Real Estate – Tax Assessment – FMV – Golf Club

Where opinions on the fair market value of the Keswick Club ranged from $2.9 million under the income approach used by the taxpayer’s expert, to over $12.7 million with the county assessor’s use of the cost approach, to $12.5 million by the county’s expert under the income approach, the Supreme Court upholds the circuit court’s decision setting the fair market value at $7 million.

On remand from this court, the circuit court set the value of the property at $7 million, a value figure that had been testified to by Michael Pownall, Keswick Club’s general manager, in the initial trial. That valuation amount was also admitted into evidence in a letter from Pownall to the board of equalization.

In our prior opinion, we held the county’s assessment was not entitled to a presumption of validity and the taxpayer was only required to show the county’s assessment was erroneous, not that the county committed manifest error or disregarded controlling evidence in making its assessment. Under those circumstances, the taxpayer can show an assessment is erroneous if, as set out in Va. Code § 58.1-3984(A), the taxpayer establishes that the property is assessed at more than its fair market value. We concluded the circuit court applied an incorrect standard of review. The case was remanded to allow the circuit court to apply the correct standard of review.

While the circuit court erred in stating this court had already determined the county’s assessment was erroneous, the court nevertheless applied the correct standard on remand when considering whether the county’s assessment was erroneous.

Keswick’s evidence concerning the value of the property was sufficient to demonstrate that the county’s assessment exceeded fair market value. We hold there is evidence to support the circuit court finding that the county committed error in its assessment. Because the circuit court properly determined the assessment was erroneous, it had power to set the assessment pursuant to Va. Code § 58.1-3987. We hold that court’s ruling that $7 million was the proper assessment of the fair market value of the property. We hold the circuit court’s ruling as to the proper value of the taxpayer’s property is not erroneous because it is not plainly wrong or without evidence to support it.

Circuit court ruling affirmed.

Dissent

Kinser, J.: I conclude the circuit court failed to determine, using the less stringent standard of review, whether Keswick Club proved the assessed value of its real property exceeded the property’s fair market value. I respectfully dissent.

The circuit court apparently believed that rebutting the presumption of validity by showing a failure to consider and properly reject certain valuation methods was ipso facto proof of an erroneous assessment. Because the circuit court expressly rejected the evidence presented by Keswick Club, I cannot accept the majority’s conclusion that Keswick Club’s evidence concerning the value of the property was sufficient to demonstrate that the county’s assessment exceeded fair market value.

Because the circuit court believed this court already had held the county’s assessment to be erroneous, it necessarily also believed itself bound by judicial duty to rule accordingly. The circuit court cannot be presumed to have analyzed the evidence under the less stringent standard of review to determine if the assessment exceeded the fair market value of the Club’s real property
I respectfully dissent. I would reverse the circuit court judgment and remand for further proceedings in accordance with this court’s earlier opinion in this matter.

County of Albemarle v. Keswick Club LP (Goodwyn, J.) No. 091590, Sept. 16, 2010; Albemarle County Cir.Ct. (Luke) Andrew H. Herrick, Sr. Ass’t County Att’y; Larry W. Davis, County Att’y, for appellant; Frederick W. Payne, William W. Tanner for appellee. VLW 010-6-091, 22 pp.