SJN Props. LLC v. Fulton County Bd. of Assessors

The trial court properly granted summary judgment to the Fulton County Board of Assessors in a taxpayer's lawsuit challenging the Board's valuation methodology in connection with ad valorem taxes and bond transactions.

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In 2009, John Sherman, a resident and taxpayer of Fulton County, filed suit, on behalf of himself and all others similarly situated, against the Fulton County Board of Assessors hereinafter, “FCBOA”, along with its Chief Appraiser and each of its members in their official capacities, to challenge the FCBOA’s method of valuing leasehold estates arising from a sale-leaseback bond transaction involving the Development Authority of Fulton County hereinafter, “DAFC”.1 As described in an earlier appeal arising from this same case, the sale-leaseback transaction at issue here was structured as follows:

A bond transaction leasehold estate is created when a local development authority, in accordance with its redevelopment powers, enters into a bond transaction agreement with a private developer of certain real property. The local development authority issues revenue bonds under a financing program to the developer, who conveys to the authority fee simple title to the property. The development authority and the developer then enter into a multi-year lease arrangement whereby the authority, as owner, leases the property to the developer. The resulting lease payments are used by the local development authority to make the principal and interest payments on the revenue bonds. The terms of the agreement allow the developer to repurchase the fee simple estate for a nominal amount once the revenue bonds are paid down or retired.As part of the transaction, the parties enter into a written agreement that sets forth a specific method for determining the fair market value of the resulting leasehold estate held by the private developer. The method estimates the initial fair market value of the leasehold estate to be 50 percent of the fair market value of the fee simple estate. The estimated value of the leasehold estate is then “ramped up” by five percent per year. By the eleventh year, the leasehold estate is valued at 100 percent of the fair market value of the fee simple estate.

SJN Props. LLC v. Fulton County Bd. of Assessors

The trial court properly granted summary judgment to the Fulton County Board of Assessors in a taxpayer's lawsuit challenging the Board's valuation methodology in connection with ad valorem taxes and bond transactions.

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