SteveK December 29th, 2011
In an recently reported decision the Tax Court affirmed the assessment of a semi private golf course in Gale & Kitson Fredon Golf v Township of Fredon.
Fredon Township conducted a revaluation and the owners of the golf course appealed the new assessment. After trial, the Tax Court, however, did not make a determination of the market value of the golf course. Instead, Judge Vito Bianco held that neither of the parties’ expert appraisers met the burden of proving any adjustment to the assessment at issue was warranted. Stated another way, Judge Bianco found deficiencies in both appraisers opinions to the point of not being able to arrive at anything other than the existing presumed valid assessment.
The taxpayer’s expert used the income capitalization approach in valuing the property. The Court found numerous deficiencies in the development of the capitalization rate. But, more importantly, Judge Bianco held that the cost approach was a more appropriate valuation method than the income capitalization approach for a semi private golf course.
The revaluation firm was the appraisal expert for Fredon and used the cost approach. However, the Court found deficiencies in the land sales used by their appraiser. The Court criticized the use of deed restricted land sales to public and not for profit entities, and held in part that these comparable properties were therefore not of the same highest and best use as the subject golf course.
As stated at the outset, this case is unreported and of limited precedential value. That being said, we have little in the way of any Tax Court decisions on valuing golf course properties. We are also awaiting a decision on another golf course case from Presiding Judge DeAlmeida. It will be interesting to see if Judge DeAlmeida agrees with Judge Bianco’s analysis that the cost approach is the correct valuation method in that golf course case.
DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum, PC (www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in real estate tax appeals. For additional information about the matters in this bulletin or in the firm’s real estate tax appeal group, please contact Martin Allen, Esq
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