ORDERS:
ORDER
I. Statement of the Case
This is a contested case brought by James E. Leppard, Jr. as the Petitioner (hereinafter referred to
as "taxpayer") against the Chesterfield County Assessor (hereinafter referred to as "assessor")
concerning property valuations for property tax year 1994. The taxpayer exhausted the prehearing
remedies with the assessor and the Chesterfield County Board of Assessment Appeals and is 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) with this
matter having been heard on November 9, 1995. After considering all of the testimony and evidence,
I conclude the property must be valued at $43,134.
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
What is the value of the property for the tax year 1994?
III. Analysis
1. Positions of Parties:
The assessor asserts the 3.34 acre property has commercial potential and should be valued at
$90,940. The taxpayer argues the property is vacant, non-income producing and is not attractive to
commercial interests, due to the need to add fill dirt to level the property. The taxpayer believes a
value of $46,760 is appropriate.
2. Findings of Fact:
I find, by a preponderance of the evidence, the following facts:
a. General
1. The taxpayer is the owner of property located within the city limits of Cheraw, South
Carolina in Chesterfield County.
2. The property is identified as Tax Map # 259-003-006-004.
3. The subject property is a single lot with a southern boundary of 211.2 feet fronting on State
Highway 9, a four-lane state highway.
4. The lot is rectangular shape and, in addition to the 211.2 feet on the southern boundary, has
a depth on the western boundary of 683.89 feet, a depth on the eastern boundary of 837.39
feet, and a width of 214.35 on the northern boundary, consisting of approximately 3.34 acres.
5. Several of the neighboring properties are commercial properties with all but one having a level
lot.
6. The lot slopes from the front to the rear with a ditch along the rear property line.
7. The front portion of the lot has a three foot drop from the road bed and approximately a
twelve feet drop at the back of the lot.
8. At a depth of 300 feet, the lot is seven feet below the level of the road bed.
9. The cost to bring the entire lot up to road level by the use of fill dirt is $141,333 while the
cost to provide a minimum elevated area upon which to construct a retail commercial building
is $40,000.
10. During rain, the lot has standing water.
11. Property two lots down from the subject property sold in 1990 for $115,000 and needed
$40,000 of fill dirt to allow the construction of a commercial building.
12. The Chesterfield County Board of Appeals determined that a value of $81,240 was
appropriate.
13. The assessor asserts the property must be valued at $90,940 for the tax year 1994.
b. Valuation Methods
14. The assessor presents three sales of property to value the subject property at $90,940 under
a market sales method, while the taxpayer relies upon one sale to value the property at
$46,760 under the market sales approach.
15. Assessor's comparable number one is Tax Map # 259-003-001-007 consisting of 200 feet of
frontage on Highway 9 and covering 1.38 acres.
16. Assessor's comparable number one sold for $80,000 on March 29, 1989, resulting in a price
per front foot of $400.
17. Assessor's comparable number two is Tax Map # 259-003-001-008 consisting of 364 feet of
frontage on Highway 9 and covering 2.3 acres.
18. Assessor's comparable number two sold for $115,000 on March 26, 1990, resulting in a price
per front foot of $316.
19. Assessor's comparable number three is Tax Map # 259-003-006-002 consisting of 260 feet
of frontage on Highway 9 with a depth of 521 feet and covering approximately 2 acres.
20. Assessor's comparable number three sold for $115,000 on March 3, 1990, resulting in a price
per front foot of $442.
21. Assessor's comparable number three required the purchaser to expend $40,000 to place fill
dirt in a suitable location to construct a building.
22. A sale of 25 acres to the Chesterfield County School District for $350,000 resulted in a sale
of $14,000 per acre.
23. The assessor's sales provide a range of values per front foot as follows: sale one -- $ 400 per
front foot; sale two -- $ 316 per front foot; sale three -- $ 442 per front foot.
3. Discussion
The issue in dispute is the value of the taxpayer's property. That 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 primary value of the property is attributed to the 211 feet of frontage on Highway 9. In order
to maximize the value of the property for commercial use, however, fill dirt is necessary to make the
property suitable for development. The subject property has an immediate drop of three feet
beginning at the road bed at the front of the property and increases to twelve feet at the back of the
lot. At a depth of 300 feet the drop is seven feet below the road bed.
Three sales of individual lots have occurred in the area. Two of the sales are of level lots and provide
a range of values of $316 per front foot for 364 feet to $400 per front foot for 200 feet on Highway
9. At least one sale of a less than level lot occurred with a sales price of $442 per front foot for 260
feet on Highway 9 with the purchaser placing $40,000 of fill dirt on the property to construct a bank
building. I do not attribute any significant weight to the third sale since it is an aberration. The sales
price of the third sale ($442 per front foot) exceeds the price of even a level lot ( $316 and $400) and
does not include the $40,000 needed for fill dirt to make the property commercially viable. If the
purchase price ($115,000) and the fill dirt cost ($40,000) were considered together, the front foot
cost of sale three would be $596 ($115,000 + 40,000 = $155,000 / 260 front feet = $596). Such a
sales price is not in line with the other sales in the area, and thus, I do not accord any significant
weight to such sale.
In this instant case, the property derives its primary value from front footage on Highway 9. Since
364 front feet yields a value of $316 per foot (sale number two) and 200 front feet yields a value of
$400 per foot (sale number one), a front footage of 211 feet yields a value of $394. Therefore, the
value of taxpayer's lot in its current low-lying status is $83,134.
The $83,134 value is not the value of a commercially feasible property. The ability to make the
property commercially feasible requires leveling by the means of fill dirt. While there is evidence that
$141,000 is the cost to completely level the lot, I find that such an expenditure is not practical and
would not be made given the current values of the level properties. I do find, however, that the lot
can be made commercially attractive. The assessor's sale number three demonstrates that it is not
necessary to completely level a lot in order to construct a commercial building on the property.
Rather, sale number three is evidence that an expenditure of $40,000 is appropriate. Accordingly,
I find a $40,000 expenditure will be required to make the subject lot commercially attractive, and
thus, I find a value for the property of $43,134 ($83,134 minus $40,000) for tax year 1994.
The one comparable presented by the taxpayer is not a reliable indicator of value. That sale was of
25 acres and is not comparable to the subject property which is small acreage and derives virtually
all of its value from its frontage on Highway 9.
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. In arriving at fair market value, the highest and best use of the property must be employed.
72 Am. Jur. 2d State and Local Taxation § 759 (1974).
4. The highest and best use of the subject property is commercial property.
5. 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).
6. The property identified as TMS # 259-003-006-004 is valued at $43,134 for tax year 1994.
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 TMS # 259-003-006-004 at a
value of $43,134 for tax year 1994.
IT IS SO ORDERED.
____________________________
RAY N. STEVENS
Administrative Law Judge
This 14th day of November, 1995. |
