Wheelabrator Bridgeport L.P. v. City of Bridgeport
A court may use the reproduction cost method to value a unique property that is difficult to quantify and that lacks similar comparables. The assessor valued real property at $401 million and personal property at $10 million. In consolidated appeals, the plaintiff, Wheelabrator Bridgeport, argued that the assessment was excessive. The property is the site of a waste-to-energy facility that consists of a 138,494 square foot building in which solid municipal waste is burned. The steam that is produced generates electricity that is sold to United Illuminating. Appraisers recognized that the property was unique and difficult to quantify, and that there were no similar comparables. The plaintiff's appraiser, Joseph Kettell, opined that the fair market value was $147 million for the real property and $54 million for the personal property. He relied on the plant's ability to produce income and used a discounted cash flow technique. The city's appraiser, Mark Pomykacz, relied in part on an appraisal from Vimini Associates. The court dismissed one of the plaintiff's appeals, because it incorrectly alleged that WEI, a company in which plaintiff Wheelabrator's parent company owns an interest, owned and leased the property. Only the property owner, or a lessee who has agreed to pay the property tax, possesses standing to appeal. The court relied on the reproduction approach to valuation. "[T]he reproduction cost method is preferable to the replacement cost method," wrote the court, "because the valuation of the subject facility should not be that of a newly constructed modern facility which did not exist as of October 1, 2008." The reproduction cost new was $503 million. The court applied a 38 percent depreciation to find that the value, as of Oct. 1, 2008, was $312 million. The court added $2 million for the value of the land. The court concluded the fair market value was $314 million. The court dismissed the plaintiff's allegations that the city double-taxed Wheelabrator and treated Wheelabrator differently than similarly situated entities. "Given the amount of confusion caused by Wheelabrator itself," wrote the court, "the claim of double taxation, if indeed any occurred, was not caused deliberately."