Grant C. Buchanan, Trustee v. Board of Assessors of the City of Attleboro (February 28, 2012)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD

GRANT C. BUCHANAN, TRUSTEE	   v.	   BOARD OF ASSESSORS OF
OF THE COOPER NORTH FARM				   THE CITY OF ATTLEBORO
REALTY TRUST

Docket Nos. F304738, F304739			   Promulgated:
								   February 28, 2012

These are appeals filed under the informal procedure, pursuant to pursuant to G.L. c. 58A, § 7A and G.L. c. 59, §§ 64 and 65 from the refusal of the Board of Assessors of the City of Attleboro ("assessors" or "appellee") to abate taxes assessed on certain property located in Attleboro owned by and assessed to Grant C. Buchanan, Trustee of the Cooper North Farm Realty Trust ("appellant") under G.L. c. 59, §§ 11 and 38 for fiscal year 2009 ("fiscal year at issue").
Commissioner Rose ("Presiding Commissioner") heard these appeals and, in accordance with G.L. c. 58A, § 1 and 831 CMR 1.20, issued single-member decisions for the appellant.
These findings of fact and report are promulgated at the request of the appellee pursuant to G.L. c. 58A, § 13 and 831 CMR 1.32.

	Grant C. Buchanan, pro se, for the appellant.

	Michael R. Siddall, Esq. for the appellee.

FINDINGS OF FACT AND REPORT
Based on the evidence and testimony offered at the hearing of these appeals, the Presiding Commissioner made the following findings of fact.
On January 1, 2008, the appellant was the assessed owner of two contiguous parcels of unimproved real estate located in Attleboro identified on the assessors' Map 195 as Lot 1 ("Parcel 1") and Lot 8 ("Parcel 2") (collectively the "subject properties").  Parcel 1 is approximately 2.7 acres in size, and Parcel 2 is approximately 10.2 acres in size, for a total acreage of 12.9 acres for the subject properties.  
For the fiscal year at issue, the assessors valued Parcel 1 and Parcel 2 at $111,200 and $166,900, respectively, and assessed taxes thereon, at the rate of $10.09 per $1,000, in the corresponding amounts of $1,122.01 and $1,684.02.  In accordance with G.L. c. 59, § 57, the appellant timely paid the taxes due without incurring interest.  On February 2, 2009, in accordance with G.L. c. 59, § 59, the appellant timely filed abatement applications with the assessors, one for each parcel, which the assessors purported to deny on May 13, 2009.  On August 11, 2009, the appellant seasonably filed his appeals with the Appellate Tax Board ("Board").  On the basis of these facts, the Presiding Commissioner found and ruled that the Board had jurisdiction to hear and decide these appeals.
Prior to the instant appeals, the appellant contested the subject properties' assessed values for fiscal year 2008 before the Board, resulting in decisions for the appellant.  See Buchanan, Trustee of the Cooper North Farm Realty Trust v. Assessors of Attleboro, Mass. ATB Findings of Fact and Reports 2010-152 ("Buchanan I").  For fiscal year 2008, the assessors valued the subject properties at $124,600 for Parcel 1 and $180,300 for Parcel 2.  Buchanan I detailed the existence of the Transmission Line Easement Deed Agreement from 1959 ("Easement Agreement"), by which the then-owners and their successors and assigns granted to the New England Power Company and its successors and assigns a transmission line easement:  "According to the plan filed with the deed, the easement is 325 feet wide and covers the entire length of the subject properties, covering approximately 95% of Parcel 1 and more than 60% of Parcel 2." Id. at 2010-154.  The Easement Agreement, also submitted into evidence in the instant appeals, specifically provides "that no buildings or structures will be erected or constructed upon said strip; and that the present grade or ground level of said strip will not be changed by excavation or filling."  Upon its analysis of the evidence in Buchanan I, the Board found that: 
given the magnitude of the power line easement, which covered approximately 95% of Parcel 1 and 60% of Parcel 2, and which eliminated the necessary frontage for Parcel 1, the subject parcels failed to meet the local zoning requirements for buildable lots and, therefore, the highest and best use of the subject parcels was as excess land. 
         
The Board therefore issued decisions for the appellant in Buchanan I and found values of $20,100 for Parcel 1 and $75,700 for Parcel 2.
The instant appeals pertain to the fiscal year immediately following the fiscal year for which the Board had rendered a decision determining the value of the subject properties.  Therefore, pursuant to G.L. c. 58A, § 12A, the burden shifts to the assessors to justify their increase in valuation for the subject properties for the fiscal year at issue.  In an attempt to meet their burden, the assessors presented as a witness Paul J. Hartel, an appraiser whom the Board qualified as an expert in the area of real estate valuation, as well as Mr. Hartel's appraisal report and an affidavit by Douglas A. Semple, the Building Commissioner and Zoning Enforcement Officer of Attleboro.  The appellee also submitted a copy of the Zoning Ordinance of the City of Attleboro.  
The appellee first presented Mr. Hartel.  Mr. Hartel determined that the highest and best use of the subject properties was for residential development.  He based this conclusion on his "extraordinary assumptions" that Parcel 1 included about 0.78 acres of land unencumbered by the power-line easement, about 29% of the total acreage of Parcel 1, and that Parcel 2 had access to Pleasant Street over Parcel 1 based on the common ownership of both parcels.  According to Mr. Hartel's appraisal report, Parcel 1 had approximately 331 linear feet of frontage along Pleasant Street, a main thoroughfare in Attleboro, and Parcel 2 was located directly behind Parcel 1 with no street frontage of its own, but according to Mr. Hartel, Parcel 2 gained frontage by virtue of common ownership with Parcel 1.    
Mr. Hartel then employed the sales-comparison analysis to value the subject properties.  For his analysis, he used three different scenarios - (1) the "bulk land value scenario," which valued the entire subject properties as one parcel of raw, potentially developable land; (2) the "two lot ANR scenario," which assumed that the subject properties could be subdivided into two ANR lots and developed through the use of the 331 feet of frontage along Pleasant Street, "some of which lies in the Power Line Easement, but can be counted toward the frontage requirement," and the use of a common driveway along the west of the power-line easement to access Parcel 2; and (3) the "hypothetical six lot subdivision scenario," which assumed that the subject properties could be subdivided into six small lots to the west of the power-line easement, to be accessed by a 40'-wide, 750'-length cul-de-sac running alongside the power-line easement.
For each of his three sales-comparison scenarios, Mr. Hartel used purportedly comparable properties for comparison with the subject properties.  Mr. Hartel applied adjustments, and he claimed to have given limited value to the subject properties' land that was encumbered by the easement, characterizing it as "excess land."  Mr. Hartel arrived at the following values for his three comparable-sales scenarios: $295,000 for the bulk-land-value scenario; $285,000 for the two-lot scenario; and $275,000 for the six-lot scenario.  
Finding that the two-lot ANR scenario was "the simplest to support, rationalize, and effectuate," Mr. Hartel gave it the greatest weight.  For the two-lot ANR scenario, Mr. Hartel assumed that the subject properties would be divided into two lots, approximately 6.5 acres each.  Access to Parcel 2 would be by a common driveway that would run along the western border of the power-line easement.  
Mr. Hartel's three purportedly comparable properties ranged in size from 4.1 acres to 5.6 acres.  He applied adjustments for location, permitting or surveying and testing (which was in place for the comparable properties but not for the subject properties), and size.  None of his purportedly comparable properties was subject to an easement aside from the so-called "typical utility easements" for drainage or underground utilities, and unlike the power-line easement at issue, these did not specifically preclude development.  Mr. Hartel's two-lot ANR scenario yielded a fair market value of $155,000 per lot, which he doubled and from that figure then subtracted $25,000 of "associated costs" for a total of $285,000 for the subject properties' two lots.  Because he relied primarily on the two-lot ANR subdivision scenario, Mr. Hartel gave that value the most weight and he thus concluded that the final estimate of value for the subject properties was $285,000.  Mr. Hartel determined that Parcel 1, the front parcel which "creates the necessary frontage" and access to the larger rear parcel, contributed about 40% of the subject properties' total value.  Accordingly, he valued Parcel 1 at $115,000 and Parcel 2 at $170,000.
The appellee next submitted the affidavit of Mr. Semple, the Building Commissioner and Zoning Enforcement Officer of Attleboro.  In his affidavit, Mr. Semple simply states that: based upon the map on file with the assessors, Parcel 1 "has approximately 355 feet of frontage on Pleasant Street, a public way"; according to Section 17-4.2 of the City of Attleboro Zoning Ordinance, the minimum lot frontage for development is 50 feet; and "[n]otwithstanding the fact that the property is subject to an easement for power lines, [Parcel 1] has sufficient frontage, lot width and lot area to be considered a buildable lot according to the Zoning Ordinance."  Mr. Semple's affidavit did not detail how Parcel 1 could satisfy the 50-foot frontage requirement despite the existence of the Easement Agreement, which specifically precluded development within the 325-linear-foot-wide easement strip that runs within the subject properties' 355 linear feet of frontage, nor was Mr. Semple presented as a witness at the hearing to further explain his conclusion and answer questions from the appellant and the Presiding Commissioner.  
The appellee also submitted as evidence a copy of the Zoning Ordinance for Attleboro.  Section 17-4.2 is, however, silent on the issue of whether or how easements or other private development restrictions impact zoning requirements.     
For his case-in-chief, the appellant submitted, among other items, a copy of the Easement Agreement.  A sketch incorporated into the agreement depicted its swath across the subject properties as running through the middle of both parcels.  The map on file with the assessors likewise portrayed the power-line easement's coverage.  
Based on the evidence presented, the Board found that the appellee failed to meet its burden of proving that they were justified in assessing the subject properties at a value greater than the value that the Board found for the subject properties for the prior fiscal year.  The Presiding Commissioner found several flaws in the appellee's evidence.  In particular, Mr. Hartel failed to explain how he determined that the highest and best use of the subject properties was residential development, given the 325-foot-wide easement which specifically precluded development and bisected the subject properties, leaving, even in Mr. Hartel's estimation, at most 6 linear feet of frontage not precluded from development.  The Presiding Commissioner thus found that Mr. Hartel failed to substantiate that his subdivision plan reflected the highest and best use of the subject properties.  Accordingly, the Presiding Commissioner found that Mr. Hartel's appraisal lacked the proper foundation to be credible evidence of the subject properties' fair market value.
The Presiding Commissioner further found that Mr. Hartel's "2-lot ANR scenario" subdivision plan, upon which he primarily relied, was a speculative valuation assumption that lacked proper foundation.  Mr. Hartel's comparable-sales analysis was based solely on sales of small, developable, single-lot properties, not sales of properties like the subject properties that were large and unpermitted.  Mr. Hartel further failed to explain how his purportedly comparable properties, which were subject only to "typical utility easements" that did not preclude development, could be considered comparable to the subject properties, which were subject to a 325-foot-wide easement that specifically precluded development within its strip.  The Presiding Commissioner found that these shortcomings undercut both the comparability of Mr. Hartel's comparable-sales properties and the overall application of the "two-lot ANR scenario" to a large, unpermitted property like the subject properties.  The Presiding Commissioner thus found that Mr. Hartel's appraisal report and his overall opinion of value were unsupported and not reliable.
Further, the Presiding Commissioner did not give Mr. Semple's affidavit any weight.  Mr. Semple was not called as a witness and therefore was not subject to cross-examination or questioning by the appellant or the Presiding Commissioner.  The affidavit is clearly  hearsay.  Although the appellant did not object to the introduction of the affidavit into evidence, the Presiding Commissioner gave it no weight.
On the basis of the evidence, the Presiding Commissioner found and ruled that the assessors failed to meet their burden of proving that the increases in the subject properties' assessed values from fiscal year 2008 were warranted.  The Presiding Commissioner thus found that the fair cash value of the subject properties was $20,100 for Parcel 1 and $75,700 for Parcel 2. Accordingly, the Presiding Commissioner issued decisions for the appellant and granted abatements of $919.20 for Parcel 1 and $920.21 for Parcel 2.  

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). 
The assessment is presumed valid unless the taxpayer sustains his burden of proving otherwise.  Shlaiker v. Board of Assessors of Great Barrington, 356 Mass. 243, 245 (1974).  Accordingly, the burden of proof is upon the appellant to make out his right as a matter of law to an abatement of the tax.  Id.  However, if the Board has made a finding of fair cash value for the property at issue for either of the two fiscal years preceding the fiscal year at issue, and the assessors have assessed the property at a value which exceeds the value found by the Board, then the burden of proving that the increase was warranted lies with the assessors.  G.L. c. 58A, § 12A.  
In the instant appeals, because the subject assessments for fiscal year 2009 exceed the Board's determinations of value for fiscal year 2008, § 12A requires that the initial burden of justifying the increases in the subject properties' valuations from fiscal year 2008 is on the appellee.  See generally, Beal v. Assessors of Boston, 389 Mass. 648, 651 (1983); Brook Road Corporation v. Board of Assessors of the Town of Needham, Mass. ATB Findings of Fact and Reports 2001-648, 655; Meka v. Board of Assessors of the City of Beverly, Mass. ATB Findings of Fact and Reports 2001-28, 35; "Once a prior determination of the Board of the fair cash value of the same property has been placed in evidence, however, the statute requires the appellee to produce evidence to 'satisfy the Board that the increased valuation was warranted.'"  Cressey Dockham & Co. Inc. v. Assessors of Andover, Mass. ATB Findings of Fact and Reports 1989-72, 86-87 (quoting § 12A).    
In the appeals for fiscal year 2008, the Board found and ruled that the power-line easement on the subject properties, "which covered approximately 95% of Parcel 1 and 60% of Parcel 2, and which eliminated the necessary frontage for Parcel 1," precluded the properties from being used as buildable lots.  Buchanan I, Mass. ATB Findings of Fact and Reports at 2010-156.  The Board, therefore, found that the highest and best use of the subject properties was as excess land.  Id.  Applying the assessors' $7,425 per-acre excess land value to the total area of the two subject parcels, the Board found a fair cash value for fiscal year 2008 of $20,100 for Parcel 1 and $75,700 for Parcel 2.  Id.  
For the instant fiscal year 2009 appeals, the burden of justifying the increase in value to $111,200 for Parcel 1 and $166,900 for Parcel 2 was on the appellee.  G.L. c. 58A, § 12A.  In an attempt to meet its burden, the appellee called as an expert witness Mr. Hartel and submitted into evidence his appraisal report.  Mr. Hartel claimed that the highest and best use of the subject properties was for residential development, contrary to the Board's prior finding that the highest and best use was as excess land.  "Prior to valuing the subject property, its highest and best use must be ascertained, which has been defined as the use for which the property would bring the most."  Tennessee Gas Pipeline Co. v. Assessors of Agawam, Mass. ATB Findings of Fact and Reports 2000-859, 874 (citing Conness v. Commonwealth, 184 Mass. 541, 542-43 (1903)); see also Irving Saunders Trust v. Assessors of Boston, 26 Mass. App. Ct. 838, 843 (1989) (and the cases cited therein).  A property's highest and best use must be legally permissible, physically possible, financially feasible, and maximally productive.  Appraisal Institute, The Appraisal of Real Estate 279 (13th ed., 2008).  See also Skyline Homes, Inc. v. Commonwealth, 362 Mass. 684, 687 (1972).  "In determining the property's highest and best use, consideration should be given to the purpose for which the property is adapted."  Northshore Mall Limited Partnership et al. v. Board of Assessors of the City of Peabody, Mass. ATB Findings of Fact and Reports 2004-195, 247 (citing Appraisal Institute, The Appraisal of Real Estate at 315-16 (12th ed., 2001) and Tennessee Gas Pipeline Co., Mass. ATB Findings of Fact and Reports at 2000-875), aff'd, 63 Mass. App. Ct. 1116 (2005). 
Evidence in the instant appeals, specifically the April 15, 1959 deed between the prior owners of the subject properties and New England Power Company, which granted the power-line easement to the power company, confirmed, as the Board found in Buchanan I, that development was prohibited within the power-line easement.  By the April 15, 1959 deed, the Grantors agreed, for themselves and their successors in interest, "that no buildings or structures will be erected or constructed upon [the 325-foot] strip; and that the present grade or ground level of said strip will not be changed by excavation or filling," in order that the power company would be able "to construct, reconstruct, repair, maintain, operate and patrol" the power lines hanging above the strip.  On the basis of the plain language of the deed, the Presiding Commissioner found and ruled in the instant appeals, as it did in the fiscal 2008 year appeals, that construction within the 325-foot easement strip was legally prohibited.  Buchanan I, Mass. ATB Findings of Fact and Reports at 2010-156.
In the instant appeals, Mr. Hartel's appraisal report did not specifically address, nor attempt to counter, the prior finding in Buchanan I that the power-line easement reduced the frontage required for development by the local zoning regulations; he simply stated that Parcel 1 had 331 feet of frontage along Pleasant Street, and while he acknowledged that "some of [that frontage] lies in the Power Line Easement," Mr. Hartel nonetheless maintained that the 325-foot strip along Pleasant Street that was governed by the easement's prohibition against development could still "be counted toward the frontage requirement."  Mr. Hartel failed to explain this "extraordinary assumption" in his appraisal report or in his testimony at the hearing, and there was no evidence in the record to support it.  
Mr. Semple's affidavit, in addition to being unreliable hearsay, likewise failed to address the specific issue of whether the power-line easement affected the amount of frontage of the subject properties required for development. The affidavit simply reiterates the frontage value reflected on appellee's Map 195 for Lot 1 and the existence of "a power line easement" of unspecified length.  The affidavit gives no further explanation of how the subject properties could be developed when the easement deed specifies that "no building or structures will be erected or constructed upon said strip," nor was Mr. Semple available to explain how subtracting 325 linear feet of frontage from a parcel of land with at most 355 total linear feet of frontage could nonetheless yield the required 50-feet of frontage required for building.    
The opinion of an expert must be based on a proper foundation. State Tax Commission v. Assessors of Springfield, 331 Mass. 677, 684 (1954). "[A] highest-and-best-use determination is a prerequisite to establishing a foundation for a determination of fair market value."  Tsissa, Inc. v. Board of Assessors of the Town of West Tisbury, Mass. ATB Findings of Fact and Reports 2011-198, 218.  The Presiding Commissioner found that the appellee failed to offer credible evidence to support Mr. Hartel's highest and best use determination in light of the power-line easement's prohibition against building.  The Presiding Commissioner thus found and ruled that the appellee failed to establish that development of the parcels was either legally permissible or physically possible.  Therefore, the Presiding Commissioner found and ruled that Mr. Hartel's appraisal report and his opinion of value lacked a proper foundation and, accordingly, the appellee failed to meet its burden of proving that the increases in the subject properties' assessments over their values that the Board found for fiscal year 2008 were warranted. 
Furthermore, Mr. Hartel failed to explain how his purportedly comparable properties, which were subject only to "typical utility easements" that did not preclude development, and which properties were approved and permitted for development, could be considered comparable to the subject properties, which were subject to an easement that specifically precluded development within its 325-foot-wide strip.  The Presiding Commissioner found that, because Mr. Hartel's analysis failed to include property sufficiently comparable to the subject properties, his analysis was not probative of the subject properties' valuation.  See, e.g., Tsissa, Mass. ATB Findings of Fact and Reports at 2011-220; Diamond Ledge Properties Corp. v. Assessors of Swansea, Mass. ATB Findings of Fact and Reports 2009-1185, 1192.  Therefore, the Presiding Commissioner found and ruled that the two-lot ANR subdivision plan upon which Mr. Hartel primarily relied was a speculative valuation assumption that lacked persuasive value.   
The Board has consistently ruled that the mere qualification of a person as an expert does not endow his testimony with any magic qualities.  Boston Gas Co., 334 Mass. at 579.  In the instant appeals, the Presiding Commissioner found objective reasons for disregarding the values that Mr. Hartel derived for the subject properties for the fiscal year at issue.  First, Mr. Hartel failed to determine whether his hypothetical five-lot subdivision plan was the highest and best use for the subject properties.  He also failed to offer for comparison sales of sufficiently large, unpermitted and unapproved land more akin to the subject properties that were also subject to easements precluding development, not just "typical utility easements," and thus sufficiently comparable to the subject properties.  
As for the affidavit of Mr. Semple, the Presiding Commissioner found and ruled that the affidavit amounted to nothing more than unreliable hearsay.  Accordingly, the Presiding Commissioner did not rely on the affidavit for determining whether the appellee met its burden of proving that the highest and best use of the subject properties was as residential development.  See,  e.g., Bell v. Assessors of Boston, Mass. ATB Findings of Fact and Reports 2006-754, 761 (finding that, because a party's evidence constituted mere unsubstantiated hearsay, that party failed to meet its burden of proving a negative effect on the value of the subject property).  
After considering all of the competent evidence of record, the Presiding Commissioner found and ruled that the appellee failed to meet its burden of justifying the increases in value from the subject properties' fiscal year 2008 values as found in Buchanan I.  Accordingly, the Presiding Commissioner issued decisions for the appellant and granted abatements of $919.20 for Parcel 1 and $920.21 for Parcel 2. 
   
				   THE APPELLATE TAX BOARD


                        By: ________________________________
	   James D. Rose, Commissioner
A true copy,


Attest: _______________________________
   Clerk of the Board

 Within thirty days of service of these appeals, the City of Attleboro, in accordance with G.L. c. 58A, § 7A and 831 CMR 1.09, elected to have the appeals heard under the formal procedure. 
 G.L. c. 59, § 59 requires that applications for abatement be filed: "on or before the last day for payment, without incurring interest in accordance with the provisions of chapter fifty-seven or section fifty-seven C, of the first installment of the actual tax bill issued upon the establishment of the tax rate for the fiscal year to which the tax relates."  According to G.L. c. 59, § 57C, the applicable payment section for these appeals, the last day for payment is February 1st.  However, in 2009, February 1st fell on a Sunday.  When the last day of a filing period falls on a Sunday or legal holiday, the filing is still considered timely if it is made on the following business day.  See G.L. c. 4, § 9.  Accordingly, the Presiding Commissioner found that the appellant timely filed his application for abatement on Monday, February 2, 2009.
 The abatement applications were actually deemed denied on May 2, 2009.  G.L. c. 58A, § 6 and G.L. c. 59, §§ 64 and 65.
 Because the abatement applications were deemed denied on May 2, 2009, the May 13, 2009 denial notice was invalid, and the appellant thus had an additional two months to file his appeals with the Board.  G.L. c. 59, § 65C; see also Boston Communications Group, Inc. v. Board of Assessors of the City of Woburn, 2011 Mass. ATB Findings of Fact and Reports 780, 785.
 "Said strip" refers to the 325-foot wide power-line easement.
 Like the instant appeals, Buchanan I was a single-member decision in accordance with G.L. c. 58A, § 1A, although Buchanan I was heard and decided by a different hearing officer than the Presiding Commissioner who heard and decided the instant appeals.
 According to Mr. Hartel's appraisal  report, an "extraordinary assumption" is defined by the United Standards of Professional Appraisal Practice as "an assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser's opinions or conclusions."
 "ANR," an abbreviation for "Approval not required," refers to a subdivision for which approval is not required by the Attleboro Planning Department.

ATB 2012-236