(concurring). I am in agreement with Justice Ryan’s analysis and disposition and have therefore signed his opinion. I write separately to address some of the considerations treated in the other opinions.
I
The lease between C.A.F., as lessor, and K-Mart, as lessee, is referred to in Justice Moody’s opinion as an unfavorable lease for the lessor. Justice Fitzgerald’s opinion seems to be saying something akin: that K-Mart was able to receive more favorable lease terms than a more marginal tenant and that that was a factor justifying the Tax Tribunal in not considering actual income. It is further suggested that the lessee’s interest, as well as the lessor’s interest, should be valued to arrive at the combined and therefore true value.
A
The constitutional standard is the market, "true cash value”.1 If a desirable tenant is able, in an arm’s-length bargain, to obtain more favorable terms than a less desirable tenant, the rent it pays is nevertheless the going market rate for such a tenant. If a desirable tenant obtains favorable *467terms, it is because that tenant is desirable; the rent it pays is the fair market value of having that desirable tenant. If another tenant pays a higher rent, it is not because the property is worth more but because the actual market value of its tenancy is of less value, due, for example, to the greater anticipated wear and tear to the property or greater financial insecurity of the tenant. In a perfect market the differential in rentals between tenants of comparable properties will not necessarily lead to a different market value for the properties. An investor valuing the income stream to be provided by a long-term lease with a less desirable tenant would apply a capitalization rate discounting the higher rentals paid by that tenant in recognition of the tenant’s characteristics that caused the landlord to charge a higher rental.
In any case, what another tenant might pay is irrelevant to determining the true cash value of property encumbered by a long-term lease. The value of the property is its value as it is, i.e., as encumbered. To say that its value would be higher if it were rented to another tenant when it cannot be rented to another tenant is to deny the legal and economic reality of the encumbrance. As Justice Ryan implies,2 the value of property is af*468fected by a lease in the same manner as its value is affected by zoning or deed restrictions.
The argument that the lessee’s interest should be valued as well as the lessor’s interest is an alternative form of the argument that the property should be valued at what another, hypothetical tenant would pay: the lessee’s interest is the degree to which the lease is "favorable” to him, i.e., the difference between what he is paying and what the owner would presumably obtain from another tenant. Thus, valuing the lessee’s interest again seeks to value the property as if it were unencumbered when it is actually encumbered.
Moreover, valuing the lessee’s interest would be to substitute a hypothetical rental for the rental reserved in the lease. To do so would be to eliminate all relation to actual income and thus to reverse, sub silentio, the first CAF decision. Separately valuing the lessee’s interest and combining it with the lessor’s interest will produce a result diametrically opposed to the original CAF opinion.
Adding an enhanced value of the lessee’s interest to the lessor’s interest where the property is bound to a long-term lease and taxing them together is as unjustified as the Internal Revenue Service saying to a taxpayer that he was imprudent to buy long-term Treasury bonds a number of years ago at 5% when he could now buy 90-day Treasury bills at 15% and that his income from those bonds, for tax purposes, will be deemed to be 15%._
*469The Tax Tribunal, and the opinions which would sustain its decision, proceed as if the portion of the lease which is favorable to the taxing authority, i.e., the portion which gave rise to the improvement and obliges K-Mart to remain at this location for a minimum of 20 years, is viable, but the portion which the taxing authorities find unfavorable, i.e., the rental terms, is not viable and the rent should be computed as if K-Mart were willing to enter into a brand new lease at this location at a rental which reflects increased costs of construction and financing — costs not borne by this landlord when this 8- or 12-year old building (in 1971 and 1975 respectively) was constructed. The taxing authorities should not be permitted to have it both ways — either the property is encumbered or it is not.
No one could be found to buy this property for what even the owner claims it is worth unless it were "encumbered” with the K-Mart lease and the assured cash flow that goes with it. This Court cannot legitimately allow local taxing authorities or the Tax Tribunal to evaluate the property as if there is a K-Mart lease encumbrance, which alone makes it saleable at any price that would justify current assessments, and ignore the rent reserved in that lease.
Finally, to ignore the lease denies the circumstances which made construction of the structure possible. No one, lessor or lessee, would be willing to erect and no mortgagee would provide funds for an improvement without some assurance that the lessee can remain in possession if it is paying for the improvement or that it will remain if the landlord is paying for the improvement, especially if the building is designed to the lessee’s specifications. The lease embodies the commitment of the *470lessor and the lessee, each thereby creating value which might not otherwise exist and forgoing other opportunities. This kind of large, specialized structure would not have been constructed but for the "encumbrance” of a long-term lease from some desirable lessee. Since there would be no structure to tax without such an encumbrance, it is not appropriate to evaluate the property as if it could be rented to someone else.
The opinions which would sustain the Tax Tribunal would substitute for the constitutionally prescribed market-based standard of true cash value a hypothetical value, ignoring the lease which alone creates value of this dimension on land which otherwise might be still vacant or less valuably improved. Nothing in the record shows that if this lease had not been entered into a structure would have been erected producing as much in taxes as are derived even when based on the actual income.
B
In re Petition of Auditor General,3 is relied on to support the argument that the value of the lessee’s interest should be assessed to the lessor. In that case this Court said:
"It is the rule in this state that a parcel of real estate must be assessed as an entirety, 1929 CL 3390, 3391, at cash value, including worth of standing timber, mineral rights, 'water power and privileges,’ etc., § 3415. This legislative policy is emphasized by the fact that the statute mentions only a single exception, i.e., the interests of tenants in common, § 3394.”
*471It is urged that "[t]o assess this 'parcel of real estate * * * as an entirety’ requires that the lessor’s and the lessee’s interest be considered.” Such a reading extends Auditor General beyond its precedential bounds. In Auditor General this Court held that "flowage rights” sold by the landowner before assessment of taxes should have been assessed to the landowner. In so holding, the Court found controlling two earlier decisions holding that mineral rights4 and standing timber5 must be assessed as part of the real estate although separately owned. In all three cases, the Court relied on specific statutory directives6 and concluded that natural aspects of the land which were still attached should be assessed to the owner of the land. The statutory list of factors to be considered by the assessor specifically included the natural elements involved in those cases — standing timber, water privileges and minerals.7 The Courts understand*472ably concluded that the assessment must include the value of all such elements of the land.
In Auditor General and its predecessors the identifiable, severable interests in natural resources were clearly subject to ad valorem taxation and the question was to whom such interests should be assessed — the owner of the fee or the owner of the severed interest. In the instant case the question posed is whether a leasehold is, for ad valorem tax purposes, an interest separate and apart from the fee and, if so, to whom it should be assessed. I conclude that the fee cannot be valued apart from the lessee’s use and the mutual commitments of the lessor and lessee reflected in the lease.
II
Even if it were proper to value the lessee’s interest or the rental that could be obtained from another tenant, there is no probative evidence in this record which would support a valuation other than one based upon the income actually derived from this property. There is no evidence of a rental or sale of a comparable property in the period 1971-1975 in the Tri-City area, to say nothing of the immediate area in which this building is situated.
Evidence of what K-Mart or other tenants are paying for comparable buildings in other areas is worthless without evidence that another tenant (or K-Mart itself) could be found to rent this building. K-Mart does not, at least as far as this record shows, rent 8- or 12-year-old buildings. It appears that when it wants a new location it also wants a new building. It doesn’t take leftovers. The proba*473bility is that if this building had been empty on the tax date, no responsible tenant would have been found to rent as is and if it were to be rented or sold someone would be obliged to spend a considerable sum converting it either to smaller stores or to another use. That has generally been the history of Grant, Arlan’s, and other discount department stores which have been vacated.
There is nothing in this record to justify the conclusion that any tenant could be found to pay more than the K-Mart rental of $1.31 and $1.63 per square foot actually derived in those years or, indeed, that a tenant could be found who would pay even that much.
In reaching its result the Tax Tribunal relied on evidence of leases asserted to be comparable. The evidence of comparability in each instance was either inadequate or non-existent. The only evidence offered was of leases in other years with other tenants or with K-Mart in various communities other than the Township of Saginaw, all a considerable distance from Saginaw.8
This lease was entered into in 1962 and construction was completed in 1963. There are 107,-260 square feet. The base rent is $137,287, or $1.28 per square foot. K-Mart pays additional rental of 1% of gross sales in excess of $6,864,350.
Under this "unfavorable” lease the landlord received additional rentals and combined (base and percentage) per-square-foot rentals as follows:
Combined
Additional Square Foot
1971 $ 3,863.00 $1.31
1972 18,060.20 1.45
1973 25,397.01 1.53
1974 32,664.06 1.58
1975 37,267.00 1.63
*474The Tax Tribunal, based on the testimony of an appraiser for the State Tax Commission who appeared for the township, found that the "current rental income” was $2.00 per square foot in 1971 and $2.25 per square foot in 1975. The basis for those figures is the following table of "comparable” rentals:
Lessee Location Year Square Footage Rate
Yankee Mt. Pleasant ’63 31,895 1.41
Bargain City Monroe County ’65 71,556 1.51
Topps Westland ’66 86,228 1.51
Tempo Sault Ste. Marie ’67 33,160 1.15
Tempo Alpena ’67 40,861 1.30
W.T.Grant Lapeer ’72 52,571 2.19
W.T.Grant Hillsdale ’73 56,216 2.45
W.T.Grant Albion ’73 52,571 2.19
W.T.Grant Traverse City ’73 94,557 2.21
K-Mart Walker (Kent Co) ’65 118,433 1.90
K-Mart Ypsilanti ’65 83,134 2.08
K-Mart Westland ’66 109,884 2.09
K-Mart Warren ’69 121,298 2.20
K-Mart Lansing ’69 119,650 2.50
K-Mart Lansing area ’70 122,362 2.55
K-Mart Lansing area ’70 123,062 2.44
(Only percentage leases are shown.)
These leases, apparently, were all of brand new stores built for the tenant, or at least there is nothing to indicate otherwise.
The foregoing list of "comparables” compiled by the township’s witness does not indicate that the rent K-Mart pays is below market. K-Mart’s rentals for stores built in 1969 of $2.20 and $2.50 plus 1% of overage sales are on a par with the rent paid by other tenants, e.g., W.T. Grant, who are now defunct.
The foregoing list indicates that rentals vary greatly depending on location. For example, the rentals on two leases K-Mart entered into in 1969, *475one in Warren and one in Lansing, are $2.20 and $2.50, respectively, a variance of almost 14%.
Nor is there any basis for assuming that K-Mart would have paid in 1971 and 1975 for the lease of an 8- or 12-year-old building as much as it was then willing to pay for a brand new building located in a different community. These rentals simply are not comparables.
The Tax Tribunal, in effect, ignored the reproduction cost and market approaches to value and determined the value solely on the basis of the income approach using the higher per square foot rates of $2.00 and $2.25. Although the Tax Tribunal ignored these alternative approaches to valuation, I mention them because it may be thought that on still another remand the Tax Tribunal could properly consider them.
The township presented an estimate of true cash value based on the reproduction cost approach.9 *476But both of the township’s assessors testified that an existing lease had no effect on the estimate arrived at by the cost approach. Our first CAF decision required that the long-term lease be considered10 and required that any method of valuation which did not take into account the effect of a lease be rejected. Moreover, there was no evidence indicating that buyers and sellers of commercial property use a cost approach, in sharp contrast to evidence that buyers and sellers of commercial property use the capitalization of income approach. If buyers and sellers of commercial property do not use a technique, estimates of value derived from it have no bearing on the market price of the property, the constitutional standard.
The only evidence of comparable sales used in the township’s market analysis is equally faulty. The township’s witness relied on five sales of K-Mart stores, but conceded that three were inapposite because they were of buildings with net-net, not percentage, leases. He therefore relied on only two sales, a 1968 sale of a Westland K-Mart (a Detroit suburb) and a 1965 sale of a K-Mart in Walker (a Grand Rapids suburb).11_
*477There is no reason to suppose that a sale in 1965 of a building located in Walker built the preceding year or a sale in 1968 of a building in Westland built that very year is a reliable indicator of what an 8- or 12-year-old building located in Saginaw Township would sell for in 1971 or 1975. As shown in the first table, the base rentals of the Walker and Westland stores (located in the largest and second largest metropolitan areas of the state) were $1.90 and $2.09.12 The rents in Westland and Walker are 1/3 or more greater than for the Saginaw store; K-Mart pays 62¡¿ more per square foot in Walker and 81^ more in Westland. Also, these stores were built between 1 and 5 years later. Differences in construction and financing costs may explain some of the differential, but I would expect that location — the value of the land —is another substantial factor.13
Manifestly, sales values based on the Westland and Walker properties with leases entered into years before the tax years in question and leases of other stores built at different times in widely differing locations, all the way from the Soo to *478Kalamazoo, are not probative of what a current market rental would be for this 8- or 12-year-old store located in Saginaw Township in the tax years 1971 and 1975.
Moreover, there is no evidence that if K-Mart had not entered into this lease that it would not, if given the chance in 1971 or 1975, have moved to a newly constructed building at some other location in Saginaw Township or an adjoining community, albeit at a higher rental because of increased costs of construction and financing.
Absent the commitment made at this location K-Mart might have chosen some other site and paid more because of competitive and other locational advantages. Merely because this store does well does not mean that K-Mart could not do better at another location in the area or that if given the choice today it would remain at this site.
I am not suggesting that the burden of proof is on the taxing authorities. Rather, I am suggesting that when they wish to disregard a lease, the burden is on them to come up with something better than the highly artificial evidence produced regarding rentals and sales in altogether different locations of buildings built many years apart. We know nothing about these other buildings. They may be tailored to the needs of their tenants. We know nothing about land values either at the time of construction or in the tax year in question.
I would expect that the paradigm K-Mart store itself has changed over the years and that what was being built in 1971 and 1975 is substantially different from what was built in 1963. K-Mart may be willing to pay more for a more modern, less labor intensive, more fuel efficient or otherwise more efficient store. It may have changed its concept of whether K-Marts are best situated alone or as part of a shopping center.
*479It was "error of law or adoption of wrong principles”14 for the Tax Tribunal to uphold the assessment although the taxing authorities failed to present any probative evidence to support the assessment and the lessor presented substantial unimpeached evidence.
Ill
Justice Moody says, and Justice Williams concurs with him on this point, that the paramount consideration is uniformity.
A
Justice Moody’s underlying concern appears to be that if commercial property is permitted to be assessed on the basis of actual income from a long-term lease, owners will be able to obtain a tax advantage by setting a rental lower than the market. Owners of other types of property assessed by a comparable sales or reproduction method would therefore pay a non-uniform rate when compared to commercial property owners. This concern is misplaced because no rational owner of income-producing property would choose to reduce rental income by an amount many times greater than could possibly be saved in taxes.
Justice Ryan correctly points out that uniformity is achieved by adhering to the constitutional market-based standard, true cash value.15 If assessors adhered to that standard, all assessments would, perforce, be uniform. All assessments would be at 50% of true cash value. The reason there is need to adjust assessments because of a lack of *480non-uniformity is that assessors do not assess property solely on the basis of the market price.
Uniformity is not achieved by adhering to a single approach to valuation. While the cost approach may be followed by many assessors, since there is no real relationship between reproduction cost and value, reproduction cost has to be adjusted for economic obsolescence. That introduces a highly subjective element, one frequently responsible for the lack of uniformity in assessments. There is no guideline for economic obsolescence.
Neither is uniformity advanced by attempting to assess all property which appears similar as if it were of equal value. Neither physical similarity nor reproduction cost is the standard, and any attempt to avoid the value set for the property by the market is to dilute, rather than strengthen, uniformity of assessment.16
B
If there truly are a substantial number of situations in which a current rental market in excess of reserved rental creates a favorable lease from the lessee’s standpoint with the consequence that the property does not support its fair share of the tax burden, the Legislature may very well be able to rectify the matter by allowing local taxing authorities to tax that favorable lease to the lessee just as it did by allowing taxation of structures built on tax-exempt land.17
Similarly, the concern that a property owner will withhold income information from a tax assessor except when such information is to the owner’s advantage is exaggerated. In those instances *481where the owner of a business also owns the property, the income derived may be more reflective of the business conducted on the property than the value of the property and therefore not a reliable indicator of the value of the property. When such information is relevant, as in the instant case, to determining the true cash value of the property, assessors may have an implied right to obtain such information under the statute which provides that income is a factor to be considered in determining the property’s selling price.18 To the extent that the present statute is inadequate and the power to assess does not constitute an adequate enforcement mechanism, the Legislature, again, can provide a solution.
While the Constitution states that "[t]he legislature shall provide for the determination of true cash value”, Const 1963, art 9, § 3, it does not empower the Legislature to establish a standard other than or to qualify the constitutional standard of "true cash value”. I therefore find unpersuasive argument based upon the statutory term "usual selling price”. MCL 211.27; MSA 7.27 (emphasis supplied).
Justice Moody, relying on NeBoShone Ass’n, Inc v State Tax Comm, 58 Mich App 324; 227 NW2d 358 (1975), attempts to distinguish the instant case from those cited by Justice Ryan by saying that in the case of a zoning or deed restriction "the limitation was imposed by the actions of a third party” whereas a lease is a self-imposed restriction.
In NeBoShone the Court of Appeals held that where a seven-member association owned a large tract of property used for their own recreation and the sale of an interest in the property was subject to approval by a majority of the members, such a restriction should be taken into account by the assessor because the owners could bar any sale for a period of years and claim there was no market or true cash value. Without addressing the merits of NeBoShone, it is clear that the danger presented in that case is not presented here. In NeBoShone the seven association members had an incentive to hold down *468their assessment since the property was not income-producing. A long-term lessor, however, would lose more in income than could ever be gained by reducing the assessment. With no incentive to take a lower rent, there is no reason not to consider the effect of the lease on the property’s true cash value. This is not a case' of the property owner controlling the assessor; rather, the lease, entered into and based upon market conditions, controls the assessor. The Constitution requires the dominance of the market.
In re Petition of Auditor General, 260 Mich 578, 581; 245 NW 522 (1932).
Curry v Lake Superior Iron Co, 190 Mich 445; 157 NW 19 (1916).
Fletcher v Alcona Twp, 72 Mich 18; 40 NW 36 (1888).
"That all property, real and personal, within the jurisdiction of this state, not expressly exempted, shall be subject to taxation.” 1897 CL 3824; 1915 CL 3995.
"For the purpose of taxation, real property shall include all lands within the state, and all buildings and fixtures thereon, and appurtenances thereto, except such as are expressly exempted by law.” 1897 CL 3825; 1915 CL 3996.
"The words 'cash value,’ whenever used in this act, shall be held to mean 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 therefor at private sale, and not at forced or auction sale. In determining the value the assessor shall also consider the advantages and disadvantages of location, quality of soil, quantity and value of standing timber, water power and privileges, mines, minerals, quarries or other valuable deposits known to be available therein and their value.” 1897 CL 3850; 1915 CL 4021.
In Curry, supra, p 450, the Court also noted that in enacting 1911 PA 51 the Legislature changed the prior policy by requiring that all mineral rights in lands should be assessed separately. This act was repealed four years later, which the Curry Court interpreted as manifesting a legislative intent to require assessment of mineral rights to the owner of the fee.
The only evidence presented relating to K-Mart stores located in Saginaw was incomplete. Two such stores were listed among the properties asserted to be comparable but each was missing either the size or the rental of the building. Thus, no comparison was possible.
This method is applied by examining the structure on the property and calculating the present cost of reproducing it. The current reproduction cost is then depreciated for physical wear-and-tear and economic obsolescence. The value ascribed to the building is then combined with an estimate of the land value to arrive at an estimate of the value of the property.
Comparables are generally available for most kinds of properties, residences and small commercial properties and offices, but there are some properties for which there are no comparables simply because sales are so infrequent or the property is so unique that there is nothing comparable in the neighborhood. In such a case, resort must be had to another method of valuation. In the case of income-producing property, bought and sold largely on the basis of the net income it will produce, the income method is probably the most accurate method of valuation, again absent evidence of comparable sales. Indeed, where there are comparables, they will tend to reinforce the result reached by the income approach. Where, however, there are no comparables we should not encourage appraisers to create pseudocomparables based on sales of divergent properties. Valuation based upon income is entirely accurate and would probably be used by a buyer and seller; there is no need to go through the rituals of adjusting non-comparables and reducing reproduction cost by economic obsolescence. The latter methods being subject to manipulation, we should not endorse their use except where more reliable evidence of market value is unavailable.
As stated in the first CAF decision:
"It is only because in this case the record indicates that the long-term lease rental fairly reflects economic circumstances at the outset of the lease term and bears a demonstrable relation to true cash value that we require its consideration.” CAF Investment Co v State Tax Comm, 392 Mich 442, 455, fn 6; 221 NW2d 588 (1974).
The Westland store was built and sold in 1968 at a price which worked out to $12.97 per square foot and yielded a gross rent multiplier of 8.94 (gross rental X gross rent multiplier = sale price).
The Walker store, built in 1964 and sold in 1965, had 118,433 square feet which equalled $15.33 per square foot for a gross rent multiplier of 10.95.
These figures were averaged and adjusted to produce a gross rent multiplier of 10 for both 1971 and 1975 and a value of $15 per square foot in 1971 and $16.50 per square foot in 1975.
Multiplying these figures by the Saginaw Township store’s gross income and square footage, the township’s appraiser came up with $1,420,000 and $1,609,000 respectively for 1971 and $1,800,000 and *477$1,777,000 respectively for 1975 which he averaged out to indicate a property value via the market approach of $1,515,000 for 1971 and $1,785,000 for 1975.
All three leases were 1% percentage leases over base rent on approximately the same amount of sales (Walker, $6,917,250; West-land, $6,518,837 and Saginaw, $6,864,350). The stores are all approximately the same size (Walker, 118,433 s.f.; Westland, 109,884 s.f. and Saginaw, 107,261 s.f.).
Since the township’s market estimates were derived by averaging the data from only two properties, their statistical value is practically nil. The township’s witnesses could have arrived at the same result by averaging innumerable pairs of values. Also, the gross rent multiplier on these two "comparables” differed by approximately 22%, a discrepancy which would have amounted to a $284,000 per year difference in 1971-1974 assessments as calculated by the Tax Tribunal and a $360,000 difference in the 1975 assessments. These differences indicate that the "comparables” were not similar to each other and that closer factual analysis should have been presented to show which, if either, was really comparable to the plaintiff’s property.
Const 1963, art 6, § 28.
See cases cited in Justice Ryan’s opinion, p 464.
See 1979 PA 114.
MCL 322.424-322.425; MSA 13.724-13.725.
MCL 211.27; MSA 7.27.