An Indianapolis tennis club failed to prove that its land was not assessed uniformly with that of other local clubs.
On August 21, 2014, the Indiana Tax Court in Indianapolis Racquet Club, Inc. v. Marion County Assessor, Cause No. 49T10-1201-TA-1, affirmed the 2002 assessment of a tennis club situated on three contiguous parcels and comprised of indoor and outdoor tennis courts, locker rooms, and retail and administrative space on approximately six acres of land. The Club’s president, who was also its counsel, testified at the administrative hearing before the Indiana Board of Tax Review that the subject land was excessively valued in comparison with other commercial properties in its neighborhood and with which it had been grouped under the applicable land order. The Club was the sole tennis facility in its neighborhood (with other commercial properties being high-priced retail, banks and gas stations) and lacked direct access to and visibility of the area’s primary commercial corridor.
Was the Club’s land assessed higher than that of other local tennis clubs? The land order used to value the subject land was based on sales of non-comparable properties, the Club contended. Instead of the land order, the Club argued that the assessed value of its land should be based on the assessments of the only other three tennis clubs in the greater Indianapolis area. The lower land values for those three clubs showed that the Club’s land assessments violated the Indiana Constitution’s “uniform and equal” requirement. The Club asserted that its land should be reclassified and that negative influence factors should be applied to lower its value.
The Club should have submitted market evidence – not other land orders. Looking at land assessments subject to different land orders was not helpful, the Court observed, because the base rates in the orders “are a reflection of the sales information for a specific neighborhood,” and that information “reflects the impact of numerous factors in and around the particular locale.” Slip op. at 8. The Club “needed to provide some sort of explanation or analysis as to what factors made the value of the land at those properties comparable to its own.” Slip op. at 9 (emphasis in original). In so doing, the Club would have had to adjust for any distinguishing characteristics affecting the land values. The Club provided no such explanations and made no adjustments.
Market evidence must support assignment of a negative influence factor. The Club failed to prove that a negative influence factor was warranted. To support application of a negative influence factor, the Club was required to show with market evidence how the inconsistent use of its property, as compared to the use of surrounding parcels, negatively impacted the property’s value. The Club made no effort to quantify the impact of the inconsistent use of its land. The Court observed: “Rather, it appears that it arbitrarily picked a number ‘that felt right’ and then adjusted the assessment computation to arrive at that number.” Slip op. at 10. That method did not “begin to demonstrate how the difference in value the Racquet Club proposes is a direct result of its land being used differently than those [parcels] surrounding it.” Id.
Arguing other parcels’ values were different did not prove lack of uniformity. The Club’s constitutional argument fell short as well. The Club needed to show that its assessed values “did not bear the same relationship to its market values as other properties within” its township. The Club merely argued that the land for the other three tennis clubs (in different townships) was valued differently. That was not enough to show a lack of uniformity and equality. Slip op. at 11.
The Club did not prove its land was over assessed. Id. However, the Court ordered the Assessor to correct the Club’s property record card for one parcel, which overstated the parcel’s dimensions by 19,063 square feet. Slip op. at 11-12.