EDMISTON v. LOUISIANA RIVERBOAT GAMING PARTNERSHIP (2020)

We granted a rehearing in order to reconsider our earlier opinion in this matter.

In that earlier opinion, the judgment of the district court was reversed in part, affirmed in part, and vacated in part. Edmiston v. Louisiana Riverboat Gaming P'ship, 52,948 (La. App. 2 Cir. 9/9/19), 278 So. 3d 1113, 1123. As the judgment pertained to the valuation approach used by the Louisiana Tax Commission (“LTC”), we affirmed the district court. As the judgment pertained to the obsolescence factor used by the LTC, we reversed the district court. Finally, as to the remaining dispositions of the judgment, it was vacated. We remanded the matter to the LTC, with instructions on how to proceed. Id.

On rehearing, we affirm our earlier opinion.

AFFIRMED ON REHEARING.

I respectfully dissent from the denial of rehearing. The majority found that there was “no articulated, precise computation justifying the 65% obsolescence factor assigned by the LTC.” In point of fact, this issue was fully litigated at an open meeting and appeal hearing, yielding a record that fully supports the LTC's finding.

The LTC received detailed testimony and extensive documentation from Edwin Litolff, a credentialed professional real estate appraiser who specializes in gaming and resort properties and was tendered and accepted as an expert. He established, without contradiction, the manifold challenges facing the DiamondJacks property, including a declining market, owing to competition from Texas and Oklahoma; two bankruptcies; limited floor space; poor maintenance, with nearly 30% of rooms unrentable; a negative cash flow of $8 million since the second bankruptcy; earnings of a negative $3.7 million in 2016; and adjusted gaming revenue down over 50% since 2006. Mr. Litolff may not have uttered the precise figure “65%,” but the overwhelming weight of his economic data and market analysis fully supports the LTC's evaluation. Notably, this court's majority opinion makes only one fleeting reference to Mr. Litolff and completely disregards his factual presentation.

By contrast, the LTC's witness, Brian Eubanks, was a Staff Tax Specialist III, who was not tendered as an expert and whose qualifications do not appear on the record. Mr. Eubanks rendered two different opinions, using an analytical framework that the LTC considered unreliable, though he ultimately estimated a 30% obsolescence factor.

Viewing this record in its entirety, I would not say that the LTC was arbitrary and capricious in adopting an obsolescence factor much closer to Mr. Litolff's expert opinion than to Mr. Eubanks's. I would affirm the ruling of the LTC and the district court, and grant the motion for rehearing.

STEPHENS, J.

MOORE, J., dissents and will assign reasons.