ORDERS:
ORDER
I. Statement of the Case
This is a contested case brought by Greenville County Real Property Services as the Petitioner
(hereinafter referred to as "assessor") against Woodrow Clark (hereinafter referred to as "taxpayer")
concerning property valuations for property tax years 1993 and 1994. The parties exhausted the
prehearing remedies with the assessor and the Greenville County Board of Assessment Appeals and
are now seeking a contested case hearing before the Administrative Law Judge Division (hereinafter
referred to as "ALJD"). Jurisdiction is granted the ALJD by 1995 S.C. Acts 60, § 12-60-2540
(A)(1995) with this matter having been heard on September 26, 1995. After considering all of the
testimony and evidence, I conclude the property must be valued at $72,767.
Any issues raised in the proceedings or hearing of this case but not addressed in this Order are
deemed denied. ALJD Rule 29(B). Further, the filing of a motion for reconsideration is not a
prerequisite to any party filing a notice of appeal of this Order. ALJD Rule 29(C).
II. Issues
Is the property correctly valued for the tax years 1993 and 1994?
III. Analysis
1. Positions of Parties:
The assessor argues that the County Board's assigned value of $125 per acre is not supported by the
evidence, since, even though there is documentation to support some degree of contamination, such
does not render the taxpayer's property worthless. The assessor asserts there have been no recent
samples to determine the degree of contamination on the taxpayer's property, and further, even if
contamination is proven, there is no documentation to substantiate the cost of clean-up. While the
assessor agrees that a perception by the public that the property is polluted would, if established, have
an impact on the market, in the instant case, the public does not have a negative perception since sales
continued in the area.
The taxpayer argues that the property has a value of zero since he cannot develop or sell the property
due to the contamination present on the land. He argues that banks will not lend any money on the
property due to the perception that the property is contaminated.
2. Findings of Fact:
I find, by a preponderance of the evidence, the following facts:
a. General
1. The taxpayer is the owner of real estate consisting of approximately 55.3 acres of vacant land.
2. The property is located in Greenville County, South Carolina, is identified on the Greenville
County Tax Map as Tax Map #s 0626.01-01-007.00, 007.03, 007.06, 007.07, 007.08, 003.19
and 006.01, and is generally located on New Harrison Bridge Road.
3. The Greenville County Board of Appeals determined, due to contamination present on the
property, a value of $125 per acre was appropriate.
4. The assessor asserts the property must be valued at $72,767 or $1,315 per acre for the tax
years 1993 and 1994.
5. The property is classified as agricultural property.
b. Valuation
6. The taxpayer's properties are either adjacent to or in proximity to property formerly used as
a landfill by Greenville County known as the Simpsonville Dump (hereinafter referred to as
"Dump").
7. The Dump operated from the mid 1960's to 1972, during which time it received domestic and
industrial wastes.
8. The Department of Health and Environmental Control (DHEC) conducted stream samples
in the area of the Dump in November 1975 and in February 1976, and detected the presence
of manganese in quantities greater than a background sample.
9. The Dump was covered, grassed, and received final closure in 1976.
10. From 1984 to 1986, the taxpayer purchased property adjacent to or in proximity to the Dump
and began selling the property.
11. In December 1985, DHEC began testing the landfill for the presence of volatile organic
contamination and did not find the level of manganese found in the 1975 and 1976 samples,
but did find the presence of ten volatile organic contaminants in one monitoring well site.
12. By the end of 1988, the New Harrison Bridge Road Water District had been created and
installation of water lines had been completed to provide public access to a water system to
cover the taxpayer's property and the surrounding area.
13. Testing by DHEC continued in August and September 1989 by the sampling of private wells
in the area.
14. The 1989 testing found volatile organics in two of five wells, with two additional wells
showing no volatile organics.
15. During 1989, DHEC held a public meeting to allow residents of the area to ask questions and
discuss the ongoing testing in the area.
16. During 1990, Roy F. Weston, Inc. was hired by DHEC to investigate the areas surrounding
the Dump.
17. The Weston investigation continued at various times during 1990 and 1991.
18. As of February 10, 1992, a neighbor of the taxpayer was unable to obtain a loan from
American Federal on 5.08 acres in the same area until "we (American Federal) have obtained
a Phase I Environmental Survey" due to "possible environmental contamination" on the
property.
19. As of March 5, 1992, Mark K. Stewart, a broker-appraiser, was of the opinion the taxpayer's
property was of no value "because we know there are hazardous materials present" on the
taxpayer's property.
20. On September 18, 1992, DHEC completed a report identified as "Site Inspection
Prioritization" (SIP).
21. The SIP concludes that "nearby private wells are contaminated with chlorinated VOC's
(volatile organic compounds) and an on-site monitoring well shows high levels of VOC
contamination."
22. The SIP concludes that a "spring-fed creek below the dump has shown VOC contamination
and flows through a wetlands area" with the wetlands "likely affected by heavy metal
contamination from the dump."
23. The spring-fed creek flows across the taxpayer's property.
24. As of August 12, 1993, NationsBank declined to loan funds to allow the taxpayer to make
improvements to the property on the basis that there were "known hazardous materials
present through DHEC testing."
25. The NationsBank no-loan policy continued on January 25, 1994, when NationsBank declined
to loan funds to the owner of another property in the area "because of known hazardous
material present."
26. On April 28, 1994, Carolina First Savings Bank loaned $300,000 to an owner of
approximately 25 acres adjacent to the Dump.
27. Sales of property in the area have occurred from 1985 through 1994.
28. An appraisal by the assessor valued the property at $1,315 per acre under a market sales
method, while no appraisal under the market sales approach was presented by the taxpayer.
29. The sales of fourteen unimproved properties were used as comparables under the market sales
approach by the assessor.
30. All fourteen properties are in the same immediate surrounding area as the taxpayer's property,
and the sales prices, year of sale, and price per acre are presented below:
Acres |
Sales
Price |
Price/
Acre |
Sale
Year |
15.1 |
$24,000 |
$1,589 |
1985 |
5.0 |
12,500 |
2,500 |
1986 |
5.0 |
12,500 |
2,500 |
1986 |
7.0 |
17,500 |
2,500 |
1986 |
5.1 |
12,500 |
2,450 |
1987 |
5.1 |
27,000 |
5,294 |
1987 |
8.0 |
20,000 |
2,500 |
1987 |
44.0 |
132,125 |
3,002 |
1989 |
8.0 |
30,500 |
3,812 |
1989 |
5.1 |
5,000 |
980 |
1989 |
5.0 |
13,400 |
2,680 |
1992 |
1.0 |
2,500 |
2,500 |
1992 |
25.0 |
260,000 |
10,400 |
1994 |
10.0 |
55,000 |
5,500 |
1994 |
31. In comparison to the taxpayer's property, the fourteen properties are similar in size, location,
and proximity to the Dump.
32. The sales of comparable properties provide a range of values per acre from a low of $980 to
$10,400, with the most common price per acre being $2,500 per acre.
33. The market sales approach supports the assessor's value of $1,315 per acre or $ 72,767 for
the taxpayer's property for tax year 1993 and 1994.
3. Discussion
The issue in dispute is the value of the taxpayer's property. The proper value is found by determining
the price a willing buyer would pay to a willing seller for the taxpayer's property. S. C. Code Ann.
§12-37-930 (Supp. 1994).
The dispute in the instant case turns upon the impact on the value of the taxpayer's property from
contamination. Here, contamination is present but is not so pervasive as to reduce the value to zero,
as contended by the taxpayer.
a. Contamination Present
There is contamination affecting the taxpayer's property. DHEC conducted stream samples in the
area of the Dump in November 1975 and in February 1976, and detected the presence of manganese
in quantities greater than that of a background sample. In December 1985, DHEC tested the landfill
itself and found the presence of ten volatile organic contaminants in one monitoring well site. Testing
in August and September 1989 by DHEC of private wells in the area found volatile organics in two
of five wells. The Weston investigation continued at various times during 1990 and 1991, and
identified a potential area of contamination from groundwater run-off from the "toe" of the Dump.
By September 18, 1992, DHEC had completed a report identified as "Site Inspection Prioritization"
(SIP) and concluded that "nearby private wells are contaminated with chlorinated VOC's and an on-site monitoring well shows high levels of VOC contamination." Further, the SIP concludes that a
"spring-fed creek below the dump has shown VOC contamination and flows through a wetlands area"
with the wetlands "likely affected by heavy metal contamination from the dump." The spring-fed
creek flows across the taxpayer's property.
b. Impact Upon Market By Contamination
The presence of contamination does not automatically result in a zero value. In the instance case, the
market has not shown a zero value. Sales have been occurring in the area from 1985 through 1994,
and have continued even after the public meeting in 1989 by DHEC to discuss the testing in the area.
Such sales have produced sales prices of a minimum of $980 per acre, with the most common price
being over $2,500 per acre. The sales in 1992 and 1994 are all $2,500 or more per acre. The
assessor, in an effort to provide a reduction in value due to any perceived contamination, seeks a
value of $1,315. I find the $1,315 is supported by the market sales.
There is conflicting evidence of the lack of lenders available to make loans to the property owners
in the area. While two lenders did not make loans to owners of property in the area (February 10,
1992 no-loan letter by American Federal unless a Phase I Environmental Survey was provided and
no-loan letters by NationsBank on August 12, 1993 and January 24, 1994) at least one lender,
Carolina First Savings Bank, on April 28, 1994, loaned $300,000 to an owner of approximately 25
acres of property adjacent to the Dump. Only NationsBank would not issue a loan, while American
Federal needed more information and Carolina First actually loaned the funds. While the lending
situation may change for subsequent years, as to 1993 and 1994, there is insufficient evidence to show
a lack of lending institutions for the area.
The assessor's basic assertion is that the market has considered the impact of the alleged
contamination on the taxpayer's property. In the instant case, the presence of water lines from a
public utility in the area is significant in that it establishes a necessary element for development. The
contamination on the taxpayer's property results from groundwater. The installation of water lines
alleviates the need to rely upon private wells, and thus, substantially cures the negative impact of the
groundwater problem. It is possible that sales have continued in the area despite the contamination
since there is an adequate public supply of water.
The taxpayer did not present any comparables and did not present any evidence of the cost to cure
the contamination. Based upon all of the evidence, for the tax years 1993 and 1994, I find the
evidence supports a $72,767 value based upon a market sales approach. The fourteen comparables
by the assessor are reliable indicators of value. The $1,315 per acre value is within the selling price
per acre of other similar property.
4. Conclusions of Law
Based on the foregoing Findings of Fact and Discussion, I conclude the following as a matter of law:
1. All property shall be valued for taxation purposes at its true value in money which in all cases
shall be held to be the price which the property would bring following reasonable exposure
to the market, where both the seller and the buyer are willing, are not acting under
compulsion, and are reasonably well informed as to the uses and purposes for which it is
adapted and for which it is capable of being used. S. C. Code Ann. § 12-37-930 (Supp. 1994).
2. Fair market value is the measure of true value for taxation purposes. Lindsey v. S.C. Tax
Comm'n, 302 S.C. 504, 397 S.E.2d 95 (1990).
3. While not conclusive, market sales of comparable properties present probative evidence of
the fair market value of similar property. 84 C.J.S. Taxation § 411 (1954); see Cloyd v.
Mabry, 295 S.C. 86, 367 S.E.2d 171 (Ct. App. 1988).
4. For the tax years 1993 and 1994, the taxpayer's property in dispute in this matter is valued
at $72,767.
IV. ORDER
Based upon the foregoing Discussion, Findings of Fact, and Conclusions of Law, the following
ORDER is issued:
The assessor is ordered to value the taxpayer's property identified as Greenville County Tax Map #s
0626.01-01-007.00, 007.03, 007.06, 007.07, 007.08, 003.19 and 006.01, at a value of $1,315 per
acre or $72,767 for assessment years 1993 and 1994.
IT IS SO ORDERED.
____________________________
RAY N. STEVENS
Administrative Law Judge
This 1st day of November, 1995. |