            If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                 revision until final publication in the Michigan Appeals Reports.




                          STATE OF MICHIGAN

                           COURT OF APPEALS



AARON G. PERGAMENT,                                                 UNPUBLISHED
                                                                    September 12, 2019
               Petitioner-Appellant,

v                                                                   No. 344250
                                                                    Tax Tribunal
CITY OF OAK PARK,                                                   LC No. 17-003805

               Respondent-Appellee.


Before: MURRAY, C.J., and METER and FORT HOOD, JJ.

PER CURIAM.

       Petitioner appeals as of right a final opinion and judgment issued by the Michigan Tax
Tribunal, upholding the 2017 assessment of his property by respondent. We affirm.

                          I. FACTS AND PROCEDURAL HISTORY

       Petitioner purchased the subject property at 25500 Colleen Street in Oak Park on April
10, 2014, for $95,000. Petitioner demolished the existing home on the property in 2015, and
replaced it with a newly-constructed home completed in 2016. The permit fee for the demolition
was $7,500, and the cost of the new construction was $244,150. The newly-constructed home is
3,192 square feet with three bedrooms and 3 ½ bathrooms.

        In 2016, after demolition of the existing home, the taxable value assessed for the property
was $11,210. After completion of the newly-constructed home, respondent assessed the property
for the 2017 tax year as follows:

       True Cash Value: $326,600

       State Equalized Value: $163,300

       Taxable Value: $152,010

Petitioner challenged the assessment at respondent’s March 2017 Board of Review, but the
Board upheld the assessment. Acting in propria persona, petitioner then appealed the Board’s


                                                -1-
decision to the Tax Tribunal, arguing that the fair market and taxable values of the property
should have been $240,000 and $106,000, respectively. Petitioner submitted to the tribunal
spreadsheets and other documents comparing his home to other allegedly similar properties
nearby.

      Respondent supported its assessment with both market and cost-approach analyses.
According to respondent:

       Due to lack of income data, the sales comparison approach and cost approach
       were utilized to determine the true cash value for 2017. By using a simple cost
       approach the value for 2017 would equate to $346,650 derived from adding the
       cost of the lot $95,000 plus the demolition cost of $7,500 plus new construction
       cost of $244,150. The city valued the parcel at $326,600 in 2017 with an assessed
       value of [$]163,300 and a taxable value of [$]152,010.

Respondent explained that it determined these final numbers based on a comparison of the
subject property with four other properties adjusted for size.

       The tribunal held a hearing following which it issued a final opinion and judgment
upholding respondent’s 2017 assessment of petitioner’s property. In so doing, the tribunal
acknowledged the mandate that it make an independent determination of the property’s true cash
value. The tribunal rejected petitioner’s sales-comparison approach to determining value
because he failed to consider or adjust for the individual features of the subject and comparison
properties and accepted respondent’s sales-comparison data as relevant to the determination of
the property’s market value, noting that “[a]ll of Respondent’s comparables were two story
construction like the subject and new or remodeled in the 2000s.” The tribunal ultimately
adopted respondent’s entire assessment, stating:

               Respondent concluded to a value of $326,600 for 2017 and $351,200 for
       2018 using the mass appraisal cost approach to value. The cost approach is based
       on the understanding that market participants relate value to cost. In this
       approach, the value of the property is derived by adding the estimated value of the
       land to the current cost of construction. This approach is particularly useful in
       valuing new or nearly new improvements. Here, the subject is new and
       Respondent used a land table to establish land value at $30,200. While the cost
       approach is an attempt to stimulate market activity, there are also the actual costs
       of construction as reported by the Petitioner, in addition to data from the land
       transaction which add up to a value of $346,650 for 2017. All Respondent’s data
       support its contention of value at $326,600 for 2017 and $351,200 for 2018.

       Petitioner moved for reconsideration of the tribunal’s decision, arguing that the 2017
taxable value of his property, under the cost approach plus construction costs, should have been
between $118,267 and $127,676. Petitioner derived the $127,676 taxable value by adding the
property’s 2016 taxable value of $11,210 to the $244,150 cost of construction, and dividing the
sum in half; he derived the $118,267 taxable value by comparing his property to the build cost
and taxable value of another newly-constructed home in Oak Park. The tribunal denied the
motion and this appeal followed.

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                                          II. ANALYSIS

       This Court’s ability to review decisions of the Tax Tribunal is very limited.
       Michigan’s Constitution provides: “In the absence of fraud, error of law or the
       adoption of wrong principles, no appeal may be taken to any court from any final
       agency provided for the administration of property tax laws from any decision
       relating to valuation or allocation.” Const 1963, art 6, §28. Thus, this Court’s
       review of decisions of the Tax Tribunal, in the absence of fraud, is limited to
       determining whether the tribunal made an error of law or adopted a wrong
       principle; the factual findings of the tribunal are final, provided they are supported
       by competent and substantial evidence. [President Inn Props, LLC v Grand
       Rapids, 291 Mich App 625, 630-631; 806 NW2d 342 (2011) (selected internal
       citations and quotation marks omitted).]

“Substantial evidence must be more than a scintilla of evidence, although it may be substantially
less than a preponderance of the evidence.” Forest Hills Coop v Ann Arbor, 305 Mich App 572,
588; 854 NW2d 172 (2014) (internal citations, block notation, and quotation marks omitted).
“This Court has stated that competent and substantial evidence will support the Tax Tribunal’s
decision if the decision is within the range of valuations in evidence.” Id.

       We affirm the Tax Tribunal’s final opinion and judgment, as it did not commit an error of
law or adopt a wrong principle when upholding respondent’s 2017 assessment of petitioner’s
property.

       Although the petition and evidence filed with the tribunal, as well as the tribunal’s final
opinion and judgment, focused largely on the calculation of the subject property’s true cash
value, on appeal, petitioner focuses on respondent’s calculation of the property’s 2017 taxable
value. MCL 211.27a(2) provides:

       Except as otherwise provided in subsection (3),[1] for taxes levied in 1995 and for
       each year after 1995, the taxable value of each parcel of property is the lesser of
       the following:

       (a) The property’s taxable value in the immediately preceding year minus any
       losses, multiplied by the lesser of 1.05 or the inflation rate, plus all additions. For
       taxes levied in 1995, the property’s taxable value in the immediately preceding
       year is the property’s state equalized valuation in 1994.

       (b) The property’s current state equalized valuation.




1
  MCL 211.27a(3) provides: “Upon a transfer of ownership of property after 1994, the property's
taxable value for the calendar year following the year of the transfer is the property's state
equalized valuation for the calendar year following the transfer.”


                                                -3-
Additions include “new construction,” defined as “property not in existence on the immediately
preceding tax day and not replacement construction.” MCL 211.34d(1)(b)(iii). “For purposes of
determining the taxable value of property under section 27a, the value of new construction is the
true cash value of the new construction multiplied by 0.50.” MCL 211.34d(1)(b)(iii). Thus, the
taxable value of newly-constructed property is determined using the lesser of the previous year’s
taxable value “multiplied by the lesser of 1.05 or the inflation rate, plus the true cash value of the
new construction multiplied [by] 0.50.” Superior Hotels, LLC, v Mackinaw Twp, 282 Mich App
621, 638; 765 NW2d 31 (2009) (internal citation and quotation marks omitted; alteration in
original).

        Petitioner asserts that, “since [respondent] had established the taxable value of his
property with partial improvements on it in 2016 with a final taxable value of $11,210 and a
build cost of $244,150,” the 2017 taxable value of his property should have been $127,680 based
on the following calculation: “($244,150 build cost + $11,210 Final Taxable value land cost with
improvements as established by [respondent] in 2016 multiplied by the CPI factor of 1.009 to
give the land cost to be $11,311) = $255,461 divided by 2 = $127,730 and not $155,200.”
Petitioner, however, provides no authority for the proposition that the true cash value of new
construction equates to the build cost,2 and substantial evidence supports the tribunal’s
affirmance of respondent’s 2017 true cash value determination for the subject property.

        “True cash value” is the “usual selling price at the place where the property to which the
term is applied is at the time of assessment, being the price that could be obtained for the
property at private sale . . . .” MCL 211.27(1). Thus, contrary to petitioner’s argument, true cash
value is synonymous with fair market value, President Inn Props, LLC, 291 Mich App at 637,
and not simply the cost of construction or build cost, as petitioner appears to assert.

        “In a property tax dispute, the petitioner must prove by the greater weight of the evidence
that the disputed assessment was too high on the basis of the Tax Tribunal’s findings of true cash
value.” Forest Hills Coop, 305 Mich App at 588. However, the tribunal must make an
independent determination of true cash value. President Inn Props, LLC, 291 Mich App at 631.
Accordingly, “the Tax Tribunal has the overall duty to determine the most accurate valuation
under the individual circumstances of the case.” Id. The tribunal did so here.

        Although the Legislature has failed to specify the methods of evaluation assessors should
employ, id. at 637, “[c]ourts have generally recognized that the three most common approaches
to valuation are the capitalization-of-income approach, the sales-comparison or market approach,
and the cost-less-depreciation approach,” id. at 639 (internal citation and quotation marks
omitted). Again, “[r]egardless of which approach is used, the value determined by the Tax
Tribunal must be the usual price for which the property would sell.” Great Lakes Div of Nat’l
Steel Corp v Ecorse, 227 Mich App 379, 390; 576 NW2d 667 (1998). Here, the tribunal adopted
the assessment respondent computed through utilization of the cost-less-depreciation approach,


2
  The record also lacks any evidence to support petitioner’s assertion that the foundation and
framing for his home were complete before respondent assessed the property for the 2016 tax
year.


                                                 -4-
and substantial evidence supported the tribunal’s use of that approach, as well as its ultimate
assessment.

        Under the cost-less-depreciation approach—“which generally considers the land to be
unimproved, requires the development of a replacement cost for improvements, and makes
adjustments for depreciation,” Forest Hills Coop, 305 Mich App at 590—respondent added
together the $95,000 cost of the property’s lot, the $7,500 demolition cost, and the $244,150 cost
of the newly-constructed home, to arrive at a fair market value for the property of $346,650.3 It
then compared that value to four properties of similar style, size, and school district, adjusting for
size differences, to assess a true cash value of $326,600 for the property in 2017. The tribunal
considered the comparisons relevant based on its review of the evidence submitted by respondent
in support, and found respondent’s cost-plus-depreciation approach appropriate to value
petitioner’s newly-constructed home.

         From the above, we see no error of law or adoption of wrong principles which would
justify reversal. The tribunal made its own independent determination of the property’s true cash
value on the basis of substantial evidence submitted by respondent and did so utilizing a
valuation method tailored to valuing property with new construction. The tribunal properly
rejected petitioner’s sales-comparison evidence due to petitioner’s failure to adjust for the
individual features of the proffered comparable properties. Accordingly, substantial evidence
supported the tribunal’s findings and petitioner’s argument to the contrary is without merit.

       Affirmed.



                                                              /s/ Christopher M. Murray
                                                              /s/ Patrick M. Meter
                                                              /s/ Karen M. Fort Hood




3
 To arrive at these figures, the tribunal considered the warranty deed for the property, as well as
building permits submitted as evidence by respondent.


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