for testing, as opposed to developing, a capitalization rate.  Id. at 519 ("when survey and opinion data . . . must be substituted for market data, mortgage-equity techniques [such as the band-of-investment method] may be more appropriately used to test capitalization rates then to develop them").  On this basis, the Board found that the appellant's valuation expert's estimates of the subject properties' values for the fiscal years at issue in these appeals produced by her income-capitalization approach were unreliable and, therefore, without merit.  
With respect to her sales-comparison approach, the Board found that the appellant's valuation expert relied on six sales of properties that, generally, were not comparable to the subject properties and, to the extent that some degree of comparability existed, were either not appropriately adjusted to reflect differences with the subject properties or were deficient in some other way.  For example, two of the purportedly comparable properties were located in neighborhoods in Boston that the appellant's valuation expert failed to demonstrate were sufficiently similar to the subject properties' location in Cambridge to warrant comparison.  Accordingly, the Board found that these two properties were not comparable to the subject properties.
The Board also found that the appellant's valuation expert was mistaken in her evaluation of a number of critical factors with respect to her purportedly comparable Cambridge properties.  For example, for one of her purportedly comparable properties located in Cambridge, she determined the unit sale price using an area that included an almost 10,000-square-foot post-sale expansion, thereby significantly and erroneously reducing its actual value.  Not surprisingly, the Board found that her unit sale price was inaccurate.  With another of her hypothetically comparable Cambridge properties, the appellant's valuation expert used a sale that was privately marketed to only two potential buyers and was not exposed to the open market.  The Board found that this sale did not result from an arm's-length transaction.  
With respect to yet another of the appellant's valuation expert's purportedly comparable Cambridge properties, the Board found that it lacked both on-site parking and expansion possibilities, rendering it of limited usefulness in estimating the value of the subject properties using the comparable-sales approach.  At any rate, the appellant's valuation expert was not clear on how or to what extent she compensated for these obviously important differences with the subject properties.  
Finally, the appellant's valuation expert's reliance on the sale of the Haviland Candy factory building in Cambridge was also misplaced because the purchase price apparently included a below market multi-year lease for the seller to continue to occupy the property as a lessee after the conveyance.  The appellant's valuation expert did not even attempt to place a value on that consideration and include it in her evaluation of this sale.  Moreover, the sale price also included an unspecified amount for what was referred to as future "development profit."  The appellant's valuation expert did not, probably because she could not, place any reasonable present value on that possible consideration, either.  Because of these issues surrounding the actual price that was paid for the purchase of this property, the Board found that it was not appropriate for the appellant's valuation expert to include this sale in her sales-comparison methodology.  On this basis, the Board found that the appellant's valuation expert's estimates of the subject properties' values for the fiscal years at issue in these appeals produced by her sales-comparison approach were unreliable and, therefore, without merit.  
Moreover, the Board found that the evidence submitted by the Assessors did not help the appellant's assertions, either.  Even though the Board did not adopt the Assessors' valuation expert's approach, none of the evidence supported the appellant's position or a valuation finding below the assessed values.  On this basis, the Board found that the appellant failed to meet its burden of proof in these appeals.  Therefore, the Board decided these appeals for the appellee.  

OPINION

	The assessors are required to assess real estate at its fair cash value.  G.L. c. 59, § 38.  Fair cash value means fair market value, which is defined as the price on which a willing seller and a willing buyer 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).  
	Generally, real estate valuation experts, the Massachusetts courts, and this Board rely upon three approaches to ascertain the fair cash value of property: income capitalization, sales comparison, and cost reproduction.  Correia v. New Bedford Redevelopment Authority, 375 Mass. 360, 362 (1978).  Neither party in these appeals considered the subject properties special purpose.  Accordingly, they did not suggest using a cost approach for estimating the value of the subject properties.  The Board agreed with their conclusion in this regard and ruled that the cost approach was not an appropriate method to use to estimate the value of the subject properties in these appeals.  
The fair cash value of property may be determined by recent sales of comparable properties in the market.  Id.  Actual sales generally "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); New Boston Garden Corp. v. Assessors of Boston,  383 Mass. 456, 469 (1981); First National Stores, Inc. v. Assessors of Somerville, 358 Mass. 554, 560 (1971).  In these appeals, the Board found that the appellant's valuation expert's purportedly comparable sales were either not comparable, not properly adjusted, not the result of arm's-length transactions, or flawed in some other respect.  Accordingly, the Board found and ruled that the appellant did not introduce competent evidence of comparable sales.  
The income-capitalization approach is useful for determining the value of income-producing property when the comparable-sales method is unavailable or less probative.  See Assessors of Lynnfield v. New England Oyster House, Inc., 362 Mass. 696, 698-701 (1972); Assessors of Weymouth v. Tammy Brook Co., 368 Mass. 810 (1975) (rescript).  With respect to these appeals, however, the appellant's valuation expert did not correctly determine or support her suggested market rents, she improperly included certain expenses, and, under the circumstances present in these appeals, she relied on faulty data and an inappropriate technique for determining her capitalization rate.  Accordingly, the Board found and ruled that the appellant's valuation expert's suggested income capitalization approach was not a reliable means for estimating the value of the subject property during the fiscal years at issue.   
The burden of proof is upon the taxpayer to make out its right as a matter of law to an abatement of the tax.  Schlaiker v. Board of Assessors of Great Barrington,     365 Mass. 243, 245 (1974).  The taxpayer must show that the assessed valuation of its property was improper.  See Foxboro Associates v. Board of Assessors of Foxborough,  385 Mass. at 691.  The assessment is presumed valid until the taxpayer sustains its burden of proving otherwise.  Schlaiker, 365 Mass. at 245.  Based on all of the evidence, the Board found and ruled that the taxpayer failed to meet its burden of persuading the Board that its property was overvalued.  The mere going forward with some evidence is not enough to meet the taxpayer's burden in this regard; the evidence must be credible and persuasive.  See id.  Furthermore, the Board may disbelieve a witness or reject evidence as long as it has an "'explicit and objectively adequate reason.'"  New Boston Garden Corp. v. Board of Assessors of Boston, 383 Mass. at 470, quoting L.L. Jaffe, Judicial Control of Administrative Action 607 (1965).  The Board found and ruled in these appeals that the appellant's valuation expert's testimony and appraisal report, as well as the other evidence presented by the appellant and even the Assessors, did not support the appellant's valuation expert's estimate of the subject properties' fair cash value during the fiscal years at issue.  The Board deemed both her sales-comparison and her income-capitalization approaches unreliable and, therefore, without merit.           
In appeals before this Board, a "taxpayer may present persuasive evidence of overvaluation either by exposing flaws or errors in the assessors' method of valuation, or by introducing affirmative evidence of value which undermines the assessors' valuation."  General Electric Co. v. Assessors of Lynn, 393 Mass. 591, 600 (1984), quoting Donlon v. Assessors of Holliston, 389 Mass. 848, 855 (1983).  In the present appeals, the Board found and ruled that the taxpayer failed to present persuasive evidence establishing either of these propositions.  

On this basis, the Board decided these appeals for the appellee.

						APPELLATE TAX BOARD

					 By: __________________________
						Abigail A. Burns, Chairman


A true copy,



Attest: ______________________
		Clerk of the Board
                          

 The record contains several different approximations of the factory building's and subject properties' total useable and rentable square footage.  In her valuation methodology, the appellant's expert real estate appraiser adopted the figure in the Assessors' property record card.  In his comparable-sales approach, the Assessors' expert real estate appraiser included the area contained in a dilapidated and windowless one-story storage building, located on one of the adjacent parcels, to reach his estimate of 127,500 square feet.  The Board found that, for both income-capitalization and sales-comparison methodologies, the area recited in the Assessors' property record card and relied upon by the appellant's expert real estate appraiser more reasonably reflected the subject properties' gross useable and rentable building space for the fiscal years at issue in these appeals.      
 The tax rate is per $1,000 of assessed value.
 The relevant tax bills were mailed on November 6, 1998.  The corresponding applications for abatement were not filed until Monday, December 7, 1998, the thirty-first day after the tax bills had been mailed.  G.L. c. 59, § 59 requires applications for abatement to be filed by the last day when the first installment on the actual tax bill is due, which, in these appeals, was within thirty days of the sending of the corresponding tax bill.  G.L. c. 59, § 57.  In these appeals, however, because the thirtieth day fell on a Sunday, the Board found that, under G.L. c. 4, § 9, which extends a Sunday payment or filing deadline until the next business day, the applications for abatement were still timely.
 The Hearing Officer allowed the appellant's motion to exclude the Assessors' valuation expert's testimony and to strike references contained in his appraisal report as to the cost of converting the subject properties.  The Board found that the Assessors' valuation expert was not an engineer or architect.  The Board, however, denied the appellant's further motion to strike the Assessors' valuation expert's opinion regarding the subject properties' highest and best use.             

ATB 2001 - 436