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2017-00496DECISION 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 2017-00496: Present at Collier County offices was Property Appraiser (PAO) represented by Mr. Donald Wegner, Ms. Maria Redding and Ms. Jenny Blaje. The Petitioner (PET) was not present but requested that their evidence and petition be heard and considered in their absence. PAO’s were sworn in. SM read the petitioner number. PAO confirmed the folio number, and just value of $559,030 The value has not changed since the TRIM notice. PAO described the property as OLCC Florida LLC Sunset Cove Resort and Suites Condominium Units Interval Ownership. The building is 7 stories in height and contains 36 residential units and two (2) commercial units. All residential units are three bedrooms with three baths; unit Type A contains 1,738-sf; unit type B contains 1,504-sf and unit type C contains 1,762-sf. The commercial units are located on the first floor; unit # 101 contains 1,783-sf; unit # 102 contains 1,455-sf. The property has a lobby and pool area and is located on a canal. The building was built in 2005. The property is located at 571 West Elkcam Circle, Marco Island FL. This petition is for unit # 306, type C with 1,762-sf. As part of PAO’s evidence, Ms. Blaje presented a 50-page report on the Level of Assessment and Equalization Support Data. Ms. Blaje presented this report once, on the first petition heard in 2017 only, and this report applies to all 2017 petitions and forms part of PAO’s evidence in every petition. The Level of Assessment and Equalization Support Data report contains Collier County’s statement of compliance, Florida real property guidelines, two Florida Department of Revenue Attorney opinion letters, attorney opinion letter on the eighth criterion, case law on the eighth criterion 2nd District Court of Appeals, Administrative court findings PTO Bulletin 11-01, Levy Law Firm, Bond Schoeneck & King (2016 VAB Attorney), Florida Department of Revenue Sales Qualification Study, Florida Department of Revenue Tax Roll Approval Letter, Form DR-493, Level of assessment statistics and graphs. This report explains the methods used in mass appraisals and how Collier County applies the eighth criteria. Ms. Blaje indicated that the just value of properties in Collier County includes the Cost of Sales adjustment of 15% made to the recorded selling prices or fair market value. Collier County groups their properties by stratum and the properties within a stratum are put on a bell curve-50% of the properties within a stratum are assessed at below market value and 50% are assessed above market value with the median being at about 85%. PAO, Mr. Wegner and Ms. Redding presented a report containing 79 pages. The report included the evidence and witness list, name and tax roll screens for 2nd floor types A, B & C, subject property deed, Florida Statute 192.037, aerial of the property, 2016 annual resales used to conclude indicated value, timeshare worksheet concluding indicated value, worksheet for comparison only, transaction totals, photographs of the property, site plan, building layout and floor plans, comparable listing, and a final judgement of a case in Osceola county. PAO considered the 8 criteria from Section 193.011 F.S. The evidence presented by PAO was considered credible, relevant and was admitted for consideration. PAO discussed three items from Florida Statute 192.037.; FS 192.037-2 which reads “Fee Timeshare real property shall be listed on the assessment rolls as a single entry for each timeshare development. The assessed value of each timeshare development shall be the value of the combined individual timeshare periods or timeshare estates contained herein.” FS 192.037-10 reads, “In making his or her assessment of timeshare real property, the appraiser shall look first to the resale market.” FS 192.037-11 reads “If there is an adequate number of resales to provide a basis for arriving at value conclusions, then the property appraiser shall deduct from the original purchase price “usual and reasonable fees and costs of the sale.” For purposes of this subsection, usual and reasonable fees and costs of the sale for timeshare real property shall include all marketing costs, atypical financing costs, and those costs attributable to the right of a timeshare unit owner or user to participate in an exchange network of resorts. For timeshare real property, such “usual and reasonable fees and costs of the sale: shall be presumed to be 50 percent of the original purchase price; provided, however, such presumption shall be rebuttable.” PAO listed 34 weeks of annual resales, at the subject Sunset Cove Resort, that occurred in 2016 to determine value. Following is a summary of the sales. ANNUAL RESALES OLCC-RESALES OLCC-RESALES INDIVIDUAL RESALES Sunset Cove Sunset Cove Sunset Cove Unit Type Type B Type C Type B Size-SF 1,504 1,762 1,504 Total Resales $724,000 $179,950 $33,450 Total Weeks Sold 19 4 11 Value/Week $38,105 $44,988 $3,041 Value/Week less COS (-65%) $13,337 $15,746 $1,064 # Weeks/Unit 51 51 51 Ind. Value/Week /Unit $680,179 $803,027 $54,280 Unit Market Value $680,179 $803,027 $54,280 2017 CCPA MK.Value $473,760 $555,030 $473,760 $/sf/Unit Type $452.25 $455.75 $36.09 Average $/sf $315 2017 $/sf $315 IND. VALUE/ 1st FLOOR UNIT $473,760 $555,030 $473,760 Floor Difference Add $4,000 Extended Lanai Add $3,000 All sales are in Sunset Resort, OLCC had 23 weeks of sales and 11 weeks of sales from individual owners sold. The value per week or market value was reduced 65% of value by PAO for cost of sales; the indicated value was multiplied by 51 weeks for the indicated value of the unit types. The values range from $36.09/sf for the units sold by individuals to $455.75/sf for the units sold by Sunset Cove. PAO estimated a value of $315/sf for all units. PAO added $4,000/floor for the floor difference (upper floors) and $3,000 for the units with an extended lanai. PAO also did a worksheet using the annual and semi-annual resales by unit type as follows: ANNUAL & SEMI-ANNUAL RESALES OLCC-RESALES OLCC-RESALES OLCC-RESALES INDIVIDUAL RESALES Sunset Cove Sunset Cove Sunset Cove Sunset Cove Unit Type Type A Type B Type C Type B Size-SF 1,738 1,504 1,762 1,504 Total Resales $68,300 $1,363,500 $331,850 $33,450 Total Weeks Sold 2 40 7 11 Value/Week $34,150 $34,088 $47,407 $3,041 Value/Week less COS (-65%) $11,953 $11,931 $16,593 $1,064 # Weeks/Unit 51 51 51 51 Ind. Value/Week /Unit $609,578 $608,462 $846,218 $54,280 Unit Market Value $609,578 $608,462 $846,218 $54,280 2017 CCPA MK.Value $473,760 $473,760 $555,030 $473,760 $/sf/Unit Type $351 $405 $480 $36 Average $/sf $318 2017 $/sf $315 IND. VALUE/ 1st FLOOR UNIT $547,470 $473,760 $555,030 $473,760 PAO indicated value: $559,030 The Property Appraiser is required by Florida Statutes (F.S.) to assess real property at its just value as of January 1 of each year, F.S. 192.042 (1). The phrase “just value” has been determined to be synonymous with “fair market value”. See Valencia Center, Inc. v. Bystrom, 543 So.2d 214, 216 (Fla. 1989). Further, an assessment challenge must stand or fall on its own validity, unconnected with the assessment of any prior or subsequent year. See Keith Investments, Inc. v. James, 220 So.2d 695 (Fla. 4th DCA 1969). The Department of Revenue (DOR) has developed specific evidence rules for presenting relevant and credible evidence. See Rule 12D-9.025 (1), Florida Administrative Code (F.A.C.). Generally, “relevant evidence” is evidence that is reasonably related, directly or indirectly, to the statutory criteria that apply to the issue under review. This description means the evidence meets or exceeds a minimum level of relevance necessary to be admitted for consideration, although it does not necessarily mean that the evidence has sufficient relevance to legally justify a particular conclusion. See Rule 12D-9.025(2)(b), F.A.C. The Legislature has enacted eight factors which a property appraiser must consider when determining just valuation, which are enumerated in F. S. 193.011. In any administrative or judicial action in which a taxpayer challenges an ad valorem tax assessment of value, the property appraiser’s assessment is presumed correct if the appraiser proves by a preponderance of the evidence that the assessment was arrived at by complying with F.S. 193.011, any other applicable statutory requirements relating to classified use values or assessment caps, and professionally accepted appraisal practices, including mass appraisal standards, if appropriate. See Section 194.301, F.S., as amended by Chapter 2009-121, Laws of Florida (House Bill 521), and Section 193.011, F.S. A taxpayer who challenges an assessment is entitled to a determination by the value adjustment board or court of the appropriateness of the appraisal methodology used in making the assessment. F.S. 193.011outlines eight factors that must be considered to make a just value determination for each property. Refer to F.S.194.301, as amended by Chapter 2009-121, Laws of Florida (House Bill 521) and F.S. 193.011. The eight criteria specified in Florida Statute 193.011 were considered by the PAO in the following manner: (1) Present cash value - the PAO applied the Sales Comparison Approach to the subject utilizing arm’s length transfers of competitive properties presumably under normal market conditions. (2) Highest and best use - land use and building codes representing highest and best use of the property were applied which were consistent with the current use; (3) Location - The PAO considers locational features of the subject through the use of neighborhood codes as identified on the Property Record Card (PRC); (4) Quantity or size - the subject’s size was considered based primarily on the unit size as identified on the PRC; (5) Cost and present replacement value – The Cost Approach was not developed; (6) Condition - The condition of the subject was factored into the estimated value via the Sales Comparison Approach; (7) Income – The Income Approach was not developed; (8) Net proceeds of sale - the PAO considers costs of sale as previously explained in the 50-page report submitted. PAO did include the Cost of Sales in this report. The weight given to each of the factors is within the discretion of the property appraiser; reliance on a particular approach is dependent upon the type of property being assessed. Id.: Atlantic International Inv. Corp. v. Turner, 383 So.2d 919,929 (Fla. 5th DCA 1980). Ultimately, the proof of the correctness of value is paramount over the emphasis placed on the applicability of one particular method of value over another. Special Magistrate determined the appraisal methodology used in making the assessment was appropriate and in compliance with criteria of F.S. 193.011, as well as consistent with professionally accepted appraisal practices. PAO is entitled to the Presumption of Correctness. PAO’s Just Value Conclusion: $559,030 PET was not present, PAO, Mr. Wegner presented PET’s evidence. PET’s evidence consisted of a 44-page report. The evidence included a cover letter, summary of evidence, property summary for each unit, Market Support, 2017 Florida Stature 192.037 with number 10 and 11 highlighted similar to PAO, Financial Performance-A survey of Timeshare and Vacation Ownership Companies, 2017 edition, prepared by Deloitte. The survey includes survey method, survey results, industry segment, revenue recognition. Photographs of the exterior and interior of the building, resort information for Sunset Cove Resort, a brochure for Sunset Cove Resort, tangible personal property tax return, resale model and list of resales. PET’s evidence was considered credible, relevant and was admitted for consideration. PET estimated the value of the units based on points. The brochure has different points for the 3- bedroom unit and the 3-bedroom deluxe unit depending on the week purchased; points are based on value, prime, peak and spring weeks. PET developed the value based on points as follows: PET # Weeks # of Points 3 Bed Total Points # of Points 3 Bed Deluxe Points 12 17,857 214,284 21,429 257,148 16 28,571 457,136 32,143 514,288 14 42,857 599,998 46,429 650,006 10 50,000 500,000 53,571 535,710 52 Total 1,771,418 1,957,152 # Weeks 52 52 Av. Points/wk 34,066 37,638 Av Price /Point $0.08 $0.08 Price/Unit/week $2,657.00 $2,934.00 RCI Fee -$99.00 -$99.00 Ind. Value $2,558.00 $2,835.00 Less COS 15% 0.85 0.85 $2,174 $2,410 Less Tangible Prop. -961 -961 Ind. Value/week $1,213 $1,449 Estimated Value: 3 Bed 3 Bed Deluxe Totals Per Week Value $1,213 $1,449 Total Weeks 51 51 Value all weeks $61,878.30 $73,886.25 Total units 24 12 36 Ind. Value $1,485,079 $886,635 $2,371,714 Less Model Units -$135,757 Indicated Value $2,235,957 Rounded Value $2,240,000 PAO indicated PET used daily points instead of weekly points in their estimate of value. PAO recalculated PET’s value based on weekly points as follows: PAO # Weeks Daily Points 3 Bed Total Points Daily Points 3 Bed Deluxe Points 12 17,857 1,499,988 21,429 1,800,036 16 28,571 3,199,952 32,143 3,600,016 14 42,857 4,199,986 46,429 4,550,042 10 50,000 3,500,000 53,571 3,749,970 52 Total 12,399,926 13,700,064 # Weeks 52 52 Av. Points/wk 238,460 263,463 Av Price /Point $0.08 $0.08 Price/Unit/week $19,077 $21,077 RCI Fee -$99.00 -$99.00 Ind. Value $18,978 $20,978 Less COS 15% 0.85 0.85 $16,131 $17,831 Less Tangible Prop. -961 -961 Ind. Value/week $15,170 $16,870 PAO Estimated Value PAO 3 Bed 3 Bed Deluxe Per Week Value $15,170 $16,870 Total Weeks 51 51 Value all weeks $773,677 $860,386 Total units 24 12 Ind. Value $18,568,249 $10,324,635 $28,892,884 Less Model Units $0.00 PAO Indicated Value for 36 units $28,892,884 PAO’s just value for the 36 units is $18,363,240 As rebuttal, PAO indicated they do not know how PET arrived at their value. PAO’s value is based on sales in the complex. PAO indicated PET provided 25-pages from a timeshare information magazine and the top of the line condo starts at $285/sf. PET used a 15% Cost of sales adjustment; PAO used 65%. PAO provided 3 pages of rebuttal evidence that was admitted into evidence. Page 1 is PET’s point system for Sunset Cove; page 2 is a list of sales from individuals and OLCC resales at Sunset Cove; and liquidation sales. Page 3 is PET’s calculation of value based on the daily points with PAO’s recalculation of the points on a weekly basis. PET was not present at the hearing and did not provide rebuttal evidenced. PET did not demonstrate that PET’s evidence was more credible, more relevant and or more sufficient than PAO’s evidence. PET did not overcome the presumption of correctness. PET’s value is understated. PET estimated the value of the all the units based on a daily point system rather than a weekly point system resulting in the property being undervalued. Conclusions of Law for Petition 2017-00496: Pursuant to Section 194.301 and Rule 12D-9.027(2)(a), the Property Appraiser’s assessment shall be entitled to a Presumption of Correctness if PAO shows, by a preponderance of the evidence, that PAO considered each of the eight criteria set forth in Section 193.011 and that the appraisal methodology utilized by the PAO in making the assessment is appropriate and that PAO did not use appraisal practices which are different than the appraisal practices generally applied by the PAO to comparable properties in the same county. The Presumption of Correctness is not established unless the admitted evidence proves by a preponderance of the evidence that the PAO’s valuation methodology complies with Section 193.011, FS. and professionally accepted appraisal practices, including mass appraisal standards, if appropriate. In this case, PAO used proper methodology and properly considered the 8 criteria in establishing value. The PAO is entitled to the presumption of correctness. In administrative reviews of just valuation, the Petitioner can overcome the Presumption of Correctness by showing that the PAO’s assessed value: A. Is arbitrarily based upon appraisal practices that are different than the appraisal practices generally applied by the PAO to comparable properties within the same county: or B. Does not represent the just value of the property after taking into account any applicable limits on annual increases in the value of the property. (See subsection 194.301(2), F.S., as amended by Chapter 2009-121, Laws of Florida (House Bill 521). PET did not demonstrate that PET’s evidence was more credible, more relevant and or more sufficient than PAO’s evidence. PET did not overcome the presumption of correctness. PET’s value is understated. PET estimated the value of the all the units based on a daily point system rather than a weekly point system resulting in the property being undervalued. Special Magistrate has determined that there is competent and substantial evidence on the record in compliance with the criteria of 193.011 and professionally acceptable appraisal practices to support the just value by the Property Appraiser’s Office (PAO). The preponderance of the evidence demonstrates that the Property Appraiser has met the burden to maintain the presumption of correctness by complying with FS 193.011, and the Petitioner has not demonstrated that the just valuation by the Property Appraiser exceeds the just value of the subject property or that the just value 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 view of the foregoing, the Special Magistrate recommends that the just value by the Property Appraiser be upheld and further relief be denied for this Petition.