SC Administrative Law Court Decisions

This is a contested case matter concerning the tax valuation for tax year 1993, of 21 parcels of real property located on Kiawah Island and Johns Island in Charleston County encompassing most of the "recreational amenities" of the Kiawah Resort. Charleston County Assessor

John Lindsey (hereinafter referred to as "Assessor") asserts that the subject parcels have a total value of $44,572,100. The above-captioned Respondents claim the total value of the subject parcels is actually $28,095,616. After a conference with the parties, the Charleston County Board of Assessment Appeals valued the properties at $28,095,616. The Assessor timely filed with the Administrative Law Judge Division (hereinafter referred to as "ALJD") a request for a contested case hearing, and the matter was transmitted to the ALJD for disposition pursuant to S.C. Code Ann. § 12-60-2540(A)(Supp.1995). A contested case hearing before the ALJD was conducted on October 3 and 4, 1996, at the Charleston County Judicial Center. Upon review of the relevant and probative evidence and applicable law, I find the total fair market value of the subject parcels for tax year 1993 to be $32,841,975.

STATEMENT OF THE CASE

Respondents are the owners of twenty-one individual but related parcels of real property located on Kiawah Island and Johns Island in Charleston County, which are generally described as "recreational amenities" and non-residential development sites of the Kiawah Resort.⁽¹⁾ The subject property includes three existing golf courses and related club house and maintenance facilities, two tennis centers, a 150-room lodging, dining and conference facility, a town center office and retail center, and vacant tracts for future hotel, commercial and residential development.

All of the subject parcels were previously owned by Landmark Land Company of Carolina, Inc. ("Landmark"). The subject parcels were part of a transfer from Kiawah Resort Associates ("KRA") to Landmark Land Company of Carolina, Inc. ("Landmark") in March, 1989, for a gross purchase price of $34,178,314. The gross price included additional real estate and certain tangible and intangible personal property not involved in this matter.

Landmark filed for protection under Chapter 11 of the Federal Bankruptcy Law in October, 1991. After protracted litigation, the Resolution Trust Corporation ("RTC") took control of Landmark in the Fall of 1992. In addition to the Kiawah Resort, Landmark operated a number of high end golf resorts throughout the United States. On July 14, 1993, in Dallas, Texas, the RTC held an open outcry auction of all Landmark resorts, including the subject parcels. KSL Recreation Corporation ("KSL") was the highest bidder for the subject parcels and certain included tangible and intangible personal property, at a total cash price of $39,011,500. KSL assigned its rights to purchase to Virginia Investment Trusts ("VIT"). VIT closed on the purchase of the Kiawah Resort on October 8, 1993, and then assigned its rights to seven (7) corporations who are the Respondents herein, which purchased the distinctive operations of the Kiawah Resort. For example, Marsh Point Golf Company purchased Marsh Point Golf Course; Osprey Point Golf Company purchased Osprey Point Golf Course, etc. . . .⁽²⁾

As part of county-wide reassessment in Charleston County in 1993, the Assessor originally valued the subject parcels at a total value of $38,684,300, with each of the twenty-one (21) parcels separately appraised and assessed by individual PID number. Respondents timely objected to the reassessment valuation of all twenty-one parcels on the grounds that the reassessments were excessive and inequitable, and claimed a total value of $28,097,300. The Assessor refused to change his valuation in response to Respondents' objections, and upon a more detailed appraisal review, asserted a total valuation of $43,486,400. Respondents timely appealed to the Charleston County Board of Assessment Appeals ("BAA"), which conducted a conference on June 5, 1996. The BAA ruled in favor of the Respondents, finding that the subject properties should be valued as a "package" at a fair market value of $28,097,300. Following the decision of the BAA, the Assessor timely requested a contested case hearing before the ALJD. The matter was transmitted to this tribunal, and a hearing was conducted pursuant to the Administrative Procedures Act.

Below is a chart showing the subject parcels and the parties' proposed valuations:

At the contested case hearing on October 3 and 4, 1996, the Assessor introduced two appraisals and his expert witness's review of those appraisals in support of his valuation. The Assessor relied primarily upon an in-depth appraisal (Petitioner's Exhibit A) prepared in 1991 by Cushman & Wakefield of Georgia, Inc., on behalf of Oaktree Savings Bank, a subsidiary of Landmark, at a time when the 21 subject properties were about to be sold. A second appraisal, done by Charleston Appraisal Service, Inc. (Petitioner's Exhibit C) on February 2, 1993, for the Resolution Trust Corporation as Conservator for Landmark, the bankrupt owner, included only one parcel of vacant land on Johns Island.⁽³⁾ The Assessor's expert concluded that the values of the 21 parcels should be the same as those stated in the Cushman & Wakefield appraisal with an adjustment to the Charleston Appraisal Services appraisal due to typographical errors. The largest single component of the Cushman and Wakefield Appraisal was the value of $20,700,000 for the 51.069-acre hotel site, PID #209-07-00-124.

Conversely, Respondents base their estimation of value of the subject parcels upon the RTC auction cash sale price, excluding the value of the tangible and intangible personal property purchased in that transaction. The subject parcels and related personalty collectively sold in October, 1993, for a total cash purchase price of $39,011,500. Respondents and the RTC allocated $28,095,616 of the sale price to the purchase of the real estate, and the $10,915,884 balance to the purchase of non-real estate items, including tangible personal property such as furniture, fixtures and equipment, and certain intangible personal property such as businesses known as the Villa Rental Program and Sports Card Program and the right to use the name "Kiawah Island Resort."

DISCUSSION OF ISSUES

Essential to determining the value of the subject parcels for tax year 1993, is the resolution of the threshold issues of which valuation approach provides the most accurate measure of fair market value and which evidence is most probative.

Respondents rely upon the RTC auction price as its main basis for valuation, supported by the 1989 purchase price of the subject parcels in the Landmark acquisition from KRA. While Landmark's purchase of the subject parcels from KRA in March, 1989, for a residual price of $26,052,914,⁽⁴⁾ was made in an arm's length transaction and is entitled to some weight, the most recent sale, the RTC auction, lacks the requisite elements of a fair market transaction negotiated and consummated between a willing buyer and a willing seller.

The RTC sale was clearly not a market sale; it was a liquidation sale, occurring before a limited audience, after limited market exposure time, with non-negotiable terms and conditions. It was an absolute sale made on behalf of an unwilling seller. The buyers and seller were not typically motivated and the seller was not acting in what it considered its best interests. There was not a reasonable time allowed for exposure on the open market, and there were sales concessions made by the RTC. An RTC auction is a forced sale from which a liquidation value may be derived for the subject property, but not a fair market value as developed from actual market conditions. The fair market value of property is not relevant to the adequacy of the price received for the property at foreclosure. See BFP v. Resolution Trust Corporation, 511 U.S. ___, 128 L.Ed. 2d 556, 114 S.Ct. 1757 (1994); See also12 U.S.C. § 1441a. (Supp. 1995). The conception of a forced, or compulsive sale includes force or compulsion as a result of legal process. Hickey v. United States, 208 F.2d 269 (1953). A forced sale is one which has no probative value, and therefore must be excluded from evidence. Id., See also United States v. 79.95-acres of land, etc., 459 F.2d 185 (1972).

On the other hand, the Assessor relies primarily upon the Cushman and Wakefield appraisal, which was prepared for a subsidiary of Landmark in 1991, when the sale of the resort was being considered by Landmark. An assessor's valuation is presumed correct, and the burden is on the property owner to disprove the assessor's determination. 84 C.J.S. Taxation § 410. In this case, the Respondents have the burden of showing that the valuation of the taxing authority is incorrect. Ordinarily this is done by showing the actual value of the property. Cloyd v. Mabry, 367 S.E.2d 171 (Ct.App. 1988). The most accurate and persuasive evidence presented of the value of the subject parcels are the 1989 KRA to Landmark sale and the Cushman and Wakefield appraisal. Respondents submit that the twenty-one parcels should be valued as a package. The recreational amenities of Kiawah may be related to one another, but because the parcels are owned by seven separate entities, have distinct uses, and are not contiguous, however, it is essential that each parcel be appraised and assessed individually.

Hotel Site

The single, most controversial valuation of the twenty-one individual tracts appraised is for the 51.069-acre undeveloped "hotel site." The hotel site is centrally located on Kiawah Island with approximately 1702 linear feet of frontage on the Atlantic Ocean. While the parties agree that the site's highest and best use is as a hotel site, the valuations for the hotel site range from $7,500,000 by Respondents, to $20,700,000 by the Assessor.

The Assessor adopts the Cushman & Wakefield appraisal of the hotel site in toto. Cushman & Wakefield base its valuation upon a highest and best use of the site as a two-phase "first class" convention hotel complex, eventually resulting in the construction and operation of a 1,000-room complex. The appraisal was based upon the issuance of a zoning permit to Landmark on June 25, 1990, for a 1,000-room hotel. A zoning permit is merely governmental verification that a specific parcel is zoned for a certain use under an existing zoning plan adopted by local ordinance. Issuance of such a permit is not predicated upon the viability or financial feasibility of the proposed project. It is proof only that the zoning classification of the property would allow for the construction and operation of a 1,000-room hotel. Besides the application for and issuance of the license to Landmark, there is no further evidence that the site is suitable for a 1,000-room hotel. The permit was issued over six years ago to a previous owner, which ultimately declared bankruptcy.

Respondents' witnesses, Prem Devadas, Manager of Kiawah Island Resort, and real estate appraisal expert, Robert Ragin, testified that development of a 1,000-room convention hotel would be neither feasible nor profitable for the site in question. There are no present plans to build a hotel on the site, but from his analysis and review of market research, Devadas testified that a hotel of approximately 250-300 rooms is the most feasible project size to maintain necessary occupancy rates and realize a profit. Even the Cushman & Wakefield report questions the viability of a 1,000-room hotel, stating on page 145 of its report (Petitioner's Exhibit #1) the following:

In our opinion, an 800 room hotel is out of scale for Kiawah and this relatively rural section of South Carolina. . ... Even a more typical resort hotel of 500 rooms would take an estimated two to three years to plan, finance and construct. A second phase (hotel) would not be opened until the original phase reaches stabilization, a period estimated at an additional three years for a total of five or six years from now before a second hotel would need to be opened.

Despite its stated skepticism that a large-scale resort hotel on Kiawah is feasible, Cushman & Wakefield forecast an immediate sale of one-half the site for development of a 500-room hotel and the sale and development of the second half for an additional 500 rooms three years later. That conclusion ignores the results of Cushman & Wakefield's own survey of large resort hotels built in the Southeastern United States from 1986 to 1991 (pp. 143-144). That survey indicates that the average size of the seven developments cited is approximately 283 rooms. The only 500-room resort hotel built in the area during that five-year period was at Disney World in Orlando, Florida; and as Cushman & Wakefield put it, "Disney World is one of the world's largest tourist attractions, [sic] this hotel market cannot be compared to the mostly lightly developed southeastern coastal areas." Id., at p. 144.

The Cushman & Wakefield land value estimate for the hotel site is based upon a $25,000 per hotel room formula, which is reasonable and supported by the evidence. Using the Cushman & Wakefield formula proposed by the Assessor, but with Respondents' projection of 300 rooms for the hotel instead of 1,000 rooms, the calculation is:

300 rooms x $25,000 = $7,500,000.

Respondents thus assert that the value of the entire 51-acre tract is $7,500,000. I disagree. The most suitable location of a resort hotel is on the seaward portion of the tract, along the 1702 feet (approximately 8 acres) of beach frontage. At most, as Cushman & Wakefield suggest, only half of the 51 acres is necessary for the development of a single hotel.

The value of the remaining landward portion of the 51-acre tract must be calculated in another manner. It is adjacent to the 10.507-acre tract containing the town and conference center (PID #209-07-00-105). The most proximate undeveloped subject parcel to the hotel site is Night Heron Park (PID #209-06-00-092), an 18.97-acre wooded and grassy park used by Kiawah residents and guests. Using the land values for each of those parcels contained in the Assessor's review of the Cushman & Wakefield appraisal (Petitioner's Exhibit B), the per acre value of those tracts are $58,808 and $58,782, respectively, for an average of $58,795. Adopting that per acre value, the 25-acre portion of the hotel site not needed for construction of a hotel is valued at $1,469,875. Together with the $7,500,000 figure for the future site of a 300-room hotel, the total value of the 51-acre tract is estimated at $8,969,875.

Conclusion

The twenty-one subject parcels are owned by seven separate entities, have distinct uses, and are not contiguous. Therefore, while the recreational amenities of Kiawah are unquestionably interconnected in terms of purpose and value, they must be appraised and assessed as individual tracts. Based upon the Cushman & Wakefield appraisal, modified by the hotel site valuation as set forth above, and the Charleston Appraisal Service appraisal of the Johns Island tract, the total value of the subject parcels for tax year 1993 is $32,841,975. That valuation is consistent with the $26,052,914 purchase price Landmark paid to KRA in March, 1989, for the subject parcels.

FINDINGS OF FACT

I find by a preponderance of the evidence the following facts:

Background and Procedural History

1. Respondents are the owners of 21 parcels of property, all located on Kiawah Island and Johns Island in Charleston County, which are generally described as the "recreational amenities" and non-residential development sites on Kiawah Island, including three existing golf courses and related club house and maintenance facilities, two tennis centers, a 150-room lodging, dining and conference facility, a town center office and retail center, and vacant tracts for future hotel, commercial and residential development, as follows:

2. The subject parcels were part of a transfer from Kiawah Resort Associates ("KRA") to Landmark Land Company of Carolina, Inc. ("Landmark") in March, 1989, for a gross purchase price of $34,178,314. The gross price included certain real estate as well as certain tangible and intangible personal property not involved in this contested case.

3. Included in the gross purchase price of $34,178,314 paid by Landmark to KRA was real estate conveyed by four (4) deeds as follows:

i. Deed dated March 31, 1989, recorded in the RMC Office for Charleston County in Book C-183, at pages 290-432, for a purchase price of $30,442,914.

ii. Deed dated March 31, 1989, recorded in the RMC Office for Charleston County in Book C-183, at pages 433 through 464, for a purchase price of $110,000. This deed was for the 219.92-acre links course tract now known as the "Ocean Course," which tract is not part of the subject property.

iii. Deed dated March 31, 1989, recorded in the RMC Office for Charleston County in Book C-183 at pages 465 to 469, for a purchase price of $2,735,400. This Deed was for a 51.854-acre tract on the east end of Seabrook Island, which tract is not part of the subject property.

iv. Deed dated March 16, 1989, recorded in the RMC Office for Charleston County in Book U-182 at pages 359-366, for a purchase price of $890,000. This Deed was for a portion of the "Turtle Point Golf Course."

4. Included in the property conveyed for a purchase price of $30,442,914 set forth above was a 9.739-acre tract on Bohicket Road, bearing PID #215-00-00-087, which had an estimated value on March 31, 1989 of $50,000, and is not part of the subject property.

5. Based upon an appraisal prepared by Cushman and Wakefield, the reasonable business value of the transfer from KRA to Landmark was $3,440,000, and the reasonable value of the furniture, fixtures and equipment was $1,790,000, for a total of $5,230,000.

6. By subtracting the total values attributed by Cushman and Wakefield to the business value and furniture, fixtures and equipment ($5,230,000) from the total purchase price of $34,178,314 which Landmark paid to KRA in March, 1989, the total price paid for all of the real estate conveyed by KRA to Landmark in March, 1989 was $28,948,314.

7. The price of the subject property transferred in March, 1989, included the purchase of the following parcels which are not involved in the present matter:

v. Ocean Course land value $ 110,000

vi. East end of Seabrook acreage 2,735,400

vii. Bohicket Road acreage 50,000

Total $2,895,400

8. Subtracting the deductions for real estate not part of the subject property, Landmark paid KRA a residual price of $26,052,914 for the subject parcels.

9. Landmark filed for protection under Chapter 11 of the Federal Bankruptcy Law in October, 1991. After protracted litigation, the Resolution Trust Corporation ("RTC") took control of Landmark in the Fall of 1992.

10. All properties owned by Landmark at the time of bankruptcy, including the subject parcels, were auctioned at an RTC auction on July 14, 1993.

11. The RTC auction was held in Dallas, Texas, and was attended by approximately 30 bidders. Five resorts other than those that are the subject of this tax appeal were also auctioned at the same time.

12. The high bid at the RTC auction for the subject properties was $45,100,000, with a cash purchase price of $39,011,500 paid by Virginia Investment Trusts (VIT), the successful bidder. The purchase price also included certain tangible and intangible personal property.

13. Of the $39,011,500 cash purchase price paid by VIT, VIT and the RTC attributed $10,915,884, to personal property, leaving a residual total purchase price of the subject real properties of $28,095,616.

14. During the process of county-wide reassessment for tax year 1993, the Assessor appraised the twenty-one subject parcels at a total value of $38,684,300.

15. Respondents timely objected to the reassessment valuations on the grounds that the reassessments were excessive and inequitable, claiming a total value of $28,097,300.

16. The Assessor refused to change his valuation in response to Respondents' objections, and upon a more detailed appraisal review using the County's CAMA (Computer Assisted Mass Appraisal) system, asserted a total valuation of $43,486,400.

17. Respondents timely appealed to the Charleston County Board of Assessment Appeals ("BAA"), which conducted a conference on June 5, 1996. The BAA ruled in favor of the Respondents, finding that the subject properties should be valued as a "package" at fair market value of $28,097,300, consistent with the RTC auction price and personalty allocation.

18. Following the decision of the BAA, the Assessor timely requested a contested case hearing before the ALJD. The matter was transmitted to this tribunal and a hearing conducted pursuant to the Administrative Procedures Act, with notice timely given to all parties.

Respondents' Valuation: RTC Auction Price

19. Respondents contend the fair market value of the properties as of December 31, 1992, is $28,095,616, the consideration paid for the subject real properties in the conveyance by the RTC to VIT, and by VIT to the named Respondents.

20. Landmark declared bankruptcy in an effort to prevent the sale of its real estate assets and was not a willing seller. Landmark's assets were sold under compulsion, at a public auction made under a Court Order.

21. The RTC distributed information packages to interested buyers in March of 1993 for a sale to be held in July of 1993, after a 3-4 month marketing period.

22. The RTC sale was a liquidation sale, occurring before a limited audience, after limited market exposure time, with non-negotiable terms and conditions.

23. The RTC auction sale price of the subject parcels represents the liquidation value or disposition value of the properties, which are not equivalent to market value.

24. The RTC auction price is not a reliable indicator of the fair market value of the subject parcels.

Assessor's Valuation: Cushman & Wakefield Appraisal

25. At the contested case hearing, the Assessor asserted a total value of the subject properties for tax year 1993 of $44,572,100, based upon a review of two previous appraisals prepared by disinterested parties in accordance with Uniform Standards of Professional Appraisal Practice.

26. The Assessor's review (Petitioner's Exhibits B and D) consisted of two written reviews of two existing appraisals: a Cushman-Wakefield Appraisal (Petitioner's Exhibit A) done in 1991 by Cushman & Wakefield of Georgia, Inc., on behalf of Oaktree Savings Bank, at a time when the 21 subject properties were about to be sold; and a second appraisal done by Charleston Appraisal Service, Inc. (Petitioner's Exhibit C) on February 2, 1993, for the RTC as Conservator for Landmark, which included only one parcel of vacant land on Johns Island.

27. All of the properties which are the subject of this contested case were included in the Cushman & Wakefield appraisal (Exhibit A).

28. The Assessor relied upon the Cushman & Wakefield appraisal for twenty of the twenty-one subject parcels, using the Charleston Appraisal Service appraisal to value the 160-acre tract on Johns Island (PID#203-00-00-060), as the Charleston Appraisal Service appraisal used comparables that were closer to the Assessor's revaluation date.

29. In both appraisals, except as specifically noted below in regard to the hotel site: (1) acceptable approaches to value in the valuation process were either used or considered; (2) the appraisers were aware of, understood and correctly employed recognizable appraisal methods and techniques; (3) the identification of the properties was adequate; (4) the use to be made of the appraisal was considered; (5) the extent of the data collection process was noted; (6) the effects of easements on the properties were considered; (7) the reviewed appraisals properly considered the land use restrictions, and other restrictions, on the subject properties and considered these restrictions when determining the value of the properties; (8) the appraisers properly reconciled data; and (9) the appraisals correctly separated real estate, FF&E and intangible values.

30. Excepting the valuation of the hotel site and the valuation of the 160-acre tract on Johns Island, the Cushman & Wakefield appraisal provides the most reliable indicator of the fair market value of the subject properties.

31. The Charleston Appraisal Service appraisal of the 160-acre tract on Johns Island is the most reliable indicator of fair market value of that tract.

Hotel Site

32. PID #209-07-00-124, known as the "hotel site" is a 51.069-acre undeveloped tract centrally located on Kiawah Island with approximately 1702 linear feet of frontage on the Atlantic Ocean.

33. The hotel site is zoned for construction and operation of a resort hotel of up to 1,000 rooms.

34. The Cushman & Wakefield report states skepticism that a large scale resort hotel on Kiawah is feasible, questioning the viability of a 1,000-room hotel, but nonetheless forecasts an immediate sale of one-half the site for development of a 500-room hotel and the sale and development of the second half for an additional 500 rooms three years later.

35. Cushman & Wakefield's conclusion that a two-phase 1,000-room convention hotel should be built on the hotel site and the resulting valuation based upon that premise, ignores the results of Cushman & Wakefield's own survey and analysis of large resort hotels built in the Southeastern United States from 1986 to 1991.

36. Cushman & Wakefield's survey indicates that the average size of the seven resort hotel developments cited is approximately 283 rooms, with the only 500-room resort hotel built in the area during that five-year period at Disney World in Orlando, Florida.

37. Development of a 1,000-room convention hotel would be neither feasible nor profitable for

PID #209-07-00-124.

38. The current owner has no present plans to build a hotel on the site.

39. The most feasible project size to maintain necessary occupancy rates and realize a profit is a hotel of approximately 250-300 rooms.

40. The highest and best use of the 51-acre hotel site is as a beachfront resort hotel with approximately 300 guest rooms.

41. The most suitable location of a resort hotel is on the seaward portion of the tract, along the 1702 feet (approximately 8 acres) of beach frontage. At most, as Cushman & Wakefield suggest, only half of the 51 acres is necessary for the development of a hotel.

42. The Cushman & Wakefield land value estimate for the hotel site is based upon a $25,000 per hotel room formula, which is reasonable and supported by the evidence.

43. Using the Cushman & Wakefield formula proposed by the Assessor, but with Respondents' projection of 300 rooms for the hotel instead of 1,000 rooms, the value calculation is:

300 rooms x $25,000 = $7,500,000

44. The value of the remaining landward half of the hotel site tract must be calculated on a per acre basis relative to comparable parcels proximately located to the hotel tract.

45. The 10.507-acre tract containing the town and conference center (PID #209-07-00-105) is the most proximate subject parcel to the hotel site.

46. The most proximate undeveloped subject parcel to the hotel site is Night Heron Park (PID #209-06-00-092), an 18.97-acre wooded and grassy park used by Kiawah residents and guests.

47. The average per acre land value of the town and conference center (PID #209-07-00-105) and Night Heron Park (PID #209-06-00-092) properties, using the land values contained in the Assessor's review of the Cushman & Wakefield appraisal (Petitioner's Exhibit B) for those tracts, is $58,795.

48. Adopting a $58,795 value per acre, the 25-acre portion of the hotel site not needed for construction of a hotel is valued at $1,469,875.

49. Adding $1,469,875 together with the $7,500,000 figure for the future site of a 300-room hotel, the total value of the 51-acre tract is $8,969,875.

Court's Valuation

50. Based upon the Cushman & Wakefield appraisal, modified by the hotel site valuation as set forth above, and the Charleston Appraisal Service appraisal of the Johns Island tract, the total value of the subject parcels for tax year 1993 is $32,841,975.

51. A valuation of the subject parcels for tax year 1993 at $32,841,975, is consistent with the $26,052,914 purchase price Landmark paid to KRA in March, 1989, for the subject parcels.

52. The subject parcels, as the recreational amenities of Kiawah, are patently related to one another in purpose and value, but because the parcels are owned by seven separate entities, have distinct uses, and are not contiguous, each parcel must be appraised and assessed individually.

CONCLUSIONS OF LAW

Based on the foregoing Findings of Fact and Discussion, I conclude the following as a matter of law:

1. The ALJD has personal and subject matter jurisdiction in this matter.

2. S.C. Code Ann. §12-60-2540 (Supp. 1995) authorizes the South Carolina Administrative Law Judge Division to hear contested cases in property tax assessment matters pursuant to Chapter 23 of Title I, as amended.

3. The proper measure of value for taxation purposes is the fair market value. Lindsey v. S.C. Tax Commission, 397 S.E.2d 95 (1990), 84 C.J.S. Taxation § 411.

4. Fair market value is defined in S.C. Code §12-37-930 as:

...the price which the property would bring following reasonable exposure to the market, where both the seller and the buyer are willing, are not under compulsion, and are reasonably well informed of the uses and purposes for which it is adapted and for which it is capable of being used.

5. An Assessor's valuation is presumed correct, and the burden is on the property owner to disprove the Assessor's determination. 84 C.J.S. Taxation § 410.

6. In this case, Respondents have the burden of showing that the valuation of the taxing authority is incorrect. Ordinarily this is done by showing the actual value of the property. Cloyd v. Mabry, 367 S.E.2d 171 (Ct.App. 1988).

7. In estimating the value of land, all of its elements or incidents which affect market value or would influence the mind of a purchaser should be considered, such as location, quality, condition, and use. 1969-70 Op. S.C. Att'y. Gen., No. 3045 at 337; See also 84 C.J.S. Taxation§ 410 at 784; § 411 at 794 (1954).

8. A property's highest and best use must be considered in calculating the property's value. "Highest and best use" may be defined as:

The reasonably probable and legal use of vacant land or improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value.

The Appraisal of Real Estate, Appraisal Institute, p. 45 (Tenth Edition, 1992).

9. To determine a fair market price for the subject property, comparisons of the sale price of other properties of the same character may be utilized. SeeCloyd v. Mabry, 295 S.C. 86, 367 S.E.2d 172 (Ct. App. 1988); 84 C.J.S. Taxation §§ 410- 411 at 785, 797 (1954).

10. The conception of a forced, or compulsive sale includes force or compulsion as a result of legal process. Hickey v. United States, 208 F.2d 269 (1953). A forced sale is one which has no probative value, and therefore must be excluded from evidence. Id., See also United States v. 79.95-acres of land, etc., 459 F.2d 185 (1972) (foreclosure sale is not an arm's length transaction, involving a willing buyer and a willing seller, and the amount of money one has paid in acquisition of property by foreclosure is not evidence of fair market value of the property, and is not relevant).

11. An RTC auction is a forced sale from which a liquidation value may be derived for the subject property but not a fair market value as developed from actual market conditions. The fair market value of property is not necessarily related to the adequacy of the price received for the property at foreclosure. See BFP v. Resolution Trust Corporation, 511 U.S. ___, 128 L.Ed.2d 556, 114 S.Ct. 1757 (1994); See also 12 U.S.C. § 1441a. (Cum. Supp. 1995).Accordingly, the RTC auction sale price of the subject parcels is not probative of the fair market value of the parcels.

12. If there are no comparable sales or recent sales to form a basis of comparison, fair market value may be determined by the testimony of persons acquainted with the property who have knowledge and experience qualifying them to form intelligent judgment as to the proper valuation of the property. See Appeal of Hart, 199 A. 225, 131 Pa. Super. 104 (1938).

13. "Appraisal is, of course, not an exact science and the precise weight to be given to any factor is necessarily a matter of judgment, for the court, in the light of the circumstances reflected by the evidence in the individual case." Santee Oil Co., Inc. v. Cox, 265 S.C. 270, 217 S.E.2d 789 (1975).

14. Where an expert's testimony is based upon facts sufficient to form the basis for an opinion, the trier of fact determines its probative weight. Berkeley Elec. Coop. v. S.C. Public Serv. Comm'n, 304 S.C. 15, 402 S.E.2d 674 (1991); Smoak v. Liebherr-Am., Inc., 281 S.C. 420, 422, 315 S.E.2d 116, 118 (1984).

15. A trier of fact is not compelled to accept an expert's testimony, but may give it the weight and credibility he determines it deserves and may accept the testimony of one expert over another. Florence County Dep't of Social Serv. v. Ward, 310 S.C. 69, 425 S.E.2d 61 (1992); Greyhound Lines v. S.C. Public Serv. Comm'n, 274 S.C. 161, 262 S.E.2d 18 (1980); S.C. Cable Tel. Assn. v. Southern Bell Tel. and Tel. Co., 308 S.C. 216, 417 S.E.2d 586 (1992).

16. Faced with divergent testimony from two experts concerning property valuation, the fact finder may adopt a valuation not proposed by either expert, so long as the court's calculation is reasonable in light of the evidence and sufficient to show that the result reached is not opposed to the clear weight and preponderance of the evidence. Santee Oil Co., Inc. v. Cox, 265 S.C. 270, 217 S.E.2d 789 (1975); McDuffie v. O'Neal, (S.C. Court of Appeals Opinion No. 2553; filed August 12, 1996).

17. The total value of the subject parcels for tax year 1993 is $32,841,975, individually valued as set forth below.

18. Any issues raised in the proceedings or hearing of this case, but not addressed in this Order, are deemed denied. ALJD Rule 20(B).

ORDER

Based upon the foregoing Findings of Fact, Discussion, and Conclusions of Law, the Assessor shall value the Respondents' properties for ad valorem tax purposes for tax year 1993 as follows:

AND IT IS SO ORDERED.

_____________________________

STEPHEN P. BATES

ADMINISTRATIVE LAW JUDGE

December 11, 1996

Columbia, South Carolina

_______________

Fn.1. Shown on the Charleston County tax maps as PID #93/203-00-00-060; #207-00-00-017 through 019; #207-06-00-013, -232 and -401-407; #209-01-00-121 and -122; #209-05-00-098; #209-06-00-092; #209-07-00-105 and -124; #264-01-00-054; #264-05-00-002.

Fn.2. At the hearing, counsel for Respondents pointed out that two (2) named Respondents in the present matter, Landmark Land Company and Virginia Investment Trusts, were not appropriate parties respondent, since they were not owners of any of the real property in question. Counsel for the Assessor stipulated to a dismissal of those Respondents and the case caption was amended accordingly.

Fn.3. All of the properties which are the subject of the lawsuit were included in the Cushman & Wakefield appraisal (Exhibit A); however, the Assessor used the Charleston Appraisal Service appraisal (Exhibit C) to value the 160-acre tract on Johns Island, as the Charleston Appraisal Service appraisal used comparables that were closer to the Assessor's revaluation date. The Cushman & Wakefield comparables were two to three years older than the Charleston Appraisal comparables.

Fn.4. That figure is equal to the gross purchase price of $34,178,314, less the cost of the real estate conveyed which is not the subject of this case [$2,895,400], and the tangible and intangible personal property conveyed, as valued by Cushman & Wakefield [$5,230,000].