attorneys for petitioner - IN.gov

ATTORNEYS FOR PETITIONER: ATTORNEYS FOR RESPONDENT:
STEPHEN E. DEVOE JEFFREY A. MODISETT
B. KEITH SHAKE ATTORNEY GENERAL OF INDIANA
MICHAEL R. HARPING
HENDERSON, DAILEY, WITHROW TED J. HOLADAY
& DEVOE DEPUTY ATTORNEY GENERAL Indianapolis, Indiana Indianapolis, Indiana _____________________________________________________________________ IN THE
INDIANA TAX COURT
_____________________________________________________________________ INDIANAPOLIS RACQUET CLUB, INC., )
)
Petitioner, ) )
v. ) Cause
Nos. 49T10-9607-TA-00088
) 49T10-9609-TA-
00119
STATE BOARD OF TAX COMMISSIONERS, )
)
Respondent. ) RACQUET SQUARE ASSOCIATES, LTD, )
)
Petitioner, )
)
v. ) Cause No. 49T10-9609-TA-00126
)
STATE BOARD OF TAX COMMISSIONERS, )
)
Respondent. )
ON APPEAL FROM FINAL DETERMINATIONS OF THE STATE BOARD
OF TAX COMMISSIONERS
___________________________________________________________________________ FOR PUBLICATION January 31, 2000 FISHER, J. Petitioners Indianapolis Racquet Club, Inc. (IRC) and Racquet Square
Associates, LTD. (RSA) (collectively Racquet Club) appeal three final
determinations of the State Board of Tax Commissioners (State Board)
denying Racquet Club's appeals challenging the validity of the 1989
assessments of IRC's indoor and outdoor tennis facilities and RSA's office
building complex. In these original tax appeals, Racquet Club presents the
following two issues for consideration:
I. Whether the subject properties were improperly classified in the
Marion County Land Valuation Order, in violation of Ind. Code Ann. § 6-1.1-
31-6 (West 1989) and the Indiana Assessment Manual, see Ind. Admin. Code
tit. 50, r. 2.1-1-1 to -6-1 (1992) (codified in present form at Ind. Admin.
Code tit. 50, r. 2.2-1-1 to -16-6 (1996)); and II. Whether the base rate for IRC's indoor tennis facility was
incorrectly determined using the GCM health club model, see Ind. Admin.
Code tit. 50, r. 2.1-4-7 (1992) (codified in present form at Ind. Admin.
Code tit. 50, r. 2.2-11-1 (1996)), instead of the GCI light warehouse
model, see id. (codified in present form at Ind. Admin. Code tit. 50, r.
2.2-11-2 (1996)).
FACTS AND PROCEDURAL HISTORY
IRC is an Indiana corporation formed in 1965 that owns indoor and
outdoor tennis facilities located at 8249 Dean Road in Indianapolis (Dean
Road Property). The Dean Road Property consists of sixteen indoor and
eight outdoor tennis courts and associated facilities. RSA is an Indiana
limited partnership that owns an office building complex located at 4141
East 82d Street in Indianapolis. The complex, which lies adjacent to the
Dean Road Property, consists of three one-story office buildings.
The issues presented arise from the 1989 assessment of three
individual parcels. Racquet Club separately appealed the assessment of
each parcel. The procedural history of these appeals is as follows.
Parcel number 8051129 (Parcel A) is part of the Dean Road Property. It
contains eight outdoor tennis courts. The Washington Township Assessor
issued a Notice of Assessment to IRC regarding Parcel A on November 22,
1989. IRC filed a Form 130 petition for review with the Marion County
Board of Review (BOR) on December 22, 1989. The BOR conducted a hearing on
the petition on April 24, 1990. On November 30, 1990, the BOR issued a
ruling adverse to IRC. Thereafter, on December 28, 1990, IRC filed a Form
131 petition for review with the State Board, which conducted a hearing on
September 27, 1995. The State Board issued its final assessment
determination on June 14, 1996. Thereafter, IRC filed an original tax
appeal regarding Parcel A with this Court on July 29, 1996.[1]
Parcel number 8048124 (Parcel B) is also part of the Dean Road
Property. It contains sixteen indoor tennis courts and associated
facilities. The Washington Township Assessor issued a Notice of Assessment
regarding Parcel B on November 22, 1989. IRC filed a Form 130 petition for
review with the BOR on December 22, 1989. The BOR conducted a hearing on
the petition on December 19, 1990. Subsequently, on February 8, 1991, the
BOR issued a ruling adverse to IRC. IRC filed a Form 131 petition for
review with the State Board on March 11, 1991. The State Board conducted a
hearing on the petition on September 27, 1995 and issued its final
determination on August 7, 1996. IRC filed an original tax appeal
regarding Parcel B with this Court on September 23, 1996.[2]
Parcel number 8048125 (Parcel C) is adjacent to and directly east of
Parcel A. The Washington Township Assessor issued a Notice of Assessment
regarding Parcel C on November 22, 1989. RSA filed a Form 130 petition for
review with the BOR on December 22, 1989. The BOR conducted a hearing on
the petition on August 9, 1990. On August 31, 1990, the BOR issued a
ruling sustaining the township assessor's valuations. RSA filed a Form 131
petition for review with the State Board on October 1, 1990. The State
Board conducted a hearing on the petition on September 27, 1995.
Thereafter, on August 16, 1996, the State Board issued its final
determination. RSA filed an original tax appeal on September 30, 1996.[3]
The Court conducted a trial involving all three parcels on May 2,
1997.[4] On October 22, 1997, the Court heard oral argument on these
cases. Additional facts will be supplied where necessary.
ANALYSIS AND OPINION
Standard of Review
The Court gives the final determinations of the State Board great
deference when the State Board acts within the scope of its authority. See
Wetzel Enters., Inc. v. State Bd. of Tax Comm'rs, 694 N.E.2d 1259, 1261
(Ind. Tax Ct. 1998). Accordingly, the Court reverses final determinations
of the State Board only when those decisions are unsupported by substantial
evidence, are arbitrary or capricious, constitute an abuse of discretion,
or exceed statutory authority. See id. Racquet Club bears the burden of
demonstrating that the State Board's final determinations are invalid. See
Clark v. State Bd. of Tax Comm'rs, 694 N.E.2d 1230, 1233 (Ind. Tax Ct.
1998).
Discussion
Racquet Club challenges the validity of the 1989 Marion County Land
Valuation Order (Order) as applied to Parcels A, B, and C. Specifically,
Racquet Club contends that Parcels A, B and C were improperly included with
surrounding commercial properties in the Order, in violation of Ind. Code
Ann. § 6-1.1-31-6 (West 1989) and the Indiana Assessment Manual. As
regards the appeal of Parcel B, Racquet Club asserts that taxing
authorities applied the wrong model to 90% of the indoor tennis courts
facility. The Court will separately consider each issue.
I. Marion County Land Valuation Order
Racquet Club asserts that Parcels A, B and C were improperly
classified within the Order, to the extent they were included as part of
the area designated as page 22 in Section IV of the Order. This area,
which the Court shall refer to as the "82nd Street Corridor,"[5] is
described in the Order as "Allisonville Road W. to Keystone on 86th St. fr
Dean Rd. Keystone No. to I-465 Interch fr 86th St." [6] (Resp't Ex. G.)
"Primary" land for this commercial property ranged from three to four
dollars per square foot; "usable undeveloped" land ranged from ninety cents
to one dollar twenty cents per square foot. (Resp't Ex. G.) Racquet Club
argues that Parcels A, B and C should have been included within the area
designated as page 24A in Section IV of the Order, which area is described
as "Township - other." [7] (Resp't Ex. G.) Values for "Primary" land in
this latter category ranged from one dollar and fifty cents to three
dollars per square foot; values for "usable undeveloped" land ranged from
forty-five to ninety cents per square foot. (Resp't Ex. G.)
Before addressing Racquet Club's argument, the Court first reviews
some basic principles of Indiana's property tax assessment laws, policies
and procedures. The Indiana Constitution provides, "The General Assembly
shall provide, by law, for a uniform and equal rate of property assessment
and taxation and shall prescribe regulations to secure a just valuation for
taxation of all property, both real and personal." Ind. Const. art. X, §
1. See also Ind. Code Ann. § 6-1.1-2-2 (West 1989) ("All tangible property
which is subject to assessment shall be assessed on a just valuation basis
and in a uniform and equal manner."). As this Court noted in Indianapolis
Historic Partners v. State Board of Tax Commissioners:
This provision has long been held to require: (1) uniformity and
equality in assessment, (2) uniformity and equality as to rate of
taxation, and (3) a just valuation for taxation of all prop