petition.pdf
Xap Enterprises, Petitioner Vs. City Of Battle Creek, Respondent · 25-003833-TT
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MICHIGAN TAX TRIBUNAL — PETITION NARRATIVE Date 12-10-2025 Petitioner: XAP Enterprises LLC Parcel No.: 0252-00-037-0 Property Address: 457 West Columbia Ave, Battle Creek, MI Tax Year: 2025 I. INTRODUCTION XAP Enterprises LLC (“Petitioner”) appeals the 2025 real property assessment for the above-referenced parcel. The City of Battle Creek assigned a 2025 State Equalized Value (“SEV”) of $708,700, implying a True Cash Value (“TCV”) of approximately $1,417,400. This assessed value is excessive, unconstitutional, unsupported by market evidence, and inconsistent with both the verified sale of the property and standard methods of valuation. Petitioner seeks correction of the assessment and requests that the Tribunal establish a TCV of $400,000 and SEV of $200,000 for the 2025 tax year. II. FACTUAL BACKGROUND 1. Arm’s-Length October 1, 2024 Sale Petitioner purchased the subject property in a verified arm’s-length transaction on October 1, 2024 for $400,000 attributable to the real estate. 2. Separate Business Value An additional $200,000 in consideration was paid for business assets and operational value. This portion is not real property and cannot legally be included in the SEV or TCV. 3. Partial Occupancy and Limited Income The building was only partially occupied at the time of purchase. Actual rent roll and vacancy conditions materially reduce the economic value of the property. A Statement of Partial Occupancy is attached. 4. 2025 Assessment Despite the verified sale and occupancy data, the City issued a 2025 SEV of $708,700, implying a TCV exceeding $1.4 million, more than three times the real-estate sale price. 5. Submission to Assessor Petitioner submitted a written Request for Correction of Assessment to the Assessor with sale documents, occupancy information, and a supporting market analysis. No correction was made. III. LEGAL FRAMEWORK A. SEV Must Equal 50% of True Cash Value Michigan Constitution, art. 9 §3, and MCL 211.27 require that real property be assessed at no more than 50% of its TCV.
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B. True Cash Value = Usual Selling Price Under MCL 211.27(1): “True cash value” means the usual selling price at a private sale. A recent arm’s-length sale is the most reliable and persuasive evidence of TCV under long-standing Michigan case law (Jones & Laughlin Steel, Meijer v Midland, Great Lakes Div. of Nat’l Steel, etc.). C. Uncapping Applies Only to Taxable Value, Not Market Value Under MCL 211.27a(3), Taxable Value is “uncapped” the year after a transfer of ownership. However: • Uncapping does not determine SEV • Uncapping does not determine TCV • SEV must still reflect current market value The assessor cannot lawfully use the prior capped Taxable Value trajectory to determine SEV. IV. ERRORS IN THE 2025 ASSESSMENT A. Assessment Based on Capped Value Instead of Market Value The 2025 assessment reflects a critical valuation error. The assessor appears to have taken the prior owner’s capped Taxable Value, rolled it forward through 2024, and then simply uncapped that trajectory for 2025. The “cap” under Proposal A applies only to Taxable Value increases and has no legal bearing on the determination of True Cash Value or State Equalized Value. By relying on capped TV growth rather than market evidence, the assessor failed to: • Reset SEV to 50% of market value, as required by law; • Consider the verified October 1, 2024 arm’s-length sale, the most reliable TCV indicator; • Account for partial occupancy and limited income, which materially reduce TCV under the income approach; • Incorporate functional and economic obsolescence, given the building’s age, condition, and vacancy; • Separate real property value from business value, despite clear documentation allocating only $400,000 to the real estate. Treating capped Taxable Value as a proxy for SEV is a legal error under both the Michigan Constitution and MCL 211.27. B. Ignoring the October 2024 Arm’s-Length Sale The real-estate component of the October 2024 transaction was $400,000. Michigan courts consistently hold that a recent arm’s-length sale is the best evidence of TCV. The City’s implied TCV of over $1.4 million conflicts directly with this evidence and is therefore excessive and unsupported.
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C. Market Conditions and Income Approach Support a $400,000 TCV The attached Supporting Market Value Analysis demonstrates: • Comparable sales in Battle Creek at significantly lower price-per-square-foot ranges; • Limited commercial demand in the corridor; • A rent roll and vacancy profile inconsistent with a value above the sale price; • Income-based valuation results aligning closely with a TCV of $400,000. V. REQUESTED CORRECTION Petitioner respectfully requests that the Tribunal: ✔ Establish 2025 TCV at: $400,000 ✔ Establish 2025 SEV at: $200,000 ✔ Adjust 2025 TV accordingly ✔ Grant any other appropriate relief These values reflect market reality, comply with the Michigan Constitution, adhere to statutory requirements, and correct the City’s excessive and unsupported assessment. VI. ATTACHMENTS / EXHIBITS 1. Warranty Deed – October 1, 2024 2. Closing Statement (ALTA) 3. Purchase Price Allocation Documentation 4. 2025 Tax Bill / Assessment Notice 5. Statement of Partial Occupancy 6. Supporting Market Value Analysis 7. Request for Correction of Assessment Submitted to Assessor VII. CONCLUSION The City’s assessment is not grounded in market evidence and improperly relies on capped taxable value history rather than the legally required methods of determining True Cash Value and SEV. The verified sale, occupancy, income, and market analyses all support a 2025 TCV of $400,000 and SEV of $200,000. Petitioner respectfully requests correction of the assessment as detailed herein.
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Additional Note Regarding Historical Assessment Pattern The subject property had not transferred ownership since the 1990s. As a result, its Taxable Value was subject to the capped‐value system under Proposal A for decades, increasing only by inflationary limits (capped at 5%). It appears that, following the 2024 transfer of ownership, the City uncapped the prior owner’s long-capped Taxable Value and relied heavily on that historical trajectory in determining the 2025 SEV. However, under the Michigan Constitution and MCL 211.27, SEV must reflect current market value, not the prior owner’s capped taxable history. The lack of prior transfers does not change this requirement, and uncapping cannot substitute for a proper determination of True Cash Value. The City’s 2025 assessment therefore reflects a fundamental valuation error by extending capped Taxable Value patterns instead of establishing SEV based on actual market evidence. Respectfully submitted, XAP Enterprises, LLC Petitioner By: Marisela Ellwanger Authorized Representative 1118 Ivy Wall Dr Houston, TX 77079 Phone: 702-539-6282 Email: marisela.ellwanger@gmail.com Date: 12-10-2025_