ORDERS:
FINAL ORDER AND DECISION
This matter is before the Administrative Law Judge Division ("ALJD") upon a request for a contested case hearing,
pursuant to S.C. Code Ann. § 12-60-2540(A) (2000), by the Orangeburg County Assessor ("Assessor") following a
decision of the Orangeburg County Board of Tax Equalization ("Board") involving the 2000 assessed value of two
parcels of property in Orangeburg County, TMS # 0174-18-02-013 and #0174-18-02-040, owned by S & F. Investments
("S & F"). The Assessor initially assessed the property at $361,800. The Board found the value of the subject property to
be $229,000. S & F maintains that the Board's valuation is correct. A hearing was held on December 4, 2001, at the
office of the Division. Based upon the relevant evidence and applicable law, I find the fair market value of the subject
property for tax year 2000, to be $285,776.
FINDINGS OF FACT
1. The subject properties, TMS # 0174-18-02-013 and #0174-18-02-040, are adjacent
parcels owned by S & F Investments. On the property is a Popeye's Chicken and Biscuits Restaurant. It is located in
Orangeburg County at 1120 Chestnut Street in Orangeburg.
2. The highest and best use of the subject property is some type of commercial
development which would benefit from the visibility and traffic along this thoroughfare in the City of Orangeburg.
3. Carlton H. Segars, Jr., an appraiser hired by the Assessor's office, examined the
subject property. He appraised the property using three different methods, the cost approach, the sales comparison
approach, and the income capitalization approach.
COST APPROACH
4. Mr. Segars valued the property based on a cost approach. He explained that the cost
approach is based on the theory that a knowledgeable and prudent purchaser would pay no more for an existing facility than
the cost of purchasing a site and building improvements with similar desirability and utility. Segars first determined the
value of the land. Using comparables of land sales in the area, he finds the cost of the land should be about $2.75 per square
foot. I find this is reasonable based on the evidence. This gives the land a total value of $78,479.
5. Mr. Segars used Marshalls Valuation Service to arrive at the other costs. As to the
reproduction cost of the subject building, he used a base cost of $90.54 after determining that the subject should be
considered a Good Quality Class C, Restaurant Facility. After considering the Marshall Valuation Service document placed
into evidence by the Respondent, it appears the proper classification for the subject property would be an Average Quality,
Class C, Fast Food Restaurant Facility. This would change the base cost to $72.76 per square foot. Using the same
adjustments that Segars used for the $90.54 cost, the adjusted base cost would become $64.03. Multiplied by 1,910, the
square footage of the building, the cost becomes $122,297.30.
6. Segars found the only other improvement to the real property was the asphalt which
covers approximately 80% of the property less the building. He valued it at $4.00 per square foot based on information
received from a paving contractor. The Petitioner objects that nothing was depreciated however he offers no evidence as to
the method of how asphalt should be depreciated. Segars contends he knows of no method for depreciating asphalt.
Therefore, I find the cost of the asphalt to be reasonable at $85,000. Therefore, $285,776.30 is the correct cost using the
cost approach method.
SALES COMPARISON APPROACH
7. In the sales comparison approach, recent sales of similar properties are compared to
the subject property with adjustments made to reflect differences between each comparable sale ("Comp") and the subject
property.
8. Assessor's Comp 1, (Richland County TMS #17006-03-039) located at 245 O'Neil
Court, Columbia, South Carolina, is an Applebee's Neighborhood Grill & Bar which was built in 1991 and purchased by
the current owner in 1997. The structure is 4,614 square feet on 1.74 acre land. Comp 1 sold for $1,500,000 on December
12, 1997.
9. Assessor's Comp #2, (Richland County TMS #17011-03-011) is a Chili's Restaurant
located at 7715 Two Notch Road, Columbia, South Carolina. It was built in 1995 and purchased by the current owner on
October 1, 1996. The building is 5,444 square feet and is made of brick veneer.
10. Assessor's Comp. #3 (Richland County TMS #13814-10-012) is an Applebee's
Neighborhood Grill & Bar located at 4505 Devine Street, Columbia, South Carolina. The structure was built in 1988 and
purchased by its current owner on July 26, 1995 for $1,751,602. The restaurant is 4,804 square feet and is brick veneer.
11. I find all three comparables to be unreasonable to establish a market comparison for
the subject property. All of the restaurants are much larger than the subject property and are far superior in construction.
Although adjustments were made for the differences, the biggest concern is the difference in location of these properties.
All of the comparables are in the City of Columbia. Two Notch Road is one of the busiest thoroughfares in the city. O'Neil
Court runs off of Two Notch Road. Devine Street is another busy thoroughfare.
Also, the report submitted by Mr. Segars states, "Unfortunately, we were unable to locate many comparable restaurant sales
with similar locations at an interstate interchange, such as the subject." Nothing in the record indicates that the subject
location is at an interstate exchange. Contrarily, the map attached to the report shows the subject property a good distance
from the closest interstate exchange. Mr. Segars testified that one reason he had difficulty finding a closer location was
because the sales in Orangeburg were right at the interstate. This is another reason I find the Comparables 1 and 2
unsatisfactory. They are very close to the interchange of Interstate 20 and Hwy. 1 (Two Notch Road).
INCOME CAPITALIZATION APPROACH
12. Mr. Segars also used an Income Capitalization Approach. This is based on the future
income capability of a property. To arrive at this figure he basically used rental income for a ten year period based on five
rental properties. However, again the comparables are unreasonable. Two are restaurants of over 6,000 square feet in
Myrtle Beach, South Carolina. One is near a major mall in Greenville, South Carolina. One is the Applebee's
Neighborhood Grill and Bar on O'Neil Court in Columbia which was found unsuitable for the sales comparison. This
approach fails because there are no valid comparables used.
CONCLUSIONS OF LAW
1. The Administrative Law Judge Division has jurisdiction over the issues and parties
involved in this contested case pursuant to S.C. Code Ann. §§ 1-23-600 (Supp. 2001) and
12-60-2540(A) (2000).
- All real property in the State of South Carolina is subject to taxation, S.C. Code
Ann. § 12-37-210 (2000). Taxes on this type of property are levied in the amount of six percent of the fair market value
and must be paid by the individual owning the property. S.C. Const. art. X, § 1 (Supp. 2000); S.C. Code Ann. § 12-37-610
(2000).
3. Under S.C. Code Ann. § 12-37-930 (2000), the measure of value for taxation
purposes is fair market value. Lindsey v. S.C. Tax Comm'n, 302 S.C. 504, 397 S.E.2d 95 (1990); 84 C.J.S. Taxation § 411
at 791 (1954).
4. Fair market value of a parcel is:
. . . 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 of 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 (2000).
5. 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).
6. 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. See Cloyd 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).
7. 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).
8. "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).
9. 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. Berkley 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).
10. 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).
11. The fact finder may adopt a valuation not proposed by either party, 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, 234 S.C. 297, 476 S.E.2d 702 (Ct. App. 1996)..
12. To determine the value of the subject property, numerous factors have been taken
into consideration, including but not limited to: size; location; condition; access; visibility; highest and best use of
property; and zoning restrictions. Any one or a combination of these factors have the potential to affect fair market value.
ORDER
Based upon the foregoing Findings of Fact and Conclusions of Law, I find that for tax year 2000 and succeeding years until
reassessed, the fair market value of the subject property, Orangeburg County TMS #0174-18-02-004 and TMS #0174-18-02-013 is $285,776.
AND IT IS SO ORDERED.
_____________________________________
CAROLYN C. MATTHEWS
Administrative Law Judge
This 18th day of April 2002
Columbia, South Carolina |
