                           ILLINOIS OFFICIAL REPORTS
                                         Appellate Court




               Kankakee County Board of Review v. Property Tax Appeal Board,
                                2012 IL App (3d) 110045




Appellate Court            THE KANKAKEE COUNTY BOARD OF REVIEW, Petitioner, v. THE
Caption                    PROPERTY TAX APPEAL BOARD and ARMSTRONG WORLD
                           INDUSTRIES, Respondents.



District & No.             Third District
                           Docket No. 3-11-0045


Filed                      May 7, 2012


Held                       The Illinois Property Tax Appeal Board’s reduction of the assessed value
(Note: This syllabus       of an old and somewhat unique industrial complex was affirmed,
constitutes no part of     notwithstanding the county’s contentions that the Board erred in relying
the opinion of the court   on sale values from out-of-market properties and in rejecting the county’s
but has been prepared      appraisal based on multitenant leases and concluding that sales involving
by the Reporter of         such leases required downward adjustments, since nonleased properties
Decisions for the          provided a better indicator of the subject property’s value, relying on the
convenience of the         adjusted value of those properties in fixing the value of the subject
reader.)
                           property was not against the manifest weight of the evidence, and the
                           reliance on values of out-of-market properties was supported by
                           testimony that the distance to the subject property was not a factor in
                           valuation.


Decision Under             Petition for review of order of Illinois Property Tax Appeal Board, No.
Review                     06-1787.001-I-3.
Judgment                   Confirmed.


Counsel on                 John J. Boyd, State’s Attorney, of Kankakee (Theresa Kubalanza,
Appeal                     Assistant State’s Attorney, of counsel), and Frederic S. Lane, Scott L.
                           Ginsburg, and Kenneth M. Florey (argued), all of Robbins, Schwartz,
                           Nicholas, Lifton & Taylor, Ltd., of Chicago, for appellant.

                           Lisa Madigan, Attorney General, of Chicago (Ann C. Maskaleris
                           (argued), Assistant Attorney General, of counsel), for appellee Illinois
                           Property Tax Appeal Board.

                           Peter Verros, of Verros, Lafakis & Berkshire, P.C., of Chicago, for
                           appellee Armstrong World Industries.


Panel                      PRESIDING JUSTICE SCHMIDT delivered the judgment of the court,
                           with opinion.
                           Justices Lytton and McDade concurred in the judgment and opinion.


                                            OPINION

¶1          The Kankakee County Board of Review (the County) appeals the decision of the Illinois
        Property Tax Appeal Board (PTAB). Armstrong World Industries (Armstrong) filed a real
        property assessment appeal with the PTAB, seeking reduction of the County’s assessed value
        of a property parcel for the 2006 tax year. The PTAB issued a decision granting Armstrong’s
        reduction, lowering the assessed value from $2,884,281 to $1,326,600. The County filed a
        petition for direct review pursuant to section 16-195 of the Property Tax Code (the Code) (35
        ILCS 200/16-195 (West 2008)) and section 3-113 of the Illinois Code of Civil Procedure
        (735 ILCS 5/3-113 (West 2008)). The County claims the PTAB erred, inter alia: (1) in
        rejecting the County’s appraisal based upon multitenant leases; (2) in concluding that sales
        involving multitenant leases require downward adjustments; and (3) by relying on sale values
        from out-of-market properties. While arguing numerous points, the gravamen of the
        County’s appeal is that the PTAB erred in valuing the property when it assigned greater
        weight to the opinion of Armstrong’s appraiser than to those of the County’s experts. We
        confirm the decision of the PTAB.

¶2                                        BACKGROUND
¶3         The property at issue is a large, old and somewhat unique industrial complex located in
        Kankakee County. Armstrong uses the facility to manufacture floor tiles, employing a fairly
        uncommon vertical manufacturing approach. This vertical process requires a very tall

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     facility, which would not be useful for many potential industrial users. Armstrong has been
     the facility’s sole owner and user since construction. Numerous additions have resulted in
     a complex comprised of multiple buildings encompassing more than 395,000 square feet.
¶4       On March 8, 2007, the County issued a final decision on assessed value for the 2006 tax
     year for the Armstrong parcel, number 17-09-28-302-018. The County found the assessed
     value to be $2,884,281 (reflecting a market value of $8,609,794). On April 2, 2007,
     Armstrong filed a real estate tax appeal petition with the PTAB, claiming that the proper
     assessed value should have been $1,307,115 (reflecting a market value of $3,150,000). In
     support of its appeal, Armstrong submitted an appraisal prepared by J. Edward Salisbury of
     Salisbury & Associates, Inc. (Salisbury). In response to Armstrong’s appeal, the County
     submitted an appraisal of the subject property prepared by Andrew Brorsen of Brorsen
     Appraisal Service, P.C. (Brorsen), as well as a review of Mr. Salisbury’s appraisal performed
     by Richard Buchaniec of Buchaniec & Company (Buchaniec).
¶5       Salisbury, Brorsen and Buchaniec all testified at a March 10, 2010, PTAB hearing. All
     three experts agreed that the sales comparison approach was the proper valuation method for
     the subject property. Buchaniec did not express any opinion of value, as he only performed
     an appraisal review.
¶6       Mr. Salisbury, Armstrong’s expert, testified that he relied upon five sales comparables
     to determine the value of the subject property. He did not consider properties where a
     significant portion was leased at the time of sale as such properties would be dissimilar to
     the subject property and, therefore, not comparable. Thus, none of Salisbury’s comparables
     were leased at the time of sale (each instead conveying unencumbered ownership). Prior to
     being retained by Armstrong, he had either visited or appraised three of his comparables or
     their surrounding properties. The five Salisbury comparable properties sold between May
     2003 and December 2005, with prices ranging from $750,000 to $2.1 million, or $2.91 to
     $8.10 per square foot. The properties ranged in size from 201,900 to 685,620 square feet and
     ranged in weighted age from 25 to 61 years. Salisbury opined that three features negatively
     affected the subject property: its 40-year weighted age, its construction in stages via multiple
     additions and its rack warehouse system, which he believed would not be useful for many
     potential buyers. Under the cost approach, Salisbury concluded that the subject property had
     a fair market value of $2.9 million. Under the sales comparison approach, Salisbury found
     the subject property had a fair market value of $3.15 million, or $8 per square foot.
¶7       Next, Mr. Buchaniec testified for the County regarding his review of Salisbury’s
     appraisal. Buchaniec expressed concern regarding Salisbury’s comparable sales. He
     challenged the accuracy of Salisbury’s appraisal, given the distance of the comparable sales
     to the subject property as well as the degree of adjustment those properties required.
     However, Buchaniec acknowledged that distance to the subject property is not a factor in
     valuation. Buchaniec agreed with Salisbury that the property was unique given its age, size
     and multistory nature. This complicated the task of finding suitable comparable sales.
     Buchaniec opined that the only reason he could see for Salisbury to use his chosen
     comparable sales was if it was “handy for him” because “he just had them in his file.” While
     Buchaniec made an effort to identify similar properties in neighboring Will County, he
     acknowledged that he made no effort to determine whether these properties were actually

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       comparable to the subject property. Buchaniec would have used comparable sales located
       closer to the subject property, but acknowledged that the best method of sales comparison
       evaluation (though cost prohibitive) would be “to do a mini appraisal” of each comparable
       sale. Buchaniec ultimately believed Salisbury was intentionally using low value comparable
       sales. However, he admitted that he had neither analyzed Salisbury’s comparable sales nor
       made an effort to verify the data from Salisbury’s comparable sales.
¶8         Finally, Mr. Brorsen testified for the County that he analyzed data associated with six
       properties to determine the value of the subject property. These six properties sold between
       September 2000 and June 2006, with prices ranging from $2.1 million to $15 million, or
       $12.27 to $26.79 per square foot. All of the sales were within 55 miles of the subject
       property, ranging in size from 100,000 to 560,000 square feet with a weighted age from 31
       to 66 years. Five of the sales were multitenant properties leased at the time of sale. Brorsen
       did not rely on information from the sixth sale as it occurred years prior to the 2006 tax
       assessment of Armstrong’s property. Four of the properties were 90% to 100% leased at the
       time of sale. Brorsen claimed that the fact that a property was leased has no effect on its sale
       price as properties “in excess of 200,000 square feet seldom are leased to a single tenant.”
       Brorsen ultimately determined that the subject property had a value of $10.4 million under
       the cost approach and $8.6 million under the sales comparison approach.
¶9         The PTAB issued a final administrative decision on December 23, 2010. It found that
       Brorsen’s determination of the sales comparison approach was deficient, as four of his six
       comparable sales were “dissimilar to the subject’s single user configuration” given their
       multitenant nature. According to the PTAB, the use of multitenant buildings “runs counter
       to Brorsen’s highest and best use determination of the subject as improved,” and Brorsen,
       therefore, should have made an adjustment for the leased properties. Furthermore, Brorsen
       provided no information regarding the lease terms, length or other details for any comparable
       sale. The PTAB found that Brorsen was not credible when he stated that “being leased does
       not have an impact on the sale” particularly given Brorsen’s statement that one of his
       comparable properties was purchased “as an investment.” The PTAB found Salisbury’s
       comparables, which were unencumbered at the time of sale, “to be more indicative of market
       value than [Brorsen’s] sales of fully leased properties.”
¶ 10       With regard to Salisbury’s appraisal, the PTAB gave the most weight to a property in
       Watseka, finding it evinced “a market more similar to the subject’s market area.” It noted the
       Watseka property required upward adjustment for location, time and market conditions. This
       comparable sold for $8.10 per square foot. Ultimately, the PTAB found the proper assessed
       value of the subject property to be $10 per square foot for a total assessed value of
       $1,326,600, which equates to a fair market value of $3,960,000. This direct review followed.

¶ 11                                         ANALYSIS
¶ 12        When reviewing a decision of the PTAB, we accept its findings and conclusions on
       questions of fact as prima facie true and correct. Peacock v. Property Tax Appeal Board, 339
       Ill. App. 3d 1060, 1068 (2003); Illini Country Club v. Property Tax Appeal Board, 263 Ill.
       App. 3d 410, 417 (1994). Our review is limited to determining whether the agency’s findings


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       are against the manifest weight of the evidence, which means that “all reasonable and
       unbiased persons would agree that the opposite conclusion is clearly evident.” National City
       Bank of Michigan/Illinois v. Property Tax Appeal Board, 331 Ill. App. 3d 1038, 1042 (2002).
       When faced with challenges to a PTAB decision reducing a taxpayer’s assessment, courts
       have noted that “we are not charged with the responsibility of determining the market value
       of the subject property. Rather, the central question before us is whether the PTAB’s decision
       to reduce petitioner’s tax assessments *** was correct.” Kankakee County Board of Review
       v. Property Tax Appeal Board, 226 Ill. 2d 36, 50 (2007); Cook County Board of Review v.
       Property Tax Appeal Board, 384 Ill. App. 3d 472, 479 (2008).
¶ 13        The Illini Country Club court addressed an issue similar to the one before us. Taxpayers
       offered comparable properties in support of their assessment, and the county board of review
       countered with its own comparables. Illini Country Club, 263 Ill. App. 3d at 412-13. The
       Illini Country Club court stated that “in the case at bar, there is dispute over the fair cash
       value of the subject properties. The [PTAB] had to assess the credibility of the witnesses and
       resolve the conflicts in the evidence. Therefore, a question of fact based on the difference of
       opinion of the fair cash value is the issue here.” Id. at 417. The court went on to note that
       “[i]f there is any evidence which fairly supports the agency’s findings, the decision must be
       sustained on review.” Id.
¶ 14        Similarly, in Du Page County Board of Review v. Property Tax Appeal Board, 284 Ill.
       App. 3d 649 (1996), the Du Page County Board of Review (Du Page Board) determined that
       the property owners’ single-family residence had a fair market value of $385,073, equating
       to an assessed value of $127,960 for the 1991 tax year. The property owners filed an appeal
       with the PTAB, claiming the assessment was excessive compared with surrounding
       properties. Id. at 650. In support of their appeal, the property owners submitted an appraisal
       report, which relied, inter alia, on four comparable properties. Id. At the hearing, the owners’
       expert testified as to the comparability of the four properties as well as the adjustments
       required for each, ultimately concluding that the proper assessed value was $92,724. Id. at
       650-51. The Du Page Board countered with experts who introduced a fifth comparable and
       emphasized the differences between the subject property and the four comparable properties
       used by the owners’ expert. Id. at 651. The PTAB agreed with the property owners, lowering
       the assessed value from $127,960 to $110,740. Id. at 652.
¶ 15        The Du Page Board sought administrative review, claiming that the PTAB decision was
       legally erroneous. Id. It argued that a lack of uniform assessment must be proved by clear and
       convincing evidence and, therefore, “as a matter of law, four comparables taken from the
       same subdivision as the subject property cannot constitute clear and convincing evidence.”
       Id. The Du Page court disagreed with the Du Page Board’s suggestion that it review the
       matter de novo. Id. at 653.
¶ 16        Relying on Illini Country Club, the Du Page court noted that “[s]imilarly, here, the only
       issue is whether the PTAB placed the proper valuation on the property. The question whether
       the four comparable sales did or did not establish that the subject property was not uniformly
       assessed was a factual issue for the PTAB to resolve.” Id. at 653-54.
¶ 17        Noting that “both parties presented expert testimony to the effect that the comparables


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       supported their respective valuations,” the Du Page court found this required the PTAB “to
       assess the credibility of the witnesses and the weight of the evidence.” Id. at 654. The court,
       again quoting from Illini Country Club, stated that “[i]f there is any evidence which fairly
       supports the agency’s findings, the decision must be sustained on review.” (Internal quotation
       marks omitted.) Id. at 655 (quoting Illini Country Club, 263 Ill. App. 3d at 417). For this
       reason, the court in Du Page held that the PTAB’s weighing of comparables involved
       findings of fact which could not properly be reviewed de novo. Du Page County, 284 Ill.
       App. 3d at 655.
¶ 18        Likewise in the case before this court, the parties have each offered expert witness
       testimony regarding the suitability of comparable properties. This required the PTAB to
       assess witness credibility and weigh the evidence presented to it. As this court has previously
       noted, “determining the weight of the evidence and the credibility of the witnesses is
       uniquely within the province of the administrative agency, and a mere difference of opinion
       concerning value is not a sufficient basis to disturb the PTAB’s decision.” National City
       Bank, 331 Ill. App. 3d at 1043. Our review indicates the PTAB’s decision is supported by
       testimonial evidence from both Salisbury and Buchaniec. Both testified that leased properties
       are less comparable to the subject property than nonleased properties. We find the PTAB did
       not err in concluding that nonleased properties were a better indicator of the subject
       property’s value. As such, its reliance on the adjusted values of those properties, when fixing
       the fair market value of the subject property, is not against the manifest weight of the
       evidence as not “all reasonable and unbiased persons would agree that the opposite
       conclusion is clearly evident.” National City Bank, 331 Ill. App. 3d at 1042.
¶ 19        The PTAB’s reliance on sale values from out-of-market properties was the result of its
       assessment of witness credibility and weighing of evidence, which was supported by
       testimony from Buchaniec that distance to the subject property is not a factor in valuation.
       Its decision of value is not against the manifest weight of the evidence.

¶ 20                                  CONCLUSION
¶ 21      For the reasons discussed above, the decision of the Property Tax Appeal Board is
       confirmed.

¶ 22      Confirmed.




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