Commercial property valuation; True cash value (TCV); MCL 211.27(1); Income-capitalization approach; Renovation deduction; New Covert Generating Co, LLC v Covert Twp; “Highest & best use”; Effect of a sale or purchase price; MCL 211.27(6); Tax Tribunal (TT)

Holding that the TT did not err in adopting and applying a renovation deduction proposed by respondent, the court affirmed its opinion and judgment determining the TCV of petitioner’s commercial property for the 2023 tax year was $525,000. The TT determined that the Stabilized TCV was $1,046,250. To account for it being vacant on the valuation date, the TT “applied respondent’s proposed deduction of $525,000, which included renovation costs and loss of rent incurred after the valuation date.” The court held that the TT’s deduction “was supported by substantial evidence.” Respondent’s appraiser (W) and petitioner’s appraiser (C) offered “‘vastly different; deductions to account for the nonstabilized occupancy of the property, including renovations.” W’s proposed deduction “accounted for both the loss of rent and renovation costs between the valuation date and the completion of work on the property.” W concluded that the renovation costs totaled $485,856 over a four-month period in early 2023. The TT found that W’s proposed deduction “was appropriately based on the renovation costs in [petitioner’s] general ledger and calculated using a discounted cash flow analysis that accounted for rent loss, renovation costs, and a discount rate that was supported by market analysis.” The court concluded “‘the dispute was a matter of the weight and credibility of the evidence’” that was for the TT to resolve. The court found that petitioner’s “focus on the actual renovation costs and when they were incurred ignores several factors that contribute to the proper determination of” TCV. The TT correctly assessed the TCV in light of the highest and best use (a commercial repurposed use), not the property’s use as a vacant bowling alley. And its decision to set the TCV “at $525,000 was consistent with the” property’s listed price when petitioner purchased it. The TT was not required to accept the $200,000 sale price as its TCV, particularly where that “price did not comport with the property’s market value.”