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21 August 2000

3-99-0580

IN THE

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

A.D., 2000

JUSTICE KOEHLER delivered the opinion of the court:

     The Kankakee County Board of Review (Board of Review) appealsthe Property Tax Appeal Board's (PTAB) June 28, 1999, decisionreducing the tax assessment for tax year 1995 on industrialproperty on which Heinz Pet Products Company (Heinz Pet Products)operates a pet food processing plant. On appeal, we review whether(1) PTAB erred when it concluded that Heinz Pet Products hadstanding to appeal the tax assessment; and (2) the PTAB hearingofficer erred in denying the Board of Review's request to make anoffer of proof on a document the hearing officer had refused to admit into evidence. Because we conclude that the hearing officererred in denying the Board of Review's request to make an offer ofproof, we reverse PTAB's decision and remand.

FACTS

The Kankakee County assessor and the Kankakee County Board ofReview assessed 1995 property taxes in the amount of $3,421,420 onindustrial property consisting of approximately 80 acres on whichHeinz Pet Products operated a pet food processing and distributionfacility. The appraisal in question concerned one approximately33.7-acre parcel of those that constitute the entire property. OnFebruary 28, 1996, Heinz Pet Products filed a real propertyassessment appeal with PTAB for tax year 1995 asking it to reducethe property taxes to $2,170,000. On May 28, 1996, the Board ofReview filed a motion to dismiss for lack of standing. PTAB deniedthe motion and, prior to closing arguments, denied the Board'srenewed motion.

In the PTAB hearing, Heinz Pet Products' witness AndrewBrorson, owner of Brorson Appraisal Service in Kankakee, testifiedthat he inspected the property, prepared the appraisal as ofJanuary 1, 1994, and prepared updated appraisals for the years 1995through 1997. Brorson testified that he appraised the propertyunder a sales comparison approach in which he used local, area andregional comparables to find a range of values for the property. Taking the midrange value, Brorson arrived at a 1994 property valueof $5 per square foot. For tax year 1995, he valued the propertyat approximately $5.8 million, or $4.50 per square foot.

While cross-examining Brorson, counsel for the Board of Reviewrequested that the hearing officer admit a copy of a document forimpeachment purposes, allegedly showing that Brorson had made aprior inconsistent statement as to the 1995 property value. Because the Board of Review did not present it for the record priorto the hearing, the PTAB hearing officer refused to admit thedocument. The hearing officer refused counsel's request to make anoffer of proof on the document, ruling that the document was notrelevant and Brorson had not relied on it. The hearing officeralso refused to allow counsel to identify the document for therecord. Consequently, the document is not included in the recordon review. However, the Heinz Pet Products and PTAB briefs eachdescribe it as Brorson's alleged prior appraisal.

PTAB concluded that Brorson's 1994 appraisal method bestindicated the property's value. Accordingly, PTAB decided that theproperty should be valued at $5 per square foot, arriving at a fairmarket value of approximately $6.5 million and an assessed value of$2,144,350. The Board of Review requested administrative review.

ANALYSIS

The Board of Review seeks administrative review of PTAB'sdecision under section 16-195 of the Property Tax Code (35 ILCS200/16-195 (West 1996)), which provides that a party seeking achange in valuation of $300,000 or greater may appeal directly tothe appellate court. First, the Board of Review contends that PTABerred when it denied its motion to dismiss the appeal on the basisthat Heinz Pet Products lacked standing to appeal the assessment.The Board of Review argues that (1) county records showed GainesFoods Corporation owned the property; (2) the county assessor hadreceived a letter from Star-Kist Foods, Inc. (Star Kist), informingthe assessor that the property had changed ownership and requestingthat the assessor send all correspondence to Star-Kist; and (3)Heinz Pet Products presented no evidence of any interest in theproperty. The Board of Review maintains that, in order to havestanding, Heinz Pet Products must show that it owned the propertyas of January 1, 1995; however, it did not do so. H.J. HeinzCompany submitted a response to the motion, arguing that, (1) byvirtue of a stock purchase agreement, it owns the property; and (2)pursuant to its obligations under the purchase agreement, it paidthe 1995 property taxes on the parcels contiguous to that at issueand will pay the property taxes on that parcel when the assessmentis finally determined. Heinz Pet Products and PTAB argue thatJanuary 1, 1995, is the date used to determine the property valuebut is not relevant to determining ownership.

The Board of Review contends that the issue of standing ispurely a legal question that this court should review de novo. Theappellees, Heinz Pet Products and PTAB argue that, in the instantcase, standing is a mixed question of law and fact requiring afactual determination as to whether stock purchase documentsreflect Heinz Pet Products' interest in the property, and a legaldetermination in that it requires this court to interpret the terms"taxpayer" or "owner". Therefore, the appellees urge us to reviewthe standing issue under the clearly erroneous standard of review.

"[T]he question of standing is a matter of law, and as such,[the] court is not bound by the administrative agency's conclusionsof law. [Citation.]" Citizens for Preservation of Knox County,Inc. v. Illinois Department of Mines & Minerals, 149 Ill. App. 3d261, 264, 500 N.E.2d 75, 77 (1986). The court reviews questions oflaw on a de novo basis. City of Belvidere v. Illinois State LaborRelations Board, 181 Ill. 2d 191, 205, 692 N.E.2d 295, 302 (1998). Therefore, we review the circuit court's decision that Heinz PetProducts had standing to appeal the assessment de novo.

The owner of real property on January 1 of any year is liablefor the taxes on the property for that year. 35 ILCS 200/9-175(West 1996). However, parties may, through clear agreement, shiftthe burden of liability. First National Bank v. Mid-Central FoodSales, Inc., 129 Ill. App. 3d 1002, 1005, 473 N.E.2d 372, 364(1984). The Illinois Administrative Code (Administrative Code)provides that "a taxpayer or owner of property" may file with theProperty Tax Appeal Board an appeal of a decision of a board ofreview pertaining to the assessment of property for taxationpurposes. 86 Ill. Adm. Code