concurring in part and dissenting in part.
174 I agree with the majority that the concessionaires' possessory interests satisfy the tripartite test for taxation announced in Board of County Commissioners v. Vail Associates, Inc., 19 P.3d 1263 (Colo.2001). Yet I disagree with the majority's conclusion that the City properly valued the concessionaires' interests for property tax purposes. In my view, the City's "mass appraisal" approach clashes with the statutory command to esti*888mate the present value of future payments due under each concessionaire's contract. Ree § 39-1-108(17)(a)(II)(A), C.R.S. (2014). Hence, I concur with the conclusion in Part III of the majority's opinion but respectfully dissent from Part IV.
T 75 By holding that the Colorado Constitution requires the taxation of possessory interests in tax-exempt property that exhibit "significant incidents of ownership," Vail Associates carried the legislature's possessory interest taxation scheme into effect. 19 P.3d at 1280; ch. 297, see. 4, § 89-1-108(17), 1996 Colo. Sess. Laws 1849, 1852 (providing a method for the valuation of possessory interests in tax-exempt land "if the Colorado supreme court holds that the Colorado constitution requires" such taxation). That taxation scheme is embodied in section 39-1-108(17), C.R.S. (2014). Section 108(17)(a) begins with the observation that "the valuation of possessory interests in exempt properties is uncertain and highly speculative." It then sets forth specific standards to allay the risk of unequal valuations. Id. The Assessor's Reference Library (ARL) fleshes these standards out with guidelines that are binding on all assessors. Huddleston v. Bd. of Equalization, 913 P.2d 15, 18 (Colo.1996). This case is our first opportunity to interpret the legislative scheme.
176 As the majority explains, section 39-1-103(17)(a)(II) prescribes a two-step method for the valuation of possessory interests un-" der the cost or income approach to appraisal. The assessor must first determine "the present value of the reasonably estimated future annual rents or fees required to be paid" under the contract. § 39-1-108(17)(a)(ID)(A). The assessor should use "the actual contract rents or fees reasonably expected to be paid . unless it is shown" that these "are not representative of the market rents or fees paid for that type of real or personal property, in which case the market rents or fees" should be substituted. Id. Pursuant to seetion 108(17)(a)(II)(B), the assessor then subtracts any amounts "paid for all rights other than the exclusive right to use and possess the ... property." For contracts that define rent as a percentage of revenue, the ARL recommends that the assessor compile current market rates for comparable properties. 3 Assessor's Reference Library 7.79 (rev. Mar. 2014). If the percentage amount is higher, the ARL suggests that the difference should be excluded as the value of the business, as opposed to the value of the property. Id. In other words, the ARL bases the value of the possessory interest on the market rent whenever that value differs from actual rent.
177 The City calculated the present value of the concessionaires' interests using the minimum monthly guaranteed rent described in the concession agreements-$56 per square foot for most. The City's valuation expert testified that this value was a reasonable approximation of future payments because it was the rent floor set by the agreements. Although most concessionaires paid a higher amount equal to a percentage of their monthly gross revenues, none would ever pay less than the minimum monthly guarantee. The expert further testified that the minimum monthly guarantee represents the market rate at DIA because DIA is its own market. This approach dismisses as irrelevant data from other, similar airports. More significantly, it assumes a uniform value across the different neighborhoods at DIA.
78 That assumption is incorrect. Passenger traffic varies from concourse to concourse, and as a result, so does the value of real estate at DIA. According to trial testimony, about half of the passengers at DIA travel through the B Concourse. As a result, one concessionaire does five times as much business at its B Concourse location than at its (otherwise identical) location in the Main Terminal. This difference proves that a square foot of space on the B Concourse is worth more than a square foot of space in the Main Terminal. Instead of accounting for this variation, however, the City applied a uniform value across the different neighborhoods at DIA, which led to an incorrect valuation of the concessionaires' interests. See Bd. of Assessment Appeals v. Sampson, 105 P.3d 198, 207 (Colo.2005) (explaining that a taxpayer who can demonstrate that an assessment is incorrect is entitled to relief).
T79 The statute required the City to make a "reasonabl[el estimate[ ]" of future pay*889ments under the concession agreements as the basis for calculating the actual value of the concessionaires' interests. § 89-1-108(17)(a)(II)(A). The City's "mass appraisal" approach did not comport with this requirement. The best estimate of future payments is past payments, and the record in this case established that most of the concessionaires paid a percentage of their monthly gross revenue, not the minimum monthly guarantee. See, eg., City & Cnty. of Denver v. Bd. of Assessment Appeals, 848 P.2d 355, 360-61 (Colo.1993) ("[Aletual rent received [is] a factor in determining the value of the property...."). Rather than assume that all concessionaires would pay the minimum monthly guarantee for the life of the agreements, the City should have estimated the actual value of the concessionaires' interests based upon each concessionaire's historic rent payments.
[80 The statute also required the City to use comparable market rents to calculate the actual value of the concessionaires' interests where "it is shown" that actual rents are not representative of market rents. § 89-1-1083(17)(a@)(IID)(A). It is thus incumbent on the assessor to inquire into the market rate and compare it to the actual contract rent. Especially where actual rent is a percentage of revenue, the ARL directs the assessor to research comparable properties because percentage rent likely comprises some value attributable to the business, which should be separated from the value of the property interest. The City cireumvented this step with the facile assumption that the only comparable market for concessions at DIA was the concessions at DIA; therefore the actual rents paid by the concessionaires (approximated as the minimum monthly guarantee) equaled the market rent. This syllogism disregards the purpose of market comparison, which is to determine whether rents paid by the concessionaires at DIA were representative of rents for similar properties outside of DIA. The statute and the ARL required a more thorough inquiry from the City. Absent that inquiry, it is unclear whether market rents should have been substituted for actual rents to calculate the value of the concessionaires' interests.
81 For the foregoing reasons;, the City's "mass valuation" of the concessionaires' interests based on the assumption that they would all pay the minimum monthly guarantee for the duration of their concession agreements departed from the statutory scheme and led to an incorrect valuation. To hew to the statute, the City should have calculated the actual contract rent for each concessionaire based on the percentage rent historically paid by that concessionaire, and compared that amount to the current market rate for similar properties. I would remand this case to the court of appeals with instructions to return it to the trial court for further proceedings to determine the value of the concessionaires' interests according to the method set forth in section 108(17)(a)(IT). I therefore respectfully dissent from Part IV of the majority opinion.