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ATTORNEYS FOR PETITIONER: BRENT A. AUBERRY VICKIE L. NORMAN BAKER & DANIELS Indianapolis, IN

ATTORNEYS FOR RESPONDENT: STEVE CARTER ATTORNEY GENERAL OF INDIANA LINDA I. VILLEGAS DEPUTY ATTORNEY GENERAL Indianapolis, IN ______________________________________________________________________

IN THE INDIANA TAX COURT
MEADOWBROOK NORTH APARTMENTS, AN INDIANA LIMITED PARTNERSHIP, ) ) ) Petitioner, ) v. ) ) Cause No. 49T10-0203-TA-35 BRENDA CONNER, ASSESSOR OF ) NOBLE TOWNSHIP, WABASH COUNTY, ) ) Respondent. ) ______________________________________________________________________ ON APPEAL FROM A FINAL DETERMINATION OF THE INDIANA BOARD OF TAX REVIEW FOR PUBLICATION August 4, 2005 FISHER, J. Meadowbrook North Apartments, an Indiana Limited Partnership

(Meadowbrook), appeals the Indiana Board of Tax Review's (Indiana Board) final determination valuing its real property as of March 1, 1995. The sole issue for the Court to decide is whether Meadowbrook is entitled to an adjustment to account for economic

obsolescence. 1 For the following reasons, the Court REVERSES the Indiana Board's final determination. FACTS AND PROCEDURAL HISTORY Meadowbrook owns and operates a subsidized housing complex (complex) in Wabash County, Indiana, which was developed under the U.S. Department of Housing and Urban Development's (HUD) 236 Program. The 236 Program is a mortgage

interest subsidy program designed as a means to encourage developers to produce below-market housing for low-income individuals. Consequently, HUD determines the maximum rent chargeable for each housing unit based upon the complex's operating expenses and Meadowbrook's mortgage debt and dividend equity. While the 236

Program does not entitle Meadowbrook to any federal tax incentives, it does entitle it to a monthly reduction in its mortgage interest payments and a limited return on investment. 2 As of the March 1, 1995 assessment date, the township assessor (Assessor) fixed the assessed value of the complex at $611,100. In arriving at that value, the Assessor did not assign an economic obsolescence adjustment to the complex. On March 27, 1996, Meadowbrook challenged its assessment by filing a Petition for Review Meadowbrook also contends that the Indiana Board violated its due process rights when it relied upon ex parte evidence not presented at the administrative hearing. Given the decision of the Court herein, it is unnecessary for the Court to address this issue. Although the 236 Program allows developers to receive a 6% return on investment, any overage must be sent to the mortgage company for placement in a reserve account. See In re Appeal of Pend O'Reille Village Apts., No. 94-A-6542, 1995 WL 65437, at *1 (Idaho Bd. Tax App. Feb. 16, 1995) (describing HUD 236 Program). Moreover, while the 236 Program did provide tax incentives to developers at one time, under the Tax Reform Act of 1986, any tax incentives the developers were to receive were abolished. See id. at *2.
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of Assessment (Form 130) with the Wabash County Board of Review (BOR). In its final determination, the BOR reduced the assessed value of the complex, but affirmed the Assessor's denial of an obsolescence adjustment. Still believing its assessment to be too high, Meadowbrook appealed to the State Board of Tax Commissioners (State Board) by filing a Petition for Review of Assessment (Form 131). In its Form 131, Meadowbrook alleged, among other things, that the apartment complex suffered from obsolescence as a result of the HUD-imposed rent restrictions. The State Board conducted an administrative hearing on

Meadowbrook's Form 131 petition on October 13, 2000. On February 8, 2002, the Indiana Board of Tax Review (Indiana Board) issued a final determination denying Meadowbrook's request for relief. 3 Meadowbrook subsequently filed a Request for

Rehearing with the Indiana Board, which was ultimately denied. On March 21, 2002, Meadowbrook filed an original tax appeal. On April 14, 2003, this Court heard the parties' oral arguments. Additional facts will be supplied as necessary. ANALYSIS AND OPINION Standard of Review This Court gives great deference to final determinations of the Indiana Board when it acts within its scope of authority. IND. CODE ANN.

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