03-1857 Mineral Point Valley Limited Partnership v. City of Mineral Point Board of Review (61240)

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“The law governing property valuation for tax purposes is found in Wis. Stat. ch. 70. Wisconsin Stat. § 70.32(1) provides that real property be valued at the ‘full value’ which could ordinarily be obtained at a private sale. ‘Full value’ means the fair market value, that is, the amount the property would sell for in an arms-length transaction between a willing buyer not obligated to buy and a willing seller not obligated to sell….

“We conclude that if the use of a market rate was proper in [Bloomer Housing Limited Partnership v.] City of Bloomer, the use of a subsidized interest rate here cannot be. Thus, the board of review did not act according to law when it accepted an assessment using the subsidized rate. Based on the result in City of Bloomer, we conclude that a capitalization rate based on a subsidized interest rate is impermissible, and that a market rate must be used, together with ‘all the other factors influencing value,’ to produce the fair value of the partnership’s real estate. … We follow Bloomer’s conclusion that an assessment based on a subsidized interest rate was excessive.”

Reversed and remanded.

Recommended for publication in the official reports.

CONCURRING OPINION: Deininger, P.J. “Our conclusion today … is that consistency on the point at issue is required, and that the rate to be employed in this ‘abstract formula’ is not a fact that should be allowed to vary from Mineral Point to Bloomer to Rhinelander, based on the credibility of the witnesses who may appear before a board of review. If a different rule is to apply, it must come from the supreme court or the legislature, or perhaps from the DOR by way of clearer direction in the assessment manual.”

CONCURRING OPINION: Lundsten, J. “I join the lead opinion, but write separately for two reasons.

“First, based on the briefs, oral argument, and my own research, it appears to me that a fiction is at work. Assessors are supposed to value subsidized housing at its fair market value yet, in common situations like the one before us, they may not take into consideration factors that directly affect fair market value. … In my view, such limitations on assessors prevent an honest appraisal of subsidized housing and create the conundrum we face today.

“Second, while I join the lead opinion and not the concurring opinion, I commend Judge Deininger on his intelligent and candid approach to the matter.

Sometimes we need to admit that the pieces of the puzzle do not fit.”

Dist IV, Iowa County, Dyke, J., Dykman, J.

Attorneys:

For Appellant: Lawrence E. Bechler, Madison; Matthew Fleming, Madison

For Respondent: Robert Horowitz, Madison