Tax Court: Eagle Rock Convalescent Center v. Township of West Caldwell; Docket Nos. 006780-2008; 008154-2009; 002089-2010; 010834-2011; 000264-2012; 000868-2013; 005687-2014, opinion by Nugent, J.T.C., decided January 6, 2021. For plaintiff – Daniel J. Pollok, Esq. (Brach Eichler L.L.C., attorneys); for defendant – Levi Kool*, Esq. (O’Donnell McCord, P.C., attorneys).
*Levi Kool argued the matters but the opinion is being sent to the current municipal attorney, Joseph McGlone.
Taxpayer, Nursing Home filed complaints alleging the property was over-assessed. Utilizing the income and cost approaches Taxpayer’s appraisal expert reconciled the concluded values opining that the property’s market value exceeded the value as equalized. Under the income approach the expert utilized the property’s actual income and expenses as economic rent in the absence of market leases. The court rejected the proofs as insufficient and found the allocation between income attributable to the business versus the real estate to be lacking. The court found the value conclusion reached under the cost approach unreliable where Taxpayer’s expert utilized the Marshall & Swift, SwiftEstimator computer program for all tax years. The program’s scientific reliability has yet to be established, and it yielded inconsistent results in this case. West Caldwell relied on two appraisal experts who both utilized only the cost approach. Because of a town-wide 2011 revaluation, West Caldwell’s revaluation first expert opined on value for tax years 2011 and 2012. The second expert utilized the SwiftEstimator software for the remaining tax years a method not accepted by the court, and where the proofs revealed a similar inconsistency in the computer output. The assessments were affirmed for lack of proofs for tax years 2008-2010, and 2013 and 2014. The court accepted Taxpayer’s expert’s land value, and the replacement cost new under the cost approach opined by West Caldwell’s revaluation expert using the Marshall & Swift calculator method. The court found no basis to apply external obsolescence or functional non-curable obsolescence but applied depreciation for physical and functional curable obsolescence. Finding the assessments for tax years 2012 fell within the common level range the court affirmed the assessment. The court also affirmed the assessment for tax year 2011 since West Caldwell did not file a counterclaim, thus, the court cannot increase the assessment.