Bodwell Extension, LLC v. Board of Assessors of the Town of Avon (January 31, 2014)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD

BODWELL EXTENSION, LLC		v.	   BOARD OF ASSESSORS OF 
							   THE TOWN OF AVON

Docket Nos.:	F310904 (FY 2011)
			F315555 (FY 2012)	   Promulgated:
							   January 31, 2014


	These are appeals under the formal procedure, pursuant to G.L. c. 58A, § 7, G.L. c. 59, §§ 64 and 65, and 831 CMR 1.03 and 1.04, from the refusal of the Board of Assessors of the Town of Avon (the "assessors" or "appellee") to abate taxes on a parcel of real estate in the Town of Avon owned by and assessed to Bodwell Extension, LLC (the "appellant") under G.L. c. 59, §§ 11 and 38 for fiscal years 2011 and 2012.
	Commissioner Mulhern heard these appeals.  Chairman Hammond and Commissioners Scharaffa, Rose, and Chmielinski joined him in the decisions for the appellant.
	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.

	Matthew A. Luz, Esq. for the appellant.

	Ellen M. Hutchinson, Esq. for the appellee.
FINDINGS OF FACT AND REPORT
	On January 1, 2010 and January 1, 2011, the valuation and assessment dates for fiscal years 2011 and 2012, the appellant was the assessed owner of an approximately   4.95-acre (215,622-square-foot), parcel of land located at 660 Bodwell Street Extension in Avon, which the assessors identified as parcel number OB8004004 or map B8, block 4, parcel 4.  The subject parcel is improved with an owner-occupied, 73,954-square-foot, warehouse-style building which is comprised of an original section that was built in 1981 and an addition that was added in 1983 (the "subject property").  The original warehouse section is twenty feet high, while the 114-foot by 200-foot addition is twenty-four feet high and was melded to the front of the original section.  The addition contains both warehouse and some office space.  The site also includes an asphalt parking lot with sufficient parking for employees and customers, as well as some landscaping and fencing. 
The subject property is situated in the Avon Industrial Park which is located approximately 1.5 miles
from State Route 24, a divided four-lane highway providing easy access to I-495 and I-95 (Route 128).  The subject property is located in an established ID industrial zone which allows, among other uses, office, research and development, commercial, manufacturing, auto repair, and storage in a roofed structure.  The subject property conforms.  The public utilities provided to the site include electric, telephone, water, and gas.  The sewage disposal is private.  The subject property has adequate frontage on Bodwell Street Extension.        
	In fiscal year 2011, the assessors valued the subject property at $3,333,800 and assessed a tax, at a rate of $25.96 per $1,000, in the amount of $86,545.45.  In fiscal year 2012, the assessors also valued the property at $3,333,800 and assessed a tax, at a rate of $28.82 per $1,000, in the amount of $96,080.12.  In accordance with G.L. c. 59, § 57C, the appellant timely paid the real estate taxes without incurring interest in both of the fiscal years at issue in these appeals.
	The appellant also seasonably filed its applications for abatement with the assessors and petitions to the Appellate Tax Board (the "Board"), as summarized in the following table.



Fiscal Year	Date Tax Bill Mailed	Date Application for Abatement ("AA") Filed	Date AA Denied or Deemed Denied	Date Petition Filed at Board	
2011	12/29/2010	01/18/2011	04/05/2011	04/25/2011	
2012	12/30/2011	01/12/2012	04/12/2012	05/11/2012	

On this basis, the Board found and ruled that it had jurisdiction to hear and decide these appeals.
	The appellant presented its case-in-chief through the testimony and appraisal report of Donald J. Griffin, a certified real estate appraiser with Don Griffin Appraisals, Inc.  Based on his licenses, designations, and experience, the Board qualified him as an expert witness in general real estate appraising.  In defense of their assessments, the assessors relied primarily on their extensive cross-examination of Mr. Griffin and their introduction into evidence of copies of the requisite jurisdictional documents and the subject property's property record and income valuation cards for the fiscal years at issue.  Both parties submitted post-hearing briefs.
	Based on this evidence, as well as reasonable inferences drawn therefrom, the Board made the following findings of fact.
During the relevant time period, the subject 73,954-square-foot building was 100% owner-occupied.  Its space was allocated -- 91.5% for warehouse use and 8.5% for office use.  The exterior of the building was one-half concrete block and one-half metal siding with decorative concrete blocks in the entrance section to the building.  The interior warehouse space had sealed concrete floors, open truss ceilings, painted concrete block and insulated metal walls, and ceiling mounted fluorescent lighting.  The interior office space had carpeted and resilient floors, painted drywall partitioned walls with some paneling, and suspended acoustic ceilings with recessed fluorescent lighting.  The main warehouse was forced-warm-air ("FWA") by gas from four roof-mounted systems.  The office area, including the lunchroom, was not only heated, but air-conditioned, as well.  The building was 100% wet sprinklered.  According to the property record cards and Mr. Griffin, the quality and condition of the building was average with some minor deferred cosmetic and maintenance issues in the interior office space.  Mr. Griffin also identified the parking surface as an area approaching the end of its useful life.          
To develop a value for the subject property for the fiscal years at issue, Mr. Griffin first examined the subject property's highest and best use and concluded that it was the subject property's existing use as a warehouse.  Mr. Griffin determined that this current use was legally permissible, physically possible, and financially feasible.  The assessors' valuation card evidences the same highest-and-best-use determination.  
Mr. Griffin next considered which of the three usual methodologies to utilize to estimate the value of the subject property for the fiscal years at issue.  While he considered using a cost approach, he did not develop one because of a lack of similar land sales and the age of the subject property's building.  He did, however, develop values for the subject property using both sales-comparison and income-capitalization approaches.  
In his sales-comparison approach, Mr. Griffin analyzed five sales of properties in Avon that were used primarily for warehouse space.  These sales occurred from March, 2007 to June, 2011 and ranged in price from $1,150,000 to $4,405,000.  The size of the warehouses varied from 22,000 square feet to 497,455 square feet.  Mr. Griffin adjusted these properties' sale prices for market conditions, location, quality, land-to-building ratio, size difference, effective age or condition, building height, and percentage of finished office space.  A summary of these properties' locations, sale dates, sale prices, gross adjustments, and net adjustments, as well as their adjusted sales prices per square foot is contained in the following table.

     Location	Sale Date	Sale Price ($)	Gross Adj. (%)	Net Adj. (%)	Adj. $/SF	

275 Bodwell St.	
06/2011	
4,405,000	
78.92	
+69.68	
38.57	
244 Bodwell St.	09/2009	1,150,000	31.16	-31.12	35.26	
175 Bodwell St.	09/2008	2,100,000	41.59	-41.59	37.55	
 91 Wales Ave.	03/2007	2,800,000	19.43	-17.81	39.72	
500 Bodwell St. Ext.	03/2010	1,350,000	34.68	-34.68	35.40	

After applying his adjustments, Mr. Griffin's indicated values ranged from $35.26 per square foot to $39.72 per square foot, with an average value of $37.30 per square foot.  Mr. Griffin multiplied this average value by the subject property's gross building area and then rounded to estimate the value of subject property at $2,760,000 for both fiscal years at issue using his sales-comparison approach.  Despite his development of a value for both fiscal years at issue using his sales-comparison approach, Mr. Griffin did not rely on this value in determining a fair cash value for the subject property for fiscal year 2011 because of "the wide disparity of sales."  Notwithstanding this concern, he did place some minimal reliance on the value derived from his sales-comparison approach when estimating the value of the subject property for fiscal year 2012.    
In his income-capitalization approach, upon which Mr. Griffin primarily relied to estimate the value of the subject property for both fiscal years at issue, he first determined the gross rental income that the subject property could generate if vacant and ready to lease.        To ascertain this gross rental income, he studied what he considered to be six relatively comparable warehouse properties in Avon.  Based on his study, Mr. Griffin found that, during the relevant time period, users of the warehouse space, with some related office area, were paying $3.50 to $5.00 per square foot over a three- to five-year triple-net lease term.  After adjusting for various factors, including time, location, size, and condition, as well as whether the purportedly comparable rental property was a listing, he calculated adjusted rents of $3.15 to $3.60 per square foot.  Based on this range, he estimated that, during the fiscal years at issue, the subject property would rent for $3.50 per square foot.  This estimate produced a monthly gross income for the subject property during the fiscal years at issue of $21,584, which he rounded to $21,580 and then annualized at $258,960.
Mr. Griffin reported that he relied on both market data and the subject property's actual experience in selecting what he considered to be an appropriate vacancy rate of 15% for both fiscal years at issue.  After applying this vacancy rate to his potential gross income figure of $258,960, Mr. Griffin developed an effective gross income of $220,116 for both fiscal years at issue.    
For expenses, Mr. Griffin recognized that the subject property's leasable space would rent under a triple-net leasing arrangement.  Because of this scenario, he did not deduct any expenses, instead assuming that either the tenants bore or the landlord was entirely reimbursed for them.  Mr. Griffin did, however, discuss including in his income-capitalization approach a deduction for a management fee of 5%, but he then neglected to list this expense in his pro forma or to include it in the derivation of his estimate of value.
Lastly, Mr. Griffin developed his capitalization rates for both fiscal years at issue using a mortgage-equity approach, information from certain national surveys, and his evaluation of some area sales.  His assumptions for his mortgage-equity approach include: a mortgage interest rate of 7.00%; a mortgage term of 20 years; a loan-to-value ratio of 70% to 30%; an equity dividend rate of 13.00%; and a holding period of ten years; plus a small amount of equity buildup but no appreciation.  These assumptions led to a mortgage-equity capitalization rate of 9.1% for both fiscal years at issue.  Mr. Griffin also considered 2009 and 2010 fourth quarter rates from "Price Waterhouse Coopers in their Korpacz reports of non-institutional grade properties," which were 10.79% and 10.31%, respectively, as well as "market rates" of 9.19% and 9.34% that he developed from some area sales.  After reconciling these three data points for both fiscal years at issue, Mr. Griffin determined that overall capitalization rates of 9.00% for fiscal year 2011 and 9.25% for fiscal year 2012 were reasonable percentages.  Because of the triple-net leasing scenario that he employed in his income-capitalization methodology, he did not use tax factors in the derivation of his capitalization rates.  A summary of his income-capitalization approach, which produced estimates of value for fiscal years 2011 and 2012 in the amounts of $2,450,000 and $2,380,000, respectively, is contained in the following table.

Summary of Mr. Griffin's Income-Capitalization Methodology
for Fiscal Years 2011 and 2012


INCOME                               Size(SF)   Rate/SF

Warehouse Use Space                   73,954     $3.50             $  258,960

Potential Gross Income ("PGI"):                                    $  258,960	

Less: Vacancy & Collection Allowance - 15.0% of PGI
            ($   38,844)


	
Effective Gross Income ("EGI"):                                    $  220,116	
	
EXPENSES
	
  Management Fee - 5% of EGI = $11,005.80       
  

Total Expenses:          $11,005.80                               ($     0.00) 	
  	
Net-Operating Income:                                              $  220,116	
	
 Divide by: Total Capitalization Rate for Fiscal Year 2011 - 9.00%	
	
Indicated Value for Fiscal Year 2011                               $2,445,733
Rounded Value for Fiscal Year 2011                                 $2,450,000	


 Divide by: Total Capitalization Rate for Fiscal Year 2012 - 9.25%



Indicated Value for Fiscal Year 2012                               $2,379,632
Rounded Value for Fiscal Year 2012                                 $2,380,000

	

Finally, Mr. Griffin reconciled the estimates of value that he achieved using his income-capitalization and sales-comparison approaches.  In his reconciliation for fiscal year 2011, he gave all the weight to the values produced by his income-capitalization technique because, in his opinion, it best reflected the market.  Accordingly, his reconciled estimate of value for fiscal year 2011 is identical to the value that he derived using his income-capitalization methodology -- $2,450,000.  In his reconciliation for fiscal year 2012, Mr. Griffin gave some minimal weight to the value that he developed using his sales-comparison approach -- $2,760,000 -- in estimating the value of the subject property at $2,400,000 -- approximately $20,000 more than the value that he derived using his income-capitalization methodology for that fiscal year.
For their part, in support of the assessments, the assessors relied almost exclusively on their income valuation card, the data on which having been obtained from the local Avon market through 38D submissions.  The following table contains a summary of the assessors' income-capitalization methodology.

Summary of the Assessors' Income-Capitalization Methodology
for Fiscal Years 2011 and 2012


INCOME                               Size(SF)   Rate/SF

Warehouse Use Space                   75,360     $5.02             $  378,307

Potential Gross Income ("PGI"):                                    $  378,307	

Less: Vacancy & Collection Allowance - 6.0% of PGI
             ($  24,212)


	
Effective Gross Income ("EGI"):                                    $  354,095	
	
EXPENSES
	
  Total Expenses - 14% - $50,990 of PGI       
  

Total Expenses:          $50,990                                  ($   50,990) 	
  	
Net-Operating Income:                                              $  303,105	
	
 Divide by: Total Capitalization Rate for Both Fiscal Years - 9.04%	
	
Indicated Value for Fiscal Years 2011 & 2012                       $3,352,931
Rounded Value for Fiscal Years 2011 & 2012                         $3,352,900	

On the basis of all of the evidence, including testimony, exhibits, and reasonable inferences drawn therefrom, the Board found that the highest and best use of the subject property during the fiscal years at issue in these appeals was, as suggested by the appellant's real estate valuation expert and the assessors' valuation methodology, its continued use as an owner-occupied or single-tenanted warehouse facility.  The Board found that this use comported with the area's zoning, and its economic and rental climate, as well as the subject building's features.  
The Board also found that the income-capitalization approach was the most appropriate technique to use to estimate the value of the subject property during the fiscal years at issue.  Consistent with Mr. Griffin's rationale, the Board found that the subject property did not lend itself to a cost analysis because of the building's age and the absence of any land sales in the record.  The Board further found that there were not enough sales of truly comparable properties during the relevant time period to support the use of a sales-comparison approach.  In addition, the sales in evidence were of leased-fee properties, and the record was devoid of evidence to adjust the related sale prices to fee-simple values.  Moreover, in his testimony and in parts of his appraisal report, Mr. Griffin disavowed the values derived from his sales-comparison approach.  The assessors also used an income-capitalization approach to estimate the value of the subject property for the fiscal years at issue on their income valuation card.  Accordingly, the Board relied on an income-capitalization approach to estimate the 
value  of  the  subject  property  on January 1, 2010,  the

valuation and assessment date for fiscal year 2011 and January 1, 2011, the valuation and assessment date for fiscal year 2012.  
In determining the subject property's gross income for the fiscal years at issue, the Board adopted Mr. Griffin's leasable area of 73,954 square feet.  The Board found that his estimation of the subject property's rentable area was based on interior dimensions as opposed to the assessors' leasable area which was likely grounded on exterior measurements.  The Board further found that the triple-net rent that Mr. Griffin developed for the subject property was based on faulty data because four of his six purportedly comparable rentals were mere listings, while another was consummated months after the last relevant valuation and assessment date.  The lone remaining purportedly comparable rental property suggested a rent of $3.75 to $4.00 per square feet, but Mr. Griffin obtained the rent range related to this property through an auction package, which may indicate that the rent is not commensurate with market rents.  On their income valuation card, the assessors used a rent of $5.02 per square foot which was based on submissions from other similar properties in Avon.  The Board adopted the rent suggested by the assessors as the best available evidence of market rent for the fiscal years at issue.  The Board, therefore, found that the gross income for both of the fiscal years at issue was $371,249, assuming that tenants rented their space under triple net leases.  
The Board further found that the most appropriate vacancy rate for each of the years at issue was six percent of effective gross income or $22,275.  This rate is the one used by the assessors on their income valuation card and was based on market data.  The Board also noted that the subject property was fully occupied during the relevant time periods.  On this basis, the Board found the subject property's effective gross income for both fiscal years at issue was $348,974.
With respect to expenses, the Board found that, under a triple net lease, the tenant is responsible for most expenses.  However, as Mr. Griffin recognized, but mistakenly failed to include in his methodology, the landlord still incurs some costs, including those for management.  The assessors used 14% of effective gross income as their expense deduction on their income valuation card, which the Board adopted as the best available evidence for expenses under the circumstances.  The Board found that Mr. Griffin should have included not only a management fee deduction in his methodology but also additional deductions for certain expenses likely incurred by an owner even in a triple-net leasing scenario, such as reserves, insurance fees, payroll expenditures, repair charges, costs for the maintenance of systems and the structure, and miscellaneous costs.  See, generally, Appraisal Institute, The Appraisal of Real Estate 484 (13th ed. 2008).  Accordingly, after subtracting $48,856 from its effective gross income, the Board adopted a net-operating income of $300,118 in its income-capitalization approach for both fiscal years at issue. 
For its capitalization rate, the Board adopted the 9.04% rate on the assessors' income valuation card, which closely approximated Mr. Griffin's recommended rates of 9.00% for fiscal year 2011 and 9.25% for fiscal year 2012.  The assessors' rate was premised on local market data garnered from 38D submissions.  The Board agreed with Mr. Griffin that the subject property's triple-net leasing scenario negated the use of a tax factor in the overall capitalization rate.  The assessors' income valuation card did not include a tax factor either.  
Applying its income-capitalization approach, the Board computed the value of the subject property at $3,319,889 for both of the fiscal years at issue, which it then rounded to $3,320,000.  A summary of the Board's income-capitalization approach is contained in the following table.
Summary of the Board's Income-Capitalization Methodology
For Fiscal Years 2011 and 2012


INCOME                               Size(SF)   Rate/SF

Warehouse Use Space                   73,954     $5.02             $  371,249

Potential Gross Income ("PGI"):                                    $  371,249	

Less: Vacancy & Collection Allowance - 6.0% of PGI
             ($  22,275)


	
Effective Gross Income ("EGI"):                                    $  348,974	
	
EXPENSES
	
  Expenses - 14% of EGI = $48,856       
  

Total Expenses:           $48,856                                 ($   48,856) 	
  	
Net-Operating Income:                                              $  300,118	
	
 Divide by: Total Capitalization Rate for Both Fiscal Years - 9.04%	
	
Indicated Value for Fiscal Years 2011 & 2012                       $3,319,889
Rounded Value for Fiscal Years 2011 & 2012                         $3,320,000	

Because the subject property's assessed value for both fiscal years at issue was $3,333,800, the Board decided the fiscal year 2011 and 2012 appeals for the appellant and granted abatements in the amounts of $358.25 and $397.72, respectively.  The bases of the Board's computations of abatements for fiscal years 2011 and 2012 are contained in the following table.

Docket Number	Fiscal Year	Tax Rate/
$1,000	Assessed Value	Tax Assessed	Fair Cash Value	Over-
Valuation	
F310904	2011	25.96	$3,333,800	$86,545.45	$3,320,000	$13,800	
F315555	2012	28.82	$3,333,800	$96,080.12	$3,320,000	$13,800	

OPINION
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 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 determine the fair cash value of property: income capitalization, sales comparison, and cost.  Correia v. New Bedford Redevelopment Authority,   375 Mass. 360, 362 (1978).  
"The [B]oard is not required to adopt any particular method of valuation."  Pepsi-Cola Bottling Co. v. Assessors of Boston, 397 Mass. 447, 449 (1986).  In these appeals, the Board ruled that neither the sales-comparison nor cost approaches were appropriate under the circumstances.  The Board found that there were not enough market sales of reasonably comparable properties or enough evidence on converting leased-fee sale prices to fee-simple ones to meaningfully estimate the value of the subject property using a sales-comparison technique.  Furthermore, the Board ruled that "[t]he introduction of evidence concerning the value based on [cost] computations has been limited to special situations in which data cannot be reliably computed under the other two methods."   Correia, 375 Mass. at 362.  The Board found here that no such "special situations" existed, and, even if they did, there was not enough evidence in the record on which to base a value using a cost approach.  Accordingly, the Board ruled that this method of valuation was not an appropriate technique to use for valuing the subject property during the fiscal years at issue in these appeals. The assessors likewise relied on an income-capitalization method to value the subject property for the fiscal years at issue as did the appellant's real estate valuation expert who also used the sales-comparison analysis but only to a limited extent for one fiscal year.    
The use of the income-capitalization approach is appropriate when reliable market data are not available.  Assessors of Weymouth v. Tammy Brook Co., 368 Mass. 810, 811 (1975); Assessors of Lynnfield v. New England Oyster House, 362 Mass. 696, 701-702 (1972); Assessors of Quincy v. Boston Consol. Gas Co., 309 Mass. 60, 67 (1941).  It is also an appropriate technique to use for valuing income-producing property.  Id. at 64-65.  In these appeals, the Board relied exclusively on the value determined from the income-capitalization approach because the other methods were not appropriate, and the approach that the Board used was equivalent to what buyers and sellers in the marketplace would have used under the circumstances.   See New Boston Garden Corp. v. Assessors of Boston, 383 Mass. 456, 469 (1981); New England Oyster House, Inc., 362 Mass. at 701-702.
In determining fair market value, all uses to which the property was or could reasonably be adapted on the relevant assessment dates should be considered.       Newton Girl Scout Council, Inc. v. Massachusetts Turnpike Authy., 335 Mass. 189, 193 (1956); Irving Saunders Trust v. Assessors of Boston, 26 Mass. App. Ct. 838, 843 (1989).  The idea is to ascertain the maximum value of the property for any legitimate and reasonable use.  Id.  If the property is particularly well-suited for a certain use that is not prohibited, then that use may be reflected in an estimate of its fair market value.  Colonial Acres, Inc. v. North Reading, 3 Mass. App. Ct. 384, 386 (1975).  On this basis, the Board ruled that the highest and best use of the subject property during the fiscal years at issue in these appeals was its continued use as an owner-occupied or single-tenanted warehouse facility.  Both the assessors and the appellant's real estate valuation expert valued the subject property similarly.         
The income stream used in the income-capitalization method must reflect the property's earning capacity or economic rental value.  Pepsi-Cola Bottling Co., 397 Mass. at 451.  Imputing rental income to the subject property based on fair market rentals from comparable properties is evidence of value if, once adjusted, they are indicative of the subject property's earning capacity.  See Correia v. New Bedford Redevelopment Auth., 5 Mass. App. Ct. 289, 293-94 (1977), rev'd on other grounds, 375 Mass. 360 (1978); Library Services, Inc. v. Malden Redevelopment Auth., 9 Mass. App. Ct. 877, 878 (1980)(rescript); AVCO Manufacturing Corp. v. Assessors of Wilmington, Mass. ATB Findings of Fact and Reports 1990-142, 166.  After accounting for vacancy and rent losses, the net-operating income is obtained by deducting the landlord's appropriate expenses.  Pepsi-Cola Bottling Co., 397 Mass. at 452-453.  Generally, the selection of expenses is for the Board.  Id.  
The Board's calculation of its gross-income figures here was based on the leasable area suggested by the appellant's real estate valuation expert, who relied on the appellant's interior measurements, and the rents suggested by the assessors, which were based on other local warehouse properties.  The Board adopted the vacancy and credit loss rate suggested by the assessors, which was likewise based on local data, and also on the fact that the subject property was 100% owner-occupied during all of the relevant time periods.  The Board further adopted the expense deductions presented by the assessors because they were based on the local market and the likely costs that a landlord would incur in a triple-net leasing scenario.  The 5% management fee deduction recommended by the appellant's real estate valuation expert, which was his only suggested expense deduction, did not comport with the totality of expenses that a landlord would realistically incur in a triple-net leasing scenario.  See, generally, Appraisal Institute, The Appraisal of Real Estate 484 (13th ed. 2008).  Moreover, he mistakenly failed to include even this expense in his calculations of the subject property's fair market value for the fiscal years at issue.  "The issue of what expenses may be considered in any particular piece of property is for the board."  Alstores Realty Corp. v. Assessors of Peabody, 391 Mass. 60, 65 (1984).  The Board found and ruled that the income and expense figures which it selected were reasonable and appropriate under the circumstances.  
The capitalization rate chosen should consider the return necessary to attract investment capital.  Taunton Redevelopment Assoc. v. Assessors of Taunton, 393 Mass. 293, 295 (1984).  Use of the "tax factor" is unnecessary under the single tenant premise because the net rental income reflects the assumption that the tenant pays the taxes.  General Electric Co. v. Assessors of Lynn, 393 Mass. 591, 610 (1984).  Relying on these principles, the Board adopted the assessors' recommendation of 9.04% for both fiscal years at issue, recognizing that their suggested rate very closely approximated the rates derived by the appellant's real estate valuation expert.  The Board did not use a tax factor here because it assumed that the subject property would remain either owner occupied or leased to a single tenant, under a triple-net leasing scenario.   
In reaching its opinion of fair cash value in these appeals, the Board was not required to believe the testimony of any particular witness or to adopt any particular method of valuation that an expert witness suggested.  Rather, the Board could accept those portions of the evidence that the Board determined had more convincing weight.  Foxboro Associates v. Assessors of Foxborough, 385 Mass. 679, 683 (1982); New Boston Garden Corp., 383 Mass. at 473; New England Oyster House, Inc., 362 Mass. at 702.  In evaluating the evidence before it, the Board selected among the various elements of value and formed its own independent judgment of fair cash value.  General Electric Co., 393 Mass. at 605; North American Philips Lighting Corp. v. Assessors of Lynn, 392 Mass 296, 300 (1984).
The Board need not specify the exact manner in which it arrived at its valuation.  Jordan Marsh v. Assessors of Malden, 359 Mass. 106, 110 (1971).  The fair cash value of property cannot be proven with "mathematical certainty and must ultimately rest in the realm of opinion, estimate and judgment."  Boston Consol. Gas Co., 309 Mass. at 72.  "The credibility of witnesses, the weight of the evidence, and inferences to be drawn from the evidence are matters for the board."   Cummington School of the Arts, Inc. v. Assessors of Cummington, 373 Mass. 597, 605 (1977).  
"'The burden of proof is upon the [appellant] to make out its right as a matter of law to abatement of the tax.'"  Schlaiker v. Assessors of Great Barrington, 365 Mass. 243, 245 (1974)(quoting Judson Freight Forwarding Co. v. Commonwealth, 242 Mass. 47, 55 (1922)).  The appellant must show that it has complied with the statutory prerequisites to its appeal, Cohen v. Assessors of Boston, 344 Mass. 268, 271 (1962), and that the assessed valuation of its property was improper.  See Foxboro Associates, 385 Mass. at 691.  The assessment is presumed valid until the taxpayer sustains its burden of proving otherwise.  Schlaiker, 365 Mass. at 245.  The Board ruled here that the appellant met its burden of proving that the subject property was overvalued in both fiscal years at issue in these appeals.
The Board applied these principles in estimating that the fair cash value of the subject property for both fiscal years at issue in these appeals was $3,320,000.  On this basis, the Board decided that the subject property was overvalued in the amount of $13,800 for both fiscal years at issue.
Therefore, the Board granted the appellant abatements for fiscal years 2011 and 2012 in the respective amounts of $358.25 and $397.72.

   					  THE APPELLATE TAX BOARD


  By: ________________________________________
 Thomas W. Hammond., Jr., Chairman



A true copy,



Attest: ________________________
Clerk of the Board

 As depicted on the subject property's property record and income valuation cards, the assessors estimated the size of the building at 75,368 square feet using exterior measurements.  The Board, however, adopted the size, 73,954 square feet, recommended by the appellant's real estate valuation expert because his area was based on the interior dimensions of the subject property.    
 The gross and net adjustments do not include Mr. Griffin's adjustments for market conditions, and, where appropriate, they have been corrected for his errors in calculation.  
 For one of his purportedly comparable rental properties, Mr. Griffin modified the existing gross lease rent to fit into his triple-net leasing scenario by subtracting from the reported rent expenses which he had developed from an analysis of the actual rent rolls and expenses of two other gross rental properties to which he was privy, which rented space using gross leases.   
 G.L. c. 59, § 38D, provides, in pertinent part, that: "[Assessors] may request the owner or lessee of any real estate property to make a written return under oath . . . containing such information as may be reasonably required by it to determine the actual fair cash valuation of such property."
 Despite disavowing his sales-comparison approach for both fiscal years at issue, Mr. Griffin nonetheless relied on the value derived from this method in reconciling his estimate of the subject property's value for fiscal year 2012.

ATB 2014-50