Docket No. 05-00359.001-C-3
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much weight for purposes of developing a capitalization rate due
to their out of state location. He also looked at sales in other
Illinois communities in calculating a capitalization rate. He
testified his analysis shows the Iowa and other Illinois
communities' sales show a consistent capitalization rate range
that is somewhat higher than the rates in Rock Island County.
Richter next provided testimony in connection with the band of
investment technique of capitalization. Richter acknowledged he
used the 2004 tax rate to calculate the effective tax load factor
in the capitalization rate
The board of review presented its "Board of Review Notes on
Appeal" wherein the subjects' final assessment of $1,133,867 was
disclosed. The subject's assessment reflects an estimated market
value of $3,403,984 using Rock Island County's 2005 three-year
median level of assessments of 33.31%. In support of the
subject's assessment, the board of review submitted an appraisal
report that estimated the subject's market value to be $3,150,000
excluding $50,000 of personal property as of January 1, 2005.
The appraiser, David Mark Nelson, was present and testified
regarding the appraisal methodology and value conclusions
contained within his valuation report.
Nelson is a licensed appraiser in the State of Illinois and Iowa.
He has been appraising real property for approximately 15 years.
Prior to appraising real property he was a property manager in
suburban Washington D.C. Nelson testified he actually appraised
the subject property for its original construction loan. He has
appraised over 25 low income housing projects within the region.
Nelson testified he has completed all the necessary requirements
for the Member of the Appraisal Institute designation.
Under questioning from opposing counsel regarding qualifications,
Nelson testified he is not a graduate of a college or university,
but had taken several courses and received 30 to 40 credit hours
from American University and Augusta College. Nelson
acknowledged his professional property management affiliations
Under the income approach to value, Nelson calculated the
subject's potential gross annual income to be $644,880 using the
subject's asking rents. He testified the actual asking rents are
supported by a survey of comparable apartment units. He
testified low income tax credit housing in the subject's market
have rental rates that are competitive to traditional market
rents. Nelson testified low income housing like the subject has
difficulty procuring new tenants due to limited income
qualification requirements. Some of these prospective tenants
can get lower rental rates at older properties that are proximate
to the subject. Nelson opined although the subject is a newer
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