Conford, Kilkenny and Lewis. The opinion of the court was delivered by Conford, S.j.a.d.
These are two appeals, argued together, from judgments of the Division of Tax Appeals resulting from a joint hearing of two separate tax appeals concerning assessments of the same property, one for the tax year 1961 (our Docket A-587-63) and the other for the tax year 1962 (our Docket A-532-63).
For the year 1961, as of the assessing date October 1, 1960, the real estate in question was assessed by the Garfield assessor as follows: land, $33,225; improvements, $179,550; total, $212,775. On appeal the Bergen County Board of Taxation reduced the assessments to land, $21,168; improvements, $138,800; total, $159,968.
For the year 1962, as of the assessing date of October 1, 1961, the property was assessed as follows: land, $21,175; improvements, $138,000; total, $159,175. On appeal the county board reduced the assessments to land, $19,600; improvements, $78,000; total $97,600.
The owner of the property as of the date of the 1961 assessment appealed the county board judgment to the Division of Tax Appeals, claiming that a further reduction was justified on the basis of the true value of the property. The taxing district appealed the county board judgment for the 1962 assessment on the ground that the reduction in assessment was unjustified. The appeals were heard together by the Division. Both sides offered testimony which it was understood was to be applicable to the appeals for both years. It was conceded
by the parties that the property had the same true value as of both assessing dates applicable, and there was no evidence to the contrary. The commissioner who heard and decided the appeals for the Division of Tax Appeals concluded that "neither side in this case has presented any persuasive proof of the true value of the subject property." Since neither side had "borne its burden of proof," both appeals were "dismissed" and the county board judgments were affirmed. It thus resulted that at the conclusion of two administrative appeals covering assessments for each of two successive tax years the final assessments for the same property, which was of the same true value in both years, were $159,968 in one year (1961) and $97,600 the next year (1962). For reasons to be stated, we hold that the condition of the evidence before the Division did not require this anomalous result and that the Division should fix the proper identical assessments for the property for both of the tax years involved.
The property in question is a 3.92-acre tract which is the site of a number of industrial buildings, originally built years ago as textile mills but converted to other uses more recently because of the economic demise of the textile industry in the Passaic-Bergen County area.
The taxpayer's case before the Division was presented principally through the testimony of a real estate appraiser, George Goldstein, M.A.I. A written 17-page appraisal by this expert was marked in evidence. It contains supporting details of his valuations not in all respects specifically repeated in the oral testimony. He valued the property at the same true value for each of the tax years in question. The 3.92 acres were valued at $20,000 per acre, or $78,400. The 14 buildings were appraised on the basis of reproduction cost new less physical depreciation, in varying percentages, and a general deduction from the remainder of 50% to reflect economic and functional obsolescence. The resulting gross total values of $351,510 were checked by the witness on the basis of an analysis of sales of comparable mill properties in the general area. This analysis developed units of price of a square foot
of usable mill space by dividing total sales prices by gross square feet of floor space. From these price units the witness concluded that "purchasers * * * were buying in the market typical industrial properties of the typical mill type buildings erected around the turn of the century, and that's about a $2.25 to $2.40 market in Bergen and Passaic Counties." The summation method of appraisal by the witness (land plus buildings, appraised separately), mentioned above, came out to about $2.26 per square foot of floor space in the properties.
Goldstein found further confirmation of his appraisal in a sale of the subject property by its original owner, Samuel Hird & Sons, Incorporated, who had conducted a textile manufacturing business thereon for years, to Aaron Levine (through a dummy intervening grantee) on May 15, 1962. The sale price was $500,000, but the transaction included two parcels of land in addition to the 3.92 acres under appeal in these cases. The witness stated that after deducting the value of the two other properties, the gross sale price reflected a price for the subject property of $390,000. The discrepancy thereof from his appraisal of $351,510 was reconciled by the concept that the seller would add 10% to the appraised value for commission when placing the property on the market for sale.
The average sales (assessment) ratio of Garfield for 1961 being 25.37%, the taxpayer contends that, applying the Goldstein appraisal, the proper equalized assessment for 1961 should approximate $89,000; and at the 1962 ...