EOFE8V E D. -Lr= D. i 3O i 49 IGINAL. JAN 25 Zu13. CLERK OF COURT SUPREME COURT F Hi JAIV rlfrk OF COURT SUPREME COURT OF OHIO

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1 IGINAL APPLE GROUP LTD., IN THE SUPREME COURT OF OHIO CASE NO. i 3O i 49 -vs- Appellant, Appeal from the Ohio Board of Tax Appeals MEDINA COUNTY BOARD OF REVISION, MEDINA COUNTY AUDITOR AND JOSEPH W TESTA, TAX COMMISSIONER OF OHIO, Board of Tax Appeals Case No K Appellees. NOTICE OF APPEAL Karen H. Bauernschmidt # (Counsel of Record) Charles J. Bauernschmidt # Stephen M. Nowak # Richard A. Morehouse # KAREN H. BAUERNSCHMIDT CO., LPA 1370 West 6th Street, Suite 200 Cleveland, Ohio T: (216) / F: (216) karencw-khbtaxlaw.com Attorneys for Appellant Apple Group Ltd. Joseph W. Testa Tax Commissioner of Ohio Department of Taxation 30 East Broad Street Columbus, OH T: (614) / F: (614) Tax Commissioner of Ohio EOFE8V E D JAIV David J. Folk (Counsel of Record) Medina County Assistant Prosecutor 72 Public Square Medina, OH T: (330) / F: (330) dfolk@medinaco.org Attorneys for Appellees Medina County Board of Revision and County Auditor -Lr= D JAN 25 Zu13 CLERK OF COURT SUPREME COURT F Hi rlfrk OF COURT SUPREME COURT OF OHIO

2 NOTICE OF APPEAL OF APPELLANTS Appellant Apple Group Ltd. hereby gives notice of its appeal as of right under R.C to the Supreme Court of Ohio from a Decision and Order of the Board of Tax Appeals, journalized in Case No K-2101 on December 28, A true copy of the Decision and Order of the Board being appealed is attached hereto as Exhibit A and incorporated herein by reference. Appellant complain of the following errors in the Decision and Order of the Board of Tax Appeals: 1: The decision of the Board of Tax Appeals is unreasonable and unlawful since it is inconsistent with the BTA's holding and factional analysis in a companion appeal in Apple Group Ltd. vs. Medina County Board of Revision, et al., (December 28, 2012) BTA Case No K : The Board of Tax Appeals erred in rejecting the Property Owner's appraisal evidence as a result the decision is unreasonable and unlawful. 3: The Board of Tax Appeals' decision is unreasonable and unlawful for the reason that the Board of Tax Appeals disregarded the Property Owner's expert witness' testimony from the "abbreviated" hearing before Board of Tax Appeals. 4: The decision of the Board of Tax Appeals was unreasonable and unlawful since it failed to consider intervening facts personally verified by the Property Owner's appraiser, which impacted the value of the property. 5: The Board of Tax Appeals erred in determining that the Appellant failed to present competent and probative evidence of value for the tax years at issue, as a result of the Board of Tax Appeals' decision is unreasonable and unlawful. 6: The Board of Tax Appeals' failure to recognize the downturn in the economy and resulting reduction in values since 2008, is contrary to the evidence in the record. 7: The Board of Tax Appeals erred when it failed to recognize that the sales data in the Racek appraisal report clearly demonstrated a decline in the value of residential sublots. 8: The Board of Tax Appeals erred in determining that two sublot sales that occurred in July of 2007 (18 months prior to tax lien date) and August of 2008 (5 months prior to tax lien date) are the best evidence of value for tax year 2009 and disregarded more recent sublot sales from August 2009 (8 months after tax lien date) and December 2009 (12 months tax lien date).

3 9: The Board of Tax Appeals erred when it failed to determine a separate value for tax year 2009, where the sales data closest to this tax lien date demonstrated that the Auditor's 2009 value was incorrect, as a result the decision is unreasonable and unlawful. 10: The Board of Tax Appeals erred in not determining a value for tax year 2010 since the 2008 tax complaint was a continuing complaint under R.C : The Board of Tax Appeals erred in their "assumptions" of the "nature" of nearby subdivisions, which resulted in the failure to consider sublot sales from nearby subdivisions that were owned and developed by the same developer as the subject property. 12: The Board of Tax Appeals' decision made "assumptions" of the "strength" of competing subdivisions that were not based upon evidence in the record. 13: The Board of Tax Appeals' decision and order is not supported by the record and therefore is unreasonable and unlawful. 14: The decision of the Board of Tax Appeals is unreasonable and unlawful since the findings of fact and conclusions of law are against the manifest weight of the evidence. 15: The Board of Tax Appeals' decision violates the Property Owner's right to due process under the Ohio and U.S. Constitution and as a result is unreasonable and unlawful. 16: The Board of Tax Appeals' decision violates the Property Owner's right to equal protection under the law and is therefore unreasonable and unlawful. Appellant requests that the Court reverse the unreasonable and unlawful decision of the Board of Tax Appeals and remand the matter to the Board of Tax Appeals to issue an Order for the Board of Tax Appeals to determine a value consistent with the Richard G. Racek, Jr., MAI's appraisal. Respectfully submitted, Karen H. Bauernschmidt # (Counsel of Record) Charles J. Bauernschmidt # Stephen M. Nowak # Richard A. Morehouse # Attorneys for Appellant

4 PROOF OF SERVICE I hereby certify that a copy of this Notice of Appeal was sent this 24t' day of January, 2013 by certified mail, return receipt requested to: David J. Folk Medina County Assistant Prosecutor 72 Public Square Medina, OH Attorney for Appellees Medina County Board of Revision and Medina County Auditor Joseph W. Testa Tax Commissioner of Ohio Department of Taxation 30 East Broad Street Columbus, OH Tax Commissioner of Ohio Karen H. Bauernschmidt # (Counsel of Record) Charles J. Bauernschmidt # Stephen M. Nowak # Richard A. Morehouse # Attorneys for Appellant

5 OHIO BOARD OF TAX APPEALS Apple Group Ltd., CASE NO K-2101 Appellant, (REAL PROPERTY TAX) vs. DECISION AND ORDER Medina County Board of Revision and Medina County Auditor, APPEARANCES: Appellees. For the Appellant - Karen H. Bauernschmidt Co., LPA Property Owner Karen H. Bauernschmidt 1370 West 6`h Street, Suite 200 Cleveland, Ohio For the County - Dean Holman Appellees Medina County Prosecuting Attorney David J. Folk Assistant Prosecuting Attorney 72 Public Square Medina, Ohio Entered EC Ms. Margulies, Mr. Johrendt, and Mr. Williamson concur. Through its appeal, appellant challenges decisions issued by the Medina County Board of Revision ("BOR") involving the valuation of a number of individual parcels for ad valorem tax purposes for tax year This matter is considered upon appellant's notice of appeal, the transcript certified by the BOR pursuant to R.C , and the record of this board's hearing. The subject parcels, consisting of 13 unimproved lots, are located in a 57-lot residential development known as the subdivision in Medina Township between the cities of Medina and Brunswick, Ohio. For tax year 2008, the auditor assessed the subject parcels as follows: EXHIBIT A

6 I Parcel Nos B , 26=06B , 26-06B ; 26-06B , 26-06B , 26-06B , 26-06B , 26-06B , 26-06B , 26-06B , 26-06B , 26-06B , and 26-06B TRIJE VALUE TAXABLE `TALUE Land $105,000 Land $36,750 Building 0 Building 0 Total $105,000 Total $36,750 Pursuant to R.C (A), appellant filed a complaint with the BOR requesting that the true and taxable values of the parcels be reduced to $65,000 and 22,750, respectively. During the BOR's hearing, Sandy Simich, identified in other proceedings as one of appellant's owners, testified that the parcels in question comprised phase three, the least desirable phase of the residential development, consisting of open meadow lots as compared with wooded lots or ones on a ravine. She went on to explain that as the economy took a downturn, sales decreased from their high, circa $125,000 to $129,000, in phases one and two in Simich testified that the only sale occurring, in 2007 was, sub-lot 55 which sold in July for $105,000, that no parcels from phase three s.old in 2008, and that anothersale was pending as of the BOR's hearingin August 2009-for $73,006. Simich requested that the BOR reduce the parcels' true valu'es to $65,000, anticipating tlie " remaining`lots would bo sold to one potential purchaser: The BOR subsequently issued decisi'oins retaining the auditor's valu'es and from these decisions, appellant filed the 'presenti appeal; basing `its value claims upon the written appraisal and testimony "of Richard G: Racek, 3r.; MAI. "When cases are appealed from a board of revision to 'the' BTA; the burden of proof is on the'appellant, whether it be a taxpayer o`r a board of educatiori "to prove its right to an increase [in] or decrease from the value determined by the board of revision." Columbus City School Dist. Bd. of Edn. v. Franklin Cty. Bd. of Revision (2001), 90 Ohio St.3d 564,

7 Typically, the "best evidence" of a property's value is the amount for which it has transferred between two unrelated parties near tax lien date. See, e.g., Berea City School Dist. Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision, 106 Ohio St.3d 269, 2005-Ohio See, also, R.C However, as is the case in the present appeal, "such information is not usually available, and thus an appraisal becomes necessary." State ex rel. Park Invest. Co. v. Bd of Tax Appeals (1964), 175 Ohio St. 410, 412. Since the lots in issue have not recently transferred, appellant heeded the court's admonition, and offered into evidence the testimony and written appraisal prepared by Racek for not only the tax year originally complained of, i.e., 2008, but also tax years 2009 and Racek described the declining condition of the residential real estate market and the impact it has had upon sales of undeveloped lots within the subdivision. Referring to a study tracking housing starts,' Racek testified: "[I]n Medina County, you'll notice that the - the housing starts in 2005 were approximately 1,214 units. That has declined substantially to about 501 units in "It's hopefully well known that the housing - the housing construction and housing market, as a whole, started to decline far before the commercial and industrial market started to decline in late 2008, early "So by the time we got to 2008, the effective date of this analysis, the housing market was already in a - in a large decline. GG* * * "In 2005, there was a high of 74 permits pulled in the township. That's declined to about 14 permits in 2008, which would be a decline of about 81 percent." H.R. at ' The document to which Racek made reference discloses that new housing in Medina County was 1,214 in 2005, 903 in 2006, 691 in 2007, and 501 in See Ex. 1, at 21. 3

8 In developing his opinion of vahie, Racek relied exclusively upon the sales comparison approach, focusing on eight sales within the same subdivision as the subject parcels and seven sales of parcels in subdivisions in close geographic proximity to the development in question which he considered substantially similar to the subdivision: Sale Sale #1 Sale #2 Sale #3 Sale #4 Sale #5 Sale #6 Sale #7 Sale #8 Sale #9 Sale #10 Sale #11 Sale # 12 Sale #13 Sale #14 Sale #15 Location Tamarind Meadows Tamarind Meadows Morning Star Morning Star Morning Star Canterbury Farm Canterbury Farm Date of Sale 7/26/07 8/27/08 8/14/09 12/30/09 4/8/10 9/7/10 12/8/11 12/27/11 8/25/08 12/29/08 2/25/08 6/11/08 11/18/08 12/8/08 12/5/08 Sale Price $105,000 $110,000 $73,500 $75,000 $82,000 $70,000 $67,500 $59,000 $77,000 $84,500 $92,000 $90,000 $85,000 $81,500 $81,500 Based upon the foregoing sales, Racek ultimately reasoned as follows: "After reviewing the actual sales which occurred within the. Subdivision as well as comparing them to recent sales of similarly sized sublots in competing. subdivisions, it is estimated that the market value of individual sublots would be say $85;000 as of January 1, Given the decline in property values which occurred after tax lien date, it' is further estimated that the individual sublots could support a market value of say $75,000 per lots as of January 1, 2009 and January 1, 2010." Ex. 1 at 29. Although the county appellees presented no additional evidence of value, electing to rely upon counsel's cross-examination of appellant's expert, they argued that 4

9 appellant's evidence actually supports the auditor's assessed values, citing to the sales with the subdivision occurring nearer the tax lien dates. We agree. - In EOP-BP Tower, L.L.C. v. Cuyahoga Cty. Bd. of Revision, 106 Ohio St.3d 1, 2005-Ohio-3096, the Supreme Court made the following observation: "VVhen real-property valuation cases are appealed from a board of revision to the BTA, the burden is on the appellant to prove his or her right to an increase or decrease in the value determined by the board of revision. Cleveland Bd. of Edn. v. Cuyahoga Cty. Bd. of Revision ( 1994), 68 Ohio St.3d 336, ***. "In order to meet that burden, the appellant must come forward and demonstrate that the value it advocates is a correct value. Once competent and probative evidence of value is presented by the appellant, the appellee who opposes that valuation has the opportunity to challenge it through crossexamination or by evidence of another value. Springfield Local Bd. of Edn. v. Summit Cty. Bd. ofrevision (1994), 68 Ohio St.3 d 493, ***. The appellee also has a choice to do nothing. However, the appellant is not entitled to the valuation claimed merely because no evidence is adduced opposing that claim. W. Industries, Inc. v. Hamilton Cty. Bd. of Revision ( 1960), 170 Ohio St. 340, 342, * * *." Id. at 5-6. While appellant's appraiser testified regarding a general decline in the residential real estate market, as well as a downturn in the construction of new homes from 2005 through 2008, his sales data suggests that sales within the subject subdivision did not begin to reflect lesser transfer amounts until third quarter Although sales data in other subdivisions reflect lower sales prices earlier than the subdivision, this may speak to the strength of that particular residential community. Sales occurring nearest tax years 2008 and 2009 in the subdivision, i.e., July 26, 2007 sale for $105,000 and August 27, 2008 sale for $110,000, are consistent with and supportive of the auditor's valuation of 5

10 $105;000.2 Cf. HD Dev. v. Cuyahoga Cty. Bd. of^revision (July 17, 2012); BTA Nos , et al., unreported appeal pending Sup. Ct. No: Accordingly, we conclude. appellant has failed to meet its affirmative burden on appeal.3 "Where the BTA rejects the evidence presented to it as not beingy competent and probative, or not credible, and there is no evidence, from which the BTA,can independently determine value; it may approve the board of revision's valuation, without the board of revision's presenting any ev"idence." Simmons v. Cuyahoga Cty. Bd. of_ Revision (1998), 81 Ohio St.3d 47;;49. We therefore'find the values of the subject parcels, i.e., parcel numbers 26-06B , 26-06B=05-034, 26-06B , 26=06B , 26=06B-:11-055, 26-06B , 26-06B , 26=06B , 26-06B , 26-06B , B , 26-06B , and 26=06B ; to be as follows: TRUE VALUE TAXABLE VALUE Land $105,000 Land, 136,750 Building 0 Building ^ 0 Total $105,000 Total $36,750 It is therefore the order ;of this:'board that the. Medina County Auditor list and assess the subject properties in conformity with the decision as anriouncedhn. 2 While Simich testified before the BOR that the quality of parcels differed during the various phases of development of the subdivision;appellant's expert highlighted no stich distinchon.-...: 3 Appellaiit had requested that this board render valrle determinations for tax years 2008, 2009, and 2010 the first two years being the latter portion of a sexennial reappraisal conducted in Medina County, while 2010 is the first year of the su6sequent triennial update. See, generally, R.C. 5713:01(B), 571 ^.33; and Iri: our decision, we have found appellant's evidence insufficient to support the requested adjustments for tax years 2008 and As for tax year 2010, the transcript certified by the BOR`does not contain information for that AERC Saw Mill Village, tax year, one in which the auditor would have established new values. See, generally, 127 Ohio St.3d 44, 2010-Ohio-4468, 19. Under the circumstances Inc. v. Franklin Cty. Bd. of Revision, presented herein, to the extent appellant challenges values ascribed for tax year 2010, we conclude the better course is to direct it to first present its evidence of value to the BOR. Id. at 38. 6

11 I hereby certify the foregoing to be a true and complete copy of the action taken by the Board of Tax Appeals of the State of Ohio and entered upon its journal this day, with respect to e captioned matter. Sally F. Van Meter, Board Secretary 7