Bloomington Hotel Investors, LLC,

1
STATE OF MINNESOTA

IN SUPREME COURT

A22-1201

Tax Court Thissen, J.

Bloomington Hotel Investors, LLC,

Relator,

vs. Filed: August 9, 2023
Office of Appellate Courts
County of Hennepin,

Respondent.

________________________

Thomas R. Wilhelmy, Gauri S. Samant, Fredrikson & Byron, P.A., Minneapolis,
Minnesota, for relator.

Mary F. Moriarty, Hennepin County Attorney, Sara L. Bruggeman, Steven R. Gershone,
Assistant County Attorneys, Minneapolis, Minnesota, for respondent.

________________________
S Y L L A B U S
1. The tax court’s assessment of the market value of a full-service hotel using
the income capitalization approach, including its use of the management fee method, was
not erroneous.
2. The tax court’s assessment of the value of a full-service hotel under the sales
comparison approach was generally not erroneous. The tax court, however, erred to the
2
extent that nothing in the record shows that it correctly adjusted its percentage reduction in
the total value of a comparator hotel used in the sales comparison approach.
Affirmed in part, vacated in part, and remanded.
O P I N I O N
THISSEN, Justice.
Relator Bloomington Hotel Investors, LLC (Bloomington Investors), the owner of
a DoubleTree in Bloomington, (the DoubleTree), challenges the value that the Minnesota
Tax Court placed on the DoubleTree for tax assessment purposes. The tax court
determined that the taxable 2018 market value of the DoubleTree was $25,500,000, an
amount that exceeded the valuations offered by Bloomington Investors and respondent
County of Hennepin (the County). We vacate and remand to the tax court on a single
issue: the tax court is directed to revisit and explain its adoption of the percentage reduction
to the sales price of one of the comparator hotels that it used in its sales comparison analysis
to account for non-taxable assets included in the sales price. To the extent doing so requires
any recalculation or adjustment to the taxable 2018 market value it placed on the
DoubleTree, we further direct the tax court to do so. We otherwise affirm the decision of
the tax court.
FACTS
Background
On January 2, 2018, the assessment date, Bloomington Investors owned the
DoubleTree. Bloomington Investors operated the DoubleTree under a franchise agreement
with Hilton Franchise Holding, LLC (Hilton). Hilton owns the hotel brand. The property
3
has a full-service hotel with 564 rooms and approximately 71,957 square feet of conference
and meeting space. The DoubleTree has an onsite restaurant, bar, and café, as well as a
gift store. The DoubleTree operates each of these services itself.
On September 3, 2019, Hilton sent Bloomington Investors a notice of default
under the franchise agreement. The stated event of default was the DoubleTree’s
12 consecutively failed quality assurance evaluations over 6 years. Under the notice of
default, the DoubleTree was required to obtain an overall score of “Acceptable” or better
by January 30, 2020, or its Double Tree franchise was subject to termination. As part of
the process, Hilton issued a formal Product Improvement Plan for the DoubleTree.
The Product Improvement Plan explained the items “earmarked for improvement”
at the DoubleTree. The improvements are those that are relevant to the Hilton brand and
“are based on conditions at the hotel.” Bloomington Investors did not undertake
performance of the Product Improvement Plan items. This failure was not only a default
under the franchise agreement with Hilton, but also a default under the mortgage with its
lender, Colony Capital (Colony).
In November 2019, Vinakom, Inc. (Vinakom) provided to Bloomington Investors a
$26 million letter of intent to purchase the DoubleTree. Bloomington Investors did not
accept the offer at that time. A few months later, on May 19, 2020, the parties signed a
purchase order for $26 million, the amount of the offer.
Before Bloomington Investors accept ed the offer, Colony engaged an engineering
firm to inspect the DoubleTree and prepare a Property Condition Report. The Property
Condition Report provided an opinion concerning the overall property condition, options
4
of cost for immediate and short-term repairs, and an opinion of the costs for capital
replacement reserve items anticipated to occur. The report stated that “[b]ased on the
systems and components observed during the site visit, the subject property appeared to be
in good condition. The overall level of preventative maintenance appeared to be good.”
The report was dated December 16, 2019. The sale closed on July 30, 2020. The tax court
found that the “sale was subject to the [Product Improvement Plan].”
Valuation of the DoubleTree Real Property and the Trial
The central question in this case is the proper value of the DoubleTree on the
assessment date, January 2, 2018. The County initially assessed the value of the
DoubleTree real property at $31,586,400. Bloomington Investors appealed the valuation
to the tax court. See Minn. Stat. § 278.01, subd. 1 (2022) (providing for appeals of assessed
value to the tax court).
At trial, Bloomington Investors and the County presented expert appraisals and
testimony in support of their proposed valuations. Bloomington Investors’ expert, Daniel
Boris, used two assessment approaches to value the DoubleTree: the income capitalization
approach (which resulted in an estimated value of $14,925,000) and the sales comparison
approach (which resulted in an estimated value of $15,645,000) . After weighing the
probative value of the two approaches, Boris settled on a valuation of $15,000,000. The
County’s expert, Donald Palmer, also used two assessment approaches to value the
DoubleTree: his income capitalization approach at trial resulted in a valuation of
$23,095,140, and his sales comparison approach resulted in a valuation of $26,775,000.
At trial, Palmer settled on a final valuation of $23,500,000.
5
After trial, the tax court determined that the taxable 2018 market value of the
DoubleTree was $25,500,000. This valuation reflected an equal weighting of the tax
court’s $24,500,000 valuation using the income capitalization approach and its
$26,500,000 valuation (rounded) using the sales comparison approach. Bloomington
Investors challenges that determination in this appeal.
ANALYSIS
Minnesota statutes direct that “all property shall be valued at its market value.”
Minn. Stat. § 273.11, subd. 1 (2022). Market value is “the usual selling price at the place
where the property to which the term is applied shall be at the time of assessment; being
the price which could be obtained at a private sale or an auction sale.” Minn. Stat. § 272.03,
subd. 8 (2022).
With certain exceptions not relevant here, only real property is subject to property
tax; personal property, including personal intangible assets, are not subject to property tax
and should not be included when valuing real property for tax purposes. Minn. Stat.
§ 272.02, subd. 9 (2022) (providing that personal property is generally exempt from tax);
Minn. Stat. § 272.03, subds. 1–2 (2022) (defining real and personal property).
Accordingly, when an entity owns real property to operate a business that generates income
from personal goods and services, the value of the taxable real property must be separated
from the value of non -real property assets (like personal property assets and intangible
business assets). See The Appraisal of Real Estate 663 (15th ed. 2020); see 1300 Nicollet,
LLC v. County of Hennepin, 990 N.W.2d 422, 435 (Minn. 2023).
6
For instance, the value of a full-service hotel consists of both the value of the real
property assets (like the land on which the hotel stands and the building in which the hotel
operates) and the value of non-real property assets like income generated from services,
such as a restaurant or conference center, furniture and trade fixtures, and the value of the
hotel brand. When assessing the real estate value of a full-service hotel, the appraiser must
separate out the value of non-real property assets. See The Appraisal of Real Estate, supra,
at 663 (citing The Appraisal Foundation, Uniform Standards of Professional Appraisal
Practice (USPAP), Standards Rule 1-4(g) (2020-2021)). One of the central disputes here
is over the proper method for differentiating the value of the taxable real property assets
and the value of non-taxable non-real property assets of the DoubleTree.
We recognize three approaches for valuing real property: the cost approach, the
income capitalization approach, and the sales comparison approach. Inland Edinburgh
Festival, LLC v. County of Hennepin, 938 N.W.2d 821, 825 (Minn. 2020). Appraisers
often use multiple approaches to valuing real estate and then assign a proportionate weight
to the estimated value derived from each method to settle on the final estimated value of
the property. The parties and the tax court agreed that the cost approach was not useful as
an approach to valuing the DoubleTree.
In this case, both experts used, and the tax court relied upon, the income
capitalization approach and the sales comparison approach in their valuations but each

7
differed in their respective applications of those approaches. On appeal, Bloomington
Investors challenges the tax court’s application of both the income capitalization approach
and the sales comparison approach.
Our review of a tax court’s valuation decision is limited and deferential. See Eden
Prairie Mall, LLC v. County of Hennepin, 797 N.W.2d 186, 192 (Minn. 2011). We review
the tax court’s application of law de novo. KCP Hastings, LLC v. County of Dakota ,
931 N.W.2d 773, 778 (Minn. 2019). We review for clear error the tax court’s valuation of
property. 1300 Nicollet, LLC v. County of Hennepin, 990 N.W.2d at 434. An error is clear
if the decision is not reasonably supported by the evidence as a whole and we are left with
a “definite and firm conviction that a mistake has been committed.” Hansen v. County of
Hennepin, 527 N.W.2d 89, 93 (Minn. 1995) (citation omitted) (internal quotation marks
omitted). “The inexact nature of property assessment necessitates that this court defer to
the decision of the tax court unless the tax court has either clearly overvalued or
undervalued the subject property, or has completely failed to explain its reasoning.” Id.
The tax court “brings its own expertise and judgment to the hearing, and its valuation need
not be the same as that of any particular expert as long as it is within permissible limits and
has meaningful and adequate evidentiary support.” Montgomery Ward & Co. v. County of
Hennepin, 482 N.W.2d 785, 791 (Minn. 1992). We will not reweigh the evidence or assess
the credibility of witnesses. Medline Indus., Inc. v. County of Hennepin, 941 N.W.2d 127,
131 (Minn. 2020).
8
I.
We turn first to Bloomington Investor’s challenges to the tax court’s income
capitalization approach analysis. The income capitalization approach analyzes the value
of real property by assessing the capacity of the property to generate income to the owner
of the real property. To make that determination, the appraiser must estimate the annual
net income the real property will generate (at its most basic level, the gross market rent the
owner of the real property could charge minus relevant expenses). See Inland Edinburgh
Festival, LLC, 938 N.W.2d at 825 –26. The appraiser must then project that annual net
income into the future subject to a discount rate to determine the total present value of
those income streams. Cont’l Retail, LLC v. County of Hennepin, 801 N.W.2d 395,
402 (Minn. 2011) (“The income capitalization approach determines the value of
income-producing property by capitalizing the income the property is expected to generate
over a specific period of time at a specified capitalization yield rate.”).
A significant dispute relating to the tax court’s income capitalization analysis in this
case arises out of the first step—estimating the annual net income generated from the real
property of the DoubleTree. As discussed above, only real property assets are taxable. In
the context of the income capitalization approach to valuing property, that means only the
income generated from real property assets may be used to estimate the taxable value of
the hotel property. That analysis requires the appraiser to distinguish between two sources
of income: income generated to the full-service hotel through real property assets, and
income generated through non-real property assets (such as business income from
9
restaurants and other retail services, personal property like furniture and fixtures, and the
value associated with a brand name).
The Income Capitalization Method of Daniel Boris for Bloomington Investors
The parties’ experts disagreed over the proper method for identifying and excluding
the income generated from non- real property assets of the DoubleTree. Bloomington
Investors’ expert, Daniel Boris, used the parsing income method and the proxy rent method
to separate real property value from business and other intangible value. See The Appraisal
of Real Estate, supra, at 676.
The parsing income method “involves estimating the business entity’s total
value . . . and then removing the value of income and expenses that are not attributable to
the real estate itself.” 1300 Nicollet, LLC, 990 N.W.2d at 428–29. Accordingly, Boris
started with the DoubleTree’s actual financial reports that divided the hotel’s total revenues
and expenses into three broad categories: gross revenues from room rental, gross revenues
from food and beverage sales, and gross revenues from other and miscellaneous sources,
like gift shop sales and sales of internet packages and other hotel “amenities.”
Boris attributed all the room rental gross income to the real estate assets of the
DoubleTree. But he took a more nuanced approach to the net income derived from food
and beverage sales and other miscellaneous sources. For instance, Boris recognized that a
portion of the income from the hotel restaurant business should be allocated to the real
property on and in which the restaurant operated. He also recognized that other income
generated by the hotel restaurant business derived from non-real property sources, like the
10
sale of food and beverages, the ambience and service in the restaurant and effective
restaurant management, should not be allocated to the real property.
The portion of the income to the hotel owner generated by the real property on and
in which a hotel restaurant is operated is easier to identify where a third-party leases space
to operate a restaurant. When the hotel owner (or owner of property on which a stand-alone
restaurant operates) leases space to a restaurant operator, the restaurant operator will use
part of the restaurant income to pay rent to the property owner—and rent is precisely the
income to the property owner derived from the value of the real property. See The
Appraisal of Real Estate, supra, at 663.
The task of identifying the portion of income generated by the DoubleTree real
property to Bloomington Investors is more complicated because the hotel itself operated
the restaurant space. There was no lease with a third-party operator and thus no lease with
a rent amount to use to calculate the income from the real property. Accordingly, a proxy
for an actual rent was employed to properly value the real property. Boris used the proxy
rent technique to separate the income generated by sales of food and beverage within the
hotel (the restaurant operations) from the income generated by the real property in which
the restaurant operated. See 1300 Nicollet, LLC, 990 N.W.2d at 429 (“The proxy rent
technique seeks to establish what the rent would be, had the spaces been leased to a third
party.”).
Boris concluded that it was appropriate to assume that had the restaurant in the hotel
been leased to an independent operator, that operator reasonably would have paid
10 percent of its gross food and beverage sales in rent to the hotel. He based this
11
determination on conversations with a Twin Cities restaurant broker who informed him
that “most restaurant and bar properties can support Real Estate Rent of 6.0% of Gross
Sales for ‘stand alone’ facilities” (facilities not inside a hotel). 1 Boris also based this
percentage on appraisal treatises admitted into evidence , including a text by Stephen
Rushmore (the progenitor of the management fee method that we will discuss shortly).
Boris increased his estimate of percentage of gross sales that an independent restaurant
located in the DoubleTree would pay as rent to 10 percent because “room guests (and
conference attendees) will spend money on Food and Beverage services as part of their
stay.” Essentially, Boris increased his estimate of food and beverage income related to the
real property (thereby increasing his estimate of the value of the hotel real property)
because hotel guests and conference attendees were a somewhat captive au dience; the
guests and conference attendees would buy more food and beverages and perhaps pay more
because they were on that specific property.
2

1 Boris noted that he did not specifically consider restaurants in hotels in making his
determination. At trial, Boris stated that the restaurant broker he spoke with brokered
stand-alone restaurants but also “all forms of restaurants whether they are part of a larger
package of real estate or not. Boris also stated, “I’m not sure if you would single out just
restaurants that are stand-alone.”

2 Boris made a similar calculation to determine the income generated by the real estate
on and in which Bloomington Investors operated gift and sundry shops. There, Boris
applied a 7 percent proxy rent to the 4-year average of each of the other and miscellaneous
revenue streams.
12
In summary, Boris calculated gross revenues derived from the DoubleTree real
property as follows:
Revenue Source
Gross Revenue
Amount
Derived from
Real Estate
Basis for Calculation
Percentage
of Total
Gross
Revenue
Room Revenue $15,811,750
Actual Room Rental
Revenues Over Previous
Four Years
93.7%
Food & Beverage
Revenue $1,019,675 10% of Total Food &
Beverage Sales 6%
Other/Miscellaneous $48,913
7% of Total
Other/Miscellaneous
Sales
.3%
TOTAL $16,880,338 100%

From the total gross revenues, Boris deducted expenses associated with operating
the DoubleTree: fixed expenses and variable expenses (management fees; utilities; repairs
and maintenance; furniture, fixtures, and equipment; and reserves for replacement). The
expenses totaled $10,178,375. Boris also deducted the hotel franchise fee which totaled
$1,343,999. Accordingly, Boris calculated that the DoubleTree annual net income derived
from real property was $5,357,964. Boris then applied a combined capitalization rate and
effective tax rate of 13.42 percent to the net income figure 3 and estimated that an
arms-length buyer would value the DoubleTree real estate at $14,925,000—a figure that
Boris rounded to $15,000,000.

3 The tax court used a capitalization rate of 9.3 percent in its calculation and an
effective tax rate of 3.59 percent or a combined rate of 12.89 percent. Those decisions are
not challenged on appeal.
13
The Income Capitalization Approach of Donald Palmer for the County
In his analysis of the income-producing capacity of the Doubletree, the County’s
expert, Donald Palmer, used a different method—the management fee method (also known
as the “Rushmore” method)—to separate the real property value of the DoubleTree from
the business or intangible value of the hotel. Under this method, management fees and
franchise fees represent the value of expert management services and access to hotel brands
and, accordingly, those fees provide a sufficient stand -in for the intangible non-real
property assets of a hotel. See generally The Appraisal of Real Estate, supra, at 676–77.
Accordingly, under the management fee approach, a management fee and/or a franchise
fee (as well as other operating expenses) are deducted from total hotel revenues from all
sources, and the result of that calculation represents the value of a hotel’s real property
assets. Id. at 677. Palmer stated that the management fee approach is “commonly used to
value hotel properties for ad valorem tax purposes” and “has been embraced by the
International Association of Assessing Officers [] for the valuation of lodging facilities.”
In accordance with the management fee method, Palmer started his income
capitalization analysis by calculating the total hotel revenues, including income from all
sources (room rentals, food and beverage, and other income), and then subtracted all
expenses specific to each of the income sources, as well as general operating expenses and
reserves for replacement. Notably for this appeal, one of the expenses that Palmer deducted
as an “undistributed operating expense” in this part of his calculation was the DoubleTree
franchise fee.
14
Another notable expense for purposes of this appeal was a reduction to address the
need for an arms-length buyer of the DoubleTree to spend money to upgrade the hotel. The
buyer will anticipate lower net income from the hotel to the extent it has to invest money
earned from hotel operations to upgrade the hotel after purchase. To determine the amount
of that expense for purposes of his income capitalization approach analysis, 4 Palmer
created a hypothetical reserve for replacement fund based on 6 percent of room revenue.
Palmer acknowledged that 3–5 percent of room revenues would be a typical reserve for
replacement fund but concluded that 6 percent would “better represent what current
management and any possible investor would prudently use.”5
From these calculations, Palmer derived a total net annual revenue amount of
$5,263,532. This amount included all revenues—those derived from taxable real property
assets and those derived from non-taxable non-real property assets like intangible business
assets and personal property. He then applied a loaded capitalization rate (including a
percentage for estimated property taxes) of 12.89 percent to set the total (or “going

4 In his sales comparison analysis, Palmer approached the issue of the amount an
arms-length buyer would set aside for future upgrades differently: He deducted
$19,880,000 to account for the investments “required to bring [the DoubleTree] to
competitive status, which would help [it] attain higher revenues in line with similar upscale
hotels.” In contrast, Palmer’s estimated reserve for replacement fund in his income
capitalization approach amounted to a deduction of $7,293,685 (the annual reserve for
replacement amount of 6 percent of total room revenue capitalized at the combined
capitalization rate and effective tax rate of 12.89 percent used by Palmer). Palmer testified
that the income replacement adjustment did not require the same deduction used in his sales
comparison analysis. Of course, a smaller deduction means a higher total taxable value.

5 A higher deduction for a reserve for replacement fund decreased Palmer’s estimate
of the total value of the DoubleTree.
15
concern”6) value of the hotel, all sources of income included. The result was a total value
for the hotel including all assets (real property and non-real property) of $40,834,229.
Palmer then made two deductions to eliminate value related to non- real property
assets. First, he deducted the portion of the total capitalized net income (and thus value)
associated with the personal property used in the hotel such as room furnishings, furniture,
and fixtures, as well as equipment used in the restaurant, kitchen, and other public spaces in
the hotel. The total personal property deduction was $6,716,350. This specific deduction
as used as part of Palmer’s approach is not challenged on appeal.
Second, Palmer deducted the capitalized value of the franchise fee to account for
income derived from non-real property and non-personal property assets, including income
related to the businesses run on the property. This franchise fee deduction is Palmer’s
version of the “management fee” required as part of the management fee approach to
distinguishing value attributable to real property assets from value attributable to intangible
and other business assets. See The Appraisal of Real Estate, supra, at 676 (“The
management fee approach has been used by some appraisers as a variant of overall
capitalization analysis. From that viewpoint, deduction of franchise fees and management
fees accounts for returns to the business.”). Under Palmer’s calculation, the value of the
business component for the hotel operations was $8,192,723. Importantly, this franchise
fee deduction duplicated the previously discussed deduction for the franchise fee that

6 A business entity’s “going concern” can include “real property, tangible personal
property (such as furniture, fixtures, and equipment) and intangible assets.” The Appraisal
of Real Estate, supra, at 663.
16
Palmer made when determining total operating expenses as part of his initial calculation of
the total net operating income of the DoubleTree.
After completing these calculations, Palmer initially concluded that the value of the
real property assets of the DoubleTree under the income capitalization approach was
$25,990,000.
Palmer’s income capitalization analysis was complicated at trial because Palmer
acknowledged that he erroneously used the wrong number for the franchise fee expense.
Rather than $1,056,042 (which he used in his report), Palmer explained that the franchise
fee was, in fact, $1,402,831. Applying the capitalization rate to the correct franchise fee,
Palmer explained that the correct capitalized value of the franchise fee should be
$11,022,739. After making that adjustment, Palmer concluded that the final value of the
DoubleTree under the income capitalization approach was $23,095,140.
Palmer’s final income approach analysis may be summarized as follows:
Going Concern Value
(including all sources of net
income)
$40,834,229
Total revenues (all income less all
expenses) multiplied by
capitalization rate
Less Franchise Fee (corrected
amount at trial) to account for
business income
($11,022,739) Calculated by multiplying franchise
fee by capitalization rate
Less Personal Property ($6,716,350)
Calculated by applying a
depreciation rate of 67% to industry
standard cost of replacing furniture,
fixtures, and equipment and adding
20% as reasonable rate of return on
balance after depreciation
Value of Real Property $23,095,140

17
In short, like Boris, Palmer recognized that the taxable value of the property could only be
based on the net income derived from the real property. Appl ying a management fee
approach, Palmer calculated the total net income from all sources of income and then
subtracted income related to (1) personal property (the furniture, fixtures, and equipment
calculation) and (2) intangible business expenses using the capitalized franchise fee
calculation as an approximation.
In its order, the tax court adopted Palmer’s income capitalization analysis with some
significant adjustments. Relevant to this appeal, the tax court used the management fee
method to exclude income related to non-real property business assets and rejected Boris’s
application of the parsing income/proxy rent method, addressed concerns about Palmer’s
decision to use a reserve for replacement fund in an amount of 6 percent of room revenue
(as opposed to total revenue) to account for the cost of needed hotel upgrades, and
eliminated the second deduction of the capitalized franchise fee that Palmer had included
in his analysis. After making these adjustments and other adjustments not relevant to this
appeal, the tax court assessed the value of the DoubleTree using the income capitalization
approach at $24,500,000, an amount greater than the income capitalization approach
valuations of either Boris or Palmer.
On appeal, Bloomington Investors challenges the tax court’s income capitalization
analysis. Bloomington Investors asserts that (1) use of the management fee method is
always improper as a matter of law when assessing the value of a full-service hotel; (2) the
tax court clearly erred in adopting Palmer’s 6 percent reserve for replacement to account
for investments that an arms-length buyer would consider necessary to upgrade the
18
condition of the DoubleTree; and (3) the tax court clearly erred when it rejected Palmer’s
second deduction for the franchise fee. We address each argument in turn.
A.
Bloomington Investors argues that the tax court erred as a matter of law when it
used the management fee method under the income analysis approach. We disagree.
The tax court determined that Palmer’s use of the management fee method was
appropriate: “The court agrees with the County that, on the record in this case, [net
operating income] is properly calculated by including all hotel revenue in full regardless
of source. . . . and then deducting expenses . . . .” The tax court cited Palmer’s testimony,
as well as some appraisal authorities and cases from other jurisdictions.
Bloomington Investors argues that the management fee method is never appropriate
when valuing full-service hotels. It asserts that the management fee method cannot
effectively separate the business value of food and beverage and other retail or service
operations from real property assets in the context of full-service hotels and, accordingly,
use of the management fee method is always improper as a matter of law when assessing
the value of a full-service hotel.
We refuse to adopt a rule that absolutely precludes the use of the management fee
method when valuing full-service hotels. We have repeatedly acknowledged that assessing
the value of properties, although necessarily based on meaningful and adequate evidentiary
support, is an inexact science—it is an estimate of value based on assumptions and
projections offered by professional appraisers. Hansen, 527 N.W.2d at 93. Our review of
the record and the literature shows us that there is no clear current consensus among
19
appraisal authorities that the management fee method fails to exclude income effectively
and reliably from food and beverage and other business value in every case. See The
Appraisal of Real Estate, supra, at 675–77; see also 1300 Nicollet, L .L.C. v. County of
Hennepin, Nos. 27-CV-17-06284, 27-CV-18-06407, 27-CV-18-12727, 2022 WL 829605,
at *10 (Minn. T.C. Mar. 16, 2022) (explaining that even though the management fee
method and parsing income method “have been competing for approximately 20 years,”
there is not a “clear preference for one or the other”) aff’d 990 N.W.2d 422 (Minn. 2023).
Consequently, we hold that the parties and the tax court may continue to use the
management fee method when valuing full-service hotels when appropriate. 7

7 The tax court also offered reasons why it did not adopt the parsing income/proxy
rent method of Boris, explaining that Bloomington Investors “has not supported the
proposition that, on this record, the ‘proxy rent’ method is an appropriate method for
calculating the [effective gross income] of the subject hotel or that hotels should be valued
using the same methodology as stand-alone restaurants.” The tax court raised case-specific
concerns about the way Boris used the parsing income/proxy rent method in this case. We
defer to the tax court’s analysis of those case-specific reasons for rejecting Boris’s income
capitalization analysis. See Eden Prairie Mall, 797 N.W.2d at 192.
The tax court also used language that suggested that the parsing income/proxy rent
method is never appropriate when valuing full-service hotels. For the same reasons we
reject Bloomington Investors’ argument that the management fee method, as a matter of
law, is never appropriate for assessing the value of a full-service hotel, we also reject the
suggestion that it is never appropriate to use the parsing income/proxy rent method when
valuing a full-service hotel.
Indeed, we recently affirmed the decision of the tax court in 1300 Nicollet, 2022
WL 829605. In 1300 Nicollet, a case that the tax court decided before it issued its decision
in the present case, the tax court used the parsing income/proxy rent method rather than the
management fee method in its income capitalization analysis of a different full-service
hotel. The tax court spent several paragraphs in the opinion detailing the advantages of the
parsing income/proxy rent method. Id. at *13. But the tax court also explained that courts
have been divided historically on whether the management fee method or the parsing
income/proxy rent method should be used for valuing hotels. Id. at *11–12. In the end,
the tax court did not conclude that the management fee method was never appropriate as a
matter of law, but rather explained why it preferred to use the parsing income/proxy rent
20
Further, and for the same reasons, we reject Bloomington Investors ’ argument that
the use of the management fee method is unconstitutional. The United States and
Minnesota constitutions require that similarly situated properties be taxed uniformly. U.S.
Const. art. I, § 8; Minn. Const. art X, § 1. And as stated above, one rule that must be
applied uniformly is that non-taxable non-real property value must not be included in the
taxable assessed value of property. Accordingly, if the management fee method failed to
effectively separate the value of taxable real estate assets from non-taxable assets while the
parsing income/proxy rent method much more effectively distinguished the value of
taxable real estate assets from non-taxable assets, then use of the ineffective method may
present a constitutional uniformity problem. But because we conclude that the
management fee method is not so flawed that it is ineffective as a matter of law for use in
separating the value of taxable real estate assets from non- taxable assets, Bloomington
Investors’ constitutional uniformity argument fails.
B.
Bloomington Investors challenges the tax court’s adoption of Palmer’s reserve for
replacement deduction figure. We conclude that the tax court did not clearly err in doing
so.
As discussed above, Palmer accounted for the expenses that a buyer of the
DoubleTree would have to invest in upgrading the condition of the hotel by creating a
hypothetical reserve for replacement fund equaling 6 percent of room rental revenues.

method in the 1300 Nicollet case. Id. at *12. We disagree with Bloomington Investors
that the tax court’s decisions in 1300 Nicollet and in this case are in unreconcilable conflict.
21
Under Palmer’s analysis, the amount of the reserve for replacement fund was $940,156 per
year, which amounts to $7,293,685 on a capitalized basis. Bloomington Investors observes
that amount is significantly lower than the $19,880,000 that Palmer used to account for
needed upgrades in his sales comparison analysis.
The tax court adopted Palmer’s use of a 6 percent reserve for replacement fund in
its order. 8 The tax court rejected Bloomington Investors’ assertion that the substantial
discrepancy between a deduction of $19,880,000 for hotel upgrades in Palmer’s sales
comparison analysis and $7,293,685 in Palmer’s income capitalization analysis
undermined the reliability of Palmer’s calculation. The tax court explained that a Property
Condition Report prepared for the ultimate buyers of the DoubleTree in 2019 stated that
there were no planned property improvements and that the property appeared to be in good
condition. Further, citing Macy’s Retail Holdings, Inc. v. County of Hennepin , Nos.
27-CV-15-6881, 27-CV -16-4588, 2019 WL 7176742 at *10– 11 (Minn. T.C. Dec. 17,
2019), the tax court observed that the income approach requires that the subject property

8 As noted above, the tax court adjusted Palmer’s calculation of the total replacement
for reserve amount “to be consistent” by calculating it based on all hotel revenue rather
than merely room revenue. Accordingly, the tax court increased the amount of the
deduction from income from $940,156 (6 percent of total room gross revenues of
$15,669,264) to $1,602,435 (6 percent of total gross revenues of $26,707,250). The
capitalized value of the updated replacement for reserve amount is $12,431,614. Because
this change increased expenses/deductions, it reduced the total net operating income. The
result was that the tax court’s income capitalization valuation estimate was lower than it
would otherwise have been had it not made this specific adjustment. Stated another way,
this specific adjustment by the tax court favored Bloomington Investors.
22
is valued in its current condition and, under Minnesota law, only items fully deteriorated
and in need of immediate repair should be categorized as deferred maintenance. 9
The tax court did not clearly err when it adopted Palmer’s 6 percent reserve for
replacement fund. It explained its reasons for its decision and those reasons are supported
in the record. See 1300 Nicollet, 990 N.W.2d at 435.
C.
Bloomington Investors also takes issue with the tax court’s decision to eliminate the
second, duplicate deduction of the franchise fee. Again, we conclude that the tax court did
not clearly err in doing so.
As discussed above, Palmer made two deductions from his total capitalized net
income estimate to eliminate the value of business and personal property assets: a
deduction for business value that he estimated by deducting the capitalized franchise fee
and a deduction for the value of personal property. In its order, the tax court refused to
adopt the capitalized franchise fee deduction from capitalized total net income. The tax
court reasoned that Palmer deducted the same amount twice: once when he deducted the

9 By using the $19,880,000 figure in his sales comparison analysis, Palmer was doing
something quite different than he was when using the reserve for replacement fund in his
income capitalization analysis. In his sales comparison analysis, Palmer was attempting to
adjust the sales price of the two comparator hotels (which were in better, more recently
renovated shape) to match the condition of the DoubleTree. To do so, he had to reduce the
value of the two comparator hotels to account for the cost of upgrades needed to bring the
DoubleTree up to the condition of the two comparator hotels. Stated another way, the two
comparator hotels essentially had already “spent” the money needed to upgrade; reducing
the actual sales price of the comparator hotels by the amount that the DoubleTree would
need to spend to upgrade to the condition of the comparator hotels (using $19,880,000 as
a proxy) allowed for an apples-to-apples comparison.
23
franchise fee from total gross revenues as an undistributed operating expense to arrive at
annual net income, and again when he deducted the franchise fee from the capitalized net
income. The tax court concluded that the second franchise fee deduction double-counted
the franchise fee expense. The tax court noted that Palmer did not provide any rationale or
authority for deducting the capitalizing franchise fee twice. The result was that the tax
court’s final valuation using the income capitalization approach was $11,022,739 higher
than it would otherwise have been using Palmer’s valuation. We conclude that this was
not clearly erroneous.
The capitalized amount of the annual franchise fee was deducted twice. The tax
court explained its reasoning for rejecting the duplicate franchise fee deduction (Palmer
did not explain why he did it) and the tax court’s explanation is supported by the record.
See 1300 Nicollet, 990 N.W.2d at 435. Bloomington Investors’ only argument on this issue
is the observation that Palmer deducted the franchise fee twice; tellingly, Bloomington
Investors does not offer a reason why deducting the capitalized franchise fee twice is
necessary or legitimate.
In summary, we hold that the tax court’s analysis of the value of the DoubleTree
using the income capitalization approach, including its use of the management fee method,
was not clearly erroneous.
II.
We now consider Bloomington Investors’ challenges to the tax court’s sales
comparison analysis. A sales comparison analysis measures the market value of real estate
by looking at the price at which comparable properties sold. “In the sales comparison
24
approach, appraisers develop opinions of value by analyzing closed sales, pending sales,
active listings, and cancelled or expired listings of properties that are similar to the property
being appraised.” The Appraisal of Real Estate, supra, at 351. In short, the sales
comparison approach “involves valuing property based on the price paid in actual market
transactions of comparable properties, and then [making] an adjustment to those sales
prices . . . to reflect differences [like location, size, and time of sale] between the sold
property and the subject property.” Menard, Inc. v. County of Clay, 886 N.W.2d 804, 817
(Minn. 2016) (first and second alterations in original) (citation s omitted) (internal
quotation marks omitted); Carson Pirie Scott & Co. (Ridgedale) v. County of Hennepin,
576 N.W.2d 445, 447 (Minn. 1998) (stating that adjustments should be made for
differences, “such as location, size and time of sale,” between the properties).
Palmer relied on two hotel property sales, both of which were fee simple properties
sold in arm’s length transactions. The first hotel, located in Bloomington, sold for
$33,000,000 in April 2017 (Comparator Hotel A). Comparator Hotel A, which was built
in 1999 and was in “above average” condition at the time of sale, had 200 rooms. The
second hotel, located in Brooklyn Park, sold for $29,250,000 in March 2017 (Comparator
Hotel B). Comparator Hotel B, which was built in 1987 and was in “average” condition at
the time of sale, had 230 rooms. Based on the attributes of the two properties, Palmer made
several adjustments to the sales prices to estimate the Double Tree’s value. He made
adjustments to account for the different conditions of the two comparator hotels compared
to the DoubleTree. He also adjusted the value of Comparator Hotel B upward by 5 percent
because Comparator Hotel B was located a greater distance from the airport and the central
25
downtown Minneapolis business district than the DoubleTree. (Comparator Hotel B has a
lower value than the DoubleTree because it is further from downtown Minneapolis and the
airport and so the appraiser must adjust upward the arms-length sales price of the
lower-valued Comparator Hotel B to properly approximate the relatively higher value of
the DoubleTree.)
Recognizing that the sales price of the two comparator hotels reflected both the
value of real property assets and non-taxable personal property and non-tangible business
assets, Palmer took steps to adjust the sales prices of the two comparator hotels to eliminate
the value of non-real property assets included in the sales price. He appears to have taken
different approaches to accomplish this task for each of the two comparator hotels.
For Comparator Hotel B, the only information Palmer considered was that
Comparator Hotel B is a full-service hotel like the DoubleTree with personal property of
roughly the same vintage as the DoubleTree. Consequently, in the absence of any other
information, Palmer relied solely on his income capitalization analysis of the DoubleTree
as a reference point. Recall that in that analysis, Palmer deducted from the total capitalized
net income of the hotel (including all real property and non-real property assets) amounts
equal to the capitalized income derived from furniture, fixtures, and equipment to reflect
the value of non-taxable personal property and the capitalized annual franchise fee to
reflect the value of non-taxable intangible business value. Supra at 14. More specifically,
in his report, the capitalized income derived from furniture, fixtures, and equipment was
$6,716,350, or approximately 17 percent of the $40,834,229 total c apitalized net income
of the DoubleTree, and the capitalized annual franchise fee was $8,192,723, or about
26
20 percent of total capitalized net income.10 In other words, the total value of non-taxable
personal property assets and non -taxable business assets in Palmer’s report rounds to
37 percent of total net income.
In his sales comparison analysis of Comparator Hotel B, Palmer simply used that
same 37 percent figure to account for the portion of the total sales price Comparator
Hotel B derived from the value of non-taxable personal property assets and business assets.
In short, he simply reduced the sales price by 37 percent.
Palmer took a different approach to Comparator Hotel A. He did so for several
reasons. Palmer noted that, unlike the dated furniture, fixtures, and equipment in the
DoubleTree, the furniture, fixtures, and equipment in the recently renovated Comparator
Hotel A was almost new. Consequently, those personal property assets would make up a
higher percentage of the total sales price in Comparator Hotel A as compared to the
DoubleTree. On the other hand, Palmer also noted the complexity added by the fact that
Comparator Hotel A had fewer personal property assets associated with meeting and other
public spaces which suggests that those assets may make up a lower percentage of the total

10 As a bit of foreshadowing for our later discussion of Palmer’s analysis adopted by
the tax court, it is important to remember that, at trial, Palmer stated that he used the wrong
franchise fee amount in his report and acknowledged that the capitalized franchise fee
amounted to $11,022,739 rather than the $8,192,723 used in his report. Consequently, the
business asset value accounted for around 27 percent of the total value of the DoubleTree
assets ($11,022,739 / $40,834,229), not 20 percent as calculated in Palmer’s expert
appraisal report ($8,192,723 / $40,834,229). Supra at 15. That further means that under
Palmer’s income capitalization approach, non-taxable personal property and business
assets made up around 43 percent (or the total of $11,022,350 and $6,716,350 divided by
$40,834,229 and then rounded down to the nearest whole percent) of the DoubleTree’s
total value.
27
sales price in Comparator Hotel A as compared with the DoubleTree. Palmer further
observed that because Comparator Hotel A was a select service rather than full-service
hotel, the food and beverage services offered by Comparator Hotel A were substantially
more limited than those offered by the DoubleTree, meaning that the intangible business
value attributable to such sources would be a lower portion of the total sales price if the
DoubleTree was sold. Accordingly, and in consideration of these factors, Palmer adopted
a different approach from that he used for Comparator Hotel B. He did not use in his
valuation of Comparator Hotel A the percent reduction figure calculated for the
DoubleTree in his income capitalization analysis. Palmer instead estimated that the value
of non-taxable personal property assets and business assets made up 40 percent of the total
sales price for Comparator Hotel A. To reach this conclusion, Palmer referred to a variety
of other sources of information.
In his report, Palmer referred to the Assessor’s ACE Sales Report for Comparator
Hotel A. The ACE Report describes the terms of the sale of Comparator Hotel A as
follows: The Cash Equivalent Sales Price of $33,000,000 is reduced by an amount
attributable to “Personal Property” valued at $8,286,252 and by an amount attributable to
“Other Terms Amount” valued at $4,968,423 leaving a “Cash Equivalent of Real Estate”
amount of $19,745,325. $8,286,252 plus $4,968,423 equals $13,254,675 or 40 percent of
the total sales price of $33,000,000.
A few things are worth noting about this information. First, according to the ACE
Report, the value of the personal property for Comparator Hotel A amounts to
28
approximately 25 percent of the total sales price of the hotel. In comparison, Palmer’s
income capitalization approach had calculated the personal property for the Double Tree
at approximately 17 percent. This increased percentage for Comparator Hotel A is
consistent with the fact that, as earlier noted, the furniture, fixtures, and equipment in
Comparator Hotel A was newer than the DoubleTree’s furniture, fixtures, and equipment.
Second, Palmer nowhere explains what is included in the category of “Other Terms
Amount” in the ACE Report. Finally, at trial, Palmer seemingly backed away from reliance
on the ACE Report in determining that a reasonable deduction for non-taxable personal
property and business assets is 40 percent.
At trial, Palmer pointed to other bases for his decision (not explicitly mentioned in
his report) to reduce the sales price of Comparator Hotel A by 40 percent to account for
the value of non-taxable personal property and business assets included in the sales price.
He said that he relied upon his experience preparing tax assessments for other hotel
properties in the area where he found that the value attributable to non-taxable business
assets of the hotels ranged from 30 percent to a bit more than 40 percent of total value of
the hotels. He also testified that, because Comparator Hotel A was recently renovated, he
had in his thoughts a survey of hotel development costs for select service and full-service
hotels.
In summary, in his sales comparison approach, Palmer started w ith the total sales
price for each comparable hotel. He then adjusted for location and the physical condition
of the hotels. He also made a 40 percent and 37 percent deduction respectively to separate
the value related to the non-taxable, non-real property assets included in the total sales
29
price of Comparator Hotels A and B and deducted that amount. The result was an Adjusted
Taxable Sale Price for each comparable hotel that Palmer then converted (by dividing by
the number of hotel rooms) to a Per Room Adjusted Taxable Sale Price.
After arriving at the Per Room Adjusted Taxable Sale Price, Palmer made an
additional adjustment to reflect the need to make renovations to the DoubleTree that were
(in Palmer’s words) “required to bring [the DoubleTree] to competitive status, which would
help them attain higher revenues in line with similar upscale hotels.” Palmer estimated
that the cost of necessary renovations to the DoubleTree was $19,880,000, or about
$35,000 per room. He testified that he made this adjustment because his two comparable
hotels “had already had extensive work done in the form of a [Property Improvement Plan]
to get to a very good condition.” Accordingly, he reduced the Per Room Adjusted Taxable
Sales Price by $35,000 . No one contests th e legitimacy of this part of the analysis. The
resulting amount was Palmer’s Adjusted Sales Price Per Room, which he used to arrive at
his sales comparison approach value for the DoubleTree.

30
The chart below summarizes Palmer’s analysis of the value of the comparator
hotels.
Adjustment Comparator Hotel
A
Comparator Hotel
B Average
Sale Price $33,000,000 $29,250,000
Location/Market N/A +5%
Physical
Condition/Facilities (15%) (5%)
Business/Intangible
Value (40%) (37%)
Adjusted
Taxable Sale Price $16,830,000 $18,427,500
Per Room Adjusted
Taxable Sale Price $84,150 $80,120
Capital Outlay Per
Room to Bring to
Competitive Level
($35,000) ($35,000)
Adjusted Sales Price
Per Room $49,150 $45,120
Weighted Average
Per Room $47,135
Total Value of
DoubleTree
(Average per Room
Multiplied by 568 Total
Rooms)

$26,772,680
(rounded to
$26,775,000)

Palmer testified that he did not adjust the value of either of the comparator hotels
based on its size relative to the DoubleTree, even though Comparator Hotel A has
200 rooms and substantially less (approximately 2,000) square feet of meeting space, and
Comparator Hotel B has 230 rooms with “dedicated meeting space,” compared to
DoubleTree’s 564 rooms and 70,000 square feet of meeting space. He also explained that
31
he did not make market conditions adjustments to either comparable sale because both
sales occurred within 8 months of the valuation date.11
The tax court accepted Palmer’s sales comparison approach with one adjustment to
correct a small error that concerned the number of rooms in the DoubleTree. The tax court
explained, “[B]oth [comparator] hotels in Hennepin County . . . sold within one year
before the valuation date and required substantial recent capital expenditure of a similar
nature to a [Product Improvement Plan].” Bloomington Investors contends that the tax
court clearly erred when it adopted Palmer’s sales comparison analysis because Palmer’s
estimate of value based on those sales is unreliable. With one exception, we reject
Bloomington Investors’ position because the tax court explained its reasoning and that
reasoning is supported in the record.
A.
Bloomington Investors first argues that the tax court clearly erred when it did not
adjust Palmer’s sales comparison approach to account for certain differences between the
DoubleTree and the comparator hotels. The tax court further found that no adjustment

11 Boris took an entirely different approach to the sales comparison analysis. Boris
provided information about 20 potential comparable sales in his report, but he concluded
that the DoubleTree has “no good comparables” and that the data generated by these
comparisons were not a reliable basis for valuation for two reasons. First, he observed that
the deviation among the various sales was too wide, thus suggesting a less reliable final
result. Second, he concluded the sales data for the comparator hotels did not provide
“ample information” to determine the allocation of the total sales price between “going
concern” and “real estate only” value. Consequently, the only “comparable sale” Boris
considered in his sales comparison analysis was the 2019 sale of the DoubleTree itself. He
conducted a retrospective analysis of the sale of the subject property to reach a
determination of value. Because Bloomington Investors does not challenge the tax court’s
rejection of Boris’s sales comparison analysis, we do not describe Boris’s analysis further.
32
based on the differences in size and number of rooms was necessary. The tax court
reasoned that the fact that the DoubleTree is larger than Comparator Hotel A and
Comparator Hotel B in terms of gross building area and the number of rooms did not matter
because the price per guest room—not the number of rooms or square footage of the
comparable properties—is the “typical unit” of comparison when comparing sales of hotel
properties. The Appraisal of Real Estate, supra, at 359. We conclude that the tax court
did not err because it explained its reasoning and the reasoning is supported in the record.
1300 Nicollet, 990 N.W.2d at 435.
B.
Bloomington Investors also argues that the tax court’s adoption of Palmer’s
37 percent and 40 percent reduction in sales price of the two comparator hotels to account
for the portion of the sales prices derived from non-taxable personal property and business
assets was clearly erroneous because Palmer’s analysis lacked foundation.
Regarding the foundation for Palmer’s percentage reductions, we conclude that the
tax court’s assessment of Palmer’s sales comparison analysis—that it “is not as strong as
it could be”—is a kind understatement. Nonetheless, with one exception, we hold that the
tax court did not clearly err in adopting Palmer’s analysis because, as the tax court said,
“the record is not devoid of evidentiary support for his calculation of the percentage
reduction for business intangible value.”
Although it is true that Palmer’s justifications for the 40 percent reduction in the
sales price of Comparator Hotel A shifted over time, Palmer did point to his experience in
estimating the value attributable to the business assets of hotels as well as documentation
33
like surveys of typical hotel development costs and the ACE Report for the sale of
Comparator Hotel A. Supra at 27. The tax court found these sources to provide sufficient
foundation for Palmer’s analysis. Under our deferential standard of review and in
recognition that estimating property values is an inexact science, we do not find the tax
court’s decision regarding Comparator Hotel A to be clear error. See 1300 Nicollet,
990 N.W.2d at 435.
We reach a different conclusion for Comparator Hotel B. For that hotel, Palmer
relied exclusively on his income capitalization analysis of the DoubleTree as the sole
justification for his 37 percent reduction in the total sales price to account for the value of
non-taxable personal property and business assets included in that total sales price.
As discussed above, in his income capitalization analysis, Palmer estimated in his
report that the value of non-taxable personal property and business assets accounted for
approximately 37 percent of the total value of the DoubleTree. We have no quibble with
the tax court’s decision to adopt Palmer’s method of transporting his percentage reductions
for the value of non- taxable personal property and business assets from his income
capitalization analysis of the DoubleTree to use in his sales comparison analysis of
Comparator Hotel B. As Palmer noted, the two hotels are both full-service hotels of
relatively similar vintage. That decision of the tax court is not clearly erroneous.
However, we agree with one criticism lodg ed by Bloomington Investors. The
rounded 37 percent figure is the sum of the 17 percent reduction for the value of furniture,
fixtures, and equipment and the 20 percent reduction for the capitalized franchise fee as set
forth in Palmer’s written report. Turning to the capitalized franchise fee, in his income
34
capitalization analysis in his report, Palmer calculated the reduction to exclude the value
of non-taxable business assets by capitalizing the annual franchise fee for the DoubleTree.
In his initial report, Palmer used the wrong franchise fee amount of $1,056,042. At trial,
Palmer acknowledged (as did the tax court in its order) that the actual franchise fee was
$1,402,831. As a result, the capitalized franchise fee in the report was $8,192,723,
compared to the capitalized franchise fee derived if the actual franchise fee had been used
of $11,022,739. Supra at 25, n.10.
The determination that the capitalized franchise fee constituted 20 percent of the
total value of the DoubleTree was based on the numbers in the initial report and
calculated by dividing the total value attributed to the DoubleTree’s non-taxable
business assets (based on the incorrect franchise fee amount) by the total value of
the DoubleTree: ($8,192,381 / $40,834,229) = 20%. If the correct, actual capitalized
franchise fee to which Palmer testified at trial had been used, the percentage of total
value attributable to the capitalized franchise fee would increase to slightly less than
27 percent: $11,022,739 / 40,834,229 = 26.99%. That is a material difference. And when
added to the deduction for furniture, fixtures, and equipment, the total reduction in value
for non-taxable personal property and business assets in the income capitalization approach
would be approximately 43 percent of total value, not 37 percent.
Nothing in the record shows that the tax court adjusted the percentage deduction
from 37 percent to 43 percent in the sales comparison analysis of Comparator Hotel B. The
tax court offered no explanation about this apparent discrepancy and we cannot discern one
from the tax court’s order. Consequently, we remand to the tax court to account for and
35
explain its reasons for adopting Palmer’s base reduction percentage of total value to
account for the value of non-taxable personal property and business assets of Comparator
Hotel B.12 To the extent doing so requires any recalculation or adjustment by the tax court
to its analysis, we further direct the tax court to do so.
CONCLUSION
For the foregoing reasons, we affirm in part, vacate in part, and remand the decision
of the tax court. We remand on a single issue. The tax court is directed to the percentage
reduction to the sales price for Comparator Hotel B that it used in its sales comparison
analysis to account for the value of non-taxable personal property and business assets
included in the sales prices of comparator hotels and conduct any recalculation or revised
analysis that may be required. We otherwise affirm the tax court’s order.
Affirmed in part, vacated in part, and remanded.

12 Bloomington Investors also suggests that the tax court clearly erred when it
concluded that the DoubleTree’s final value of the taxable real property was greater than
either of the expert appraisals. We disagree. For the reasons discussed above, we conclude
that the tax court “carefully explain[ed] its reasoning for rejecting the appraisal testimony
and the gro unds for adopting a . . . higher value, and adequately describe[d] the factual
support in the record for its determination.” See Eden Prairie Mall, 797 N.W.2d at 194.
Accordingly, the mere fact that the tax court settled on a value greater than those offered
by both of the parties is not error. Id.