                          State of New York
                   Supreme Court, Appellate Division
                      Third Judicial Department
Decided and Entered: December 18, 2014                   518303
_________________________________

In the Matter of KOHL'S
   ILLINOIS INC. #691,
                    Appellant,
      v
                                            MEMORANDUM AND ORDER
BOARD OF ASSESSORS OF THE TOWN
   OF CLIFTON PARK et al.,
                    Respondents.

(And Another Related Proceeding.)
_________________________________


Calendar Date:   October 16, 2014

Before:   Lahtinen, J.P., Garry, Egan Jr. and Lynch, JJ.

                             __________


      Schroder & Strom, LLP, Mineola (Robert N. Goldstein of
counsel), for appellant.

      The Vincelette Law Firm, Albany (Daniel G. Vincelette of
counsel), for Board of Assessors of the Town of Clifton Park and
another, respondents.

      Cooper Erving & Savage LLP, Albany (David C. Rowley of
counsel), for Shenendehowa Central School District, respondent.

                             __________


Lynch, J.

      Appeal from a judgment of the Supreme Court (Crowell, J.),
entered April 11, 2013 in Saratoga County, which dismissed
petitioner's applications, in two proceedings pursuant to RPTL
article 7, to reduce the 2010 and 2011 tax assessments on certain
real property leased by petitioner.
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      Petitioner leases a 10.81-acre parcel of real property in
the Town of Clifton Park, Saratoga County under a 20-year ground
lease. The property includes a 95,715-square-foot retail store
constructed in 2003 pursuant to petitioner's specifications.
Petitioner commenced these proceedings to challenge the 2010 and
2011 tax assessments, which were based on an assessed value of
$5,200,900 that, from an equalization rate of 58%, yields a fair
market value of $8,967,069. Following a bench trial in which the
parties presented the testimony and reports of their respective
appraisers, Supreme Court dismissed the petitions. Petitioner
appeals.

      Petitioner maintains that Supreme Court's decision is
procedurally flawed in that the court ultimately granted
respondents' motion to dismiss the petitions made at the close of
petitioner's proofs, even though petitioner satisfied its
threshold burden of establishing a prima facie dispute regarding
valuation through the presentation of a competent appraisal. As
a consequence, petitioner maintains that Supreme Court, in
finding that the property was not overvalued, applied the wrong
burden of proof in granting the motion to dismiss. Although we
recognize that there is an anomoly in the court's decision, we do
not agree with petitioner's ultimate conclusions.

      As explained by the Court of Appeals in Matter of FMC Corp.
(Peroxygen Chems. Div.) v Unmack (92 NY2d 179 [1998]), "a
property valuation by the tax assessor is presumptively valid and
thus obviates any necessity, on the part of the assessors, of
going forward with proof of the correctness of [the] valuation.
However, when a petitioner challenging the assessment comes
forward with substantial evidence to the contrary, the
presumption disappears" (id. at 187 [internal quotation marks and
citations omitted]). There is no dispute here that petitioner
satisfied this minimal threshold burden of proof through the
report and testimony of its appraiser, Christopher Harland, and
Supreme Court acknowledged as much in its decision. In this
regard, it is important to recognize that "[t]he ultimate
strength, credibility or persuasiveness of petitioner's arguments
are not germane during this threshold inquiry. Similarly, the
weight to be given to either party's evidence is not a relevant
consideration at this juncture" (id. at 188). Once the threshold
                              -3-                518303

has been met, however, "a court must weigh the entire record,
including evidence of claimed deficiencies in the assessment, to
determine whether petitioner has established by a preponderance
of the evidence that its property has been overvalued" (id.).

      Although Supreme Court erred in one part of the decision in
its description of the appropriate procedure and failed to
discuss respondents' proof or set a value for the property, the
court did expressly confirm that it weighed the entire record.
In this context, petitioner was still required to establish that
the property had been overvalued and the credibility and
persuasiveness of petitioner's appraiser was squarely at issue.

      The record shows that Harland utilized both a sales
comparison approach and a capitalization of income approach in
concluding that the market value of the property was $4.8 million
and $4.6 million in 2010 and 2011, respectively. In his sales
comparison analysis, Harland primarily utilized five vacant,
older big-box stores located outside of the Capital District as
comparables. In contrast to Harland, respondent's appraiser,
John O'Neill, opined that vacant properties could not be
considered as comparables to the subject property. For income
capitalization purposes, Harland chose eight second-generation
lease properties as comparables. Harland's basic premise was
that build-to-suit leases, such as petitioner's, were not
accurate indicators of market value because the original user
would pay more to build its prototype building than the market
would be willing to pay. O'Neill adamantly disagreed, explaining
that such leases are negotiated at arm's length between a tenant
and developer motivated to maximize profits. Utilizing build-to-
suit lease properties located in the Capital District, and
emphasizing that the subject property was in a "premier
commercial location," O'Neill completed a comparable sales and an
income capitalization analysis, valuing the property at $11.1
million and $10.8 million for the tax years 2010 and 2011,
respectively. The difference in the valuation approach of each
expert presented a credibility determination for Supreme Court to
resolve (see Matter of Rite Aid of N.Y. No. 4928 v Assessor of
Town of Colonie, 58 AD3d 963, 964 [2009], lv denied 12 NY3d 709
[2009]).
                              -4-                  518303

      We find that the record supports Supreme Court's rejection
of Harland's appraisal and its conclusion that petitioner failed
to sustain its burden of proof of establishing overvaluation of
the subject property. Lest there be any uncertainly here, and
"in the interest of judicial economy, we exercise our broad
authority to independently consider the evidence" (Matter of
Friar Tuck Inn of Catskill v Town of Catskills, 2 AD3d 1089
[2013]). Considering the above, we find that the court properly
dismissed the petitions (see Matter of NYCO Mins. v Town of
Lewis, 296 AD2d 748, 750-751 [2002], lv dismissed and denied 99
NY2d 576 [2003]; see also Matter of Thomas v Davis, 96 AD3d 1412,
1415 [2012], lv denied 21 NY3d 860 [2013]; Matter of Villa Roma
Country Club v Fulton, 301 AD2d 911, 912-913 [2003]).

     Lahtinen, J.P., Garry and Egan Jr., JJ., concur.



     ORDERED that the judgment is affirmed, without costs.




                             ENTER:




                             Robert D. Mayberger
                             Clerk of the Court
