Clark Hill Successfully Defends Alpena County in Michigan Tax Tribunal Hearing

Michigan tax attorneys Rick Sundquist and Greg Longworth recently defended Alpena County against the City of Alpena in an industrial real property county equalization case. It was the first equalization case filed and heard by the Michigan Tax Tribunal in more than 15 years.

Following a four-day hearing in January, the Tribunal ruled on June 25 in favor of the County and affirmed its 2023 industrial equalization.

“We’re pleased with the Tribunal’s determination that the County followed methods that have long been used for equalizations,” Sundquist said. “This had the potential to rewrite the whole methodology of equalization in Michigan.” 

Case Background

The City of Alpena appealed the intra-county equalization of industrial personal property that was adopted by Alpena County in April 2023. The city claimed the county equalization director’s appraisal-ratio equalization study was unfair, unjust, inequitable, or discriminatory due to allegedly improper sample stratification and insufficient larger-sized industrial parcels.

One key issue that the City argued against was the inclusion of the “Wolverine Parcel” which it claimed to skew the entire industrial study.

Key Findings

The Tribunal determined that the County Equalization Director fully complied with the State Tax Commission Assessor’s Manual, relevant bulletins, guidelines, rules, and other relevant sources dealing with equalization.

In reviewing the City’s attempt to use a fee appraisal for the Wolverine parcel to attack the county’s equalization, the Tribunal rejected that methodology and gave no weight to the City’s valuation reports. 

“The Tribunal found that an equalization appeal is not to determine the true cash value of a single parcel within a class, but rather, to determine the average level of assessment of all properties in the class based on a random sampling of the entire class of property with the assessing unit and the county,” Sundquist said. 

An analysis of the appraisal study by the Property Services Division for the Michigan State Tax Commission also proved key to the Tribunal’s findings. The Property Services Division found that the County study was supported and that the ratio applied against the City was the direct result of incomplete and inaccurate assessment records by the City assessor. They found that more than $200,000 of true cash value was missing from the Wolverine parcel record cards, and numerous other parcels had “flat values” which resulted in them escaping annual adjustments and not being properly assessed and valued.  

In affirming the County’s equalization, the Tribunal found that the county study was supported and that the factor applied by the County Equalization Director to equalize the industrial real property class at the statutorily mandated 50% was appropriate.

“The Tribunal found that it is not acceptable to mix an independent third-party appraisal report with a county equalization study.  The Tribunal rejected the City’s attempts to rewrite the methodology of equalization in Michigan,” Sundquist said.