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04/17/1989 BOR - 5384CONTINUED MEETING OF BOARD of REVIEW Apri1 17, 1989 1989 Board of Review Members, The follawing pages contain the data and recommendations, prepared by the Fridley Assessor's office, regarding 1989 EMV complaints made at the April 10, 1989 Board of Review. An attempt has been made to contact each property owner concerned, to advise them of our intended recommendations. We were unable to complete review of two of the cases presented April 10. We will continue to work on these and should be prepared to present them for action, May 1. On behalf of the Fridley Assessor's office, I want to thank the Board for its excellent conduct of these meetings, Property taxation is a difficult process for all of us, including the taxpayers, and I am sure your concerned deliberations, in these matters, are greatly appreciated. Yours truly, Leon Madsen, City Assessor I 721 68th Ave. George Zuk PTN #14-30-24-11-0026 Subj ect Style: Rambler Area: 1025 sq Yr Blt: 1959 Bmt Fin: 240 sq Fire Pl: 0 Ex Bath: 0 A/ C : 0 Garage: 2 car Lt size: 75X119 1989 EMV $69,700 S1 date: N/A S1 price: --- ft ��� 6830 Monroe Rambler 1025 1959 0 0 0 0 2 car 75X120 $70,400 5/88 $74,500 Sales Comparables 6842 Monroe Rambler 1025 1959 216 BF 2 open 0 2 car 81X120 $72,100 8/88 $74,500 6898 Monroe Rambler 1025 1959 462 poor 0 0 Yes 2 car 87x120 $71,800 5/88 $76,000 6870 Brookiew Dr. Rambler 1056 1963 (R) 462 1 0 Yes 1 car 81x150 $66,200 4/88 $75,500 All of the sales comps on Monroe St. are virtually identical. They were built by the same builder. It is unusual to find this many comps for a subject, that are so similar. It is difficult to refute such good evidence. The Assessor's office recommends no change in value. 6820 Oakley St. Don Crispin PIN #13-30-24-22-0042 Subj ect Comparable Sales 6730 841 Kennaston Kennaston Adj • Ad ' Style: Rambler Basement: Full Size: 1245 sq.ft. Yr Blt: 64 (R) Bsmt.Fin: 228 sq.ft. Ex Bath: 3/4 up Fire P1: 0 A/C: Yes Walkout: No Lot size 85x123 Garage: Att 2 car 1989 EMV: $84,100 S1 Date: N/A S1 Price: N/A Accumulated Adjustment Adjusted Market Values Rambler Partial 1335 (-)4050 65 (R) 924 (-) 1392 3/4 en. 1 (-) 750 Yes No 75X127(+)1500 Det 2 car $84,200 3/87 $89,500 -4692 $84,808 841 Rice Creek Terr. �_ Adi• Rambler Partial 1377 (-)5940 59 (+)2500 516 (-)600 0 (+) 1200 0 Yes No 80x133 Det 2 car $81,200 11/87 $89,200 Rambler Full 1144 (+)4545 61 748 (-)2080 2 1/2 (-) 1650 2 (-) 1250 Yes Yes (-)750 82x146(-)3000 Att 2 car $87,200 4/87 $89,000 -2840 -4185 $86,360 $84,815 The three comparable sales differ from the subject in a number of respects. The adjustment column, following each comp, shows the amount of $ adjustment needed to make the sale like the subject. After making the adjustments, an adjusted sale price is obtained which should indicate the value of the subject. The results of the above process yields an adjusted value range of $84,808 to $86,360. The most reliability, in this process, is obtained from the comp sale needing the fewest adjustments. The comp at 841 Kennaston is therefore judged to be the most indicative of value for the subject @$86,360. The mean sales ratio of the 3 comp sales is 94%. By equalizing the $86,360 @ 94�, an indicated market value for the subject is $81,200. The Assessor's office recommends a reduction in the 1989 estimated market value as originally submitted from $84,100 to �8i.2o0_ 7325-27 Evert Court Kenneth Thornton PIN #12-30-24-13-0046 Our office recorded the sale of 3 double bungalow-duplex properties in 1988, as follows: Address 114 - 62nd Way 5961 Main St. 353 - 57th Place Sale Price $88,000 $85,000 $98,900 Our 1989 EMV $84,100 $80,100 $85,000 These building are physically inferior to the subject. The sales were used, in this case, only to estabish a"gross rent multiplier" . A GRM is a method used to convert the gross annual rent of a rental property into an indication of value. The following GRMs have been developed for the above sales. Address 114 - 62nd Way 5961 Main St. 353 - 57th Place Gross Annual Rent G R M $13,200 6.66 $12,000 7.08 $13,440 7.36 We were also able to develop GRMs from the data provided us by Mr. Thornton, as follows: 212 - 42nd St. N.E. 681 - 51st St. N.E. $13,200 $13,200 7.20 7.42 Disregarding the GRMs indicated by the last two sales, the mean GRM of Fridley sales is 7.03. Including the GRMs of the last two sales, a mean GRM of 7.14 is indicated. Inasmuch as GRMs are sensitive to market area, it is better to recognize the results of sales in Fridley. Therefore, applying the GRM of 7.03 is proper in this case. The subject property produces rents of $700 and $725 per month, for a gross annual income of $17,100. Applying the GRM of 7.03 X $17,100 produces an indicated market value of 5120.213. In the absence of sales of physiscally similar property, the GRM method is typically employed. This property was purchased by the current owner in September 1984 for $115,000. Based on the foregoing, it is the recommendation of our office to reduce the 1989 EMV from $130,300 to 5120,200. 160 Hartman Circle Frank Walz PIN #15-30-24-12-0034 A review of this property was made on April 12, 1989 by this office. A review of the land values in this neighborhood was made and four properties including this one have been adjusted downward. Also the quality of construction had been overstated in the past, on the structure, and has now been corrected. The Assessor's office recommends a reduction in the 1989 Estimated Market Value as originally submitted from $125,800 to .$114,300. Burlington-Northern leased land James Dowds Land Area 63,292 sq. ft. Our 1989 EMV = $99,700 PIN #34-30-24-42-0013 This is a parcel located between the Burlington-Northern yard parking lot at approximately 41st and East River Road, and the old Dunkley Blacktop plant, now owned by Mr. Dowds. It is indicated on the accompanying map as the cross-hatched area. The dashed outline area is the parcels owned outright by Mr. Dowds and the Fridley Auto Salvage operation. Mr. Dowds leases the subject parcel from Burlington-Northern for $8000 per year plus, he pays the real estate taxes. A common method of valuing a lease is to capitalize the net income by a capitalization rate derived from market sales of similar land and leases. In Fridley we do not have access to any other railroad land lease data of similar parcels. We have interviewed other local assessors and have found a general consensus that proper cap rates would be 8- 10�. Capitalizing the $8000 rent at 8� equals $100,000 indicated value, and using 10�, would yield a$80,000 value. Mr. Dowds has pointed out that the lease is only for 6 month periods, which reduces its face value. This is probably true. Another approach we can take, in estimating the value of this unique situation, is to use the method used by the State Department of Revenue in valuing the rest of the railroad operating property. They establish an acreage value simply by dividing all of the land values in the entire city by the total acres in the city. For the 1989 railroad operating land value, the State will be using approximately $1.00 per square foot. This is based on information obtained from Mr. Wayne Gerwing of the Department of Revenue. This would indicate a value of 563,300 for the subject if it were only used as railroad operating land. As can be seen, due to the lack of specific sales data, the evaluation of this type of situation becomes highly subjective. Therefore, a fair solution would be to blend both the application of the 10� conservative cap rate to the $8000 net rent, and the value that would be applied by the State as purely railroad operating land. 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The basement finishing was found to be torn up due to electrical, plumbing and heating repairs being made. The assessor's office recommends a reduction in the 1989 estimated market value as originally submitted from $94,800 to Ss6.5oo. 265 Stoneybrook Way Neil Wanamaker Our 1989 EMV = $161,200 PIN #10-30-24-12-0065 Building Style: = 3 story & basement contemporary Building area: = 1360 sq ft foundation area 2700 sq ft living area plus 864 sq ft basement Garage: 2 car Year Built: 1972 Fireplace: 1 Extra baths: 1 3/4 Walkout: Yes Lot: 91 X 163 on Stoneybrook Creek Purchased by current owner May 1987 for $151,000. This a very unique building. There are no comparable sales in Fridley or immediate surrounding areas. The owner obtained the attached letter from Dave Ryan, a reputable realtor in Fridley, expressing an opinion of value of $151,000. In the case of such unique properties, where there is an acute lack of sales data, we are willing to accept the opinion of a reputable realtor in the local market. The Assessor recommends a reduction in the 1989 value, as submitted from $161,200 to 5151,000. A ME►MER OF TIIE SEARS F WANCIAL NEf WORK � . � COLDWELL BANKEH � � � � RESIDENTIAIREAL.ESTATE .. � � � � Nf SUHUHBAN (rt f ICI � � � � � 951HUlWINI)ItUAI) � . � FRIUII r. MN',S.1:t7 . . . � � . � . � IEil71'�/� I011l � . April 10, 1989 To Whom It May Concern: Mr. & Mrs. Wanamaker at 265 Stoney Brook Way have requested that I give an opinion on the value of the home purchased two (2) years ago for $151,000.00. I told r.hem that I see no evidence of any real appreciation on that h�me since their purchase. The home would be near or at the to�� of the sale market in that area. ' ncerel.�,, / ti • r�,,,,,� � . �� ✓e Rya DI.:t:slc n 6278 Baker St. Patricia Levoir PIN #13-30-24-33-0010 Subj ect Style: 3 level Basement: Partial Size: 1166 sq.ft. Yr.Blt: 55 Bsmt.Fin: 440 sq.ft. Ex. Bath: 3/4 dn Fire P1.: 1 A/C: Yes Porch: No Loc/Lot sz: 90X150 Garage: Att lcar 1989 EMV: $77,100 S1 Date: N/A S1 Price: N/A Accumulated Adjustment Adjusted Market Values Our 1989 EMV = $77,100 Comparable Sales #1 6378 Dellwood Aa,• #2 7320 Melody Dr. Ad�• 3 level 3 level Partial Partial 1166 1078 54 63 480 (-)300 390 1/2 dn(+)300 3/4 dn 1 0 (+)3500 (-)2600 (+)400 (+) 100 Yes Yes Screen(-)1400 No 90X181 79X120 Att lcar Att 2car(-)1200 $78,000 $77,100 10/86 11/86 $85,500 $84,500 -1400 +1100 $84,100 $85,600 These comparables are all split-level structures. #3 80 Loqan Pkwv Adj • 4 level Full (-)3100 1166 55 393 (+)400 3/4 dn 1 Yes No 100X197(-)2900 Att 2car(-)1200 $87,600 11/88 $89,000 -6800 $82,200 Walter Mulcahy, of our office, made a physical review of this home April 14, 1989. He found no unusual condition in the property that would suggest that our current data is inaccurate. Based on the three comparable sale properties, listed above, it would appear that our value of $77,100 is well within acceptable ranges. Sale comp #1 is considered to be the most comparable to the subject. The adjusted value indication is $84,100. That would put the sales ratio of the subject at 91.6�. The Assessor's office recommends affirmation of the EMV at $77,100.