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April 18, 1983


Appeal from an order of the Circuit Court for Adams County: Andrew P. Cotter, Judge.

Petition to Review Denied.

Gartzke, P.j., Dykman, J. and W.l. Jackman, Reserve Judge.

The opinion of the court was delivered by: Dykman

The Board of Review of the Town of Rome appeals from an order remanding this case to the board to reconsider the 1981 tax assessments on real property owned by East Briar, Inc. The issues are whether the assessor followed statutory requirements in assessing East Briar's dam, artificial lake and golf course, and whether she considered the time and expense necessary to sell lots in a subdivision. We conclude that the assessor erred in both respects and therefore affirm the trial court's order.

East Briar, Inc., owns a real estate development called "Lake Arrowhead", located near Wisconsin Dells. It consists of 3,581 acres, including several subdivisions and recreational amenities such as a lake, dam, golf course, clubhouse, swimming beaches, beach center buildings, park forest, ski chalet, ski hill and tennis courts. The development is in various stages of construction with lots for sale in several subdivisions. The artificial lake, dam and golf course are substantially completed.

East Briar objected to the town's property tax assessment and a hearing was held before the town board of review on August 17, 1981. East Briar and the town assessor presented extensive evidence concerning valuation and assessment.

After the board upheld the assessments, East Briar appealed by certiorari to the circuit court. The trial court remanded the matter to the board because the real estate amenities were not assessed at the amount obtainable at a private sale and because the assessor failed to consider marketing expense in connection with selling the subdivision lots.

We stated the scope of judicial review of tax assessments in State ex rel. Wis. Edison Corp. v. Robertson, 99 Wis. 2d 561, 565-66, 299 N.W.2d 626, 628-29 (Ct. App. 1980):

"'The principles of law are well settled governing the jurisdiction of courts in reviewing the findings of boards of review on certiorari. The duties of boards of review are quasi -judicial and courts have no jurisdiction to disturb their findings or determinations except where they act in bad faith or exceed their jurisdiction. Judicial review of the action of boards of review on certiorari extends only to jurisdictional errors. If a board of review does not act arbitrarily or dishonestly and the evidence presented before it is sufficient to furnish any substantial basis for the valuation found by the board, its decision will not be disturbed. The review here extends only to correction of jurisdictional errors and does not include mere errors of judgment as to the preponderance of the evidence. Upon certiorari to a non-judicial body such as a board of review, the court will review the evidence only so far as to ascertain if there is reasonable ground for belief that the decision is the result of honest judgment, in which case it will not be disturbed. This court will review the proceedings to ascertain whether such body has kept within its jurisdiction and whether such board acted upon competent evidence sufficient to give it jurisdiction. The presumptions are all in favor of the rightful action of such board. The assessor's valuation of property is prima facie correct and is binding upon the board of review in the absence of evidence showing it to be incorrect.' [Quoting State ex rel. Pierce v. Jodon, 182 Wis. 645, 647-48, 197 N.W. 189, 190 (1924).]

"In addition, failure to make the assessment on the statutory basis is an error of law and correctable by the courts on certiorari. If the trial court finds upon the undisputed evidence before the board that the assessment has not been fixed upon the statutory basis, the assessment should be set aside. (Citations omitted.)"


Section 70.32(1), Stats., provides in pertinent part:

Real property shall be valued by the assessor in the manner specified in the Wisconsin property assessment manual provided under s. 73.03(2a) from actual view or from the best information that the assessor can practically obtain, at the full value which could ordinarily be obtained therefor at private sale. . . .

This statute has been consistently construed to mean that real property must be assessed on the basis of its fair market value. Rosen v. Milwaukee, 72 Wis. 2d 653, 661, 242 N.W.2d 681, 684 (1976). Fair market value of land is the "amount it will sell for upon negotiations in the open market between an owner willing but not obliged to sell and a buyer willing but not obliged to buy." Id. (footnote omitted).

The best information of fair market value is a sale of the property or sales of comparable properties if no such sale has occurred. Wis. Edison Corp., 99 Wis. 2d at 567, 299 N.W.2d at 629. Some property, however, is not subject to assessment in the manner outlined above.

"For property whose market is restricted or nonexistent and for unique property which is not for sale the appraisal is necessarily based on many factors other than actual sales of this or comparable property. Nevertheless, the task of the appraiser is to determine, as accurately as he can, the amount which the property would bring in the period for which the assessment is made, both buyer and seller being willing and able to deal. . . ." [Citation omitted.]

State ex rel. Mitchell Aero v. Bd. of Review, 74 Wis. 2d 268, 277-78, 246 N.W.2d 521, 526 (1976).

In such a case, fair market value is obtained by considering all relevant factors which have a bearing on that value, including cost, depreciation, replacement value, income, industrial conditions, location and occupancy, sales of like property, book value, amount of insurance carried, value asserted in a prospectus and appraisals produced by the owner. Id. at 278, 246 N.W.2d at 526. "In the absence of actual sale, or sale of reasonably comparable property, all of the above factors which are ascertainable and which collectively have a bearing on the value of the property must be considered by the assessor in order to determine its fair market value." Id.

The trial court remanded because the assessor had not considered the effect of "restrictions" on the sale of the amenities which affect their value. *fn1 Restrictions on the sale of the amenities exist. Each member of Lake Arrowhead Association, Inc. has a fractional interest in the amenities. East Briar is required to convey the amenities to the association within six months of sale of all tracts in the development. These restrictions reduce the value of the amenities because a buyer would have to be willing to purchase them with their restrictions as to sale and use. These restrictions therefore reduce the amenities' value below the value they would have were the restrictions not in existence.

The amenities have some value, however. East Briar retains the right to open the amenities to the public and charge user fees. It could retain one or two lots and avoid conveyance of the amenities indefinitely. In addition, it may apply the restrictions to other, noncontiguous land and thereby continually increase the development and never convey the amenities. The value of amenities must be determined by the assessor for tax purposes. *fn2

The only testimony by the assessor concerning her assessment of the amenities related to the golf course. She stated that she arrived at its value strictly according to costs of construction. She compared the golf course to other courses in the area. She acknowledged that this course was a championship course and the other courses were not. She was not aware that there were restrictions on the sale and use of East Briar's golf course and that no golf course she used as a comparable had restrictions similar to those in this case.

The assessor must consider the restrictions on East Briar's amenities because they have a bearing on the value of the amenities. It was error for the board to sustain the assessments. The trial court correctly remanded the matter back to the board for reconsideration.


The trial court determined that the assessor did not consider the time and expense necessary to market the lots, contrary to sec. 70.325, Stats., which requires her to do so. ...

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