Case 119438 CLERK OF THE APPELLATE COURTS Filed 2019 Jul 03 PM 3:43 No. 18-119438-A IN THE COURT OF APPEALS OF THE STATE OF KANSAS IN THE MATTER OF THE EQUALIZATION APPEAL OF KANSAS STAR CASINO, L.L.C. FOR THE YEAR 2016 IN SUMNER COUNTY, KANSAS IN THE MATTER OF THE EQUALIZATION APPEAL OF KANSAS STAR CASINO, L.L.C. FOR THE YEAR 2017 IN SUMNER COUNTY, KANSAS BRIEF OF APPELLEE AND BRIEF OF CROSS-APPELLANT APPEAL FROM THE BOARD OF TAX APPEAL NOS. 2016-2148-EQ, 2016-2149-EQ, 2017-3172-EQ, AND 2017-3173-EQ Andrew D. Holder, #25456 FISHER, PATTERSON, SAYLER & SMITH, L.L.P. 3550 S.W. 5th Street Topeka, KS 66606 Office: (785) 232-7761 - Fax: (785) 232-6604 Email: dcooper(a?fisherpatterson.com / aholder(tl}fisherpatterson.com Attorneys for Appellee/Cross-Appellant Sumner County, Kansas ORAL ARGUMENT REQUESTED 30 MINUTES TABLE OF CONTENTS NATURE OF THE CASE .................................................................................................. .. 1 STATEMENT OF THE ISSUES ......................................................................................... ! STATEMENT OF FACTS .................................................................................................... ARGUMENTS AND AUTHORITIES ............................................................................ .. 17 I. Standard of Review ..................................................................................... 17 KS.A 77-601 ........................................................................................................... 17 KS.A 77-621 ..................................................................................................... 17, 18 In re Brocato, 46 Kan.App.2d 722, 277 P.3d 1135 (2011) ...................................... 17 In re Johnson Cnty. Appraiser/Privitera Realty Holdings, 47 Kan.App.2d 1074, 283 P.3d 823 (2012) .................................................................................................. l 7 Saline Cty. Ed OJCty. Comm 'rs v. Jensen, 32 Kan.App.2d 730, 88 P.3d 242 (2004) ................................................................................................................................... 17 In re Kansas Star Casino, L.L.C.for Tax Year 2014, 2018 WL 2749734 (Kan. Ct. App. June 8, 2018) (unpublished) ............................................................................. 17 Frick Farm Properties v. Kan. Dept. ofAg., 289 Kan. 690,216 P.3d 170 (2009) ........................................................................................................................ 18 KS.A 77-620 ........................................................................................................... 18 Eureka Building & Loan Ass 'n v. Myers, 147 Kan. 609, 78 P.2d 68 (1938) ............ 18 Rural Water Dist. #2 v. Miami Cnty. Ed ofCnty. Com 'rs, No. 105, 2012 WL 309165 (Kan. Ct. App. 2012) (unpublished) ......................................................................... 18 Zinke & Trumbo, Ltd v. State Corp. Comm'n ofState ofKan., 242 Kan. 470, 749 P.2d 21 (1988) ........................................................................................................... 18 Bluestem Tel. Co. v. Kansas Corp. Comm'n, 52 Kan. App. 2d 96, 363 P.3d 1115 (2015) ................................................................................................................................... 18 Citizens' Utility Ratepayer Ed v. Kansas Corporation Comm 'n, 47 Kan.App.2d 1112, 284 P.3d 348 (2012) .................................................................................................. 18 II. BOTA's depreciation analysis does not comport with USPAP, is unsupported by substantial, competent evidence and should be reversed ....................................................................................................................... 19 In re Kansas Star Casino, L.L.C. for Tax Year 2015, 2018 WL 3486173 (Kan. Ct. App. 2018) (unpublished) ................................................................................... 19, 20 Frick Farm Properties v. Kan. Dept. ofAg., 289 Kan. 690,216 P.3d 170 (2009) ....................................................................................................................... .20 In re Kansas Star Casino, L.L.C. for Tax Year 2014, 2018 WL 2749734 (Kan. Ct. App. June 8, 2018) (unpublished) ............................................................................ .20 Saline Cty. Ed OfCty. Comm 'rs v. Jensen, 32 Kan.App.2d 730, 88 P.3d 242 (2004) ................................................................................................................................... 21 III. Appellant's claim that the ancillary facilities are 100 percent superadequate is erroneous and should not be adopted ........................ .21 In re Kansas Star Casino, L.L.C. for Tax Year 2015, 2018 WL 3486173 (Kan. Ct. App. 2018) (unpublished) ........................................................................................ .21 a. KELA and the management contract require Appellant to maintain the ancillary facilities as a matter oflaw ................................................. .22 CoreFirst Bank & Trust v. JHawker Capital, LLC, 47 Kan.App.2d 755,282 P.3d 618 (2012) ....................................................................................................................... .22 KS.A 21-6406 ........................................................................................................ .22 KS.A 21-6403 ........................................................................................................ .22 In re Tax Appeal ofBHCMC, 307 Kan. 154,408 P.3d 103 (2017) ................... .22, 23 Alain Ellis Living Tr. v. Harvey D. Ellis Living Tr., 308 Kan. 1040, 427 P.3d 9 (2018) ................................................................................................................................... n KS.A 74-8734 ........................................................................................................ .23 In re Kansas Star Casino, L.L.C. for Tax Year 2014, 2018 WL 2749734 (Kan. Ct. App. June 8, 2018) (unpublished) ............................................................................ .23 In re Kansas Star Casino, L.L.C. for Tax Year 2015, 2018 WL 3486173 (Kan. Ct. App. 2018) (unpublished) ........................................................................................ .23 b. KELA and the management contract cannot be disregarded under a USPAP-compliant highest and best use analysis ..................................... .24 In re Prieb Properties L.L.C., 47 Kan.App.2d 122, 275 P.3d 56 (2012) ........... .24, 25 11 In re Ottawa Housing Assoc., L.P., 27 Kan.App.2d 1008, 10 P.3d 777 (2000) .......... ....................................................................................................................... 25,26,27 KS.A 1997 Supp. 79-503 ................................................................................. .25, 26 In re Paola Sundance Apartments, 2006 WL 5485883 (2006) (unpublished) ........ .26 KS.A 2009 Supp. 79-503 ....................................................................................... .26 KS.A 75-503 .............................................................................................. .26, 27, 28 Wingv. City ofEdwardsville, 51 Kan.App.2d 58,341 P.3d 607 (2014) ................. .27 KS.A 74-8734 ........................................................................................................ .27 KS.A 2017 Supp. 74-8734 ..................................................................................... .27 In re Tax Appeal of Western Resources, Inc., 22 Kan. App. 2d 593, 919 P.2d 1048, rev. denied260 Kan. 993 (1996) ............................................................................. .27 KS.A 2017 Supp. 79-503 ....................................................................................... .27 In re Kansas Star Casino, L.L.C. for Tax Year 2013, 2018 WL 2748748 (Kan. Ct. App. 2018) (unpublished) ........................................................................................ .27 In re Tax Appeal ofBHCMC, 307 Kan. 154,408 P.3d 103 (2017) ......................... .28 In re Kansas Star Casino, L.L.C. for Tax Year 2014, 2018 WL 2749734 (Kan. Ct. App. June 8, 2018) (unpublished) ............................................................................ .29 In re Kansas Star Casino, L.L.C. for Tax Year 2015, 2018 WL 3486173 (Kan. Ct. App. 2018) (unpublished) ........................................................................................ .29 c. The subject property suffers from no superadequacy a matter of law ....................................................................................................................... 29 In re Kansas Star Casino, L.L.C. for Tax Year 2014, 2018 WL 2749734 (Kan. Ct. App. June 8, 2018) (unpublished) ............................................................................ .29 In re Kansas Star Casino, L.L.C. for Tax Year 2015, 2018 WL 3486173 (Kan. Ct. App. 2018) (unpublished) ......................................................................................... 30 CONCLUSION .................................................................................................................. 31 BRIEF OF CROSS-APPELLANT .................................................................................. .. 32 111 CERTIFICATE OF SERVICE ....................................................................................... .40 APPENDIX IV NATURE OF THE CASE