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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Leonard T. Kelley v Municipality of Anchorage, Board of Equalization (5/31/2019) sp-7369

Leonard T. Kelley v Municipality of Anchorage, Board of Equalization (5/31/2019) sp-7369

           Notice:   This opinion is subject to correction before publication in the P                     ACIFIC  REPORTER.  

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           303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email  

                                                                                                                            

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                       THE SUPREME COURT OF THE STATE OF ALASKA                                       



LEONARD  T.  KELLEY,                                              )  

                                                                  )    Supreme  Court  No.  S-16980  

                                 Appellant,                       )  

                                                                                                                                  

                                                                  )    Superior Court No. 3AN-17-07122 CI  

           v.                                                     )  

                                                                                            

                                                                  )    O P I N I O N  

                                      

MUNICIPALITY OF ANCHORAGE,	 )  

                                                                                                          

                       

BOARD OF EQUALIZATION,	                                           )    No. 7369 - May 31, 2019  

                                                                  )  

                                 Appellee.	                       )  

                                                                  )  



                                                                                                               

                                   

                      Appeal from the Superior Court of the State of Alaska, Third  

                                                                                                         

                      Judicial District, Anchorage, Yvonne Lamoureux, Judge.  



                                                                                                    

                      Appearances:              Leonard  T.  Kelley,  Kelley  &  Canterbury,  

                                                                                                        

                      Anchorage,  for  Appellant.                      Quincy  H.  Arms,  Assistant  

                                                                                                        

                      Municipal   Attorney,   and   Rebecca   A.   Windt   Pearson,  

                                                                                   

                      Municipal Attorney, Anchorage, for Appellee.  



                                                                                                                         

                      Before:  Bolger, Chief Justice, Winfree, Stowers, Maassen,  

                                           

                      and Carney, Justices.  



                                            

                      MAASSEN, Justice.  



I.         INTRODUCTION  



                                                                                                                          

                      Thesuperior court affirmed a municipality's tax valuation ofalandowner's  



                                                                                                                                  

property.   The landowner argues on appeal that the municipality's valuation review  



                                                                                                                                

board abused its discretionby excluding certainevidenceofvalue on timeliness grounds;  



                                                                                                                                 

we find no abuse of discretion.   The landowner also argues that the board applied  


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fundamentallywrongprinciplesofvaluation byfailingtoconsider, as definitiveevidence  



                                                                                                                                  

of value, either his purchase price for the property or the price for which he sold a  



                                                                                                                         

neighboring lot.  But the assessor explained at the hearing why he considered certain  



                                                                                                                            

evidence of value more persuasive and more consistent with the municipality's usual  



                                                                                                                               

methods of appraisal, and it was well within the board's broad discretion to accept the  



                                      

assessor's explanation.  



                                                                                                                        

                    We therefore affirm the superior court's decision upholding the board's  



                          

valuation of the property.  



                                  

II.       FACTS AND PROCEEDINGS  



          A.        Facts  



                                                                                                                             

                    In September 2016 Leonard Kelley bought Thunderbird Falls Lot 5 from  



                                                                                                                               

the Mancel O. Pederson Estate for $160,000.   Located in a subdivision within the  



                                                                                                                              

Municipality of Anchorage, Lot 5 is 93,006 square feet and has a residence on it.  The  



                                                                                                                     

Municipality's assessor valued Lot 5 at $318,900 using a market adjusted cost approach,  



                                                                                                                 

which he described as "includ[ing] land value as if vacant plus depreciated replacement  



                                                                                                                            

cost of the improvements . . . calibrated to specific market segments based on a large  



                                      

sampling of sales data."  



                                                                                                                                

                    In February 2017 Kelley appealed the valuation to the Municipality of  



                                                                                                                            

Anchorage Board of Equalization, asking for time to gather additional evidence.  With  



                                                                                                                             

his appeal he submitted the settlement statement from his purchase of Lot 5, along with  



                                                                                                                               

a letter describing various "building deficiencies" in the residence:  problems with the  



                                                                                                                        

septic  system,  rot  in  the  garage  and  deck,  a  leaky  roof,  and  windows  that  needed  



                                                                                                                               

replacing, as well as a general need for improvements and repairs.   In response, the  



                                                                                                                                 

Municipality's assessor asked Kelley to submit "[c]ontractors['] itemized estimates of  



                                                                                                                                

the cost to repair damage, as indicated in your [letter]," by April 1, but Kelley did not do  



       

so.  



                                                               -2-                                                         7369
  


----------------------- Page 3-----------------------

                                         The assessor nonetheless made a number of adjustments to his valuation of                                                                                                                                                    



the property following a March site inspection, including correcting the square footage,                                                                                                                                                           



removing the garage and carport from the assessed property, and changing the condition                                                                                                                                                        



"from average to poor plus for deferred maintenance." Kelley then submitted additional                                                                                                                                                       



evidence: a Multiple Listing Service (MLS) listing for Lot 5 showing an asking price of                                                                                                                                                                              



$298,000; his purchase agreement; photos of the property; and a 2016 article describing                                                                                                                                                    



economic trends in Alaska.                                                            Kelley later submitted the name of the seller's agent for his                                                                                                                



purchase, along with information about his August 2016 sale of a neighboring lot to a   



                                                                                                                                        1  

developer, Troy Davis Homes, for $77,000.                                                                                                    



                                         The assessor emailed the seller's agent seeking an explanation for Lot 5's  

                                                                                                                                                                                                                                                                  



purchase price; he noted that the property had been listed for months, had a sale pending  

                                                                                                                                                                                                                                                   



at $225,000, then, when that sale "fell through," was sold to Kelley for "his cash offer  

                                                                                                                                                                                    



of $160,000" just a few weeks later.  The seller's agent later responded to Kelley, who  

                                                                                                                                                                                                                                                              



forwarded her response to the assessor.  She explained that the property "was marketed  

                                                                                                                                                                                                                                               



heavily" but failed to sell because of "the age and deferred maintenance of the property,"  

                                                                                                                                                                                                                                            



making financing "a challenge," and ultimately "the owner decided to accept an offer  

                                                                                                                                                                                                                                                            



lower than list price, taking into consideration the cost of repairs the buyer would need  

                                                                                                                                                                                                                                                             



to address." In the meantime, on March 29, the Municipality sent Kelley a new valuation  

                                                                                                                                                                                                                                               



of  $259,800,  based  on  the  assessor's  revised  recommendation  following  his  site  

                                                                                                                                                                                                                                                               



inspection.  Kelley did not accept this valuation either, however, and his appeal was  

                                                                                                                                                                                                                                                               



forwarded to the Board.  

                                                                            



                     1                   The lot Kelley sold to Troy Davis Homes was identified as "Thunderbird                                                                                                                  



Falls #1 lot 5," not to be confused with the Lot 5 at issue here, which was purchased by                                                                                                                                                                            

Kelley a month later.                                                



                                                                                                                                  -3-                                                                                                                       7369
  


----------------------- Page 4-----------------------

                             B.            Proceedings  



                             The Board held an appeal hearing on April 20 and upheld the assessor's  

                                                                                                                                                                    



recommended  value  of  $259,800.                                               Kelley  asked  for  reconsideration,  alleging  two  

                                                                                                                                                                                



procedural errors: (1) the Board's refusal to admit "documentary evidence" of the value  

                                                                                                                                                                              



of two other properties in the subdivision and (2) the Board's refusal to allow Kelley to  

                                                                                                                                                                                      



directly question the assessor. The Board granted reconsideration and scheduled another  

                                                                                                                                                                          



hearing for May 10.  

                                             



                             At the start of the second hearing, the Board chair announced that new  

                                                                                                                                                                                



procedures  would  allow  "both  parties  [to]  have  an  opportunity  to  ask  each  other  

                                                                                                                                                                             



questions  before  we  close  the  testimony."                                                        The  chair  also  ruled  that  absent  the  

                                                                                                                                                                                 



Municipality's agreement, the Board would not accept Kelley's offered documentary  

                                                                                                                                                             



evidence related to other properties because he had failed to comply with the deadline  

                                                                                                                                                    

for submitting that information to the assessor.2                                                          The assessor, while maintaining the  

                                                                                                                                                                                   



Municipality's objection to that evidence, agreed that Kelley could "speak to it"; the  

                                                                                                                                                                                  



chair allowed this, reasoning that if the evidence was really from municipal records, as  

                                                                                                                                                                                     



Kelley claimed, "it should be very easy for anyone to find."  

                                                                                                                                  



                             Kelley testified that Lot 5 had been "fairly marketed, openly marketed" by  

                                                                                                                                                                                    



a realtor and listed on MLS for over 15 months and that the seller "was under no duress"  

                                                                                                                                                                          



when he bought it.  He testified that neighborhood lot values ranged from $77,000 to  

                                                                                                                                                                                     



$90,000, referring to the documentary evidence to which the Municipality had objected.  

                                                                                                                                                                                           



              2              See  AMC12.05.053(C)(7)(2018)("Documentstobesubmitted                                                                               asevidence   



by the appellant must be filed with the assessor no later than 15 days from the close of                                                                                             

the appeal period unless the appellant and the assessor agree to an extension.                                                                                               If an   

appellant has refused or failed to provide the assessor or assessor's agent full access to                                                                                           

property or records, the appellant shall be precluded from offering evidence on the issue                                                                                      

or   issues   affected   by   that   access   and   those   issues   shall   be   decided  in  favor   of   the  

assessor.").  



                                                                                          -4-                                                                                 7369
  


----------------------- Page 5-----------------------

                                                                                                                         

He argued that the comparable sales figures used by the assessor were higher because  



                                                                                                                             

they were "pre-recessionary."  He said that his own valuation of $160,000 - the price  



                                                                                                                              

he paid for Lot 5 - was based on the poor condition of the building, necessitating over  



                                       

$45,000 in repair costs.  



                                                                                                                              

                    The  assessor  then  testified  about  his  use  of  the  "market  adjusted  cost  



                                                                                                                                 

approach" in valuing Kelley's property.  He explained that "[p]art of the definition of  



                                                                                                                             

market value is [whether the property was] exposed to an open market, was [the sale]  



                                                                                                                    

between knowledgeable buyers, between reasonably informed buyers or reasonably  



                                                                                                                                

informed sellers."  He testified that the open market was usually accessed through the  



                                                                                                              

MLS, and that if owners sold their property without an MLS listing, the Municipality's  



                                                                                                                             

"operating procedure" required that he "not consider that [as] exposure to the open  



                                                                                                                           

market."  He believed Kelley's purchase of Lot 5 to be a "discounted cash sale" which  



                                                                                                                        

did not represent fair market value; factors he considered were that previous pending  



                                                                                                                          

sales had fallen through, Kelley offered cash ("an atypical financing transaction type"),  



                                                                                                         

and Kelley accepted the property "as is" without an inspection.  He pointed to Lot 5's  



                                                                                                                                  

listing history, in which the price dropped from $225,000 to $160,000 in ten days, as  



                                                                                                            

evidence of some sort of duress on the seller.   He also testified that purchases from  



                                                                                                                            

estates  "generally  are  not  considered  at-market  sales,  especially  when  they  have  



                                                                                                                           

condition issues," because the heirs "may have just [given] up on it and wanted to unload  



                                                                                                                         

the  property  .  .  .  ."         He  conceded  that  "[b]ecause  of  the  condition  of  the  subject  



                                                                                                                                 

[property], it is difficult to find comparable sales that support the revised value," but he  



                                                                                                                                  

stood by that value as equitable and consistent with the Municipality's usual methods of  



                    

assessment.  



                                                                                                                            

                    TheBoard again affirmed theMunicipality's valuationof$259,800. Kelley  



                                                                                                                          

appealed to the superior court, which affirmed the Board's decision. Kelley now appeals  



          

to us.  



                                                                -5-                                                         7369
  


----------------------- Page 6-----------------------

III.       STANDARD OF REVIEW
             



                      We   "independently   review   the   merits   of   an   administrative   board's  



                  3  

decisions."                                                                                                                              

                     We will affirm an administrative decision involving questions of fact or law  



                                                                                                        4  

                                                                                                                           

requiring agency expertise if the decision has a reasonable basis.                                         We have consistently  



                                                                                                                                   

held that "[t]axing authorities are to be accorded broad discretion in deciding among  



                                                    5 

                                                                                                                               

recognized valuation methods."   The taxing authority is "not bound by any particular  



                                                                                                                            

formula, rule or method, either by statute or otherwise.  Its choice of one recognized  



                                                                            

method of valuation over another [is] simply the exercise of a discretion committed to  



                  6  

                                                                                                                                            

it by law."           What concerns us is "nothing less than fraud or the clear adoption of a  



                                                                         7  

                                                                                                                                          

fundamentally wrong principle of valuation."                                If the appraiser has not "transgressed the  



                                                                                                                                            8  

                                                                                                                                                

bounds of honest judgment," the taxing authority's selected valuation should be upheld. 



                                                                                                                                         

                      "An agency adjudicator's decision to exclude evidence is reviewed for  



                                  9  

                                     

abuse of discretion." 



           3          Lakloey,   Inc.   v.   Univ.   of   Alaska,   157   P.3d   1041,   1045   (Alaska   2007)  



(quoting  Gunter v. Kathy-O-Estates                        , 87 P.3d 65, 68 (Alaska 2004)).             



           4          N.  Star  Alaska  Hous.  Corp.  v.  Fairbanks  N.  Star  Borough  Bd.  of  

                                                                                                                                          

Equalization, 778 P.2d 1140, 1144 n.7 (Alaska 1989).  

                                                                               



           5          Cool Homes, Inc. v. Fairbanks N. Star Borough, 860 P.2d 1248, 1262  

                                                                                                                                      

(Alaska 1993) (quoting N. Star Alaska Hous. Corp., 778 P.2d at 1143-44).  

                                                                                                           



           6          Twentieth Century Inv. Co. v. City of Juneau, 359 P.2d 783, 788 (Alaska  

                                                                                                                  

 1961) (internal citations omitted).  

                                         



           7          Id.  



           8          Id.  



           9          Brandner v. Municipality of Anchorage , 327 P.3d 200, 202 (Alaska 2014).  

                                                                                                                                    



                                                                     -6-                                                              7369
  


----------------------- Page 7-----------------------

IV.	       DISCUSSION  



                     Kelley  raises  three  arguments  on  appeal,  one  procedural  and  two  

                                                                                                                          



substantive.  He first challenges the Board's exclusion of certain evidence of value, but  

                                                                                                                                     



we conclude that the Board's action was consistent with the governing provisions of the  

                                                                                                                                     



Anchorage  Municipal  Code  and  not  an  abuse  of  discretion.                                       Kelley's  substantive  

                                                                                                                       



arguments focus on the Board's failure to accept as determinative of value two sale  

                                                                                                                                   



prices:  one the amount Kelley paid for the lot at issue and the other the amount Kelley  

                                                                                                                               



received a month earlier for his sale of the neighboring lot.  But we conclude that the  

                                                                                                                                     



Board acted well within its broad discretion in considering the evidence of value and  

                                                                                                                                    



reached a decision that had a reasonable basis in the evidence.  

                                                                                                     



           A.	       The  Board  Did  Not  Err  By  Refusing  To  Admit  Kelley's  Offered  

                                                                                                                            

                     Documentary Evidence Of Other Lots' Values.  

                                                                                         



                     The documentary evidence Kelley offered at the two hearings, and which  

                                                                                                                                



the Board refused to admit on timeliness grounds, consisted of public inquiry statements  

                                                                                                                         



showing the assessed values of two neighboring lots.  The Anchorage Municipal Code  

                                                                                                                                 



(AMC) provides that "[d]ocuments to be submitted as evidence by the appellant must be  

                                                                                                                                      

filed with the assessor no later than 15 days from the close of the appeal period,"10 which  

                                                                                                                                

is "30 days after a tax assessment is mailed to the property owner."11                                        "The appellant is  

                                                                                                                                       



precluded from introducing at the Board hearing any evidence not submitted by the  

                                                                                                                                    

deadline."12  

                     



                     Kelley  argues  that  he  made  "good  faith  attempts  to  comply  with  the  

                                                                                                                                    



[Municipality's] deadlines," but he does not elaborate on what those attempts were. The  

                                                                                                                                    



           10        AMC 12.05.053(C)(7).   



           11        Brandner, 327 P.3d at 203.           



           12        Id.  



                                                                  -7-	                                                           7369
  


----------------------- Page 8-----------------------

date of the original assessment does not appear in the record, but Kelley responded to it                                                                                                                                                                                                                                                                                                                                                



on February 13, 2017, requesting an extension of the evidence-submission deadline                                                                                                                                                                                                                                                                                                                  



"until assessor review." The assessor conducted his site inspection on March 8 and sent                                                                                                                                                                                                                                                                                                                                    



Kelley a reduced valuation on March 29; in the meantime Kelley had sent the assessor                                                                                                                                                                                                                                                                                                                  



 a variety of additional evidence, not including the public inquiry statements.                                                                                                                                                                                                                                                                                                                     He first   



 attempted to introduce those statements at the April 20 appeal hearing, over 60 days after                                                                                                                                                                                                                                                                                                                              



he had                               first requested an                                                                             extension   of the 15-day                                                                                                            time   limit for                                                        the submission of                                                                 



 evidence.  



                                                                   While maintaining the documents' exclusion at the second appeal hearing,                                                                                                                                                                                                                                                            



on May 10, the Board still allowed Kelley to testify about the property values shown in                                                                                                                                                                                                                                                                                                                                              



the excluded statements.                                                                                                      Kelley was also allowed to question the assessor about the                                                                                                                                                                                                                                       



differences between those values and the one assigned to Lot 5; the assessor theorized                                                                                                                                                                                                          



that the different values could reflect differences in topography or wells and septic                                                                                                                                                                                                                                                                                                                            



 systems.     In Brandner v. Municipality of Anchorage                                                                                                                                                                                                                            , the record suggested that the                                                                                                             



property owner "did not make a good faith attempt to comply with the Municipality's                                                                                                                                                                                                                                                                                  



deadline" for the submission of repair estimates, and the Board nonetheless allowed the                                                                                                                                                                                                                                                                                                                                         



owner to testify about them; we concluded that the Board did not abuse its discretion by                                                                                                                                                                                                                                                                                                                                           

                                                                                                                                                                                          13   Because the record does not reveal a good faith  

 excluding the documentary evidence.                                                                                                                                                                                                                                                                                                                                                                                    



 attempt at compliance, and because the Board in any event allowed Kelley to introduce  

                                                                                                                                                                                                                                                                                                                                                                                                



the substance of the omitted evidence through testimony, we reach the same conclusion  

                                                                                                                                                                                                                                                                                                                                                                                         

here.14  

                                  



                                  13                              Id.  



                                  14                               We note that  Brandner  involved an unrepresented party and the leniency                                                                                                                                                                                                                                       



we extend to pro se litigants.                                                                                                                     See id.                                 Kelley is an attorney representing himself.                                                                                                                                                                                  Our  

decision of this issue does not require us to distinguish their cases; Kelley's argument                                                                                                                                                                                                                                                                                                       

                                                                                                                                                                                                                                                                                                                                                                              (continued...)  



                                                                                                                                                                                                                  -8-                                                                                                                                                                                                   7369
  


----------------------- Page 9-----------------------

                             B.	                         The Board Was Not Required To Find That Kelley's August 2016 Sale                                                                                                                                                                                                                                     

                                                         Of A Different Lot For $77,000 Was Definitive Evidence Of Value.                                                                                                                                                                                                                 



                                                         Kelley contends that the Board erred "in refusing to consider" his sale of                                                             



a different lot in the same subdivision a month earlier to a developer for $77,000 "as a                                                                                                                                                          



fair market value transaction."                                                                                                    But the Board heard the assessor's testimony about that                                                                                                                                                                       



sale in response to Kelley's questions; we cannot conclude that the Board refused to                                                                                                                                                                                                                                                                                    



consider the evidence, only that the Board, after considering it, failed to find the evidence                                                                                                                                                                                                                                               



definitive.   



                                                         Rejecting the sale as definitive proof of Lot 5's value has support in the                                                                                                                                                                                                                                



assessor's testimony.                                                                       He testified that the Municipality defined market value based on                                                                                                                                                                                                          



how the property was "exposed to the open market"; when property is not listed on MLS,                                                                                                                                                                                                                                                                   



the Municipality considers the purchase price as unreliable evidence of market value and                                                                                                                                                                                                                                                                          



will not use it for that purpose. Kelley counters that there are "many ways" for an owner                                                                                                                                                                                                                                                              



to expose a property to the open market, such as posting a "For Sale" sign, and that the                                                                                                                                                                                                                                                                            



Municipality's reliance on the MLS exclusively for determining exposure to the open                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                     15   In support of this argument  

market is a "fundamentally wrong principle of valuation."                                                                                                                                                                                                                                                                                

                                                                                                                                                                                                                                                                                                                                           16  though  

he cites CH Kelly Trust v. Municipality of Anchorage, Board of Equalization,  

                                                                                                                                                                                                                                                                                                                                                   



without a clear explanation of why he considers the case supportive.  

                                                                                                                                                                                                                                                                                                      



                             14                          (...continued)  



                                                                                                                                                                                                                                                                                       

fails even if we grant him the lenience we grant to unrepresented litigants.  



                             15                          See Cool Homes, Inc. v. Fairbanks N. Star Borough                                                                                                                                                                           , 860 P.2d 1248, 1262                                                  



                                                                                                                                                                                                                                                                                                                                            

(Alaska 1993) ("If a reasonable basis for the taxing agency's method exists, the taxpayer  

must   show   fraud   or   the   'clear   adoption   of   a   fundamentally   wrong   principle   of  

                                                                                                                                                                                                                                                                                                                                                                

valuation.' " (quoting Hoblit v. Greater Anchorage Area Borough, 473 P.2d 630, 632  

                                   

(Alaska 1970))).  



                             16                          909 P.2d 1381 (Alaska 1996).  

                                                                                                                                                             



                                                                                                                                                                                   -9-	                                                                                                                                                                      7369
  


----------------------- Page 10-----------------------

                          We held in            CH Kelly Trust                that the Municipality's appraisals of four vacant                               



lots used "a fundamentally wrong principle of valuation" because of the appraiser's                                                                 



"total failure even to consider" the prices the owners paid at auction for the lots the year                                                                      

              17  We also observed, however, that "[t]horough analysisofthe subject sales might  

before.                                                                                                                                                        



well indicate that the auction prices paid did not represent true market value"; it was the  

                                                                                                                                                                    



failure to consider them at all - for purposes of deciding whether they were relevant -  

                                                                                                                                                                     

that justified reversal.18  

                                                



                          In this case, the assessor testified that he considered Kelley's sale of the lot  

                                                                                                                                                                     



to the developer but concluded that the price did not reflect true market value because,  

                                                                                                                                                         



absent an MLS listing, there was no assurance that the lot had actually been exposed to  

                                                                                                                                                                      



the open market.  The assessor testified that a property owner "ha[s] the option" to list  

                                                                                                                                                                    



the property on MLS; while the listing may carry a cost, it has the benefit of assuring  

                                                                                                                                                          



exposure to the open market for tax valuation purposes. Kelley's conclusory discussion  

                                                                                                                                                      



of  this  issue  does  not  persuade  us  that  the  Municipality's  reliance  on  the  MLS  to  

                                                                                                                                                                     



demonstrate exposure to the market made its valuation methodology "fundamentally  

                                                                                                                                           



wrong."  



             C.	          The Board Was Not  Required To Find That Kelley's Payment Of  

                                                                                                                                                                    

                          $160,000 For Lot 5 Was Definitive Evidence Of Its Value.  

                                                                                                                                     



                          Kelley also argues that the Board "erred when it declined to consider the  

                                                                                                                                                                    



cash sale price of $160,000" as conclusive evidence of Lot 5's fair market value.  He  

                                                                                                                                                                    



argues that cash sales are "the accepted definition of the concept of market value," and  

                                                                                                                                                                   



he cites AS 29.45.110(a)'s definition of "full and true value" for purposes of municipal  

                                                                                                                                                      



taxation: "the estimated price that the property would bring in an open market and under  

                                                                                                                                                               



             17           Id.  at   1382.  



             18           Id.  



                                                                                 -10-                                                                                 7369  


----------------------- Page 11-----------------------

the then prevailing market conditions in a sale between a willing seller and a willing                                                                                 



buyer   both   conversant with                                the   property   and   with   prevailing   general price levels."                                                          



Kelley contends that the "sales comparison approach is the most reliable method" of                                                                                               



estimating   full   and   true   value,   and   he   cites   an   appraisal   manual   in   support   of   the  



proposition that the sales comparison approach is usually employed for the "valuation     



                                                                                  19  

of a single[-]unit residential property."                                              



                            The Municipality counters that itdoes employ a comparable sales approach  

                                                                                                                                                                    



for the land and did so in valuing Lot 5; it simply selected different sales for comparison  

                                                                                                                                                              



purposes than those Kelley advocates. The Municipality submitted to the Board a "Land  

                                                                                                                                                                         



Sales Adjustment Grid" listing three comparable land sales and concluding that "[t]he  

                                                                                                         



indicated value range from $96,800 to $161,000 supports the [Municipality's] land- 

                                                                                                                                                                           



assessed value of $112,900." But the assessor declined to consider the price Kelley paid  

                                                                                                                                                                              



for Lot 5 in determining its market value, concluding that the sale "was not an arm's  

                                                                                                                                                                           



length sale, but rather a discounted cash sale."  

                                                                                                   



                            The assessor explained this further at the May appeal hearing. He testified  

                                                                                                                                                                      



that Kelley's purchase of Lot 5 from the Pederson Estate was not considered proof of  

                                                                                                                                                                                  



market  value  because  "estate  sales  generally  are  not  considered  at-market  sales,  

                                                                                                                                                                          



especially when they have condition issues"; the heirs may have "just [given] up on it  

                                                                                                                                                                             



and wanted to unload the property." He also pointed to the MLS listing history, showing  

                                                                                                                                                                     



the price falling from $225,000 to $160,000 in just ten days, as evidence of seller duress.  

                                                                                                                                                                                         



Theassessor explained theMunicipality's standard practiceofvaluing theimprovements  

                                                                                                                                                          



by estimating their replacement cost minus depreciation, and he described the various  

                                                                                                                                                                       



reductions he made in Lot 5's valuation following his site inspection.  

                                                                                                                                                    



              19            See  THE  APPRAISAL  INSTITUTE,  THE  APPRAISAL  OF  REAL  ESTATE  45  (14th  



ed.  2013).  



                                                                                       -11-                                                                                        7369  


----------------------- Page 12-----------------------

                                       Kelley argues that it is "a fundamentally wrong principle of valuation" to                                                                                                                                    



categorically exclude from consideration cash sales and sales by estates, again citing                                                                                                                                                          CH  



Kelly Trust                      .   But the assessor did not purport to apply arbitrary rules; rather, he testified                                                                                                                



that the Municipality generally considered such circumstances as evidence that the price                                                                                                                                                     



did not reflect market value.                                                      He testified that "estate sales                                                      generally  are not considered                      



at-market sales,                              especially when they have condition issues                                                                               ," as here, and he testified that                                         



the cash sale in this case was evidence "that it could be under some sort of duress."                                                                                                                                                                         



 (Emphasis added.)                                       As noted above,                                     CH Kelly Trust                                  only counsels against arbitrarily                               



ignoring sales information; it does not require that the assessor accept the property                                                                                                                                            

owner's proffered sales as definitive evidence of value.                                                                                                         20  



                                       The assessor gave a cogent explanation of his methodology, and the taxing  

                                                                                                                                                                                                                                         

                                                                                                                                                                                                              21        We  are  not  

authority  had  broad  discretion  in  deciding  whether  to  implement  it.                                                                                                                                                                    

                                                                                                                                                                                                       



persuaded that the Municipality applied "a fundamentally wrong principle of valuation"  

                                                                                                                                                                                                                             



when it declined to accept the price Kelley paid for Lot 5 as definitive evidence of its  

                                                                                                                                                                                                                                                    



value.  Because the Board's valuation decision had a reasonable basis in the evidence,  

                                                          



we see no reason to disturb it.  

                                                                                         



V.                  CONCLUSION  



                                       We AFFIRM the superior court's decision affirming the May 10, 2017  

                                                                                                                                                                                                                                            



decision of the Board of Equalization.  

                                                                        



                    20                 909 P.2d at 1382.                  



                    21  

                                                                                                                                                                                                                                               

                                       See Twentieth  Century Inv.  Co.  v.  City of Juneau,  359  P.2d  783,  788  

                                                                                                                                                                                                                                  

(Alaska 1961) (holding that taxing authority is "not bound by any particular formula,  

                                                                                                                                                                                             

rule or method, either by statute or otherwise" (internal citations omitted)).  



                                                                                                                        -12-                                                                                                                 7369
  

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