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2017-00251DECISION 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 2017-00251: ATTENDEES: The Collier County Property Appraiser’s Office (PAO) was represented by Mr. Jack Redding, Mr. Jeep Quinby, & Ms. Jenny Blaje. The Petitioner (PET) did NOT attend the hearing in person or on the phone, but was represented by Mr. Baxter Trabold with Duff & Phelps. The PET & PAO both timely submitted evidence into the record for consideration. PROPERTY IDENTIFICATION/TYPE: The subject is the Scripps ‘Naples Daily News’ property, which was built in 2009. It is located at 1100 Immokalee Road in Naples. The subject has an adjusted (multi-story) building size of 201,375 SF situated upon a site of 19.85 acres. PAO TESTIMONY/EVIDENCE: The PAO submitted all three traditional approaches to value to support the contested just value of $21,230,931. The PAO also provided the subject’s building card information, zoning map, color aerial, location map, building sketch, along with the subject’s prior deed when it sold for $23,075,000 back in 2006. Thus, the current 2017 assessment is still less than the subject’s prior sale. In the Cost Approach, the PAO estimated land value at $10/SF ($8,646,660), plus $783,530 of impact fees. The land value estimate was based upon the 11 land indicators (all sales), 5 of which closed during 2016. A land sales map is provided. 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 9% physical depreciation. The PAO concludes a final Cost Approach value indication of $31,790,000. I give greatest weight to this approach, as the subject is a rather specialized property type/design. In the Sales Comparison Approach, the PAO presents 3 improved sales from various locations in SW Florida that closed between 2014-16. Sale #1 in Naples sold for $86.53/ SF, while Sale #2 in Naples sold for $235.98/SF. Sale #3 (FedEx in Lee County) is the closest in building size and it is also similar in FAR (floor-to-area ratio), and it sold for $98.29/SF of building area. The PAO provides CoStar sales sheet details for all 3 sales in his evidence. The PAO concludes the subject’s value at $140/SF from the 3 sales, or $28.193M. In the Income Approach, the PAO concludes a value of $27,008,000, based upon a $16/ SF rental rate, 5% vacancy, 25% expenses, and a loaded OAR of 8.5% applied to the NOI of $2,295,675. The PAO does provide various exhibits showing market data, rates, and rents. Some of that data is based upon confidential sources provided by various Collier taxpayers. The PAO does establish the presumption of correctness by providing a good Cost Approach. The PAO’s Income Approach & Sales Comparison Approach are both supportive of the Cost Approach, which is given most weight. The PAO also does include some of the subject’s historical building permit information dating back to the 2007-09 time frame exceeding $30M. The Petitioner (PET) did NOT attend the hearing, but did submit evidence for consideration. The PET did provide a letter of authorization. The PET did check the box on the petition to indicate non-attendance. The PET submitted a subject photo with Collier County’s assessment information breakdown. The PET requests a value of $20,510,000. In the PET’s Cost Approach, the PET incorrectly uses the PAO’s administrative land allocated value of $4,867,930. This is inappropriate to use in these VAB hearings. Land values should be obtained from the market, and not from the PAO’s administrative assessment breakdowns. Furthermore, in the Cost Approach, the PET fails to account for entrepreneurial profit, fails to account for impact fees (which are significant), fails to consider some of the PAO’s timely land sale indicators from the subject’s vicinity, and fails to consider some soft costs/taxes during construction. I give NO WEIGHT to the PET’s Cost Approach, given the land component was not estimated from market information. This is a significant error in a case where land values for large parcels are available, as proven by the PAO’s land support. RULING: I find all of the evidence submitted by the PAO to be relevant & credible. I find some of the PET’s evidence to be relevant with regard to cost information; however, [with regard to the PET’s land value estimate] it is not credible to use the PAO’s administrative land assessment breakdown within the PET’s Cost Approach. Land value should be estimated from market evidence. The PET’s Cost Approach should have also included entrepreneurial profit, soft costs, taxes during construction, and impact fees. These major failures in the PET’s Cost Approach undermines the PET’s one and only approach to value. Therefore, 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 specialized property on a fee simple basis. The PAO’s two remaining approaches are supportive, but for a fairly specialized property type, they have greater subjectivity. Based upon the weight and preponderance of evidence, it is recommended the PAO’s assessment be upheld. Conclusions of Law for Petition 2017-00251: Petitioner failed to appear at the hearing but the Petitioner has indicated that their evidence and petition should be considered. 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.