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EHP Glendale, LLC v County of Los Angeles

Case No. B244494 (CA Dist. 2 Ct. App., Sep. 18, 2013)

For a second time, we are asked to review an action for a property tax refund filed by appellants EHP Glendale, LLC and Eagle Hospitality Properties Trust, Inc. (Eagle), against the County of Los Angeles (County). Eagle challenges the property tax assessment for the Glendale Hilton Hotel (hotel or property) by the Los Angeles County Assessor (assessor) following Eagle‟s purchase in 2005, an assessment confirmed by the Los Angeles County Assessment Appeals Board (Board). In the first appeal, we reversed the grant of summary judgment to Eagle, finding the trial court improperly rendered the decision on an incomplete administrative record that contained disputed issues of fact. (EHP Glendale, LLC v. County of Los Angeles (2011) 193 Cal.App.4th 262 (EHP Glendale).) On remand, the trial court held a bench trial on the complete record and entered judgment in the County‟s favor, affirming the assessor‟s and the Board‟s assessment (with one exception for a reduction in the purchase price undisputed by the parties). Eagle timely appealed that judgment. We affirm.

FACTS



We set forth the background facts from our prior opinion, which have not changed (EHP Glendale, supra, 193 Cal.App.4th at pp. 264-268 [all footnotes in original]):

“1. The Subject Property



“The property at issue is located near the intersection of Brand Boulevard and Glenoaks Boulevard in the City of Glendale (City). The 18-story structure, built in 1991, is operated as a full-service first-class hotel with 351 guestrooms, including 13 suites. The hotel encompasses about 285,000 square feet of improvements, including a lobby, administrative offices, hotel laundry, two ballrooms, a „prefunction‟ area, seven meeting rooms, a business center, a fitness facility, a gift shop, an outdoor pool and spa with sundeck, two restaurants, a lounge, kitchen facilities and an approximately 196,000-square-foot, five-level, below-grade parking garage accommodating over 500 vehicles.

“2. Hotel Sale and Purchase



“In January 2005, the Hilton Hotels Corporation (Hilton) offered the hotel for sale. Hilton marketed the property as being located in a prime location, distant from competing Hilton hotels, relatively insulated from new supply, in good physical condition and the only „four diamond‟ facility in the San Fernando and San Gabriel Valleys.
















 

 

Judge(s): Madeleine Flier
Jurisdiction: California Court of Appeals, Second District
Related Categories: Property
 
Trial Court Judge(s)
Michelle Rosenblatt

 
Court of Appeals Judge(s)
Madeleine Flier
Elizabeth Grimes
Laurence Rubin

 
Amicus Lawyer(s) Amicus Law Firm(s)
Dean Freeman Office of the California Attorney General
Paul Gifford Office of the California Attorney General
Kamala Harris Office of the California Attorney General
Felix Leatherwood Office of the California Attorney General
Marta Smith Office of the California Attorney General
Douglas Mo Sutherland Asbill & Brennan

 
Appellant Lawyer(s) Appellant Law Firm(s)
Andrew Bodeau Cahill Davis & O'Neall
John Cahill Cahill Davis & O'Neall
Stephen Davis Cahill Davis & O'Neall
Cris O'Neall Cahill Davis & O'Neall

 
Appellee Lawyer(s) Appellee Law Firm(s)
John Krattli Office of the Los Angeles County Counsel
Albert Ramseyer Office of the Los Angeles County Counsel

 

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stream of the hotel.18 we may overturn the decision of the board only if it was “„so subdivision (e) states, “taxable property may be assessed and valued by assuming the business personal property and some intangible assets,” it also expressly held the of a property before capitalization in order to remove their value from the final valuation. centers] are among the features of an upscale hotel and that to remove them would facts and we do not find it controlling here. “eagle argued at the hearing before the board that the franchise agreement, the intangible assets. we need not comment on the sbe‟s current views of section 502 or 187 cal.app.4th 669, 686.) we find the board adequately addressed the issues to enable agreements from the projected income from the property, the income method in his “eagle‟s expert appraiser testified he valued the property using all three finally, neither sky river nor elk hills changed the controlling rules of law similar argument that assessor‟s valuation must have included intangible assets because it verified sales price as the value of the real estate. he then deducted the nontaxable value management agreements as conditions to closing, which were separately paid for through the pertinent facts. (cal. rules of court, rule 8.204(a)(2)(c).) eagle argues the board‟s decision constitutes law of the case, which validated the board‟s use of the income expense for the management agreement) were separate from the purchase price. even capital and other nontaxable operating assets and to compensate unpaid or underpaid purchase price. are exempt from taxation and, except as otherwise provided in the following sentence, the opinion that the purchase price did not include nontaxable intangible values and that he from searle does not apply because we have not identified any reason not considered in value of intangible assets that must be excluded. eagle cites several cases to argue, as a royalties and fees; and provided that all employees would either be terminated upon sale assessors‟ handbook section 502, but that no assessor in california follows section 502 property involved.” section 212, subdivision (c) provides, “intangible assets and rights assuming the purchase price was the full market value of only the taxable property. we set forth the background facts from our prior opinion, which have not changed intangible assets may not be reflected in the valuation of taxable property, but removing them as an expense from the income stream.” he also removed more than $1.3 management.”15 plaintiffs and appellants, review only the record presented to the board. [citations.] the trial court may overturn cahill davis & o‟neall, john d. cahill, cris k. o‟neall, c. stephen davis and clarita organization for planning the environment v. county of los angeles (2007) 157 for defendant and respondent. the value of the redevelopment agency‟s $2.5 million retained profit sharing interest as property . . . . [t]he propriety of including nontaxable intangible values in the valuation advantage of the exigencies of the other, and both the buyer and the seller have county provided the court with the full administrative record, “the absence of a complete whether the income approach to valuing a business necessarily includes the value of property contained within the unit shall be determined by removing from the value of the “assessor in this case did not include components of value for business enterprise value deputy assessor‟s testimony that his valuation excluded in particular the value of judgment on the credibility of the testimony and evidence presented, selecting the “a. eagle’s valuation (2002) 98 cal.app.4th 1066, 1070, fn. 2.) they “represent „merely the opinions of the court remanded the matter for a reassessment hearing, “at which time the [sbe‟s] management against a property‟s revenue (such as for gardening, janitorial, and plumbing facts, the franchise agreement with hilton and the management contract were among the price of the property, “unless it is established by a preponderance of the evidence that the and the valuation of real property at fair market value under sections 110, subdivisions 3. proceedings on remand arbitrary as to constitute a deprivation of property without due process. [citations.]‟” cal.app.3d 1142, 1155.) under the facts presented to the board, house‟s deduction of take place in the context of a summary judgment motion.‟ [citations.] in view of the ruling in the prior appeal that we now perceive to be manifestly erroneous.” (searle v. filed 9/18/13 2. standard of review in applying the income approach to confirm the purchase price as the taxable full the property at its full market value, the assessor was entitled to assume the presence of deducted even if they existed. (id. at p. 1004.) this was merely “lip service to the power, as opposed to the liquidation value of the business or of its assets‟”), section 110, 26 not have bought the hotel and the purchase price would have been less without the hilton taxable property. taxable property may be assessed and valued by assuming the “[t]hat reason for the rule is inoperative when the court hearing the subsequent appeal 18 assessor‟s and board‟s use of the “rushmore-like approach” was not arbitrary, in excess property based on the income approach, claiming it taxed the value of intangible 23 income approach he removed the value of intangibles from the income stream, a further estimated the value of the intangible assets at market prices, and the market value glendale, supra, 193 cal.app.4th at pp. 275-276.) in ruling for the assessor, the board forth in a draft of the assessors‟ handbook section 502 that was rejected, it misinterprets return which a reasonably well informed owner and reasonably well informed buyers obispo (1974) 39 cal.app.3d 57, 61 (madonna).) but the issue we must decide is not our review. recognized approaches to value, i.e., sales comparison, income capitalization and cost.3 of a business‟s income stream to the enterprise activity that was directly attributable to by appellants ehp glendale, llc and eagle hospitality properties trust, inc. (eagle), the property (§ 110, subd. (b); cal. code regs., tit. 18, § 2, subd. (b); ehp glendale, of the hotel. as a final step, however, he deducted from his valuation the value of three agree with the trial court that “[t]he board was reasonable in determining that [the service “in january 2005, the hilton hotels corporation (hilton) offered the hotel for sale. first-class hotel, which was the only permitted use of the land. a deduction from the because it was undisputed they were legally necessary to put the property to its beneficial required to put a property to its beneficial and productive use, and no additional value determines that there should be a reversal on a ground that was not considered on the the property‟s true value as a full-service lodging facility. [¶] the board considered the comparable properties should be used in estimating the future income if, in the opinion of 12 house clarified at the hearing that he did not view the management and franchise assets. that would violate section 110(d)(1) as well as section 212(c). rather, it is identify the value of any particular intangible assets; excluded the hilton trademarks and other profit centers. the deputy assessor, on the other hand, testified that because in his of the property. (board of equalization, assessors‟ handbook section 502, advanced given our review is limited to whether substantial evidence supported the board‟s and the value of those intangibles assets such as the management and franchise operation of a full-service hotel. was the income method. however, the expert opined a further deduction should be made names, logos, system operations, advertising, customer and distribution relationships, and “after eagle purchased the property, the assessor reassessed the property as the intangibles are not directly taxed.” (elk hills, supra, 57 cal.4th at p. 608.) but in the nontaxable operating assets and to compensate unpaid or underpaid management.” rule the assessor also reasonably viewed the presence of the service centers as part of “1. the subject property direct taxation of intangible rights and assets when assessors use methods of unit principle of unit valuation is used to value properties that are operated as a unit and the found the assessment invalid because it included the value of intangible assets, rejecting entered judgment in the county‟s favor, affirming the assessor‟s and the board‟s 4 the value of intangible assets were included in the assessment; instead, the sbe and its purchase. this calculation yielded an estimated value for the hotel of $76.3 million. house acknowledged his valuation conflicted with the sbe‟s guidance published franchise in place, this was a factual dispute and the board was entitled to credit the equipment, the assembled workforce and business center within the hotel separate from charged against revenue. to the contrary, competent management of a property is such persons may foresee as of that date.” that income stream cannot be subsumed in the valuation of taxable property terms of the purchase agreement supported the board‟s conclusion that the value of the 17 rule 8(c), provides in relevant part: “the amount to be capitalized is the net intangible assets and actively remove that value from a unit‟s taxable base value, so that 22 plant‟s income stream. (elk hills, supra, 57 cal.4th at p. 617.) but the court rejected the the purchase price of the real estate alone, not the intangibles and not the personal „business enterprise value‟ method, which was followed by eagle‟s experts and espoused parties). eagle timely appealed that judgment. we affirm. matter of law, “an income approach includes or subsumes the value of the intangible decision on this point. (see american sheds, supra, 66 cal.app.4th at p. 394 [rejecting management and a workforce. relying on rule 8(e) and rule 8(c) (cal. code regs., tit. the service centers necessary to that operation. properly removed the value of the identified intangible assets in his application of the house testified that the hotel‟s owner before hilton was superior in its management of (1994) 26 cal.app.4th 992, 999 (gte sprint), mola development corp. v. orange is not whether the assessor used a valid methodology, but whether the assessor subtracted intangible rights like ercs merely allow for the taxable property to generate income to provide for a return on the non-taxable operating assets in the total amount deducted that requires many services to put the property to beneficial use, but which may not carry because the rule is “harsh,” courts “have declined to adhere to it where its “as a final step, however, eagle‟s appraiser incorporated a value allocation made revenue, and capitalizing the net income, he reached $73.3 million, an amount close to retail centers, and supercenters. at the time of the hearing, he had specialized in hotel decision. rights) was $77.3 million. redevelopment agency‟s reserved participation interest. elk hills addressed whether the state board of equalization (sbe) improperly assessor and the sbe failed to present any evidence to rebut the taxpayer‟s experts that property.” supra, 57 cal.4th at pp. 618-619.) the ercs in the case fit in the first line of cases the value of intangible assets and deduct that value prior to assessment. [citation.] the trial court‟s judgment is affirmed. this matter is remanded to the board to [citations.] the question of credibility of the experts was a matter to be decided by the as a starting point, the fair market value is presumed to be the purchase price of workforce was one of the activities to be performed under that agreement. components of the purchase price. we merely noted in our prior opinion “[t]he purchase required to put it to beneficial and productive use, and routine charges for that property. (gte sprint, supra, 26 cal.app.4th at p. 998.) on de novo review, the court that could be separately valued. the board did discuss the separate valuation of the and certain intangible assets and rights.2 under the stipulated facts, the franchise sutherland asbill & brennan and douglas mo for american seniors housing capitalize that income into a value estimate for the property. he then deducted furniture, application would result in an unjust decision, e.g., where there has been a manifest american sheds, inc. v. county of los angeles (1998) 66 cal.app.4th 384, 392-393 eagle relies heavily on gte sprint, arguing that case forecloses the assessor‟s “primary purpose served by the law-of-the-case rule is one of judicial economy,” but (morohoshi v. pacific home (2004) 34 cal.4th 482, 491-492 (morohoshi).) further, the intangible assets that relate to the going concern value of a business within the unit value 2005 date of the hotel‟s change in ownership. business enterprise and includes all tangible assets and intangible assets and rights, trade as a question of methodology. (id. at pp. 605-606.) it also approved the sbe‟s issues presented to the court were based on uncontested or undisputed facts and thus p. 274.) “the income method is based on the assumption that in an open market a willing the market rate of an intangible asset reflects that investors do not require a return on the procedural history at p. 618.) deputy deducted appropriate projected expenses to arrive at a net operating income for “2. hotel sale and purchase incomplete record. (ehp glendale, supra, 193 cal.app.4th at p. 273.) we explained the here. eagle‟s claimed “substantial injustice” is simply a disagreement with our 20 the assessor‟s income (rushmore-type) approach arbitrary, in excess of discretion, or in presents a question of fact.” (ibid.) because “the issue whether the board‟s findings are intangible assets acquired by eagle during the sale.” (ehp glendale, supra, 193 findings did not “include all legally relevant subconclusions supportive of its ultimate and productive use as a power plant and there was “no indication that the [sbe], when it workforce was therefore subsumed in the management agreement because managing the service hotel and would have violated the requirement that the hotel be assessed at its full the income to be derived from the property.” (ibid.) [citation.] this is true even if the court that issued the opinion becomes convinced in a valuation of an inn. in that case, the court affirmed a decision by the county board of from the income generated by the hotel, and capitalized the result to determine the value is no evidence to suggest the assessor included separate values for the service centers in (see bret harte inn, inc. v. city and county of san francisco (1976) 16 cal.3d 14, 24 rejecting each issue raised by the parties. [citation.]” (farr v. county of nevada (2010) assessor‟s office, had concentrated on commercial properties, shopping centers, strip p. 1007; service america corp. v. county of san diego (1993) 15 cal.app.4th 1232, sources that methodology known as the „business enterprise approach‟ (bea), has “the hotel purchase closed in june 2005. the purchase price was $79.8 million allstate life ins. co. (1985) 38 cal.3d 425, 435 (searle).) productive use.‟ [citation.]”].) property. had he not deducted the expenses for the franchise and management adopted the opinion and valuation from the county‟s deputy assessor richard house, a fixtures and equipment) and certain intangible assets and rights. under the stipulated 24 “during the valuation hearing, the assessor‟s deputy, whose analysis the assessor service centers. that analysis resulted in ascribed values of $7.1 million for the violation of the standards prescribed by law and/or supported by substantial evidence[?] defendant and respondent. glenoaks boulevard in the city of glendale (city). the 18-story structure, built in 1991, findings. it quoted the standard of review from our prior opinion and explained its view board is vested with special expertise in property valuation and its factual determinations operating property, provided the taxpayer proves its value beyond an “average” trade house‟s valuation under rule 8(e) because, in their view, he did not subtract an amount the nontaxable assets. as the county points out, the appropriate charge against the in the management‟” of the inn, when it should exclude “„any income from businesses or price was $79.8 million and included the real property, personal property (e.g., furniture, as whether, as a matter of law, the assessor‟s methodology was valid. but because the franchise agreement for eagle to use the hilton franchise in exchange for payment of a knowledge of all the uses and purposes to which the property is adapted and for which it of otherwise taxable property has been asserted by the courts in a variety of contexts, and position is supported by the evidence presented by the assessor.” second, it held the “„whether the board properly equalized the value of [eagle‟s] property, based on the andrew w. bodeau for plaintiffs and appellants. square-foot, five-level, below-grade parking garage accommodating over 500 vehicles. presented to the court was whether „“„there was evidence of sufficient substantiality like house, in applying the income approach, eagle‟s appraiser subtracted expenses conclusion that gte sprint and other cases are distinguishable. further, the exception p. 268.) eagle moved for summary judgment, stating that the sole issue concerned may anticipate on the valuation date that the taxable property existing on that date will court held it was, the error did not impact the court‟s judgment affirming the board‟s kamala d. harris, attorney general, paul d. gifford, assistant attorney general, or productive use.” equaled the purchase price for both tangible and intangible assets when the taxpayer gave sbe‟s appraisers testified that “they did not look for and made no attempt to value transaction.” (§ 110, subd. (b); see ehp glendale, supra, at p. 274.) because “[t]he supra, 193 cal.app.4th at p. 274), and here, the board had before it evidence that the assets when valuing the taxable property put to beneficial or productive use. while the we concur: the glendale redevelopment agency (redevelopment agency) to participate in a shall not enhance or be reflected in the value of the taxable property. [¶] (2) if the agreements as intangible “attributes” under section 110, subdivision (f). eagle acquired the hotel as a “full-service” hotel, defined as “[g]enerally mid-price, legally valid, that the remaining issue was one of fact and not law, and that the court‟s the value of nontaxable assets. nor did any prior decision in this case analyze the (assessors‟ handbook section 502, supra, at p. 162, fns. omitted.) taxable value of a power plant. (elk hills, supra, 57 cal.4th at pp. 601-602.) in that must be deducted from an income stream analysis prior to taxation.” (elk hills, or remove the value attributable to the business enterprise that operates the hotel.” of property prior to assessment. section 110(d)(2) requires taxing authorities to value been used as an “element of the chosen method to be used in calculating the market value of the property,” an issue that did not call for the weighing of facts. (sky river, supra, the rooms, in conjunction with the franchise and related management agreements” (italics the board accepted house‟s valuation: “the board reviewed the points raised by to clarify the ruling, the court entered judgment in eagle‟s favor, declaring the assessor‟s opinions of eagle‟s experts over the opinion of the assessor and his deputy. whether the fixtures, and equipment from the value estimate to reach a base value for the property. deducted appropriate expenses and projected expenses to arrive at a net operating deduct from the assessment the undisputed $2.5 million paid by reason of the profit 1. procedural history leading to first appeal in applying any valuation method, intangible assets must be excluded because they eagle and amicus curiae american seniors housing association chiefly object to satisfactory agreement with the city to eliminate the redevelopment agency‟s profit million from the income stream (capitalized to $15 million) beyond the expenses for the he opined that, because “capitalization is the process of converting income into because the value of the real property he obtained from the income capitalization required by proposition 13. the assessor initially enrolled a total value for the hotel of these cases illustrate the principle that although assessors may assume the presence of when put to its beneficial or productive use. thus, their contribution to the income 5 “the county concedes, and there is no dispute, that the hotel‟s assessment should property. (cal. const., art. xiii, § 1; elk hills, supra, 57 cal.4th at p. 606.) “fair market board‟s decision. we agree. shall be reflected in the value of the real property. these intangible attributes of real for the california state board of equalization as amicus curiae. the court reviewed the board‟s decision and resolved the issues against eagle. intangibles, the trial court could not make a finding that such valuation „necessarily‟ ercs as part of the valuation of the power plant. the taxpayer argued in calculating the unit the fair market value of the intangible assets and rights contained within the unit.” the appraiser, they are reasonably indicative of the income the property will produce in its with the court‟s ruling on summary judgment.6 the county appealed from the judgment, that cannot be separately taxed as property may be reflected in the valuation of taxable supra, 193 cal.app.4th at pp. 272-273.) eagle urges us to “clarify or limit” that holding value, . . . to remove income from the capitalization process is in effect to remove glendale).) on remand, the trial court held a bench trial on the complete record and deduction from the valuation for the hotel‟s service centers would not accurately reflect purchase price in the assessment. eagle further argued that the hotel‟s various service 9 all undesignated statutory citations are to the revenue and taxation code. super. ct. no. bc 385925) sales of comparable hotels to arrive at the estimated value of the property as of the date of workforce,” rule 8 requires an adjustment in the net operating income to account for that above-average management. absent superior management or an exceptional workforce, rejected eagle‟s argument that the trial court did not exceed its jurisdiction because the acquired by eagle during the sale. 9 purchase price as urged by eagle would have altered the character and profile of the full- appraisal (dec. 1998) pp. 156, 158 [(assessors‟ handbook section 502)].)” valuation hearing over the course of six days. p. 273.) we distinguished a line of cases eagle cited because they “did not review enhance the value of the tangible property.” (id. at p. 1008.) including gte sprint, courts “disapproved assessments that failed to attribute a portion time of sale and that the assessor was legally required to deduct those values from the the board demonstrating that a valuation different from the purchase price is warranted. testimony of one group of experts was more persuasive than the expert opinion of another assessor was permitted to assume the presence of intangible assets in the valuation of the supported by substantial evidence presupposes that the trial court has before it all the on the assessor‟s “unit valuation” of the hotel assuming the presence of the service on remand to a different judge, the case was tried based upon the entire record and [citation.].” (id. at p. 276.) the hotel. these deductions from the income stream included hilton‟s management and as well as minimum service levels often including bell service and room service. these review was for substantial evidence that presupposed a complete record. (ehp glendale, evidence to support [the board‟s] decision in favor of the assessor.” the court remanded valuation for the past four years and served as the hotel appraiser for the county. in hilton hotels, relatively insulated from new supply, in good physical condition and the cash value‟ or „fair market value‟ of real property, intangible attributes of real property accorded great weight in interpreting valuation questions. [citation.]” (sky river, supra, enhanced the value of the tangible property as a going concern.” (id. at p. 1003.) the “are reasonably indicative of the income the property will produce in its highest and best the conflicting evidence.” (ehp glendale, supra, at p. 275, fn. omitted.) presumption is that the assessment of the board is both regularly and correctly made. cal.app.4th 149, 156.) from nontaxable property or other sources. when income from operating a property is subsequent adoption of the assessor‟s income approach „is contrary to california law.‟ in concluded “eagle was not entitled to a trial de novo in the trial court. the question a refund of about $187,000 in property taxes. (ehp glendale, supra, 193 cal.app.4th at independent businesses whose value also should have been deducted from the hotel‟s is operated as a full-service first-class hotel with 351 guestrooms, including 13 suites. reviewed in detail the evidence presented to the board and held there was “substantial he analyzed the historical operating revenue and expenses of the hotel and used the data of property, namely, the market data method, the income method and the cost method. finally, we distilled the disputed issue to one of the competing credibility of the considering the presence of intangibles may be necessary to value real property at its fair “3. postsale price refund percentage of the hotel‟s gross revenue. because hilton was unable to reach a only the taxable real and personal property. (ehp glendale, supra, 193 cal.app.4th at of discretion, or in violation of the standards prescribed by law. finally, the court will not revisit them. facts contention because “under an income stream approach, not all intangible rights have a 2. our decision in the first appeal rooms, a business center, a fitness facility, a gift shop, an outdoor pool and spa with cannot be removed by merely deducting the related expenses from the income stream to assets required to generate the revenue.” (see, e.g., gte sprint, supra, 26 cal.app.4th at purchase price reflected only the value of the taxable real and personal property.13 the method, “the sum of income attributable to the property is capitalized to reach a value for or arbitrary use of its powers the board is the sole judge of questions of fact and of the workforce are all components of an[] enterprise value that create value separate and apart „assuming their presence‟ in order to tax the property in question as a fully functioning standard of review was for substantial evidence is law of the case. the sole question of the taxable property. elk hills did not address eagle‟s primary argument that the franchise and management agreements, which he opined were shared expenses, some of “eagle took title to the hotel subject to a covenant running with the land allowing 2 the board‟s decision only when no substantial evidence supports it, in which case the intangibles when considering the income stream derived from taxable property that is put royalties (plus any taxes paid on the property by the lessee) of the subject property and board‟s exclusion of intangible assets “call[ed] for the weighing of facts.” (id. at p. 273.) his valuation certain intangible assets, such as a return on the franchise and management administrative offices, hotel laundry, two ballrooms, a „prefunction‟ area, seven meeting valuation, that is, subtracting the expenses for intangible assets from the income stream reflected merely the presence of the service centers as an indirect contribution to the “„valuation methodology, which was adopted by the [board], necessarily failed to 21 which likely benefitted the service centers. in all, he removed 14.6 percent from total county of los angeles assessment appeals bd. (1993) 13 cal.app.4th 102, 113; los he conceded he was unaware of any statute or court decision in california sundeck, two restaurants, a lounge, kitchen facilities and an approximately 196,000- expenses, from his going concern valuation methodology,‟ and that the board‟s valuation. section 110(d)(1) prevents tax assessors from including the value of valuation, the board implicitly found his appraisal complied with rule 8(e). recently come into favor with hotel property tax representatives and some appraisers, of property, namely, the market data method, the income method and the cost method. before the board to justify the finding [citation], and in the absence of fraud or malicious lodging facilities report food and beverage revenue.” the property on which the hotel issue before the trial court was subject to the substantial evidence review was not taxable real and personal property. john f. krattli, county counsel, and albert ramseyer, deputy county counsel, apply when there is a mere disagreement with the prior appellate determination.” in the court of appeal of the state of california [hotel], and is contrary to california law.‟” (id. at pp. 269-270.) the judgment remanded (ehp glendale, supra, 193 cal.app.4th at pp. 264-268 [all footnotes in original]):1 10 evidence presented by eagle and the assessor, and the board appropriately exercised its or being reflected in the valuation of taxable property. section 110(e) allows assessors to additional consideration for the purchase].) franchise and management agreements (as well as the workforce, subsumed in the case at bar.” (ibid., citing gte sprint communications corp. v. county of alameda unit includes intangible assets and rights, then the fair market value of the taxable “after projecting the hotel‟s income revenue from all sources, the assessor‟s 8(e) is binding on assessors and the board. (cal. code. regs., tit. 18, § 1.) assessing the hotel in issue, he reviewed overall trends in the hospitality market and supported the board‟s assessment.8 502 in a similar manner. it asserts that section 502 cannot be interpreted to require evidentiary matter, the board should address specifically its reasoning for accepting or subdivision (e) permits taxable property to be “„assessed and valued by assuming the exclude the value of intangible assets from the assessment of [eagle‟s] property, the valuations presented a factual dispute not amenable to summary judgment: “in the be adjusted downwards by $2.5 million for this profit participation interest.” values of property. [citation.]‟”‟ [citation.] it is presumed the board has properly discussion7 association as amicus curiae on behalf of plaintiffs and appellants. agreement with hilton and the management contract were among the intangible assets name. present evidence as to the portion of the intangible values, if any, can be deemed to as a primary reference and basic guide for assessors, and have been relied upon and michelle r. rosenblatt, judge. affirmed. value of the property should be decreased to $51 million. eagle argued that the intangible assets” and one even testified that intangible values would not have been distinguished, as well as the newly issued decisions in sky river llc v. county of kern properties is preferred to income derived from their operation since income derived from also elk hills, supra, 57 cal.4th at p. 606.) on appeal, we apply the same standard of decision so that a reviewing court is able to trace and adequately examine the board‟s $79.8 million, allocating $7.8 million to the land, about $68.5 million to improvements the degree of knowledge goes more to the weight of the evidence than its admissibility.‟ 3. substantial evidence supported the board’s decision against the county of los angeles (county). eagle challenges the property tax 7 the county argues we should not reach the merits of eagle‟s appeal because cal.app.4th 634, 640; dennis v. county of santa clara (1989) 215 cal.app.3d 1019, “in may 2005, eagle and hilton entered into a sale and purchase agreement for agreements because they did not carry a value beyond the market rate for those assets.16 sufficient income be deducted for a return on nontaxable operating assets. house parties‟ witnesses: “the court effectively made a credibility determination in favor of the the matter to the board to deduct from the assessment the undisputed $2.5 million equalization (1992) 11 cal.app.4th 768, 776 (los angeles smsa) [“„[i]ntangible values “5. appeal to board assessor‟s evidence over eagle‟s. we find substantial evidence supported the board‟s the ercs from the income stream. (id. at p. 619.) here, as we previously held, the issue board „erroneously applied a valid method of determining full cash value, the decision of other intellectual property; provided that the parties would execute separate franchise and facts were undisputed and thus the issue was one of law reviewed de novo. (id. at use under prudent management”; or, as house did, using “income from operating a of the issues presented: “thus, the court finds . . . it is faced with a question of law: is which included a general assignment of intangible property, “including without limitation court reasoned that the applicable standard of review was for the court to “„examine the and franchise, (2) the assembled and trained workforce, and (3) the hotel‟s various essentially resting on a credibility determination between dueling experts. (ehp base, and favorable franchise terms or operating contracts all make a direct contribution subd. (a).9) the “fair market value” or “full cash value” is presumed to be the purchase 13 while the board found the “purchase included the real estate, furniture, fixtures, opinion would have yielded a value reflecting “land, improvements, personal property, royalty and a management contract under which hilton agreed to continue managing the decision, gte sprint is distinguishable. far from providing “lip service” to addressing rules 8(e) and 8(c), and it ignores cases like gte sprint that require the removal of 214 cal.app.4th at p. 735; see also watson cogeneration co. v. county of los angeles subdivision (e), for purposes of determining the „full cash value‟ or „fair market value‟ of ehp glendale, llc, et al., (american sheds); see also los angeles smsa ltd. partnership v. state bd. of “b. assessor’s valuation assets necessary to the productive use of taxable property without deducting value for supported by substantial evidence[?]” included the value of intangible emission reduction credits (ercs) when it assessed the 3 “assessors have developed three basic methods for determining the full cash value (ibid.) in support of its motion, however, eagle submitted only fragmentary excerpts of 11 the board did not expressly resolve the issue of the service centers, but it properties. there is obviously a difference in opinion as to the use of the rushmore hotel‟s income for contribution of intangible assets utilized in operations was a factual from this value for intangibles such as the hilton franchise, assembled workforce and the assessor‟s methodology because it failed to fully exclude nontaxable intangible assets management agreements, the assessor complied with elk hills by deducting the franchise before the trial court and presented in this appeal is whether substantial evidence all operations and businesses conducted on or from the real property,” but it did not assessed and valued by assuming the presence of intangible assets or rights necessary to from the property assessment. (ehp glendale, supra, 193 cal.app.4th at p. 268.) the impermissibly captured the value of nontaxable intangible assets. the board held a (ehp glendale, llc v. county of los angeles (2011) 193 cal.app.4th 262 (ehp yield under prudent management and subject to such legally enforceable restrictions as operation is the more likely to be influenced by managerial skills and may arise in part proof, therefore this application is denied.” for a return on the nontaxable assets, as well as an amount for the return of the value of eagle‟s assessment appeals application to the board for further proceedings consistent (bret harte).)” 16 eagle claims house‟s math in deducting expenses was “fundamentally cal.app.4th at p. 272.) in doing so, we ruled the income approach applied by the in california, property taxes are assessed based on the “fair market value” of the rushmore approach, and david lennhoff, who developed the business enterprise controlling rules of law have been altered or clarified by a decision intervening between the court granted the motion, ruling the board erred as a matter of law in adopting the administrative record. (ibid.) failed to do so. [¶] „where a witness has disclosed sufficient knowledge, the question of was supported by the record, and we find no reason to overturn the board‟s decision. franchise, $265,000 for the assembled workforce and $7.3 million for the hotel‟s various market value, house identified the franchise and management agreements as intangible portion of the power plant‟s income to the erc‟s and then deduct that expense from the second appellate district and exclude intangible assets from the assessed property as required by california law. eagle challenges the board‟s conclusion because, in its view, the income approach value means „the amount of cash or its equivalent that property would bring if exposed intangible assets from the hotel‟s valuation. we conclude the assessor did. deducted from the entire business enterprise as a going concern to arrive at taxable value question within the board‟s expertise and house provided ample support for his estimate county assessment appeals bd. (2000) 80 cal.app.4th 309, 316, 328, county of and on the work force in place, and further bears no relationship to the costs associated [citation.]” (ehp glendale, supra, 193 cal.app.4th at p. 266, fn. 3.) under the income could be separated from the purchase price of the hotel as an intermingled operation.11 our prior decision that would warrant a reversal of the trial court‟s decision. real property would not have transferred for that purchase price in an open market 14 the board did not expressly address rule 8(e), but again, by accepting house‟s and included the real property, personal property (e.g., furniture, fixtures and equipment) wade any further into this policy debate. neither the board nor the trial court found actions of the board are deemed so arbitrary as to constitute a deprivation of property and excluding nontaxable intangible assets, house provided evidence to support his as an operation as a whole,” which is the way “market participants would view this any taxable property, all of the following shall apply: [¶] (1) the value of intangible (ehp glendale, supra, 193 cal.app.4th at p. 271.) under this deferential standard of assessor‟s valuation over that of eagle‟s expert. [citation.] [¶] in granting the summary or productive use.” and subdivision (f) states, “for purposes of determining the „full 8(e) (cal. code regs., tit. 18, § 8, subd. (e) (rule 8(e))),14 which describes two general additional deductions in every case in which the property is an operating business with only „four diamond‟ facility in the san fernando and san gabriel valleys. in the prior appeal, we held the issue before the trial court was one of fact, and highest and best use under prudent management. income derived from rental of expert deducted the ascribed value of intangible assets and rights, to account for the in contrast, in applying the cost, sales comparison, and income methods to reach a approach was close to the hotel‟s verified sale price, the deputy assessor accepted the to develop a stabilized income and expense projection for the property as of the june presented solely issues of law, as to which review is de novo,” finding review of the assessment, relied upon a finding that the assessor is . . . more credible and that his assessor (assessor) following eagle‟s purchase in 2005, an assessment confirmed by the value of $73.3 million. valuation decisions calling for the weighing of facts and are wholly inapplicable to the their presence in valuing the taxable property. as in elk hills, the assessor‟s valuation evidence regarding which, if any, amounts should be deducted from the property value to to beneficial or productive use (§ 110(e)), the value of intangibles that directly enhance (los angeles county 6 the trial court also found the board erred in the assessment of eagle‟s property by angeles smsa, supra, 11 cal.app.4th at p. 776, fn. 6; madonna v. county of san luis 8 in light of this conclusion, the trial court erred on remand in identifying one issue decision regarding the first and only trial where stephen rushmore, the creator of the the purchase agreement. the $79.8 million purchase price was effectively reduced to taxable value of the property using the income approach the sbe failed to attribute a and rehired by eagle or continue to be employed by hilton and managed under the negotiated rents or royalties” of the property or comparable property, so long as the rents certified for publication removed their value by using what has been termed the “rushmore method” of income eagle argues our holding validating the assessor‟s methodology and finding the case. in that case, the court addressed the income approach in considering intangible return on the capital expenditure. for example, allowing the deduction of wages paid to a on an incomplete record and on disputed facts. yet, to find the trial court erred in approach and limited eagle to challenging whether substantial evidence supported the change the revenue, expense and service profile of the hotel.” this conclusion was based the hotel, producing higher net incomes in 2000 and 2001 than hilton produced in 2003 the hotel encompasses about 285,000 square feet of improvements, including a lobby, concept of exempting intangible assets from taxation.” (id. at p. 1005.) notably, the value of $77.3 million, reflecting the value of both taxable real and personal property and market value. (michael todd co. v. county of los angeles (1962) 57 cal.2d 684, 696; based on all three approaches, his final opinion of the value of the going concern hotel glendale, supra, 193 cal.app.4th at p. 270, fn. 8.) participation, hilton paid eagle a postclosing refund of $2.5 million under the terms of 2 “for discussion purposes all dollar sums are rounded.” based on its history; he projected the hotel‟s income revenue from all sources and business center, vending machines, health club, guest laundry and parking facilities, were used, sufficient income shall be excluded to provide a return on working capital and other 27 review. (freeport-mcmoran resource partners v. county of lake (1993) 12 asset, a “sufficient” deduction under rule 8(e) could be zero, provided that is adequately misleading.” eagle also takes issue with house‟s analysis of the income and expenses there is considerable force to this argument. by its terms, rule 8(e) requires only 3 both the applicant and the assessor as to the two approaches to valuing hotels and related additional return on those assets should be viewed as zero. reviewing the grant of summary judgment to the sbe and kern county, the court categories of intangible assets calculated by eagle‟s intangible valuation expert: (1) the flier, j. to valuation always results in a “business enterprise value” that necessarily includes the assets and rights) was $62.6 million. board realizes that the sbe handbook is a guide and is not binding on the assessor or significantly reducing a hotel property tax assessment. as defined in the uniform handbooks are not regulations and do not possess the force of law,” although “they serve are treated with deference,” the property owner bears the burden to present evidence to from prior years of the hotel‟s operations and industry data for similar hotels. indeed, value, . . . and it is an acceptable methodology to value the value of intangibles by rubin, acting p. j. assessor was a valid methodology for determining full cash value, so “eagle‟s contention enhanced by the presence of intangible assets.” (elk hills, supra, 57 cal.4th at p. 615.) 803; county of orange, supra, 13 cal.app.4th at p. 533; county of los angeles v. “when a taxpayer challenges a decision of the board of equalization claiming the we also find substantial evidence supported the board‟s conclusion that house 11 equalization that the assessor‟s capitalization approach improperly included enterprise supported by the record. we can conceive of many types of nontaxable operating assets 29 equalization (2013) 57 cal.4th 593 (elk hills). the county responds that our prior previously cited, the dispute in sky river was over which of two tax rates should have property,” so long as sufficient income is excluded “to provide a return on working indicator, because the amount of the wages paid does not necessarily represent a return of franchise fees, labor costs and marketing expenses. (2013) 214 cal.app.4th 720 (sky river) and elk hills power, llc v. board of subsequent consideration that the former opinion is erroneous. [citation.]” (santa disposition v. 15 rule 8(e) states in full, “recently derived income and recently negotiated rents or assessor‟s methodology for appraising the hotel was invalid and that the assessment 18 eagle also cites madonna, supra, 39 cal.app.3d at page 61, involving the is capable of being used.‟” (elk hills, supra, at p. 606; see rev. & tax. code, § 110, in a valuation of property that relate to “above-average or superior operation of a business that [eagle] paid for the [h]otel” included “land, building improvements, fixtures, that the assessor improperly applied the income approach by not deducting intangibles misapplication of existing principles resulting in substantial injustice, or where the warranted for a return on the intangible assets such as the franchise and management enterprise‟s assets or of the enterprise itself as an active business with future earning participation agreement with the redevelopment agency, as recommended by the assessor eagle to acquire the hotel. as part of the transaction, hilton and eagle entered into a summary judgment based on a fragmentary record.” (ehp glendale, supra, 193 (d) and (e), and section 212, subdivision (c). “[s]ection 110(d)(1) and (2) prevents the as we noted in our prior opinion, the issue before the board was a factual question expenses to remove the value of intangible expenses was consistent with rule 8(e) and subd. (c); see gte sprint, supra, 26 cal.app.4th at p. 1002.)10 thus, the value of and management fees from the income stream to remove their values from the valuation market value for assessment purposes is the value of property when put to beneficial or enterprises carried on in the same property.‟” (id. at p. 60.) the court found no evidence 15 stream is indirect, whereas intangible assets like the goodwill of a business, customer 28 judgment, the court found the assessor‟s methodology „necessarily failed to exclude from “the property at issue is located near the intersection of brand boulevard and investors might pay for an intangible asset could include a return on the asset. equally, if enhance the valuation of taxable property, not by including the value of intangible assets properly removed the value of intangible assets by subtracting expenses from the income the board, relied on an invalid appraisal methodology that did not fully identify, value, have upheld income-based assessments that properly assumed the presence of intangibles evidence presented to the board‟” and contending the assessor‟s valuation, adopted by 14 finally, we briefly address elk hills, which was decided after oral argument in this considerable detail the evidence each side presented to the board and the board‟s stanislaus v. assessment appeals bd. (1989) 213 cal.app.3d 1445, 1450 & county of grimes, j. board.” (ehp glendale, supra, 193 cal.app.4th at pp. 275-276, fn. omitted.) we thus, our holding that the board applied a legally valid methodology and the decide whether substantial evidence supports the board‟s finding as to valuation. „the in the assessors‟ handbook section 502, supra, pages 150 to 165. citing, inter alia, rule therefore subject to the “substantial evidence” standard of review. (ehp glendale, income approach by subtracting the expenses of intangible assets from the income stream income method and the board‟s role in property valuation, and found the parties‟ property (including land, improvements and personal property and excluding intangible felix e. leatherwood, w. dean freeman and marta l. smith, deputy attorneys general, and other intangibles over and above the value of the realty.” 1. law of the case by the statewide assessors‟ handbook section 502. the assessors‟ handbook $77.3 million. mode of analysis. [citations.] while it is not necessary for the findings to cover every “using a direct capitalization technique, also called the „rushmore method,‟4 the failing to exclude the $2.5 million postclosing refund from the assessed value. (ehp service centers, or a claimed total value for intangible assets and rights of $14.6 million. eagle also invokes the exceptions in morohoshi and searle, but they do not apply put the taxable property to beneficial or productive use.” (§§ 110, subds. (d) & (e), 212, analyzing two lines of cases, the court explained in one category of cases “courts the first and second appellate determinations. the unjust decision exception does not a question of fact: is the decision of the board upholding the assessor‟s appraisal oversight, however, the board neglected to adjust the enrolled assessment by deducting the court in elk hills recently clarified the relationship between intangible assets intangible assets.” (elk hills, supra, 57 cal.4th at p. 618.) in the other line of cases, approach method; faced each other in court was reviewed. it has been reported by some presented to the trial court “amounted to one of fact, and the trial court erred in granting presence of intangible assets or rights necessary to put the taxable property to beneficial employed the income capitalization approach, valued ercs in any manner other than by accepted house‟s opinion, and he did not view the service centers as intangible assets the property, less an allowance for the risk of partial or no receipt of income.” (id. at identified the primary issue as one of statutory interpretation, which it reviewed de novo and about $3.4 million to personal property. was offered to correct the assessor‟s valuation, so the court found the taxpayer‟s application of the income approach, even though the sbe did not subtract any value for underlying record for substantial evidence and to ascertain whether the board applied a first, it found “the board, in making a finding that [eagle] did not meet its burden of was an issue to be decided by the board. the role of the trial court and this court is to house‟s disagreement with section 502 problematic, nor do we. “[a]ssessors‟ [sbe] staff, and [have] no binding legal effect on boards, assessors, or taxpayers.‟ [citation.]” (prudential ins. co. v. city and county of san francisco (1987) 191 of expenses for the intangible assets, which were based on marketplace rates estimated valuation to be proper. (ibid.) like gte sprint, madonna involved a different set of hilton flag and franchise, (2) the assembled and trained workforce, and (3) the hotel‟s appraisers “categorically denied that they taxed the intangible assets, except as they value of the taxable property is enhanced, it is not enhanced by the value of intangible with locating, interviewing, training and otherwise acquiring the work force. similarly, that expense that should be recognized in addition to the amount of the expense itself and for a second time, we are asked to review an action for a property tax refund filed “c. board decision 25 from, and value inherent in the tangible assets. [¶] the board finds that the assessor used for other intangible assets, such as a superior trade name associated with an further, if the methodology passes the bret harte test, the court finds that it is faced with performed the duties entrusted to it and, absent a showing otherwise by the taxpayer, the division eight quantifiable fair market value that must be deducted.” (ibid.) (§ 110(d)(1)), and must be deducted from the unit prior to assessment (§ 110(d)(2)).” (id. and ordered by the trial court. respondent is awarded costs. regarding the proper standard of review. like gte sprint and the other cases we value of intangible assets and rights shall not enhance or be reflected in the value of in the valuation (see § 110(d)(1)), but simply by assuming the presence of intangible the deduction of a management fee from the income stream of a hotel does not recognize though, the presence of prudent management and a reasonably skilled workforce are 1025-1026.) adopted, testified he employed the income capitalization approach. under this method, enterprise that uses the real property, such as through an exceptional management team or are generally not subject to direct property taxation, although “[t]axable property may be 214 cal.app.4th at p. 731.) supporting his approach. he also noted that the sbe disagreed with his method in the local assessment appeals boards. [¶] after hearing all oral testimony and exhibits by assessment (with one exception for a reduction in the purchase price undisputed by the service centers by eagle‟s expert. making this determination, the court impermissibly weighed and drew inferences from management agreement and the assembled hotel workforce had independent value at the 17 thus, “[s]ection 110(d)(1) prevents the value of intangible assets from enhancing granting summary judgment, we necessarily decided the assessor‟s methodology was valid appraisal technique correctly,‟” and held that the assessor‟s “„methodology failed downward by $2.5 million to reflect the seller‟s refund of part of the sale price for the 13 for the prior owner and hilton. these are factual disputes resolved against eagle, and we supra, 193 cal.app.4th at pp. 271-272.) we even rejected eagle‟s argument that “the assets that should be removed from the income stream of the hotel.12 he testified he buyer would pay a willing seller an amount approximately equal to the present value of hotel and there was no evidence to suggest the assessor did anything more than assume and 2004, from which the board could have inferred that no further deduction was actual weighing of conflicting evidence by the factfinder is a process which can never instead, he merely opined the “highest and best use” of the property was as a full-service, because it disagrees the issue is factual, citing the gte sprint line of cases we had to the going concern value of the business as reflected in an income stream analysis. standards of professional appraisal practice, bea refers to the value of the entire centers, such as food and beverage, room telephone and telecommunications services, deduction from the purchase price would have altered the character of the full-service arguments from the parties. in a written decision and judgment, the court summarized in the county argues the guidance in section 502 reflects the “flawed assumption” house also did not view any service centers present in the hotel as assets that various service centers. the resulting valuation was approximately $63 million in given that it moves a disproportional share of [a] hotel‟s value out of the real property 12 assessment for the glendale hilton hotel (hotel or property) by the los angeles county an adequate value for intangible assets from the income stream of the hotel, which called be capitalized. allowing a deduction for the associated expense does not allow for a decision on an incomplete administrative record that contained disputed issues of fact. our decision here is consistent with elk hills. with regard to the franchise and management agreement for the benefit of eagle. in house‟s view, the value of the prior appeal. the fact that reversal is necessary in any event frees us from the necessary to our prior decision that the trial court erroneously granted summary judgment in its amicus brief, the sbe interprets rule 8 and assessors‟ handbook section orange v. orange county assessment appeals bd. (1993) 13 cal.app.4th 524, 529-530 approach and the business enterprise approach. during the board‟s deliberation, the 1240; shubat v. sutter county assessment appeals board (1993) 13 cal.app.4th 794, “where an appellate court states in its opinion a principle or rule of law necessary or productive use.‟” (elk hills, supra, at p. 608.) intangible assets; we must determine whether substantial evidence supported the board‟s 7 needs to be deducted from the income stream. the sbe urges that this approach could be income, including a portion of the income “„largely predicated on the personal expertise taxable property, but not their value. (elk hills, supra, 57 cal.app.4th at p. 615.) there “4. property reassessment second, we held there were triable issues of material fact in dispute even on the property. as a result, house looked at the hotel “under the concept of the unit valuation compulsion that the rule of law of the case might otherwise impose on us to follow a deputy assessor divided the stabilized net income by a capitalization rate derived from 5 presence of intangible assets or rights necessary to put the taxable property to beneficial “the assessor recommended to the board that the assessment be adjusted and eagle cross-appealed from a later denial of a motion for attorney fees. (ibid.) nontaxable intangible assets (sometimes called the “business enterprise approach”). present case, one of the methods eagle‟s expert appraiser used to value the hotel property “assessors have developed three basic methods for determining the full cash value concern, necessarily captured only the enhancement value of the intangible assets as centers for a full-service, first-class hotel. as noted above, under unit valuation, the record of proceedings prevents a substantial evidence review.” (id. at pp. 272-273.) we licensed assessor with an advanced certificate who, throughout his career at the county we determined the trial court erred in two respects. first, we held the issue valuation, eagle‟s expert appraiser produced what he claimed was a “going concern” „going concern‟ value of the hotel business. he concluded that the value of the taxable 19 of the furniture, fixtures and equipment (an undisputed $3.4 million) to arrive at a taxable 8(e), section 502 provides in pertinent part: “the value of intangible assets and rights business (including land, improvements, personal property and intangible assets and identification and/or valuation of intangible assets. at that hearing, both parties may recommended that intangible rights and assets be separately identified, valued and then upscale or luxury lodging facilities with a restaurant, lounge facilities, and meeting space 8 the case must be adhered to both in the lower court and upon subsequent appeal. skilled work force does not remove the value of the work force in place from the income evidence considered by the board in making its assessment,” and neither eagle nor the 4 “the deputy assessor testified there was an alternative method of assessment, the concern value of $113,803,000.” “eagle appealed the enrolled assessment to the board, contending the market 10 section 110, subdivision (d) states in relevant part, “except as provided in methods for estimating future income: using “[r]ecently derived income and recently appraisers shall have an opportunity to present evidence rebutting [the taxpayer‟s] a separate investment value (e.g., housekeeping services). services, etc.) are properly accounted for in their market prices, and the appropriate 18, § 8, subd. (c) (rule 8(c))),17 it argues that when intangibles are alleged to be included the applicant and appraiser, the board finds that the applicant did not meet the burden of correctly allowed for the intangibles, through marketing and franchise expenses. the only the latter category of intangible assets and rights has a quantifiable fair market value (county of orange).) to its decision, that principle or rule becomes the law of the case. [citation.] the law of 16 property include zoning, location, and other attributes that relate directly to the real without due process. [citations.]” (ehp glendale, supra, 193 cal.app.4th at p. 271; see presence of intangible assets or rights necessary to put the taxable property to beneficial assets and rights relating to the going concern value of a business using taxable property account for the value of intangibles. in doing so, the board properly weighed the context of the going concern value of a business (i.e., “„[t]he value of a commercial power plant.” (id. at p. 619.) component and into the business [and] personal property components, thereby (ehp glendale, supra, at p. 274; see § 110, subd. (b).) added), the board did not expressly address the components of the purchase price. by market value, including by assuming the presence of intangible assets. in order to value cal.app.4th at p. 265, fn. omitted.) while the trial court found the “total consideration county of los angeles, from the hotel‟s income stream.‟” (id. at p. 269.) after denying a motion by the county eagle challenged the board‟s determination by bringing the present action seeking “from his final opinion of property value of $77.3 million, eagle‟s valuation agreement[s]. but the value would have been much[,] much higher,” i.e., a “true going that a management expense (or any expense) results invariably in a positive “return on” by another of eagle‟s experts who appraised the fair market value of (1) the hilton flag sits is limited to first-class hotel use, which was the “highest and best use” of the permitted by law.” (id. at p. 995.) the court‟s decision turned on its view that the hilton marketed the property as being located in a prime location, distant from competing “the board adopted the assessor‟s property valuation. through an apparent 6 for the board to weigh conflicting evidence and testimony. assessor did not deduct sufficient value from the income stream to remove the full value reduction in purchase price. valuation here. in that case, the taxpayer challenged an assessment of public utility decision that, under the facts of this case, the assessor properly removed the value of of intangible assets under rule 8(e). as for the service centers, as we noted above, a appeal from a judgment of the superior court of los angeles county, the grant of summary judgment to eagle, finding the trial court improperly rendered the recommended by the assessor.5” the court explained the difference in the two lines of cases is “one of degree; proof of rebutting the reliability of the property‟s acquisition value as a basis for its in valuing the property, house viewed the purchase price as reflecting the value of hotel for two years. for sale in the open market under conditions in which neither buyer nor seller could take the sbe‟s argument “that the unit valuation of sprint‟s tangible property, as a going though eagle‟s representative who signed the purchase agreement testified eagle would the valuation of a full-service hotel operating at its beneficial and productive use. we income; and he analyzed market rates to derive a capitalization rate with which to p. 276, fn. 12.) his opinion was based in part on the terms of the purchase agreement, eagle refutes the sbe‟s interpretation, arguing the sbe‟s current view was set submarket; he studied the hotel‟s historical operations and made projections of future use eagle did not fairly summarize the record. eagle‟s brief, however, adequately set forth b244494 los angeles county assessment appeals board (board). in the first appeal, we reversed review, we find substantial evidence supported the board‟s valuation. 1 we add any additional facts as needed in the discussion part. the board is equivalent to the determination of a trial court, and the trial court in turn may to be capitalized. eagle argues house‟s valuation did not comply with property tax rule on that issue. accepting house‟s valuation, though, the board implicitly found the price did not include under rule 8(e) that would fall into this category, especially in an operation like a hotel


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