IN THE SUPREME COURT OF OHIO NOTICE OF APPEAL OF APPELLEE - APPELLANT CRE JV MIXED FIFTEEN OH 2 BRANCH HOLDINGS, LLC

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1 IN THE SUPREME COURT OF OHIO BOARD OF EDUCA'I'ION OF THE CLEVELAND : MUNICIPAL SCHOOL DISTRIC'T, Appellant - Appellee Vs. Appeal from the Ohio Board of Tax Appeals CRE JV MIXED FIFTEEN OH 2 BRANCH HOLllINGS, LLC Appellee - Appellant CIJYAHOGA COUNTY BOARD OF REVISION, CUYAHOGA COUNTY AUDITOR AND RICHARD LEVIN, TAX COMMISSIONER OF OHIO Board of Tax Appeals Case No K-291 Appellees. NOTICE OF APPEAL OF APPELLEE - APPELLANT CRE JV MIXED FIFTEEN OH 2 BRANCH HOLDINGS, LLC Karen H. Bauernsclimidt, # (COUNSEL OF RECORD) Karen H. Bauernschmidt C'o., LPA 1370 West 6n' Street, Suite 200 Cieveland, Ohio (216) (216) Facsimile karen(a,)khbtaxlaw.com Saundra Curtis-Patrick, # (CO(JNSEL OF RECORD) Assistant Cuyahoga Coutity Prosecutor 8tliFloor - Justice Center 1200 Ontario Street Cleveland, Ohio (216)443-7$00 (216) Facsimile scurtispatrick(a),cuyahogacounty.us COUNSEL FOR APPELLEE - APPELLANT CRE.IV MIXED FIF'I'L'EN OII 2 BRANCII HOLDINGS, LLC ATTORNEY FOR APPELLESS CUYAHOGA COUNTY BOARD OF REVISION CUYAIIOGA COUNTY AUDITOR

2 David H. Seed, # (COUNSEL OF RECORD) Brindza, McIntyre & Seed, LLP 1111 Superior Avenue, Suite 1025 Cleveland, OH (216) (216) Facsimile dsced@bms-law.com Ricllard Levin Tax Commissioner of Ohio 30 East Broad Street, Suite Columbus, OH (614) (614) Facsimile TAX COMMISSIONFR OF OHIO ATTORNEY FOR APPELLAN"I' - APPELLEES BOARD OF EDUCATION OF THE CLEVELAND MUNICIPAL SCHOOL DISTRICT

3 Notice of Appeal of Appellce - Appellant Appellee - Appellant, CRL JV Mixed Fifteen OH 2 Branch Holdings, LLC, hereby gives notice of its appeal as of right, pursuant to R.C , to the Supreme Court of Ohio, from a Decision and (?rder of the Board of Tax Appeals, journalized in Case No K-291 on March 30, A trve copy of the Decision and Order of the Board being appealed is attached hereto as Exhibit A and incorporated herein by reference. Appellee - Appellant, CRE JV Mixed Fifteen OH 2 Branch Holdings, LL,C, complains of the followiug errors in the Decision and Order of the Board o1' Tax Appeals: 1) The Board of Tax Appeals acted unreasonably and unlawfully in overturning the Board of Revision's deteimination of value when no such evidence in the record existed supporting that decision. 2) The Board of Tax Appeals acted unreasonably and unlawfully in determining that a prima facie case had been established for using the allocated sale price of the subject property. 3) The Board of T'ax Appeals acted unreasonably and unlawfully in disregarding the unrebutted testiinony of the property owner as to the allocation of the sales price of the subject property. 4) T'he decision of the Board of Tax Appeals is unreasonable and unlawful for the reason that it valued the subject real property based upon a sale that was not arms length and that was part of a sale and leaseback transaction utilized purely as a financing too1. 5) 'I'he Board of Tax Appeals acted unreasonably and unlawftilly in detennining that the board of education met its burden of proof when no evidence was presented supporting that detennination. 6) The decision of the Board of 'I'ax Appeals adopting the allocated sale price of the subject property is unreasonable and unlawful based on this Court's holding in S. Fnc1i(kLyndhur st 13d. of Fdn. v_ Cuyahoga Cty. Bd. of Revision, (1996), 74 Ohio St. 3d 314, 658 N.E.2d ) The decision of the Board of Tax Appeals is unreasonable and Luilawful, basecl on this Court's holding in St. Bernard Self Storage, L. L.C v_ Ilamilton Cty. 13d. of Revision (2007), 115 Ohio St. 3d 365, 2007-Ohio-5249.

4 8) The decision and order of the Board of Tax Appeals is unreasonable and unlawful since it is in contravention of Ohio laws and the Ohio Constitution. 9) The decision of the Boai-d of'tax Appeals violates Article XII, Section 2 Ohio Constitution that property should be taxed by uniform rule according to value. 10) 1'he decision of the Board of Tax Appeals violates the right of "equal protection" under Article I, Section 2 and Article Il, Section 26 Ohio Constitution and Amendment XIV, Section I tjnited States Constitution in that it treats the Appellant different from other property owners for purposes of vahiatioii. Appellee - Appellant, CRE JV Mixed Fifteen OH 2 Branch Holdings, LLC, requests that the Court reverse the unreasonable and unlawfal decision of the Board of Tax Appeals and remand the matter to the Board of Tax Appeals to issue an Order settuig forth the total valuation of the property for tax year 2006 at a true value of $159,800. Respectfiilly submitted, Karen H. Bauernschmidt, # COUNSEL FOR APPELLEE - APPELLANT, CRE JV MIXED F1P'i'EEN OFI2 BRANCH HOLDINGS, LLC

5 PROOF OF SERVICE I hereby certify that a copy of this Notice of Appeal was sent this 26Ih day of April, 2010 by certified mail, return receipt requested to: Saundra Curtis-Patrick Assistant Cuyahoga County Prosecutor 8tli Floor - Justice Center 1200 Ontario Street Cleveland, Ohio AT7'ORNEY FOR APPELLEES CUYAHOGA COIJNTY BOARD OF REVISION CUYAHOGA COUNTY AUDITOR David H. Seed Brindza, Mclntyre & Seed, LLP 1 t 11 Superior Avenue, Suite 1025 Cleveland, OH ATTORNEY FOR APPELLANT - APPELLEES BOARD OF EDUCATION OF 'THE CLEVELAND MUNICIPAL SCHOOL DISTRIC"I' Mr. Richard Levin Tax Conunissioner of Olhio 30 East Broad Street, 22nd Floor Columbus, O "I'AX COMISSIONER OF OHIO COUNSEL FOR APPELLEE - APPELLANT, CRE JV MIXED FIFTEEN OIl 2 BRANCH HOLDINGS, LLC

6 OHIO BOARD OF TAX APPEALS Board of Education of the Cleveland ) Municipal School District, ) ) Appellant, ) ) vs. ) ) Cuyahoga County Board of Revision, ) Cuyahoga County Auditor, and CRE JV ) Mixed Fifteen OH 2 Branch Holdings, LLC, ) ) Appellees. ) CASE NO K-291 (REAL PROPERTY TAX) DECISION AND ORDER APPEARANCES: For the Appellant - Brindza, McIntyre & Seed, LLP David H. Seed 1111 Superior Avenue, Suite 1025 Cleveland, Ohio For the County - William D. Mason Appellees Cuyahoga County Prosecuting Attomey Saundra Curtis-Patrick Assistant Prosecuting Attorney Courts Tower, 8tlr Floor 1200 Ontario Street Cleveland, Oltio For the Appellee - Karen H. Bauernschmidt Co., LPA Property Owner Karen H. Bauernschmidt 1370 West 6th Street, Suite 200 Cleveland, Ohio Entered MAR Ms. Margulies, Mr. Johrendt, and Mr. Dunlap concur. Appellant appeals a decision of the Cuyahoga County Board of Revision ("BOR") in which it effected no change to the values of the subject property, i.e., parcel number , from that originally established by the Cuyahoga County Auditor ("auditor") for ad valorem tax purposes for tax year Two days prior to bearing before EXHIBIT A

7 this board, appellant orally waived its appearance and requested that a briefmg schedule be established. Since the appellees had not disclosed whether they intended to present evidence on appeal, the hearing proceeded as scheduled but neither the property owner nor the county appellees were in attendance. Accordingly, we consider this matter upon appellant's notice of appeal and the transcript certified by the BOR. The subject property, located at 5201 Storer Avenue, is improved with a retail bank branch and is owned by CRE JV Mixed Fifteen OH 2 Branch Holdings, LLC. For tax year 2006, the property had been assessed by the auditor consistent with the following values: TRUE VALUE TAXABLE VALUE Land $ 25,400 Land $ 8,900 Building $ 134,400 Building Total $159,800 Total $55,900 Appellant filed a complaint with the BOR seeking an inerease in the subject property's total true and taxable values to $201,030 and $70,930, respectively, based upon a sale which occurred approximately eight months after tax lien date. In response, the property owner and lessee of the property jointly filed a complaint pursuant to R.C (B) seeking a reduction in total true and taxable values to $135,000 and $47,250, respectively, alleging in their complaint that "[t]he sale the BOE is relying on is not an ann's[-]length sale. The sale transaction involves a portfolio, sale and leaseback. No exposure to the open market - purely a financing tool. The price is not an indication of the true value of the real estate." S.T., Ex. B. 2

8 During the BOR's hearing, which apparently involved several related coinplaints, appellant presented a copy of a special warranty deed' evidencing the sale of the subject property by "Charter One Bank, N.A., a national banking association, successor to Keystone Savings & Loan Co.," to CRE JV "in consideration of the sum of TEN AND 00/100 DOLLARS($10.00) and other good and valuable consideration ***," Affixed to this deed is a stamp of the auditor's office indicating that the property transferred on August 7, 2006 for $201,033, that a conveyance fee of $ was paid, and that the sale was considered arm's length. S.T., Ex. A. Appellant's counsel acknowledged the sale of the subject property was one of many transferred in the sale of a portfolio for which an aggregate purchase price was paid. In a January 23, 2008 letter directed to the BOR, appellant's counsel asserted: "In 2006, American Financial Realty Trust and Dillon Read Capital Managetnents LLC acquired 236 fully occupied branches from Citizens Bank, N.A. and Charter One Bank N,A., two bank subsidiaries of Citizens Financial Group, Inc., a wholly owned subsidiary of The Royal Bank of Scotland Group PLC. *** AFR's property management affiliate, First States Management Corp. L.P. is the Managing Agent of CRE JV Five ' According to the exhibit list identified on DTE Form 3, as well as the BOR's hearing notes, appellant also presented a copy of the conveyance fee statement associated with the transfer of the subject property. However, such document is not included within the transcript. We note also that the tape of the BOR's hearing appears to end before the conclusion of the hearing. We therefore remind the BOR of its obligations in the real property valuation complaint process, beginning with R.C which requires that "[t]he county board of revision shall take full minutes of all evidence given before the board, and it may cause the same to be taken in shorthand and extended in typewritten form. The secretary of the board shalt preserve in his office separate rccords of all minutes and documentary evidence offered on each complaint." Upon the filing of an appeal, "[t]he county board of revision shall thereupon certify to the board of tax appeals a transcript of the record of the proceedings of the county board of revision pertaining to the original complaint, and all evidence offered in connection therewith." R.C In this instance, where the parties elected to waive hearing, it is their obligation to ensure that the record before this board is complete and to the extent it is not they tnust suffer the consequences from any deficiencies. Cf. Columbus Bd. o,f Edn. v. FTanklin Cty. 71d of Revision (1996), 76 Ohio St.3d 13,

9 Branch Holdings, LLC, CRE JV Five OH 2 Branch Holdings, LLC." S.T. Ex. A. Included among the attachments to appellant's counsel's letter were copies of American Financial Realty Trust's 2006 annual report and Form I0-Q which he argued supported the allocation of the total sale price since it was achieved using a variety of methodologies, e.g., appraisals, comparable sales, discounted cash flow analyses, etc. The property owner called as its witness Jim Brill, vice president with the real estate management department of Charter One, who testified regarding a purchase agreement in which Charter One and Citizens Baiilc, N.A., agreed in June 2006 to sell to First States Group, L.F. one hundred twenty-three retail banks located in Ohio and Michigan for a total purchase price of $176,482,676. See S.T., Ex. B. I-Ie testified that these properties were not previously advertised for sale on the open market prior to this sale and that to his knowledge Charter One did not have any appraisals performed regarding the properties which were the subject of this sale. Brill acknowledged that the purchase agreement set forth allocated values, as well as lease terms, for individual properties involved in the transaction. Referring to a "Memorandum/Notice of Lease," he indicated that it was a sale/leaseback situation and served as a financing tool. Durhig her presentation, counsel also referenced several "comparable sales" which she provided to the BOR and an order of this board confirming the stipulation of value resolving litigation associated with tax years 2003 through The BOR effected no change in the subject's values and the present appeal ensued. "While a determination of the true value of real property by a board of revision is entitled to consideration by the BTA, such determination is not presumptively valid." 4

10 Amsdell v. Cuyahoga Cty. Bd of Revision (1994), 69 Ohio St. 3d 572, 574. See, also, Springfield Local Bd ofedn. v. Summit Cty. Bd. of Revision (1994), 68 Ohio St.3d 493, 495; Cambridge Arms, Ltd. v. Hamilton Cty. Bd. of Revision (1994), 69 Ohio St.3d 337, 338. Nevertheless, "[w]hen cases are appealed &om a board of revision to the BTA, the burden of proof is on the appellant, whether it be a taxpayer or a board of education, to prove its right to an increase (in] or decrease frorn 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, 566. Pursuant to R.C , "[t]he county auditor, from the best sources of information available, shall detennine, as nearly as practicable, the true value of each separate tract, lot, or parcel of real property and of buildings, structures, and improvements located thereon ***. In determining the true value of any tract, lot, or parcel of real estate under this section, if such tract, lot or parcel has been the subject of an arm's length sale between a willing seller and a willing buyer within a reasonable length of time, either before or after the tax lien date, the auditor shall consider the sale price of such tract, lot, or parcel to be the true value for taxation purposes. ***" (Emphasis added.) Accordingly, the best evidence of the tive value of real property for tax purposes is its transfer in an actual, recent, arm's-length sale. See, e.g., Berea City School Dist. Bd. of Edn. v. Cuyahoga Cty. Bd of Revision, 106 Ohio St.3d 269, 2005-Ohio-4979, at 13 ("when the property has been the subject of a recent arm's-length sale between a willing seller and a willing buyer, the sale price of the property shall be `the true value for taxation purposes."'). This board has previously held that evidence of a sale exhibited through a 5

11 deed, conveyance fee statement, or purchase agreement, not otherwise controverted, constitutes competent and probative evidence of a property's value for tax purposes, see, e.g., Poley v. Montgomery Cty. Bd of Revision (Sept. 24, 2004), BTA No M-1784, unreportcd, and recently, in Worthington City Schools Bd. of Edn, v. Franklin Cty. Bd. of Revision, 124 Ohio St.3d 27, 2009-Ohio-5932, the Supreme Court reached the same conclusion, noting "that the BTA was justified in viewing the conveyance-fee statement and the deed that the school board had presented to the BOR as constituting a prima facie showing of value." Id. at 28. Through the presentation of such evidence, "a rebuttable presumption exists that the sale has met all the requirements that characterize true value." Cincinnati Bd. of Ed.n. v. Harnilton Cty. Bd. of Revision (1997), 78 Ohio St.3d 325, 327. Typically, "the only rebuttal lies in challenging whether the elements of recency and arm'slength character between a willing seller and a willing buyer are genuinely present for that particular sale." Cummins Property Servs., L.L.C. v. Franklin Cty. Bd. ofrevision, 117 Ohio St.3d 516, 2008-Ohio-1473, at 13. As previously indicated, the record certified to this board by the BOR is less than optimal. However, the parties elected to waive hearing on appeal and, despite being accorded the opportunity to do so, failed to submit written argument regarding their respective positions in this appeal. Before the BOR, appellant presented evidence of a sale occurring eight months after tax lien date. Although the property owner presented evidence indicating the sale of the subject property was one of several properties transferred and that it involved a sale-leaseback arrangement, neither of these issues; standing alone, necessarily renders a purchase price unrepresentative of value. See, e.g., St. Bernard Self-Storage LLC v. 6

12 Ilamilton Cty. Bd. ofrevision, 115 Ohio St.3d 365, 2007-Ohio-5249; Pingue v. Franklin Cty. Bd. ofrevision ( 1999), 87 Ohio St.3d 62; AEI Net Lease Income & Growth Fund v. Erie Cty. Bd. ofrevision, 119 Ohio St.3d 563, 2008-Ohio See, also, Ohio Asset II (OH), LLC v. Cuyahoga Cty. Bd. of Revision (Jan. 26, 2010), BTA No V-2125, et al., unreported; FirstCal Industrial 2 Acquisitions, LLC v. Franklin Cty. Bd, of Revision (July 28, 2009), BTA Nos , et seq., unreported; Regency Centers, L.P. v. Delaware Cty. Bd. of Revision (July 20, 2001), BTA Nos M-1 165, 1196, unreported. Upon consideration of the existing record, we simply are unable to conclude that the property owner has deinonstrated in this instance that the recorded sale price is unrepresentative of the subject's value. See, generally, HIN, L.L.C. v. Cuyahoga Cty. Bd. ofrevision, Slip Opinion No Ohio-687, at 123. With respect to the property owner's counsel's presentation of "comparable sales," even if wc were to look beyond the subject's sale, statements of counsel are not evidence. Corporate Exchange Bldgs. IV & V, L.P. v. Franklin Cty. Bd. of Revision ( 1998), 82 Ohio St.3d 297, 299. Counsel's reference to an agreement of the parties for prior tax years is equally unpersuasive. See, e.g., Olmsted Falls Bd. of Edn. v. Cuyahoga Cry. Bd. of Revision, 122 Ohio St.3d 134, 2009-Ohio-2461, at 1120 ("As a matter of both case law and elementary principles, each tax year should be determined based on the evidence presented to the assessor that pertains to that year. We have so held in the past."); TBC Westlake, Inc. v. Hamilton Cty. Bd. of'revision (1998), 81 Ohio St.3d 58. 7

13 Accordingly, it is the decision of the Board of Tax Appeals that the best evidence of the subject's value as of the effective tax lien date, i.e., January 1, 2006, is the amount at which it transferred in August 2006, allocated as follows:z TRUE VALUE TAXABLE VALUE Land ^ $ 32,160 Land $11,260 Building $ 168, 870 Building $ 59, 100 Total $201,030 Total $70,360 It is the order of this board that the Cuyahoga County Auditor list and assess the subject property in conformity with the decision as announced herein. ohiosearchkcvbta 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 the captioned matter, SaNly F. Vank`1vleter, Board Secretary Z The above-referenced values have been allocated between land and improvements utilizing the same percentages reflected by the auditor's assessment of the property with such values being rounded where necessary. Cf. R.C (A)(1). See, also, Consolidation Coal Co. v. Noble Cty. Bd of Revision (June 30, 1988), BTA Nos D-291, et al., unreported; Litteral v. Montgomery Cty. Bd, of Revision (June 11, 2004), BTA No J-2057, unreported; Walker v. Montgomery Cty. Bd of Revision (July 16, 2004), BTA No J-1641, unreported. 8