2017-00175DECISION OF THE VALUE ADJUSTMENT BOARD
VALUE PETITION
County
The actions below were taken on your petition.
These actions are a recommendation only, not final These actions are a final decision of the VAB
If you are not satisfied after you are notified of the final decision of the VAB, you have the right to file a lawsuit
in circuit court to further contest your assessment. (See sections 193.155(8)(l), 194.036, 194.171(2), 196.151, and 197.2425,
Florida Statutes.)
Petition # Parcel ID
Petitioner name
The petitioner is: taxpayer of record taxpayer’s agent
other, explain:
Property
address
Decision Summary Denied your petition Granted your petition Granted your petition in part
Value
Lines 1 and 4 must be completed
Value from
TRIM Notice
Before Board Action
Value presented by property appraiser
Rule 12D-9.025(10), F.A.C.
After Board
Action
1.Just value, required
2. Assessed or classified use value,* if applicable
3. Exempt value,* enter “0” if none
4. Taxable value,* required
*All values entered should be county taxable values. School and other taxing authority values may differ. (Section 196.031(7), F.S.)
Reasons for Decision Fill-in fields will expand or add pages, as needed.
Findings of Fact
Conclusions of Law
Recommended Decision of Special Magistrate Finding and conclusions above are recommendations.
Signature, special magistrate Print name Date
Signature, VAB clerk or special representative Print name Date
If this is a recommended decision, the board will consider the recommended decision on at
Address
If the line above is blank, the board does not yet know the date, time, and place when the recommended decision will be
considered. To find the information, please call or visit our web site at
Final Decision of the Value Adjustment Board
Signature, chair, value adjustment board Print name Date of decision
Signature, VAB clerk or representative Print name Date mailed to parties
DR-485V
R. 01/ 17
Rule 12D-16.0 02
F.A.C.
Eff. 01/17
Findings of Fact for Petition 2017-00175:
ATTENDEES: The PAO was represented by Mr. Jack Redding, Mr. Jeep Quinby, & Ms.
Jenny Blaje. The Petitioner (PET) was represented by Deneen Maly, who did submit
evidence to be entertained at this hearing.
PROPERTY IDENTIFICATION/TYPE: The subject is a CVS store built in 2005,
located at 6800 Collier Boulevard in Naples. This is at the major intersection of CR-951
& Tamiami Trail East. The subject has an adjusted building size of 14,308 SF situated
upon a site of 87,751.8 SF (i.e. 2.01 acres).
PAO TESTIMONY/EVIDENCE: The PAO submitted all three traditional approaches to
value to support the contested just value of $2,885,923 (i.e. $201.70/SF of adjusted
building area). The PAO also provided the subject’s building card information, along
with the subject’s prior deed when it sold back as a land sale in 2011.
In the Cost Approach, the PAO estimated land value at $25/SF, plus $107,170 of impact
fees for a total of $1,613,276. The land value estimate was based upon the 10 land
indicators (all sales), most of which closed during 2016. It appears the PAO is
reasonable in his land value estimate. The PAO does provide back-up improvement cost
information from Marshall Valuation, as well as impact fee calculations. The PAO
applies 11% physical depreciation. The PAO concludes a final Cost Approach value
indication of $3,990,000. I give greatest weight to this approach, as it is typically not
influenced by leases and it provides the best ‘fee simple’ manner to analyze this property
type and substantial land value component. The subject’s impact fees & land value (both
well supported) account for 82.3% of the total assessment. The PAO should have also
included entrepreneurial profit in the Cost Approach, which would have made this
approach’s conclusion slightly higher.
In the Sales Comparison Approach, the PAO presents 12 improved sales from various
locations in Collier County. Sales #1-#9 are leased fee drug store sales that are all well
above the subject’s assessed value/SF, as they were purchased far more for the financial
backing of the tenants. The subject is assessed on a fee simple basis; thus, very little
weight is given to the leased fee (i.e. “net lease”) drug store sales presented by the PAO.
The PAO provides $/SF of building indicators, sale date, land SF, FAR, zoning, and year
built details relating to the improved sales provided. The PAO concludes $275/SF of
adjusted building area X 14,308 SF = $3,935,000 for the subject. The estimated price/SF
figure appears reasonable for the subject’s busy intersection location, based more heavily
upon the PAO’s last 3 sales. The PAO does provide photos of each improved sale. I give
greater weight to the PAO’s sales #10, #11 & #12, given they apparently are not ‘net
lease’ transactions.
In the Income Approach, the PAO concludes a value of $3,915,000, based upon a $27
rental rate, 5% vacancy, 20% expenses, and a loaded OAR of 7.5% applied to the NOI of
$293,600. The PAO does provide various drug store listings and lease data, yet the vast
majority of that data is based upon ‘net lease’ properties being marketed. I give less
weight to the PAO’s Income Approach.
The PAO does establish the presumption of correctness by providing a good Cost
Approach. The PAO’s inclusion of the Income Approach & Sales Comparison Approach
are supportive of the Cost Approach.
The Petitioner (PET) did attend the hearing, and did submit evidence (2 of the 3
traditional approaches) for consideration. The PET’s evidence includes subject property
details/breakdowns, the Cost Approach, Income Approach, subject’s CoStar information,
subject photographs, CoStar retail statistics/rent comparables, the subject’s Collier
County Property Appraiser’s summary of subject information/aerial, PAO’s building
sketch information, Marshall Valuation back-up, and land sale back up data. The PET is
requesting a lower just value of $2,250,000, which is a reduction request of $635,923, or
22% of the PAO’s assessment.
In the PET’s Income Approach, the PET’s exhibit indicates a value estimate of
$2,286,672 (after a 15% COS deduction). The PET’s Income Approach value is based
upon a gross rental rate of $12.50/SF, 5% vacancy, 5% expenses, no reserves, and a
‘market’ cap rate of 6.00% (unloaded). The PET does not appear to provide much (if
any) good market support for the market rent estimate. While the CoStar sheet for the
subject indicates its location is in the ‘outlying Collier County Submaket’, it is not
particularly reflective of the fact that the subject is at a major intersection. Thus, most of
that submarket data given weight by the PET is not really indicative of the subject’s
exceptionally better location within that submarket. The Integra Realty Resources (IRR)
annual 2017 market information provided has community retail, neighborhood retail and
regional mall data; however, often freestanding stores (like the subject) are not
specifically broken out (or sometimes excluded) from those data sets. Thus, the
combined ways the PET derived the subject’s projected rental rate appear to be lower
than would be anticipated for a busy intersection location of a freestanding property. Had
even the PET used the IRR Naples average rent of $18.39, the assessment would have
been upheld as reasonable, even though the PAO’s market rent projection was still much
greater using $27/SF. The signing dates of 2 specific rent comps was mid-2015, and not
as timely as desired for the 1/1/2017 assessment. One of those specific rent comparables
was in a grossly inferior Immokalee location with a starting rent of $14.16/SF NNN.
In the PET’s Cost Approach, the PET concludes a land value of $1,314,697, or $15/SF.
It is very difficult to follow the PET’s logic and data to support a figure that low after
also reviewing the PAO’s land sale and listing indicators (some within close proximity to
the subject). Furthermore, in her Cost Approach, the PET fails to account for
entrepreneurial profit, fails to account for impact fees (which are significant at
$182,453), fails to consider some of the PAO’s timely land sale indicators from the
subject’s vicinity, and fails to consider some soft costs. The PAO notes that one of the
PET’s land sales was 10 acres (substantially larger than the subject.
RULING: The PET fails to overcome the PAO’s presumption of correctness established
at the hearing. The PAO does present a good and credible Cost Approach, which is a
very good way to value this type of property on a fee simple basis. The main difference
between the two Cost Approaches is the understatement of land value by the PET. This
combined with $182,453 of impact fees, entrepreneurial profit, and some soft costs by
the PET, combine for a total of $1,384,000 difference between the two parties. The
PAO’s presentation appears more credible and reasonable. The subject’s prior sale as
vacant land back in 2011 was $5.35M, while the 2017 assessment being contested is far
less at $2,885,923. Based upon the weight and preponderance of evidence, it is
recommended the PAO’s assessment be upheld.
Conclusions of Law for Petition 2017-00175:
Florida Law requires the Property Appraiser to establish a presumption of correctness.
For the Property Appraiser to establish a presumption of correctness for the assessment,
the admitted evidence must prove by a preponderance of the evidence that the Property
Appraiser's just valuation methodology complies with Section 193.011, Florida Statutes
and professionally accepted appraisal practices. In the instant matter, the Property
Appraiser established a presumption of correctness for the assessment because the
admitted evidence proves by a preponderance of the evidence that the Property
Appraiser's just valuation methodology complies with Section 193.011, Florida Statutes
and professionally accepted appraisal practices. Since the Property Appraiser established
a presumption of correctness, the Petitioner must overcome the established presumption
of correctness by proving that the admitted evidence proves by a preponderance of the
evidence that: (a) the Property Appraiser's just valuation does not represent just value; or
(b) the Property Appraiser's just valuation is arbitrarily based on appraisal practices that
are different from the appraisal practices generally applied by the Property Appraiser to
comparable property within the same county. In the instant matter, the Petitioner failed
to overcome the Property Appraiser's established presumption of correctness because the
admitted evidence fails to prove by a preponderance of the evidence that: (a) the
Property Appraiser's just valuation does not represent just value; or (b) the Property
Appraiser's just valuation is arbitrarily based on appraisal practices that are different
from the appraisal practices generally applied by the Property Appraiser to comparable
property within the same county. Therefore the appraisal should be upheld.