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07/14/88 Ellsworth Grain Company, v. the Illinois Property Tax

July 14, 1988

ELLSWORTH GRAIN COMPANY, PLAINTIFF-APPELLANT

v.

THE ILLINOIS PROPERTY TAX APPEAL BOARD ET AL., DEFENDANTS-APPELLEES



APPELLATE COURT OF ILLINOIS, FOURTH DISTRICT

526 N.E.2d 885, 172 Ill. App. 3d 552, 122 Ill. Dec. 492 1988.IL.1104

Appeal from the Circuit Court of McLean County; the Hon. Wayne C. Townley, Judge, presiding.

APPELLATE Judges:

JUSTICE SPITZ delivered the opinion of the court. GREEN, P.J., and McCULLOUGH, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE SPITZ

This appeal is from the administrative review in the circuit court of McLean County affirming a decision of the Illinois Property Tax Appeal Board relating to the real estate tax assessment for the year 1984 of the Ellsworth Grain Elevator facilities in Ellsworth, Illinois. The PTAB affirmed the assessed valuation of said property set by the McLean County Board of Review at $196,764. The only issue on appeal is whether the PTAB improperly applied a method for valuation of the subject property so that the assessed valuation arrived at was against the manifest weight of the evidence.

The subject property consists of five parcels which comprise a grain elevator and storage facility. The principal improvements on the parcels are round and flat grain bins, wooden elevator, dryer, office, and scale. Total capacity is 910,000 bushels.

The 1984 assessed valuation of the property, after applying the township multiplier, was $196,764. The plaintiff claimed the property should have been assessed at $75,000. At the hearing before the PTAB, plaintiff called two witnesses, Wallace Furrow and Gene Williams, and the county offered one, Art Nafziger.

Furrow, himself a grain elevator operator, testified he purchased a grain elevator at Minonk two or three years before the assessment date of the subject property and another grain elevator at Merna about nine months after the assessment date. He paid 10.11 cents per bushel of storage capacity for each of these. The Minonk facility was purchased in 1981 for $100,000 and is rated at 1 million-bushel capacity. The Merna facility, including personal property such as trucks, tractors, and office equipment, was purchased in September of 1985 for $110,000 and is rated at 250,000-bushel capacity. Furrow testified that the price of the personal property should be deducted to determine the real property value. A real estate and personal property breakdown was submitted for the Merna facility with allocation for the equipment and real property. However, nothing was submitted documenting the breakdown of the Minonk facility. Furrow further testified concerning the problems associated with flat storage bins, which comprise approximately one-half of the storage area of the subject property. He stated that flat warehouse bins increase the expense of storage due to the intense labor of getting the grain in and out. Therefore, these are considered less valuable than round bin storage areas. Furrow stated that the subject property is not a modern operation due to the scattered layout of the dumping and storing system. Newer facilities are built so that there is less handling and hauling of the grain, with most work done by conveyors, lathes, or elevators. He pointed out that because the subject facility requires a great deal of labor to transport the grain from one area to another, the profitability of the operation is reduced and the market value decreased. Finally, Furrow testified that due to the age and wood construction of the elevator house, insurance is extremely expensive, to the point of affecting the saleability of the property.

Williams, one of the owners of Ellsworth Grain Company, testified concerning a financial audit for the 1983 and 1984 business years. He explained in detail the results and findings of the audit, with respect to earnings and changes in the financial position of the subject facility. He pointed out the net income from the subject property of $31,699.89 in 1983 and the loss in income of $157,620.73 in 1984. He testified that the low profit in 1983 was due to a poor growing season, while the 1984 loss of income was due primarily to the government payment in kind program, although some could be attributed to an unrelated 40-acre family operation. This document, however, which was prepared for income tax purposes, was unsigned and the preparer was not available for examination by counsel.

Williams further testified concerning other grain storage facilities in the area in competition with his company. He explained the various differences in construction, storage, grain dumps, drying capacities, and overall layouts as compared to the subject property. Finally, Williams testified about numerous attempts to sell the subject property. He stated that, since the spring of 1984 to the time of the hearing, the subject facility has been for sale. During that period of time the asking price started at $320,000 and was reduced to $275,000. Representatives of several prospective buyers viewed the facility and inspected the books and records of the operation. As of the time of the hearing, none indicated any interest in purchasing the subject facility, nor made any offers.

Nafziger, past chairman of the McLean County Board of Review, a certified Illinois assessing official and an officer in a company owning a grain elevator, testified he had visited the subject property. Nafziger admitted sales of elevators are few and far between. As a result, he was unaware of any sales of elevators and had not determined the fair cash value of the subject property, or any of the other properties he compared to the subject property. He did, however, review the age, characteristics, and assessed value of the various types of improvements and storage facilities in other elevators to demonstrate his belief that the assessed value on the subject property was comparable to those of other elevators.

In its written decision, the PTAB completely recited the evidence and then concluded as follows:

"After hearing the testimony and reviewing the record, the Property Tax Appeal Board finds that it has jurisdiction over the parties and the subject matter of this appeal. The Board further finds that the financial statement offered by the appellant in support of its income analysis is essentially unsubstantiated. The audit, which was prepared for income tax purposes, was unsigned and the preparer was not present for examination. Thus, the weight and credibility to be given this testimony is significantly diminished due to the lack of documentation. The comparable sales data were also unsubstantiated. The appellant offered no probative evidence to document the comparability of two suggested comparables as compared to the subject property. With respect to the number of attempts to sell the subject property, the Board notes that no listing agreements or documented offerings were submitted into evidence. Only the testimony from the appellant was presented in support of the suggested offerings and rejections of the prospective purchasers. Based on the evidence presented, the Board finds that it can give little weight to the appellant's ...


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