ERROL G. WILLIAMS, ASSESSOR, PARISH OF ORLEANS
OPPORTUNITY HOMES LIMITED PARTNERSHIP AND LOUISIANA TAX COMMISSION
FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2015-08441,
DIVISION "C" Honorable Sidney H. Cates, Judge
S. Brown SULLIVAN STOLIER AND John Jurgen Weiler Christian N.
Weiler WEILER & REES, LLC COUNSEL FOR
G. Walker, III Robert Dean Hoffman, Jr. ROBERT D. HOFFMAN,
JR., APLC COUNSEL FOR DEFENDANT/APPELLEE.
composed of Chief Judge James F. McKay, III, Judge Roland L.
Belsome, Judge Regina Bartholomew-Woods).
Erroll G. Williams, Assessor for the Parish of Orleans
("Assessor Williams" or "the Assessor"),
appeals the judgment of the Orleans Parish Civil District
Court dated July 11, 2016, in favor of Defendants-Appellants,
Opportunity Homes Limited Partnerships ("Opportunity
Homes") and the Louisiana Tax Commission (the
"LTC" or "the Commission"). Assessor
Williams asserts four (4) assignments of error relative to
two decisions rendered by the Tax Commission on August 5,
2015, determining the fair market value for certain
affordable housing rental properties for the 2014 and 2015
tax years for purposes of ad valorem taxation. For
the reasons that follow, we reverse the judgment of the
district court and reinstate the fair market valuations as
determined by Assessor Williams.
AND PROCEDURAL BACKGROUND
Homes describes itself as a "scattered-site, low income
affordable housing development." It consists of
thirty-two (32) single- and double-unit residential
buildings. The separate properties are connected by way of a
Tax Credit Regulatory Agreement ("TCRA").
Opportunity Homes notes the TCRA prohibits separation and
sale of the various properties, and restricts the chargeable
rents to "no more than sixty percent (60%) of the Area
Median Income ("AMI")" for an extended period
of time, but the rates are even lower for some buildings.
to the powers and authority delegated to him by La. R.S.
47:1903, La. R.S. 47:1957, and La. R.S. 47:2323, Assessor
Williams determined the fair market value ("FMV")
of Opportunity Homes' scattered-site properties using
what is known as the "market approach." In using
this particular approach, Assessor Williams determined the
FMV of Opportunity Homes' properties to be $4, 200, 900
and $4, 083, 610 for tax years 2014 and 2015, respectively.
to its authority under La. Const. art. VII, § 18, the
Commission reviewed the "correctness" of Assessor
Williams' assessment. At a January 13, 2015 hearing,
counsel for Opportunity Homes noted that in 2013, the same
properties were valued at $1, 525, 000, and assessed
accordingly. The Commission relied on assessments by Randy
Harrington, its own staff appraiser, who used what is known
as the "income approach" and reached FMVs of $1,
525, 000 for both tax years 2014 and 2015, which assessments
specifically excluded the value of "Low Income Housing
Tax Credits" ("LIHTCs") received by the
taxpayer for encumbering the properties with
below-market-value rents. Counsel for Opportunity Homes noted
that pursuant to adopted and promulgated regulations, the
income approach is the "recommended" approach for
determining the FMV of "affordable rental housing."
Based on the foregoing, the Commission moved to accept the
staff recommendations as to each tax year.
result of the Commission's actions, on September 2, 2015,
Assessor Williams commenced suit in the district court
pursuant to La. R.S. 47:1998, La. R.S. 47:1989 and La. R.S.
49:964. The district court affirmed the Commission's
decision, finding that the Commission's decision
"was not in violation of any constitutional or statutory
provisions, was not in excess of its statutory authority, was
not made upon unlawful procedure, or affected by other error
of law, was not arbitrary or capricious or characterized by
abuse of discretion or clearly unwarranted exercise of
discretion." The district court further noted the
decision "was clearly supported by the testimony and
preponderance of the evidence before it, where [the
Commission] had the opportunity to judge the credibility of
witnesses by first-hand observation."
review the decision of the Commission pursuant to La. Const.
art. VII, section 18(E) and La. R.S. 47:1998(A)(1). Judicial
review of an agency's adjudication is governed by La.
R.S. 49:964(G), which provides as follows:
The court may affirm the decision of the agency or remand the
case for further proceedings. The court may reverse or modify
the decision if substantial rights of the appellant have been
prejudiced because the administrative findings, inferences,
conclusions, or decisions are:
(1) In violation of constitutional or statutory provisions;
(2) In excess of the statutory authority of the agency;
(3) Made upon unlawful procedure;
(4) Affected by other error of law;
(5) Arbitrary or capricious or characterized by abuse of
discretion or clearly unwarranted ...