Appeal from the Superior Court of the District of Columbia; Hon. Annice McBryde Wagner, Trial Judge
Steadman, Schwelb and Farrell, Associate Judges.
The opinion of the court was delivered by: Farrell
The Washington Post Company appeals from a judgment following trial rejecting its challenge to real property tax assessments levied against its challenge to real property tax assessments levied against its property at 1150 15th Street, N.W., for the tax years 1985, 1986, 1987, and 1988. The Post claims that for the entire four-year period the District government greatly overvalued the improvements on the property, chiefly by miscalculating the gross building area as comprising more than 900,000 square feet when in fact the building was barely more than 500,000 square feet in size. The result, the Post argues, is that the assessments on the improvements were excessive and invalid as a matter of local law, and that when compared with assessments on comparable improvements in the area they reveal a pattern of intentional overvaluation of the Post's improvements in violation of constitutional equal protection, thus subjecting the District to liability for damages (and attorney's fees) under 42 U.S.C. § 1983. The trial Judge, after a five-day bench trial, rejected these claims in a thorough 38-page opinion. We affirm.
For each of the four tax years in question, the District government proposed a total assessed value of the Post's property in the amount of $52,440,000, broken down as follows:
Tax Years 1985 & 1986 1987 & 1988
Land $28,210,395 $37,060,715
($225/sq. ft.) ($335/sq. ft.)
Improvements $24,229,605 $15,379,285
In its appeal of each such assessment to the Board of Equalization and Review, D.C. Code § 47-825 (e) (1990), the Post maintained that the assessment rested on an erroneous premise that the improvements were almost twice as large as they actually were. The Board nonetheless sustained the proposed assessments. The Post then filed timely petitions in Superior Court, § 47-825 (i), and the court set the matter for trial. The District did not dispute, and the trial Judge found, that as to each assessment "there a flaw in the allocation between land and improvements of the subject ." Whereas the District's assessment records had shown the improvements (or gross building area) to be 978,755 square feet, the improvements in fact contained approximately 513,484 square feet. Moreover, the parties agreed that the building had only a "nominal value." The Post's expert (Reynolds) testified that "there is no compelling reason to retain the building" and the average buyer would "get rid of it." The District's assessor for 1986 (Davis) agreed that the "real value in this property was in the land." Davis testified that "if I had to do it all over again [ i.e., the 1986 assessment] . . . I would have allocated. . . almost 95 or 98 percent in the land." The trial Judge accepted the Conclusion that the land component of the property had been undervalued.
The Judge further found that for the entire four-year period in question, the Post's
property has been assessed substantially below its estimated market value. For tax years 1985, 1986, 1987, and 1988 the assessed value for petitioner's property was retained at $52,440,000 by the District. Petitioner's property had an estimated fair market value during those years, according to petitioner's expert , of $75,000,000 in 1985; $88,000,000 in 1986; $92,000,000 in 1987; and $98,000,000 in 1988. Petitioner's property was valued by the District during those years at 69.92% of market value in 1985; 59.59% of market value in 1986; 57% of market value in 1987; 53.51% of market value in 1988.
The Judge denied the Post's demand under local law for a refund based on the overvaluation of the improvements, and rejected its constitutional equal protection claim "that the value allocated to the improvement by the District was assessed and taxed at a substantially higher percentage of value than the improvements of other properties of the same class." While agreeing that there had been a misallocation of value between the land and improvements, the Judge read the statutory scheme as providing that "taxes are imposed on the estimated market value of the whole " (emphasis added), and that "the property should be considered as a unit for purposes of determining equalization" of the tax burden among comparable properties. After considering the appraisal technique and confirmatory assessment-sales ratio studies relied on by the District for the assessments in dispute, the Judge concluded that
petitioner appears to have been treated as favorably or more favorably than others in the study. It cannot be said that petitioner has been required to bear an unequal burden for taxes. Not only does it appear that he has not suffered unequal treatment in his ...