Board of Appeal and Equalization – 05-03-07 - 5
SAINT MICHAEL CITY COUNCIL
BOARD OF APPEAL AND EQUALIZATION
May 3, 2007
Saint Michael City Council Chambers 6:00 P.M.
CALL TO ORDER ROLL CALL
Pursuant to due call and notice a special meeting of the Saint Michael City Council (acting as the local Board of Appeal and Equalization) was held on Thursday, May 3, 2007, at Saint Michael City Hall. Acting Mayor Dean Eggert called the meeting to order at 6:00 p.m., declaring a quorum present. The following City Council members were present: Councilors Dean Eggert, Joe Hagerty, Kevin Kasel and Joe Marx. Also present were County Assessor Greg Kramber, City Assessors Tom Zander and Jane Grossinger; City Administrator Bob Derus, and City Clerk Carol Beall. Mayor Jerry Zachman was absent.
Acting Mayor Eggert turned the meeting over to City Assessor Tom Zander, who introduced staff in attendance and in turn introduced Wright County Assessor Greg Kramber. Kramber provided the County Assessor’s Certificate Approving Assessment for the City records. He explained about the fairly new requirement that at least one of the members of the Local Board of Appeal and Equalization be trained and certified. Three members of St. Michael’s board have been trained, including Dean Eggert, Joe Hagerty and Kevin Kasel, and there will be opportunities during the year for the others to be trained if they wish.
Kramber said this meeting is to look at the 2007 assessment for taxes due and payable for tax year 2008. If residents are not satisfied at this meeting, they can sign up with the county—an appointment is necessary--or they may appeal directly to the Minnesota Tax Court. Kramber also explained tax evaluation increases and limited market values. He gave an overview of what is happening in Wright County. He explained the role of assessors and how they try to keep up with market trends and other conditions in the area. They do try to answer questions from property owners in advance of this meeting. There has been some real stabilization now in residential; however, there is still a very strong commercial market. Kramber explained about sales ratios. The sales ratio study of Wright County as a whole was shown.
Zander provided local information, including that the City of St. Michael has 6,789 parcels, including tax exempt. The county has 59,920 parcels. He also provided the Council with the following information for Saint Michael market values and what portion is new construction:
Total Market Values: New Construction
2007 - $1,758,916,400 $52,028,800
2006 - $1,653,398,400 $64,795,100
2005 - $1,422,435,600 $78,360,700
2004 - $1,206,959,000 $92,389,200
2003 - $1,038,851,100 $74,216,800
2002 - $ 859,945,100 $75,818,500
2001 - $ 688,823,400 $60,846,900
2000 - $ 528,607,600 $47,869,300
1999 - $ 430,306,300 $24,128,900
1998 - $ 381,558,800 NA
Zander said their job is to be at 100% of market value for which they use sales. Between 90% and 105% is acceptable. He explained several residents had signed up for the meeting and others could walk in and be heard in order.
David and Rose Gindele, 114-500-052200, 114-500-061100, 114-500-062100, were first on the list of appointments. Zander said they met with the Gindeles, who did not appear. No action was required.
Albert Hardinger, PIN 114-151-001010, 101 Liquors. Jane Grossinger said that Hardinger’s main concern was that his business would lose visibility with the Highway 101 construction project. This was the January 2007 assessment and the property would be looked at again for the January 2, 2008, assessment, to see what changes may have occurred.
Mike Bruner, 517 Oak Avenue SE, PIN 114-013-002160, said his evaluation went up a little over 7%, and he was trying to figure out why. Zander explained Bruner’s property received a reduction a few years ago because of storm damage that reduction for storm damage was not removed. The storm was pretty generalized in St. Michael, but this property was the only one to get a reduction, and that reduction was not given to anyone else for the 2007 assessment. He said he had about $30,000 in storm damage and has not yet completed repairs, since he was also hit by a second storm. Zander explained that was common and many of the repairs, particularly from the second storm are just being done now on our properties as well.
Evangeline Kasper, 114-500-153304, 142200 and 151200, asked about her tract that she cannot get to. She said there had been a bridge across the County ditch at one time, but it deteriorated. She wondered if a culvert could be put in to allow access to that parcel. Zander explained how the property has been evaluated. The culvert would be a private project. It was suggested Mrs. Kasper discuss her request with the County, since it is a County ditch. The board took no action.
Tom Schany, 5795 Quam Avenue NE, 114-129-001100, said he had no problem with evaluations. The concern is the amount of taxes per square foot, which are $4.18 on this building, and he has another larger building with metal construction with the taxes coming to $2.00 per square foot. Grossinger explained the first building is a small block one with a dock and loading in the fenced area. Next door is a large steel frame building with a small office in the front that is finished. The lot sizes are the same. Schany said he rents by the square foot, so the rent he must charge is inconsistent. His next question was about expanding and putting in a warehouse. He was told that was a question for Community Development Director Marc Weigle. Typically office costs more to build than an open structure. Grossinger assured that the criteria for evaluation of the two buildings has been met.
Danielle Miller, 406 3rd Street NW, 114-091-003070. Miller said Jane Grossinger had answered some of her questions prior to this meeting. Miller lives in Natures View IV with an across the board raise of land value. She did not understand how that was equitable. She spoke of newer and more desirable developments and said it is not an apple to apple comparison—that the location or desirability of the neighborhood should be taken into consideration. It was explained how property appraisals are done and that the assessors try to treat everyone the same. The sales ratio study was also referred to and properties were looked at parcel by parcel. Miller talked more of properties that are not being maintained and which then bring down the value of the neighborhood. Miller also brought some examples of properties which are on the market or have been sold, and said she did not believe she could sell her home at this time for the assessed value. It was explained this is the January 2, 2007, assessment and the market has probably leveled out some since that time. A recommendation was made for a reduction, but Miller felt it should be greater. Next year’s sales ratio will be looked at for the January 2008 assessment. Miller was told that the County board of review would be meeting on June 11 at the courthouse and if she wanted to follow further, she could make an appointment to meet with that board. A letter will be provided concerning this local board’s action.
Robert & Patricia Lenneman, 114-500-152100 and 114-500-103300. Mrs. Lenneman asked why there was a 106.4% increase in the market value. This was a farm parcel, and they were still receiving green acres which went up a small amount as well. Kramer explained the green acre law enacted in 1964 to help assist farmers from being forced from their property. The Ag value is what it is worth to the farmer, and the market value recognizes the highest and best use. Those areas where development is more prominent are recognized in the market value. There was more discussion on the green acres program, tillable, pasture and waste land. Kramber also gave several examples. He said that the green acre value will affect taxes, but the market value does not. The tax impact has not really changed significantly. No change will be made at this time.
Evangeline Kasper asked another question about valuation of property. She sold some property several years ago on a contract for deed which has not been recorded, so now the additional value affects her. It was suggested this is a matter between her and the buyer, who should recognize the increased value. The current market value has to be recognized in assessing.
Layne Roschen, 3095 Lander Avenue NE, 114-230-001020. Zander spoke with Roschen and said he would not be appearing.
John Gardner, 114-104-001090, 114-104-001100, 114-260-002090, 114-104-002080, 114-260-001010, 114-260-001030, 114-260-001050, 114-260-001080, 114-260-002020, 114-260-002030, 114-260-002040, 114-260-002050, 114-260-002060, Benchmark Custom Homes. Gardner said they purchased lots in the Wildflower development and they feel the farmstead greatly affects the value of the property. They have been actively marketing these lots for three years and have not sold one lot in over three years. He discussed the current market conditions and competition from Otsego. He explained some of the marketing they have done, and future strategies. He said they just want to be treated fairly on taxes. Kramber explained the seven-year plat law. There was further discussion on the concerns and the risk factor in land development. Gardner was told if they see land values decreasing, the City/County will make every effort to make the proper reductions. It was suggested Gardner keep in touch with Assessor Zander. Zander was recommending the cul-de-sac lots – Parcels 114-104-001100 and 114-104-001090 be reduced back to $70,000, but no change on the other parcels, and Kramber explained the limited market value, which is basically a circuit breaker.
Bryan Sieve, CineMagic Theatre, 114-276-001020. Sieve discussed the methodology of valuation, indicating this is a unique property, which will take a good three years to mature and establish the business. He discussed their property in the City of Rochester, developed in 2001, which has stabilized after five years. He said they were given a gradual increase in value so as not to put an undue burden on the business to support itself. In St. Michael 2/3 of the theatre opened on December 22, and due to the circumstances, they did not even do a high profile opening. They are very concerned about putting undue stress on the business. He did say they would be moving the corporate office out here, which will bring full-time employees to the City. They would like to try to ease into a supportable market valuation. It was explained the assessors are required to value what the property is worth. This is a special purpose building. There was additional discussion on commercial properties and cash flow, competition, market values. It was explained to Sieve how the building has been assessed, with the upper level not included. Sieve was concerned with putting the property into jeopardy. County Assessor Kramber offered to get together on a yearly basis over the next three years to review cost estimates, income, etc. It was suggested Sieve take the matter to the Wright County meeting on June 11 at the courthouse with no change tonight. It was also pointed out that we are always a year behind with valuations.
Roger and Kay Arens, 114-500-131203, submitted a letter about their apartment buildings. Greg Kramber said this is a difficult type of property to value. He has spoken on the phone several times with the owners. He said if you lose a strip of land it does not for the most part affect value. He said he has not had a chance to meet with the owners or see income stream information. He said it would be necessary to look at income expense data, and recommended no change be made at this level but to move on to the County Board.
Tysen Burke, 11855 – 48th Street NE, 114-111-008110, said he purchased his house for $305,000 and felt it should be valued at that price. The circumstances of this sale were discussed, as well as a comparison to another home with the same builder and model, but with a superior finish. The assessors proposed reducing the valuation by $22,931, to $329,433, but not down $305,000 as requested, since the value is there.
The board was given a list of additional properties for which the local assessor made recommendations. The board then made motions on the properties considered.
CineMagic Theatre, 114-276-001020. Council Members Kasel/Marx moved to make no change. All voted aye.
John Gardner, Parcels 114-104-001090 and 114-104-001100 – Councilors Marx/Kasel moved to reduce the values from $80,000 to $70,000 on each of the lots. All voted aye
Roger and Kay Arens, Parcel 114-500-131203 - Council Members Kasel/Marx moved to make no change. All voted aye.
Eugene/Lois Zachman, 60th Street, 114-500-032200. Councilors Marx/Kasel moved to approve reduction of market value from $693,240 to $603,000 and reduction of Green Acres from $117,946 to $100,650, due to corrected acreage from 59.93 to 52.41 acres. All voted aye.
Lenz Estate, 114-800-182200, bare land along the river. There is a problem with access to the land at this time which for all intents and purposes makes the parcel landlocked. Council Members Kasel/Marx moved to reduce the value on the property from $91,500 to $46,500. All voted aye.
Hank Stahlman, 213 Edgewood Drive SE, PIN 114-013-001130. The assessors reduced the basement finish and lowered the square footage amount. Council Members Kasel/Marx moved to approve lowering the valuation on this property by $2,000 to $206,900, as recommended by the assessors. All voted aye.
Stephanie Lange, 305 Edgewood Drive SE, PIN 114-013-002020. The quality of the basement finish on this property was reduced. Council Members Kasel/Hagerty moved approval of lowering the value on the property by $10,293 to $192,329, due to the lower quality basement finish. All voted aye.