Court affirms 35 percent property tax reduction based on KE Andrews’ analysis of economic obsolescence in underutilized infrastructure

The Intermediate Court of Appeals of West Virginia has upheld a reduction in assessed value for a set of natural gas liquids pipelines, marking a significant legal validation of KE Andrews’ technical approach to economic obsolescence. The decision reinforces the firm’s long-standing reputation for delivering data-driven, defensible valuations in complex property tax matters.

At issue was whether the pipelines, which were operating significantly below design capacity, should be valued considering the actual current economic environment rather than solely on a historical cost basis. The reduced volumes were linked to changes in market demand following adverse economic conditions, prompting the property owner to seek a reduction based on economic obsolescence.

KE Andrews was retained to evaluate whether the conditions warranted an obsolescence adjustment under West Virginia law. The firm’s valuation team, led by Vice President Daniel Kistler, applied an income-based method grounded in public financial data and consistent with industry and regulatory standards. Their analysis concluded that an adjustment for economic obsolescence was appropriate based on long-term underutilization and external economic conditions affecting the assets.

The West Virginia Office of Tax Appeals agreed with the findings and adopted a reduction in value in consideration of economic obsolescence. That decision was appealed, but the appellate court affirmed the ruling, noting the credibility and rigor of the KE Andrews analysis. The court further held that the local assessor failed to rebut the evidence or offer a more accurate methodology.

“This decision validates what we continue to see in the field. Economic obsolescence is real, and it can significantly affect the fair market value of specialized infrastructure,” said Daniel Kistler, Vice President at KE Andrews. “This case reinforces the importance of evidence-based analysis when market realities diverge from design expectations.”

With capital-intensive assets increasingly affected by shifting market dynamics, the ruling highlights the importance of the consideration of external forces on an asset’s value. The KE Andrews Valuation Team continues to support clients nationwide with valuation strategies that hold up under the highest levels of scrutiny.

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"This decision validates what we continue to see in the field. Economic obsolescence is real, and it can significantly affect the fair market value of specialized infrastructure."